ACCT 321 QUIZ 1

1. Buy here:
http://theperfecthomework.com/acct-321-quiz-1/
(Multiple Choice)
1. Following are the operating results of the two segments of
Parklin Corporation:
Segment A Segment B Total
Sales $10 000 $15 000 $25 000
Variable costs of
goods sold
4 000 8 500 12 500
Fixed costs of
goods sold
1 500 2 500 4 000
Gross margin 4 500 4 000 8 500
Variable selling and
administrative
2 000 3 000 5 000
Fixed selling and
administrative
1 500 1 500 3 000
Operating income
(loss)
$1 000 ($500) $500
Variable costs of goods sold are directly related to the operating
segments. Fixed costs of goods sold are allocated to each
segment based on the number of employees. Fixed selling and
administrative expenses are allocated equally. If Segment B is
eliminated, $1,500 of fixed costs of goods sold would be
eliminated.
Assuming Segment B is closed, the effect on
operating income would be

2. a. an increase of
$500.
b. an increase of
$2,000.
c. a decrease of
$2,000.
d. a decrease of
$2,500.
(Short Answer)
2. Greg Morrison recently graduated from mortuary school. He
is considering opening his own funeral home. A funeral home is
a high-fixed cost business, as it requires considerable
expenditures for facilities, labor, and equipment, no matter how
many families are served. Assume the annual fixed cost of
operations is $800,000. Further assume that the only
significant variable cost relates to burial containers like urns and
caskets. An average casket costs $1,200. Greg's banker has
asked a variety of questions in contemplation of providing a
loan for this business.
a. If the average family is charged $6,000 for services and a
burial container, how many families must be served to clear the
break-even point?
b. If the banker believes Greg will only serve 100 families
during the first year in business, how much will the business
lose during its first year of operation?
c. If Greg believes his profits will be at least $100,000 during
the first year, how much is he anticipating for total revenue?
d. The banker has suggested that Greg can reduce his fixed
costs by $150,000 if he will not buy any vehicles. Greg can
instead rent vehicles as needed. The variable cost of renting is
$700 per family served. Will this suggestion help Greg reach
the break-even point sooner?

3. (Multiple Choice)
3. Which is the best cost accumulation procedure to use when there is a continuous mass
production of like units?
A. Process.
B. Standard.
C. Job order.
D. ABC.
E. None of these.
(Multiple Choice)
4. An equivalent unit of material
is equal to:
A. the amount of material necessary to
complete one unit of production.
B. a unit of work in process
inventory.
C. the amount of material necessary to start a unit of
production into work in process.
D. fifty percent of the material cost of a unit of
finished goods.
E. None of these.
(True or False)

4. 5. To apply process costing, there is no need to decide on a specific methods such as
FIFO or weighted-average.
(Short Answer )
6. Explain the difference between contribution margin and
gross margin.
Zeus Corporation produces cultured diamonds via a secretive process that grows the
diamonds in a vacuum chamber filled with a carbon gas cloud. The diamonds are produced
in a single continuous process, and Zeus uses the weighted-average process costing
method of accounting for production.
Below is the company's calculation of cost per equivalent unit for October. During October,
the company completed and transferred 8,000 diamonds to finished goods. An additional
4,000 units were still in process at the end of the month. The ending work in process was
60% complete with respect to direct materials and 40% complete with respect to both
elements of conversion cost.