ACCT505 Week 8 Final Exam 100% Correct Answers Download Here: http://homeworkfox.com/tutorials/general-questions/12399/acct505-week-8-final-exam-100- correct-answers/1. (TCO C) Silver City, Inc., has collected the following operating information below for its currentmonths activity. Using this information, prepare a flexible budget analysis to determine how wellSilver City performed in terms of cost control.Actual Costs IncurredStatic BudgetActivity level (in units)5,2505,178Variable Costs:Indirect materials$24,182$23,476Utilities$22,356$22,674Fixed Costs:Administration$63,450$65,500
Rent$65,317$63,9042. (TCO D) Globe Co. manufactures automatic door openers. The company uses 15,000 electronichinges per year as a component in the assembly of the openers. You have been engaged by Globe toassist with an evaluation of whether the company should continue producing the hinges or purchasethem from an outside vendor.The Accounting Department provided the following detail regarding the annual cost to produceelectronic hinges:Direct materials$54,000Direct labor60,000Variable manufacturing overhead36,000Fixed manufacturing overhead90,000Total costs$240,000The Procurement Department provided the following supplier pricing:Supplier A price per hinge$11.00Supplier B price per hinge$10.75Supplier C price per hinge$10.50The supplier pricing was obtained in response to a formal request for proposal (RFP). Procurement hasdetermined these suppliers meet Globes technical specifications and quality requirements.
If Globe stops producing the part internally, 10% of the fixed manufacturing overhead would beeliminated.Required: Prepare a make-or-buy analysis showing the annual advantage or disadvantage (in dollars) ofaccepting an outside suppliers offer. Should the company buy the parts? If so, from which supplier?3. (TCO E) Mesa Company produces a single product. Operating data for the company and itsabsorption costing income statement for the last year are presented below:Units in beginning inventory2,000Units produced9,000Units sold10,000Sales$100,000Less cost of goods sold:Beginning inventory12,000Add cost of goods manufactured54,000Goods available for sale66,000Less ending inventory6,000Cost of goods sold60,000Gross margin40,000
Less selling and admin.expenses28,000Net operating income$12,000Variable manufacturing costs are $4 per unit. Fixed factory overhead totals $18,000 for the year. Thisoverhead was applied at a rate of $2 per unit. Variable selling and administrative expenses were $1 perunit sold.Required: Prepare a new income statement for the year using variable costing. Comment on thedifferences between the absorption costing and the variable costing income statements.4. (TCO A) The following data (in thousands of dollars) have been taken from the accounting recordsof the White Sands Corporation for the just-completed year.Sales1,150Raw materials inventory, beginning15Raw materials inventory, ending40Purchases of raw materials150Direct labor250Manufacturing overhead300Administrative expenses500Selling expenses300
Work in process inventory, beginning100Work in process inventory, ending150Finished goods inventory, beginning80Finished goods inventory, ending120Use the above data to prepare (in thousands of dollars) a schedule of Cost of Goods Manufactured anda Schedule of Cost of Goods Sold for the year. In addition, what is the impact on the financialstatements if the ending finished goods inventory is overstated or understated?1. (TCO F) Farmington Corporation uses the weighted-average method in its process costing system.Data concerning the first processing department for the most recent month are listed below.Work in process, beginning:Units in beginning work-in-process inventory400Materials costs$6,900Conversion costs$2,500Percentage complete for materials80%Percentage complete for conversion15%Units started into production during the month6,000Units transferred to the next department during the month
5,000Materials costs added during the month$112,500Conversion costs added during the month$210,300Ending work in process:Units in ending work-in-process inventory1,200Percentage complete for materials60%Percentage complete for conversion30%Required: Calculate the equivalent units for materials (using the weighted-average method) for themonth in the first processing department.2.(TCO G) - (Ignore income taxes in this problem.) Tennessee Co. is considering the production ofan exterior paint that will require the purchase of new mixing machinery. The machinery will cost$700,000, is expected to have a useful life of 12 years, and is expected to have a salvage value of$100,000 at the end of 12 years. The machinery will also need a $40,000 overhaul at the end of Year 7.A $50,000 increase in working capital will be needed for this investment project. The working capitalwill be released at the end of the 12 years. The new paint is expected to generate net cash inflows of$120,000 per year for each of the 12 years. Tennessee’s discount rate is 14%.Required:a. What is the net present value of this investment opportunity?b. Based on your answer to (a) above, should Tennessee go ahead with the new paint?3. (TCO B) Winslow Corporation produces and sells a single product. Data concerning that productappear below.Selling price per unit$130.00
Variable expense per unit$27.30Fixed expense per month$165,3Required:a) Determine the monthly break-even in unit sales. Show your work!b) Determine the monthly break-even in dollar sales. Show your work!1. (TCO F) Manchester, Inc. bases its predetermined overhead rate on the estimated machine hours forthe upcoming year. Data for the upcoming year appear below.Estimated machine hours85,000Estimated variable manufacturing overhead$5.55 per machine hourEstimated total fixed manufacturing overhead$951,888Required:Compute the companys predetermined overhead rate.2. (TCO F) Memphis Corporation is preparing its cash budget for February. The budgeted beginningcash balance is $27,000. Budgeted cash receipts total $136,000 and budgeted cash disbursements total$128,000. The desired ending cash balance is $50,000. The company can borrow up to $110,000 at anytime from a local bank, with interest not due until the following month.Required:Prepare the companys cash budget for February in good form. Make sure to indicate what borrowing,if any, would be needed to attain the desired ending cash balance.