Accounting Principles 2 - Exam 3: Chapters 19, 20, 21

CH21 If fixed costs are $46,800, the unit selling price is $42, and the unit variable costs are $24, what is the break-even sales (units) if the variable costs are decreased by $2?

2,340

CH21 If variable costs per unit increased because of an increase in hourly wage rates, the break-even point would

increase

Which of the following would use a process costing system?

lumber mill

CH21 Which of the following costs is a mixed cost?

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

CH19 During the period, labor costs incurred on account amounted to $175,000, including $150,000 for production orders and $25,000 for general factory use. Factory overhead applied to production was $23,000. The entry to record the factory overhead applied to production is

Work in Process_______________23,000 _____________Factory Overhead____________23,000

CH21 If fixed costs are $450,000, the unit selling price is $75, and the unit variable costs are $50, what are the old and new break-even sales (units) if the units selling price increases by $10?

18,000 units and 12,857 units

CH20 The four steps necessary to complete a cost of production report in a process cost system are 1. allocate costs to transferred and partially completed units 2. determine the units to be assigned costs 3. determine the cost per equivalent unit 4. calculate equivalent units of production The correct ordering of the steps is

2, 4, 3, 1

CH21 Lee industry sales are $525,000, variable costs are 53% of sales, and operating income is $19,000. What is the contribution margin ratio?

47%

CH19 Which of the following is a product cost?

Drill bits for a drill press used in the plant assembly area

47,200

CH20 The following unit data were assembled for the assembly process of the Super Co. for the month of April. Direct materials are added at the beginning of the process. Conversion costs are added uniformly over the production process. The company uses the FIFO method. __________________________________________________________ __Units__ Beginning work in process, (60% completed)____________________________________5,000 Units started in April_______________________________48,000 Ending work in process, (30% completed)___4,000 The number of equivalent units produced with respect to conversion costs is

$88

CH21 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_________________________Arks_____________Bins Unit Selling Price_____________$120______________80 Unit Variable Cost____________$80_______________60 Unit Contribution Margin__$40_______________20 What was Carter Co.'s unit selling price of E, with E representing one overall "enterprise" product?

CH19 The cost of production of completed and transferred goods during the period amounted to $540,000, and the finished products shipped to customers had production costs of $375,000. The entry to record the transfer of costs from finished goods to cost of goods sold is

Cost of Goods Sold________375,000 __________Finished Goods___________________375,000

CH19 A manufacturing company applies factory overhead based on direct labor hours. At the beginning of the year, it estimated that factory overhead costs would be $360,000 and direct labour hours would be 30,000. Actual manufacturing overhead costs incurred were $377,200, and actual direct labor hours were 36,000. The entry to apply the factory overhead costs for the year would include a

Credit to factory overhead for $432,000

CH19 The entry to record the flow of direct labor costs into production in a job order cost accounting system is to

Debit___Work in Process, Credit___Wages Payable

CH19 Materials purchased on account during the month totaled $190,000. Material requisitioned and placed in production totaled $165,000. The journal entry to record the material purchase on account is

Materials______________________190,000 _______Accounts Payable_________________190,000

CH20 Department S had no work in process at the beginning of the period. It added 12,000 units of direct materials during the period at a cost of $84,000; 9,000 units were completed during the period; and 3,000 units were 30% completed as to labor and overhead at the end of the period. All materials are added at the beginning of the process. Direct labor was $49,500 and factory overhead was $9,900. The total conversion costs for the period were

$59,400

CH21 The three most common cost behavior classifications are

fixed costs, variable costs, and mixed costs

CH19 Sanders Inc. has applied $567,988 of overhead to jobs in the cost ledger. Actual overhead at the end of the year is $575,000. The adjustment for over or underapplied overhead is

$7,012 underapplied, increase Cost of Goods Sold

CH19 The Thomlin Company forecasts that total overhead for the current year will be $15,000,000 with 300,000 total machine hours. Year to date, the actual overhead is $16,000,000 and the actual machine hours are 330,000 hours. If the 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 overapplied

$24

CH21 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_________________________Arks_____________Bins Unit Selling Price_____________$120______________80 Unit Variable Cost____________$80_______________60 Unit Contribution Margin__$40_______________20 What was Carter Co.'s weighted contribution margin of the products sold?

CH19 During the period, labor costs incurred on account amounted to $175,000, including $150,000 for production orders and $25,000 for general factory use. In addition, factory overhead charged to production was $32,000. The entry to record the direct labor costs is

Work in Process____________________150,000 ___________Wages Payable_________________________150,000

CH19 In a job order cost accounting system, when goods that have been ordered are received, the receiving department personnel count, inspect the goods, and complete a

receiving report

CH21 Which of the following describes the behavior of a variable cost per unit?

remains constant with changes in the activity level

CH20 For which of the following businesses would a process cost system be appropriate?

shampoo manufacturer

CH21 As production increases, variable costs per unit

stay the same

CH20 Which of the following is *not* a characteristic of a process cost system?

the system measures costs for each completed job

CH21 A firm operated at 80% of capacity for the past year, during which fixed costs were $330,000, variable costs were 70% of sales, and sales were $1,000,000. Operating profit (loss) was

$(30,000)

CH21 Bryce Co. sales are $914,000, variable costs are $498,130, and operating income is $196,000. What is the contribution margin ratio?

45.5%

CH21 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

CH21 Assume that Corn Co. sold 8,000 units of product A and 2,000 units of product B during the past year. The unit contribution margins for Products A and B are $30 and $60, respectively. Corn has fixed costs of $378,000. The break-even point in units is

10,500 units

CH21 If fixed costs are $1,200,000, the unit selling price is $240, and the unit variable costs are $110, what is the amount of sales required to realize an operating income of $200,000?

10,769 units

CH20 Department B had 3,000 units in Work in Process that were 25% completed at the beginning of the period at a cost of $12,500. 13,700 units of direct materials were added during the period at a cost of $28,700. 15,000 units were completed during the period, and 1,700 units were 95% completed at the end of the period. All materials are added at the beginning of the process. Direct labor was $32,450 and factory overhead was $18,710. The number of equivalent units of production for the period for materials, if the first-in, first-out method is used to cost inventories was

13,700

CH20 Department K had 3,000 units 45% completed in process at the beginning of the period; 17,000 units completed during the period; and 1,200 units 40% completed at the end of the period. What was the number of equivalent units of production for the period for conversion if the first-in, first-out method is used to cost inventories? Assume the completion percentage applies to both direct materials and conversion cost.

16,130

CH20 In a process cost system, the cost of completed production in Department A is transferred to Department B by which of the following entries?

debit Work in Process--Dept. B; credit Work in Process--Dept. A

CH21 As production increases, the fixed cost per unit

decreases

CH21 If fixed costs are $500,000, the unit selling price is $55, and the unit variable costs are $30, what is the break-even sales (units) if fixed costs are increased by $80,000?

23,200 units

CH19 The recording of the jobs completed would include a debit to

Finished Goods

CH19 A manufacturing company applies factory overhead based on direct labor hours. At the beginning of the year, it estimated that the factory overhead costs would be $360,000 and direct labor hours would be 30,000. Actual factory overhead costs incurred were $377,200, and actual direct labor hours were 36,000. What is the amount of overapplied or underapplied manufacturing overhead at the end of the year?

$54,800 overapplied

CH19 The 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

CH19 A manufacturing company applies factory overhead based on direct labor hours. At the beginning of the year, it estimated that factory overhead costs would be $360,000 and direct labor hours would be 30,000. Actual manufacturing overhead costs incurred were $377,200, and actual direct labor hours were 36,000. What is the predetermined overhead rate per direct labor hour?

$12.00

CH19 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

CH20 Department E had 4,000 units in Work in Process that were 40% completed at the beginning of the period at a cost of $12,500. During the period, 14,000 units of direct materials were added at a cost of $28,700, and 15,000 units were completed. At the end of the period, 3,000 units were 75% completed. All the materials are added at the beginning of the process. Direct labor was $32,450 and factory overhead was $18,710. The number of equivalent units of production for the period for conversion cost

15,650

CH20 Department B had 3,000 units in Work in Process that were 25% completed at the beginning of the period at a cost of $12,500. 13,700 units of direct materials were added during the period at a cost of $28,700. 15,00 units were completed during the period, and 1,700 units were 95% completed at the end of the period. All materials are added at the beginning of the process. Direct labor was $32,450 and factory overhead was $18,710. The number of equivalent units of production for the period for conversion cost

15,865

CH20 Department S had 500 units 60% completed in process at the beginning of the period; 9,000 units completed during the period; and 600 units 30% completed at the end of the period. What was the number of equivalent units of production for the period for conversion if the first-in, first-out method is used to cost inventories? Assume the completion percentage applies to both direct materials and conversion cost.

8,880

4,200 units

CH20 The following production data were taken from the records of the Finishing Department for June: Inventory in process, June 1 (30% completed)__________________________4,000 units Completed units during June__________65,000 units Ending Inventory (60% complete)____7,000 units What is the number of conversion equivalent units of production in the June 30 Finishing Department inventory, assuming that the first-in, first-out method is used to cost inventories?

$64

CH21 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_________________________Arks_____________Bins Unit Selling Price_____________$120______________80 Unit Variable Cost____________$80_______________60 Unit Contribution Margin__$40_______________20 What was Carter Co.'s variable cost of E?

48,000

CH20 The following unit data were assembled for the assembly process of the Super Co. for the month of April. Direct materials are added at the beginning of the process. Conversion costs are added uniformly over the production process. The company uses the FIFO method. _______________________________________________ __Units__ Beginning work in process, (60% completed)_________________________5,000 Units started in April____________________48,000 Ending work in process, (30% completed)_________________________4,000 The number of equivalent units produced with respect of direct materials costs is

$0.11

CH21 Given the following cost and activity observations for Bounty Company's utilities, use the high-low method to calculate Bounty' variable utilities costs per machine hour. Round your answer to the nearest cent. ________________________Cost_______________Machine Hours March_______________$3,100_____________15,000 April_________________2,700______________10,000 May__________________2,900______________12,000 June__________________3,600______________18,000

CH19 The Cavy Company estimates that the factory overhead for the following year will be $1,250,000. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 40,000 hours. The machine hours for the month of April for all of the jobs were 4,780. If the actual factory overhead totaled $141,800, determine the over- or underapplied amount for the month.

$7,575 overapplied

40,000 units

CH21 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_________________________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, what was Carter Co.'s break-even point in units?

CH20 Department A had 5,000 units in work in process that were 60% completed as to labor and overhead at the beginning of the period; 34,000 units of direct materials were added during the period; 31,000 units were completed during the period; and 2,000 units were 80% completed as to labor and overhead at the end of the period. All materials are added at the beginning of the process. The first-in, first-out method is used to cost inventories. The number of equivalent units of production for conversion costs for the period was

29,600

CH20 Department M had 600 units 60% completed in process at the beginning of June, 6,000 units completed during June, and 700 units 30% completed at the end of June. Using the first-in, first-out method of inventory costing, what was the number of equivalent units of production for conversion costs for the period?

5,850 units