ACC 349 Final Exam PLEASE DOWNLOAD THE ANSWERS HERE!!!1) What is the best way to handle manufacturing overhead costs in order to get themost timely job cost information?2) At the end of the year, manufacturing overhead has been overapplied. Whatoccurred to create this situation?3) Luca Company overapplied manufacturing overhead during 2006. Which one ofthe following is part of the year end entry to dispose of the overapplied amountassuming the amount is material4) Which of the following would be accounted for using a job order cost system?5) Which one of the following is NEVER part of recording the issuance of rawmaterials in a job order cost system?Finished Goods Inventory is debited when goods are transferred from work inprocess to finished goods, not when raw materials are issued for a job.6. What is unique about the flow of costs in a job order cost system?7) Which one of the following costs would be included in manufacturing overhead ofa lawn mower manufacturer?Depreciation on testing equipment would be included in manufacturing overheadbecause it is indirectly associated with the finished product.8) What broad functions do the management of an organization perform?9) Which of the following represents the correct order in which inventories arereported on a manufacturer’s balance sheet?10) In traditional costing systems, overhead is generally applied based on11) An activity that has a direct cause-effect relationship with the resourcesconsumed is a(n)12) A well-designed activity-based costing system starts with13) Which of the following factors would suggest a switch to activity-based costing?14) All of the following statements are correct EXCEPT that15) What sometimes makes implementation of activity-based costing difficult inservice industries is16) One of Astro Companys activity cost pools is machine setups, with estimatedoverhead of $150,000. Astro produces sparklers (400 setups) and lighters (600setups). How much of the machine setup cost pool should be assigned to sparklers?17) Poodle Company manufactures two products, Mini A and Maxi B. Poodlesoverhead costs consist of setting up machines, $800,000; machining, $1,800,000;and inspecting, $600,000. Information on the two products is: Mini A Maxi BDirect labor hours 15,000 25,000Machine setups 600 400Machine hours 24,000 26,000Inspections 800 700
Overhead applied to Mini A using activity-based costing is18) Poodle Company manufactures two products, Mini A and Maxi B. Poodlesoverhead costs consist of setting up machines, $800,000; machining, $1,800,000;and inspecting, $600,000. Information on the two products is: Mini A Maxi BDirect labor hours 15,000 25,000Machine setups 600 400Machine hours 24,000 26,000Inspections 800 700 Overhead applied to Maxi B using activity-based costing is19) Seran Company has contacted Truckel Inc. with an offer to sell it 5,000 of thewickets for $18 each. If Truckel makes the wickets, variable costs are $11 per unit.Fixed costs are $12 per unit; however, $5 per unit is avoidable. Should Truckel makeor buy the wickets?20) Rosen, Inc. has 10,000 obsolete calculators, which are carried in inventory at acost of $20,000. If the calculators are scrapped, they can be sold for $1.10 each (forparts). If they are repackaged, at a cost of $15,000, they could be sold to toy storesfor $2.50 per unit. What alternative should be chosen, and why?21) The cost to produce Part A was $10 per unit in 2005. During 2006, it hasincreased to $11 per unit. In 2006, Supplier Company has offered to supply Part A for$9 per unit. For the make-or-buy decision22) Hartley, Inc. has one product with a selling price per unit of $200, the unitvariable cost is $75, and the total monthly fixed costs are $300,000. How much isHartley’s contribution margin ratio?23. Which statement describes a fixed cost?24) Disney’s variable costs are 30% of sales. The company is contemplating anadvertising campaign that will cost $22,000. If sales are expected to increase$40,000, by how much will the companys net income increase?25) Variable costing26) Which cost is NOT charged to the product under variable costing?27) Orbach Company sells its product for $40 per unit. During 2005, it produced60,000 units and sold 50,000 units (there was no beginning inventory). Costs perunit are: direct materials $10, direct labor $6, and variable overhead $2. Fixed costsare: $480,000 manufacturing overhead, and $60,000 selling and administrativeexpenses. The per unit manufacturing cost under absorption costing is28) Which of the following is NOT considered an advantage of using standard costs?29) The difference between a budget and a standard is that30) If a company is concerned with the potential negative effects of establishingstandards, they should31) The per-unit standards for direct materials are 2 gallons at $4 per gallon. Lastmonth, 11,200 gallons of direct materials that actually cost $42,400 were used toproduce 6,000 units of product. The direct materials quantity variance for lastmonth was32) The standard number of hours that should have been worked for the output
attained is 8,000 direct labor hours and the actual number of direct labor hoursworked was 8,400. If the direct labor price variance was $8,400 unfavorable, and thestandard rate of pay was $18 per direct labor hour, what was the actual rate of payfor direct labor?33) The total variance is $10,000. The total materials variance is $4,000. The totallabor variance is twice the total overhead variance. What is the total overheadvariance?34) Manufacturing overhead costs are applied to work in process on the basis of35) The overhead volume variance relates only to36) If the standard hours allowed are less than the standard hours at normal capacity37) Gottberg Mugs is planning to sell 2,000 mugs and produce 2,200 mugs duringApril. Each mug requires 2 pounds of resin and a half hour of direct labor. Resin costs$1 per pound and employees of the company are paid $12.50 per hour.Manufacturing overhead is applied at a rate of 120% of direct labor costs. Gottberghas 2,000 pounds of resin in beginning inventory and wants to have 2,400 pounds inending inventory. How much is the total amount of budgeted direct labor for April?38) Lewis Hats is planning to sell 600 straw hats. Each hat requires a half pound ofstraw and a quarter hour of direct labor. Straw costs $0.20 per pound andemployees of the company are paid $22 per hour. Lewis has 80 pounds of straw and40 hats in beginning inventory and wants to have 50 pounds of straw and 60 hats inending inventory. How many units should Lewis Hats produce in April?39) At January 1, 2004, Barry, Inc. has beginning inventory of 4,000 widgets. Barryestimates it will sell 35,000 units during the first quarter of 2004 with a 10% increasein sales each quarter. Barry’s policy is to maintain an ending inventory equal to 25%of the next quarter’s sales. Each widget costs $1 and is sold for $1.50. How much isbudgeted sales revenue for the third quarter of 2004?40) In most cases, prices are set by the41) A company must price its product to cover its costs and earn a reasonable profitin42) The cost-plus pricing approachs major advantage is43) What does cost accounting measure, record, and report44) Why is factory overhead applied to products and jobs by manufacturingcompanies?45) In a job order cost accounting system, the Work in Process account is46) Managerial accounting47) A well-designed activity-based costing system starts with48) Which of the following is a value-added activity?49) Which of the following is a nonvalue-added activity?50) Each of the following is a limitation of activity-based costing EXCEPT51) Ace Company sells office chairs with a selling price of $25 and a contributionmargin per unit of $15. It takes 3 machine hours to produce one chair. How much isthe contribution margin per unit of limited resource?52) Walton, Inc. is unsure of whether to sell its product assembled or unassembled.The unit cost of the unassembled product is $16, while the cost of assembling each
unit is estimated at $17. Unassembled units can be sold for $55, while assembledunits could be sold for $71 per unit. What decision should Walton make?53) Which cost is charged to the product under variable costing?54) Which of the following statements is FALSE?55) If standard costs are incorporated into the accounting system56) A standard cost is57) The per-unit standards for direct labor are 2 direct labor hours at $12 per hour. Ifin producing 2,400 units, the actual direct labor cost was $51,200 for 4,000 directlabor hours worked, the total direct labor variance is58) If the standard hours allowed are less than the standard hours at normalcapacity, the volume variance59) Which of the following statements is FALSE?60) Looker Hats is planning to sell 600 felt hats, and 700 will be produced duringJune. Each hat requires a half yard of felt and a quarter hour of direct labor. Feltcosts $3.00 per yard and employees of the company are paid $20 per hour. Howmuch is the total amount of budgeted direct labor for June?61) In cost-plus pricing, the markup percentage is computed by dividing the desiredROI per unit by the62) Which would be an appropriate cost driver for the ordering and receiving activitycost pool?63) The first step in activity-based costing is to64) Which one of the following is required in order for an activity base to be useful incost behavior analysis?65) Which cost is NOT charged to the product under absorption costing?66) A company developed the following per-unit standards for its product: 2 poundsof direct materials at $6 per pound. Last month, 2,000 pounds of direct materialswere purchased for $11,400. The direct materials price variance for last month was67) The standard rate of pay is $5 per direct labor hour. If the actual direct laborpayroll was $19,600 for 4,000 direct labor hours worked, the direct labor price (rate)variance is68) Waco’s Widgets plans to sell 22,000 widgets during May, 19,000 units in June,and 20,000 during July. Waco keeps 10% of the next month’s sales as endinginventory. How many units should Waco produce during June?69) In cost-plus pricing, the target selling price is computed as70) Which one of the following is an important feature of a job order cost system?71) Which of the following represents the two basic types of cost accountingsystems?72) Which one of the following is indirect labor considered?73) Which of the following is an element of manufacturing overhead?74) Which of the following is NOT typical of traditional costing systems?75) Max Company uses 10,000 units of Part A in producing its products. A supplieroffers to make Part A for $7. Max Company has relevant costs of $8 a unit tomanufacture Part A. If there is excess capacity, the opportunity cost of buying PartA from the supplier is
76) H55 Company sells two products, beer and wine. Beer has a 10 percent profitmargin and wine has a 12 percent profit margin. Beer has a 27 percent contributionmargin and wine has a 25 percent contribution margin. If other factors are equal,which product should H55 push to customers?77) During December, the capital budget indicates a $280,000 purchase ofequipment. The ending November cash balance is budgeted to be $40,000. Cashreceipts are $840,000, and cash disbursements are $610,000 during December. Thecompany wants to maintain a minimum cash balance of $20,000. What is theminimum cash loan that must be planned to be borrowed from the bank duringDecember?78) Prices are set by the competitive market when79) The standards and rules that are recognized as a general guide for financialreporting are called __________.80) Hess, Inc. sells a single product with a contribution margin of $12 per unit andfixed costs of $74,400 and sales for the current year of $100,000. How much is Hess’sbreak even point?81) In what situations will a static budget be most effective in evaluating amanagers effectiveness?82) The primary purpose of the statement of cash flows is to __________.83) The category that is generally considered to be the best measure of a companysability tocontinue as a going concern is84) Of the items below, the one that appears first on the statement of cash flows is85) Which of the following transactions does not affect cash during a period?86) One of Lara Dole Companys activity cost pools is machine setups, withestimated overhead of $300,000. Dole produces flares (400 setups) and health packs(600 setups). How much of the machine setup cost pool should be assigned toflares?87) As compared to a high-volume product, a low-volume product ACC 349 Final Exam PLEASE DOWNLOAD THE ANSWERS HERE!!!