Accounting 285 Final Exam Tophat Questions

Which of the following costs is an example of a product cost for John Deere? a. The cost of an advertising campaign b. the cost of tires in a large tractor c. depreciation expense of the john deere equipment used in the assembly facility d. wages of john deere assembly plant workers

the cost of tires in a large tractor

Ivy enterprises is considering a special order of its products. Ivy's normal sales price is $15 per unit. The special order sales price is $10/unit, for 10,000 units. Ivy's variable costs are normally $8/unit, but $1/unit in selling expenses would be avoided on the special order. Ivy has capacity to produce 100,000 units and is currently selling 90,000 units. Total fixed costs of 30,000 per year would be unaffected as a result of the special order. What is the impact of accepting the special order on Ivy's income?

$100,000 ($10 x 10,000) - 70,000 ($7 x 10,000) = $30,000

Sturgill Co manufactures footballs for premier college football teams in the SEC. During 2023, Sturgill estimated it would incur $3,500,000 in total manufacturing overhead. Sturgill applies MOH based on direct labor hours and during 2023, estimated it would incur 25,000 of direct labor hours. Calculate the POHR for Sturgill in 2023.

**Simple question compared to ones on exam, there will be more numbers and information on exam** Pre Determined Overhead Rate = total estimated MOH / total estimated activity level (direct labor or machine hours) --> 3.5m / 25,000 = $140 per DL hour ** remember it is the estimated number of hours

Cyclone Inc. has the following unit sales proposed in its budget for next quarter, each unit sells for $24,50. Oct: 22,500 units Nov: 32,000 units Dec: 45,000 uints Cyuclone collects accounts receivable 35% in the month of sale and 65% in the following month. Calculate: What amount is reported as Sales ($) in the Dec sales budget? What amount is reported as cash collections in teh Dec budget?

509,600 (32,000 units x 24,50) x (65%) and then add following month

Cyclone company has the following expected sales (in units) for the first five months of next year: January: 90,000 February: 85,000 March: 87,000 April: 94,000 May: 88,000 It is Cyclone's policy to maintain inventory at month and equal to 20% of the next month's sales. How many units would Cyclone produce in March?

87,000 (March sales) + 18,800 (20% of April Sales= 0.2x 94,000) - 17,400 (beg. inventory 20% x 87,000) = 88,400

Salty's promotes and sells pretzels during sporting events. The following standards are set for Salty's production: 3 oz of dough are required per pretzel at $1.50 per oz, $4.50 of dough per pretzel. During May, Salty produced 2,000 pretzels for the Kentucky Derby.l Also in May, 6,050 ounces of dough were purchased and used in produciton, each ounce of dough purchased cost $1,25. What is the direct material price variance? What is the direct material quantity variance?

AQ (AP-SP)= 6050 (1.25-1.50) = -1512.50 Favorable SP(AQ-SQ) = 1.50(6050-600) = $75 Unfavorable

Which of the following would create an unfavorable direct labor rate variance for Salty's pretzels? A. Direct materials were of poor quality, requiring more material to be used overall. B. Salty's incurred less overtime hours than anticipated. C. Salty's recently provided its employees with an hourly wage increase. D. Salty's employees recently completed a training course to improve efficiency, thus reducing the time to produce each pretzel.

Answer: C Not A: that is overall Not B: hours indicates quantity and less hours is favorable Not D: reducing time would be an indicator of quantity not the rate.

Calculate units and sales dollars required to break even: Sales price: $600/unit Variable expense: $350/unit Total fixed expenses: $150,000 Units sold: 800units

BE (in units): fixed cost/ cm per unit 150,000 / (600-350) = 600 units BE (in sales dollars)= BE point in units * sales price = 600 * 600 = 360,000

If sales increase by 900 how much does net operating income increase? Sales $300,000 Variable Expense $240,000 CM $60,000 Fixed Expense $20,000 Net Operating Income $40,000 *Unit Sales = 3,000

CM / units = 60,000/3,000 = $20 * 900 new units = $18,000 increase in net operating income

Manning Co manufactures football jerseys. Each jersey has $65 in variable product osts, and $5 in variable selling and admin costs. Each jersey has a selling price of $150. During July, Manning incurred $100,000 in fixed selling costs and sold 20,000 jerseys. What is the total contribution margin Manning recognized in their July income statement?

Sales price - variable cost = 150 - 70 = $80/ unit, CM x 20,000 jerseys ** CM doesn't include fixed costs

Which of the following costs is an example of a period cost for John Deere? a. The cost of an advertising campaign b. the cost of tires in a large tractor c. depreciation expense of the john deere equipment used in the assembly facility d. wages of john deere assembly plant workers

a. the cost of advertising campaign

Which of the following cost is NOT relavant to determine if a special order should be accepted? a. Additional fixed costs incurred to process the special order b. variable product costs c. fixed costs that do not change d. incremental revenue...

c. fixed costs that do not change

Swift Industries, a concert promotion company and the following info used in preparing the budget: - The activity driver is the number of concerts provided - The expected revenue per concert is $6,000 - Swift expects to promote 100 concerts in the planning budget Budgeted costs in the planning budget include: Labor is $100,000 per year plus $2,000 per concert Admin expenses are $80,000 per year Materials expense is $500 per concert Swift actually promoted 105 concerts during the year. A. What amount of Net Operating Income does Swift expect in the planning budget? B. What amount of NOI does Swift expect in the flexible budget?

didn't get it