Accounting Exam Semester 2
Dolan Company's during 2017, $800,000 of raw materials were purchased, direct labor costs amounted to $670,000 and manufacturing overhead incurred was $640,000. The total raw materials available for use during 2017 for Dolan Company is
$1,060,000
if a company has a contribution margin of $1,000,000 and a contribution margin ratio of 40%, total variable costs must have been
$1,500,000
During 2017, Benson purchased $1,450,000 of raw materials, incurred direct labor costs of $250,000 and incurred manufacturing overhead totaling $160,000. assume Benson's cost of goods manufactured for 2017 amounted to $1,660,000. how much would it report as cost of goods sold for the year
$1,668,000
Dolan Company's during 2017, $800,000 of raw materials were purchased, direct labor costs amounted to $670,000 and manufacturing overhead incurred $640,000. If Dolan Company's cost of goods manufactured for 2017 amounted to 1,890,000, its costs of goods sold for the year is
$1,850,000
a company can sell all the units it can produce of either Product A or Product B but not both. Product A has a unit contribution margin of $16 and takes two machine hours to make and produce B has a unit contribution margin of $30 and takes three machine hours to make. if there are 5,000 machine hours available to manufacture a product, income will be
$10,000 less if Product A is made
for its inspecting cost pool, Ellsworth, Inc. expected overhead cost of $400,000 and 4,000 inspections. the actual overhead cost for that cost pool was $480,000 for 5,000 inspections. the activity-based overhead rate used to assign the costs of inspecting cost pool to products is
$100 per inspection
Gribble Company's high and low level of activity last year was 60,000 units of product produced in May and 20,000 units produced in November. machine maintenance costs were $156,000 in May and $60,000 in November. using the high-low method, determine an estimate of total maintenance cost for a month in which production is expected to be 45,000 units
$120,000
Stellar, Inc decided on January 1 to discontinue its telescope manufacturing division. on July 1 the divisions assets with a book value of $1,260,000 are sold for $900,000. operating income from January 1 to June 30 for the division amounted to $195,000. ignoring income taxes, what total amount should be reported on Stellar's income statement for the current year under the caption, "discontinued operations"?
$165,000 loss
Dolan Company's during 2017, $800,000 of raw materials were purchased, direct labor costs amounted to $670,000 and manufacturing overhead incurred $640,000. Dolan Company's total manufacturing costs incurred in 2017 amounted to
$2,060,000
Laflin Company's cost of goods manufactured for the year is
$2,580,000
Tidwell Industries: if overhead is applied using activity-based costing, the overhead application rate for ordering and receiving is
$240 per order
Redman Company: what is the total manufacturing cost for Job. No 978
$27,450
a company has a unit contribution margin of $120 and a contribution margin ratio of 40%. what is the unit selling price
$300
in 2016, Teller Company sold 3,000 units of $600 each. variable expenses were $420 per unit, and fixed expenses were $240,000. what was teller's 2016 net income
$300,000
Tidwell Industries: if overhead is applied using traditional costing based on direct labor hours, the overhead application rate is
$34.17
In applying the high-low method, what is the fixed cost
$35,000
Alvarez Company: what is the incremental profit
$4,000
Kline Manufacturing: the entry to record the cost of factory labor and associated payroll tax expense will include a debit to Factory Labor for
$550,000
Able Company: a special order for 2,000 units has been received from a foreign company. the unit price requested is 55$. the normal unit price is 80$. if the order is accepted, unit variable costs will increase by 2 for additional freight costs. If the order is accepted, incremental profit (loss) will be
$6,000
It costs Garner Company $12 of variable and $5 of fixed costs to produce one bathroom scale which normally sells for 35. a foreign wholesaler offers to purchase 3,000 scales at $15 each. Garner would incur special shipping costs of $1 per scale if the order were accepted, what will be the effect on the net income
$6,000 increase
one of the Matheny Company's activity cost pools is inspecting, with estimated overhead of $200,000. Matheny produces throw rugs (700 inspections) and area rugs (1,300 inspections). how much of the inspecting cost pool should be assigned to throw rugs
$70,000
Dandy Candy Company sold its licorice division resulting in a loss of $80,000. assuming a tax rate of 25%, the loss on this disposal will be reported on the income statement at what amount
$60,000
a company is considering eliminating a product line. the fixed costs currently allocated to the product line will be allocated to other product lines upon discontinuance. If the product line is discontinued,
the contribution margin of the product line will indicate the net income increase or decrease
when a job is completed and all costs have been accumulated on a job cost sheet, the journal entry that should be made is
debit: finished goods inventory credit: work in process inventory
a materials requisition slip showed that direct materials requested were $66,000 and indirect materials requested were $9,000. the entry to record the transfer of materials from the storeroom is
debit: work in process inventory and manufacturing over head credit: raw materials inventory
the discontinued operations section of the income statement refers to
the disposal of a significant component of a business
time tickets should be approved by
the employee's supervisor
Lipton Inc, disposes of an unprofitable segment of its business. the operation of the segment suffered a $200,000 loss in the year of disposal. The loss on a disposal of the segment was $100,000. if the tax rate is 30% and income before income taxes was $1,600,000
the income from continuing operations is $1,120,000
which of these best reflects a distinguished factor between a job cost system and a process cost system
the number of work in process accounts
if a plant is operating at full capacity and receives a one-time opportunity to accept an order at a special price below its usual price, then
the order will likely be rejected
all of the following would be entries in assigning accumulated costs to the Work In Process Inventory except:
the purchase of raw materials
which of the following is relevant information in a decision weather old equipment presently being used should be replaced by new equipment
the salvage value of the old equipment
if there are no units in process at the beginning of the period, then
the units to be accounted for will equal the units transferred out and the units in process at the end of the period
advances in computerized systems, technological innovation, global competition, and automation have changed the manufacturing environment drastically by
decreasing direct labor costs and increasing overhead costs
the predetermined overhead rate is
determined at the beginning of the year
when deciding weather or not to replace old equipment with new equipment, the overriding consideration is the
difference between future cost savings and the new equipment's costs
if the entry to assign factory labor showed only a debit to Work in Process Inventory, than all labor costs were
direct labor
the work of factory employees that can physically and directly associated with converting raw materials into finished goods is
direct labor
which of the following would not be classified as manufacturing overhead
direct materials
the costs that are easiest to trace directly to products are
direct materials and direct labor
manufacturing costs include
direct materials, direct labor, and manufacturing overhead
an income statement would not include
dividends paid
an activity-based overhead rate is computed as follows:
estimated overhead divided by estimated use of cost drivers
the increased use of automation and less use of the work force in companies has caused a trend towards an increase in
fixed costs and a decrease in variable costs
in a process cost system, a production cost report is prepared
for each processing department
if the activity level increases 10%, total variable costs will
increase 10%
if a company has a discontinued operation gain of $30,000 and a 32% tax rate, what is the effect on net income
increase of $20,400
in a make-or-buy decision, which costs can be considered relevant
incremental variable costs, incremental fixed costs, and opportunity costs
the wages of a timekeeper in the factory would be classified as
indirect labor
comparisons of financial data made within a company are called
intracompany comparisons
which one of the following best describes a job cost sheet
it is a form used to record the costs chargeable to a specific job and to determine the total and unit costs of the completed job
the two basic types of cost accounting systems are
job order and process cost system
process costing is not used when
jobs have distinguished characteristics
as current technology changes manufacturing processes, it is likely that direct
labor will decrease
the relevant range of activity refers to the
levels of activity over which the company expects to operate
which one of the following is not a direct material
lubricant for a ball-bearing joint for a large crane
which of the following is not an example of an activity cost pool
machine hours
which of the following statements is true with respect to financial statement reporting a change in accounting principle
management must show that the new accounting principle is preferable to the old method
Pratt Company has old inventory on hand that costs $15,000. its scrap value is $20,000. the inventory could be sold for $50,000 of manufactured further at an additional cost of $15,000. what should Pratt do
manufacture further and sell it for $50,000
the product cost that is most difficult to associate with a product is
manufacturing overhead
Swanson Company has two divisions; Sporting goods and Sports gear. the sales mix is 65% for sporting goods and 35% for sports gear. Swanson incurs $6,660,000 in fixed costs. the contribution margin ratio for sporting goods is 30%, which for sporting gear it is 50% - a shift from low-margin sales to high-margin sales
may increase net income, even though there is a decline in total units sold
Reardon Inc. has an investment in trading securities of $140,000. this investment experiences an unrealized loss of $7,000 during the current year. assuming a 35% tax rate, the effect of this loss on comprehensive income will be
no effect
in process cost accounting, manufacturing costs are summarized on a
production cost report
a major accounting contribution to the managerial decision-making process in evaluating possible sources of action is to
provide relevant revenue and cost data about each course of action
for analysis purposes, the high-low method usually produces a(n)
reasonable estimate
a fixed cost is a cost which
remains constant in total with changes in the level of activity
which of the following would not be acceptable way to express contribution margin
sales minus unit costs
NF Toy Company is unsure of weather to sell its product assembled or unassembled. the unit cost of the unassembled product is $24 and NF Toy would sell it for $52. the cost to assemble the product is estimated at $17 per unit and the company believes the market would support a price of $68 on the assembled unit. what decision should NF Toy make
sell before assembly, the company will be better off by $1 per unit
a process cost accounting system is more appropriate when
similar products are mass-produced
if graphed, fixed costs that behave in a curvilinear fashion resemble a(n)
stair-step pattern
which of the following is the best definition of sustainable income
sustainable income is the most likely level of income to be obtained in the future
which of the following will always be relevant. Sunk Cost Fixed Cost Variable Cost Opportunity Cost
Opportunity Cost
Minor Company: materials are added at the beginning of the process. what is the total number of equivalent units for materials in July
210,000
Ramirez Corp sells two types of computer hard drives. the sales mix is 30% (Q-Drive) and 70% (Q-Drive Plus). Q-Drive has variable costs per unit of $90 and a selling price of $195. Ramirez's fixed costs are $891,000. how many units of Q-Drive would be sold at the break-even point
3,300
For pierce company, sales is $500,000, variable expenses are $340,000 and fixed expenses are $140,000. Pierce's contribution margin ratio is
32%
costs of goods manufactured equals $85,000 for 2017. Finished goods inventory is $2,000 at the beginning of the year and $5,500 at the end of the year. beginning and ending work in process for 2017 are $4,000 and $5,000 respectively. how much is cost of goods sold for the year
$81,500
Worth Company reported the following year-end information: beginning work in process inventory, $180,000; cost of goods manufactured $866,000; beginning finished foods inventory $252,000; ending work in process inventory, $220,000; and ending finished goods inventory, $264,000. Worth Company's cost of goods sold for the year is
$854,000
estimated costs for activity cost pools and other items are as follows: machining = $500,000 assembling = $200,000, advertising = $450,000 inspecting and testing = $175,000. total estimated overhead is
$875,000
Moonwalker's CVP income statement includes sales of 5,000 units, a selling price of $100, variable expenses of $60 per unit, and fixed expenses of $110,000. The net income is
$90,000
in 2016, Teller Company sold 3,000 units of $600 each. Variable expenses were $420 per unit, and fixed expenses were $270,000. the same selling price, variable expenses, and fixed expenses are expected for 2017. what is Teller's break-even point in sale dollars for 2017
$900,000
the required sales in units to achieve a target net income is
(fixed cost + target net income) divided by contribution margin per unit
Swanson Company has two divisions; Sporting goods and Sports gear. the sales mix is 65% for sporting goods and 35% for sports gear. Swanson incurs $6,660,000 in fixed costs. the contribution margin ratio for sporting goods is 30%, which for sporting gear it is 50%. - the weighted-avg contribution margin ratio is
37%
which of the following costs are variable
1 and 4
a process with no beginning work in process, completed and transferred out 85,000 units during a period and had 50,000 units in the ending work in process inventory that were 30% complete. the equivalent units of production for the period were
100,000 equivalent units
in the month of June, a department had 20,000 units in beginning work in process that were 70% complete. during June, 90,000 units were transferred into production from another department. at the end of June there were 10,000 units in ending work in process that were 40% complete. materials are added at the beginning of the process, while conversion costs are incurred uniformily throughout the process. how many units were transferred out of the process in June?
100,000 units
if beginning work in process is 4,000 units, ending work in process is 2,000 units and the units accounted for equals 15,000 units, what must units started into production be
11,000
Danner Corporation reported new sales of $650,000, $720,000 and $780,000 in the years 2016, 2017, and 2018, respectively. if 2016 is the base year, what percentage do 2018 sales represent of the base
120%
20,000 units in a process that are 70% complete are referred to as:
14,000 equivalent units of production
The 2016, Carow sold 3,000 units at $500 each. Variable expenses were $250 per unit, and fixed expenses were 500,000. the same selling price is expected for 2017. Carow is tentatively planning to invest in equipment that would increase fixed costs by 20% while decreasing variable costs per unit by 20%. what is Carow's break-even point in units for 2017
2,000
a department adds raw materials to a process at the beginning of the process and incurs conversion costs uniformly throughout the process. for the month of January, there were no units in the beginning work in process inventory; 90,000 units were started into production in January; and there were 20,000 units that were 40% complete in the ending work in process inventory at the end of January. what were the equivalent units of production of conversion costs for the month of January
78,000 equivalent units
Curtis Corp contribution margin is $25 per unit for Product A and $30 for Product B. Product A requires 2 machine hours and Product B requires 4 machine hours. how much is the contribution margin per unit of limited resources for each product
A) $12.50 - $7.50
in a process cost system
a Work in Process account is maintained for each process
if Qualls Quality Airline cuts its domestic fares by 30%
a profit can be earned either by increasing the number of passengers or by decreasing variable costs
the last step in activity-based costing is to
assign overhead costs to products, using overhead rates determined for each cost pool
activity-based costing
allocates overhead to activity costs pools, and it then assigned the activity cost pools to products and services by means of cost drivers
the CVP income statement classifies costs
as variable or fixed and computes contribution margin
in reporting discontinued operations, the income statement should show in a special section 1. gains on the disposal of a discontinued component 2. losses on the disposal of a discontinued component
both 1 & 2
in incremental analysis
both costs and revenue may be analyzed
an activity that has a direct cause-effect relationship with the resources consumed is a(n)
cost driver
Price Company assigns overhead based on machine hours. The Milling Department logs 2,400 machine hours and Cutting Department shows 4,000 machine hours for the period. If the overhead rate is $5 per machine hour, the entry to assign overhead will show a
credit to Manufacturing Overhead for $32,000