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