Accounting Final 211 Samual Bass

A company sells goods for $150,000 that cost $54,000 to manufacture. Which of the following statements is true?

The company will decrease finished goods by $54,000

Which of the following statements is true of the profit-volume chart? Selected

The profit line intersects the horizontal zero operating profit line at the break-even point.

Thomlin Company forecasts that total factory overhead for the current year will be $15,000,000 with 300,000 total machine hours. Year to date, the actual factory overhead is $16,000,000 and the actual machine hours are 330,000 hours. If Thomlin Company uses a predetermined overhead rate based on machine hours for applying overhead, as of this point in time (year to date), the overhead is

$500,000 over applied

On the income statement of manufacturing company, which of the following replaces purchases in the "cost of goods sold" section of a retail company/

Cost of goods Manufactured

Which one of the graphs in figure 1 illustrates the behavior of the total fixed costs?

Graph 1

Which of the following graphs in figure one illustrated the behavior of the total variable costs

Graph 3

Which of the following statements is true of operating leverage?

It is used to measure the impact of changes in sales on operating income.

Carter Co. sells two products: Arks and Bins. Last year, Carter sold 14,000 units of Arks and 56,000 units of Bins. Related data are as follows: Product Arks Bins Unit Selling Price $120 80 Unit Variable Cost $80 60 Unit Contribution Margin $40 20 Assuming that last year's fixed costs totaled $960,000, Carter Co.'s break-even point in units was

40,000 units

In order to be useful to managers, managerial accounting reports should possess which of the following characteristics?

All of these

Which of the following terms is commonly used to describe the concept whereby the cost of manufactured products is composed of direct materials cost, direct labor cost, and variable factory overhead cost?

variable costing

As production increases, the fixed cost per unit

decreases

The cost of a manufactured product generally consists of which of the following costs?

direct labor costs, direct materials cost, and factory overhead cost direct materials cost and factory overhead cost

The amount of income under absorption costing will be more than the amount of income under variable costing when units manufactured

exceed units sold

which of the following budgets allows for adjustments in activity levels

flexible budget

The source document for the data for debating work in process for direct materials is a

materials requisition

Compute conversion costs given the following data: direct materials, $347,500; direct labor, $196,300; factory overhead, $187,900; and selling expenses, $45,290.

$384,200

The Total factory overhead allocated per unit of rings is

$64.50

A widely used activity base for developing factory overhead rates in highly automated settings is

machine hours

period costs include

operating costs that are shown on the income statement in the period in which they are incurred

Managerial accounting reports are

prepared according to management needs prepared according to GAAP

Which of the following is most associated with ancial accounting reports?

prepared in accordance with GAAP

The relative distribution of sales among the various products sold by a business is the

sales mix

In job order costing, on which of the following would labor cost initially be recorded?

time tickets

If fixed costs are $500,000, the unit selling price is $55, and the unit variable costs are $30, the break-even sales (units) if fixed costs are increased by $80.000 is

23,200 units

Which of the following terms is used to describe the process of developing the organizations long-term objectives?

Strategic planning

Which of the following would most likely use job ordering costing

Swimming pool installer

Which of the following is the correct flow of manufacturing cost?

raw materials, work in process, finished goods, cost of goods sold

in the job order costing, when goods that have been ordered are received, the receiving department personnel count the goods, inspect the goods and complete a

receiving report

What is the balance of Sales for Adams Company at the end of the first quarter?

$2,685

This information will be used for the following 4 question's Adams company is manufacturing company that has worked on several production jobs during the first quarter of the year.

$456

A business operated at 100% of capacity during its first month and incurred the following costs: Production costs (20,000 units): Direct materials Direct labor Variable factory overhead Fixed factory overhead Operating expenses: Variable operating expenses Fixed operating expenses $180,000 240.000 280,000 100,000 $130.000 50.000 $800,000 180.000 If 1,500 units remain unsold at the end of the month, the amount of inventory that would be reported on the variable costing balance sheet is

$52,500

Thomlin Company forecasts that total overhead for the current year will be $15,500,000 with 250,000 total machine hours. Year to date, the actual overhead is $16,000,000 and the actual machine hours are 330,000 hours. The predetermined overhead rate based on machine hours is

$62 per machine hour

If sales are $400,000, variable costs are 80% of sales, and operating income is $40,000, the operating leverage is

2.0

which of the following terms is used to describe the process by which managers monitor operations and compare actual and expected results

evaluation

Which of the following would be classified as a variable cost for a T-shirt manufacturer?

ink used for screen printing

Which of the following is an example of a mixed cost?

rental costs of $10,000 per month plus $0.30 per machine hour of use

The Darwin Company reports the following information: Sales $76,500 Direct materials used 7,300 Depreciation on factory equipment 4,700 Indirect labor 5,900 Direct labor 10,500 Factory rent 4,200 Factory utilities 1,200 Sales salaries expense 15,600 Office salaries expense 8,900 Indirect materials 1,200 Product costs are a. $24,500 b. $30,300 c. $29,200 d. $35,000

$35,000

A business operated at 100% of capacity during its first month, with the following results: $160.000 Sales (160 units) Production costs (200 units): Direct materials Direct labor Variable factory overhead Fixed factory overhead Operating expenses: Variable operating expenses Fixed operating expenses $100.000 20.000 10,000 4,000 $ 12,000 2,000 134.000 14,000 The amount of manufacturing margin that would be reported on the variable costing income statement is

$56,000

Carter Co. sells two products: Arks and Bins. Last year, Carter sold 14.000 units of Arks and 56,000 units of Bins. Related data are as follows: Unit Selling Price Unit Contribution Margin Product Arks S120 80 Bins Carter Co.'s variable cost of M was

$64

Which of the following would most likely use process costing?

Lawn fertilizer manufacturer

The total factory overhead to be allocated to Nooks is

$488,000

The point where the sales line and the total costs line intersect on the cost-volume-profit chart represents the

break-even point

Contribution margin is

the excess of sales revenue over variable cost

The level of inventory of a manufactured product has increased by 8,000 units during a period. The following data are also available: Variable Fixed $24.00 $10.00 Unit manufacturing costs of the period 8.00 3.00 Unit operating expenses of the period The effect on operating income if variable costing is used rather than absorption costing would be a(n)

$80,000 decrease

Carter Co. sells two products, Arks and Bins. Last year Carter sold 14,000 units of Arks and 56,000 units of Bins. Related data are: Product Unit Selling Price Unit Variable Cost Unit Contribution Margin Arks $120 $80 $40 Bins 80 60 20 Carters cos sales mix last year was

20% Arks; 80% Bins

A business operated at 100% of capacity during its first month and incurred the following costs: Production costs (5,000 units): Direct materials $70.000 20,000 Direct labor 10.000 Variable factory overhead 2,000 $102,000 Fixed factory overhead Operating expenses: Variable operating expenses $17.000 1.000 18.000 Fixed operating expenses If 1,000 units remain unsold at the end of the month and sales total $150,000 for the month, the amount of manufacturing margin that would be reported on the absorption costing income statement is

not reported

Here are the formulas for Exam 2. You can write these down on your scrap paper, or you can keep referencing back to this question during the exam Total Cost = Total Fixed Cost + (Variable Rate x Units of Output) Variable Costing Product Cost = Direct Materials + Direct Labor + Variable Overhead Operating Income = (Price x Number of Units Sold) - (Variable Cost per Unit x Number of Units Sold) - Total Fixed Cost Also: Sales - Variable Cost of Goods Sold = Manufacturing Margin - Variable Operating Expenses = Contribution Margin - Total Fixed Costs = Operating Income Or: Operating Income = (Price x Number of Units Sold) - Cost of Goods Sold - Operating Expenses i. Also: Sales - Cost of Goods Sold = Gross Margin - Operating Expenses = Operating Income Break-Even Units = Total Fixed Cost/Unit Contribution Margin Target Operating Income Sales = (Total Fixed Cost + Target Income/Contribution Margin Ratio Degree of Operating Leverage = Total Contribution Margin/Operating Income

True

Which of the following terms is commonly used to describe the concept whereby the cost of manufactured products is composed of direct materials cost, direct labor cost, and all factory overhead cost?

absorption costing

in which of the following is operating income impacted by changes in inventory levels?

absorption costing only

Which of the following budgets is directly associated with the production budget?

all of these

Managers use managerial accounting information for which of the following purchases?

all of these choices

Principal components of a master budget include

all of these choices

Accountants prefer the variable costing method over the absorption costing method for evaluating the performance of a company because

by using the absorption costing method, income could appear to be higher by producing more inventory.

The systematic examination of the relationships among selling prices, volume of sales and production, costs, and profits is termed___ analysis.

cost volume profit

Most operating decisions of management focus on a narrow range of activity called the

relevant range

Given the following cost and activity observations for Bounty Company's utilities, use the high-low method to determine Bounty's variable utilities cost per machine hour. Round your answer to the nearest cent. Cost $3,100 March April 2,700 May 2,900 June 3,600

$0.11

What is the ending balance of finished goods for Adams company at the end of the first quarter?

$1,067

what is the ending balance of cost of goods sold for Adams company at the end of the first quarter

$1,685

If budgeted beginning finished goods inventory is $8,000, budgeted ending finished goods inventory is $9,400, and budgeted cost of goods sold is $10,260, budgeted cost of goods manufactured should be

$11,660

Zipee Inc.'s unit selling price is $90, the unit variable costs are $40.50, fixed costs are $170,000, and current Sales are 12,000 units. How much will operating income change if sales increase by 5,000 units?

$247,500 increase

Smith company reports the following information cost of goods manufactured $68,250 direct materials used 27,000 direct labor incurred 25,000 work in process inventory, January 1 11,000 Factory overhead is 75% of the cost of direct labor. Work in process inventory on December 31 is

$13,500

Piper Technology's fixed costs are $1,500,000, the unit selling price is $250, and the unit variable costs are $130. The amount of sales (rounded to the nearest whole unit) required to realize an operating income of $200,000 is

$14,167 units

A business operated at 100% of capacity during its first month and incurred the following costs: Production costs (5,000 units): Direct materials Direct labor Variable factory overhead Fixed factory overhead $70.000 20.000 10.000 2,000 $102.000 Operating expenses: Variable operating expenses $17.000 Fixed operating expenses 1,000 18.000 If 1.000 units remain unsold at the end of the month and sales total $150,000 for the month, the amount of contribution margin that would be reported on the variable costing income statement is

$18,200

A firm operated at 90% of capacity for the past year, during which fixed costs were $420,000, variable costs were 40% of sales, and sales were $1,000,000. Operating income was

$180,000

Adirondack Marketing Inc. manufactures two products, A and B. Presently, the company uses a single plantwide factory overhead rate for allocating overhead to products. However, management is considering moving to a multiple department rate system for allocating overhead. Painting Dept. Finishing Dept. Totals Overhead $250.000 75,000 $325,000 Total Direct Labor Hours 10.000 12.000 22.000 DLH per Product 스 16 4 20 B 4 16 20 Using a single plantwide rate (rounded to the nearest cent), the factory overhead allocated per unit of Product A in the Painting Department is

$236.32 per unit

Carter Co. sells two products: Arks and Bins. Last year, Carter sold 14,000 units of Arks and 56,000 units of Bins. Related data are as follows: Unit Selling Price Product Arks Bins $120 80 Unit Variable Cost $80 60 Unit Contribution Margin $40 20 • Carter Co.'s unit contribution margin of M was

$24

If a business had sales of $4,000,000 and a margin of safety of 25%, the break-even point was

$3,000,000

The fabrication Departments factory overhead rare (rounded to the nearest cent) is?

$3.75 per machine hour

Miller and Sons' static budget for 10,000 units of production includes $50,000 for direct materials, $44,000 for direct labor, variable utilities of $5,000, and supervisor salaries of $24,000. A flexible budget for 12,000 units of production would show

direct materials of $60,000, direct labor of $52,800, utilities of $6,000, and supervisor salaries of $24,000

A disadvantage of static budgets is that they

do not allow for possible changes in activity levels

The amount of income under absorption costing will equal the amount of income under variable costing when units manufactured

equal units sold

When Job 117 was completed, direct materials totaled $4,400; direct labor, $5,600; and factory overhead, $2,400. A total of 1,000 units were produced at a per-unit cost of

$12.40

Which of the following are actual factory overhead allocation methods?

Single plant-wide rate, multiple production department rates, and activity based costing methods.

Understanding how costs behave is useful to management for

all of these choices

Which of the following managerial decisions relies on accurate product costing?

all of these choices

Strait Co. manufactures office furniture. During the most productive month of the year, 3,000 desks were manufactured at a total cost of $59,000. In the month of lowest production, the company made 1,125 desks at a cost of $38,000. Using the high-low method of cost estimation, total fixed costs are

$25,400

This information will be used for the following 2 questions. Skagit Company manufactures Hooks and Nooks. The following shows the activities per product and total activity information: Hooks Nooks Units 4.000 8.000 Setups Inspections Assembly (dih) Activity Setups Inspections Assembly (dih) Total Activity-Base Usage 20.000 24.000 28.000 Budgeted Activity Cost $ 60,000 120.000 420,000 The total factory overhead to be allocated to each unit of Hooks is

$33

Graham Company wants to reduce activity costs by $0.30 per unit. The setup activity for a batch of 100 units of Part RR110 currently costs $80 per setup. A process engineer proposes reengineering the setup activity so that it takes 60% of the original cost per setup. By how much will this reduce activity costs per unit? Will more cost savings need to be found?

$0.32;No

This information will be used for the following 3 questions. Aleutian Company produces two products: Rings and Dings. They are manufactured in two departments: Fabrication and Assembly. Data for the products and departments are listed below. Product Rings Dings Number of Units 1,000 2.000 Direct Labor Hours per Unit Machine Hours per Unit All of the machine hours take place in the Fabrication Department, which has estimated total factory overhead of $90,000. All of the labor hours take place in the Assembly Department, which has estimated total factory overhead of $105,000. Aleutian Company uses the multiple production department factory overhead rate method. The Fabrication Department uses machine hours as an allocation base, and the Assembly Department uses direct labor hours. The Assembly Department's factory overhead rate (rounded to the nearest cent) is

$10.50 per direct labor hour

Given the following data Cost of materials - $45,000 Direct labor costs- 48,000 Factory overhead 39,000 Work in process beginning 28,000 work in process ending 18,000 Finished goods beginning 28,000 Finished goods ending 18,000 what is the cost of goods sold?

$152,000

Carter Co. sells two products: Arks and Bins. Last year, Carter sold 14,000 units of Arks and 56,000 units of Bins. Related data are as follows: Product Arks Bins Unit Selling Price $120 80 Unit Variable Cost $80 60 Unit Contribution Margin $40 20 Carter Co.'s unit selling price of M, with M representing one overall company product, was

$88

Motorcycle Manufacturers, Inc., projected sales of 78,000 machines for the year. The estimated January 1 inventory is 6,500 units, and the desired December 31 inventory is 6,000 units. The budgeted production for the year is

$77,500

A plant managers salary is an

indirect cost

Pinnacle Corp. budgeted $700,000 of overhead cost for the current year. Actual overhead costs for the year were $650,000. Pinnacle's plantwide allocation base, machine hours, was budgeted at 100,000 hours. Actual machine hours were 80,000. A total of 100,000 units was budgeted to be produced and 98,000 units were actually produced. Pinnacle's plantwide factory overhead rate for the current year is

$7.00 per machine hour

If a business had sales of $4,000,000 and a margin of safety of 25%, the break-even point was

expected to increase by 48%