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1. ACCT 505 Week 4 Midterm –
New 2016
Click Link Below To Buy:
https://hwaid.com/shop/acct-505-week-4-midterm-new-2016/
Contact Us:
hwaidservices@gmail.com
ACCT 505 Week 4 Midterm – New 2016
ACCT 505 Week 4 Midterm – New 2016
1. (TCO A) Direct material cost is a part of (Points :
6)
Conversion Cost NO…. Prime Cost NO.
Conversion Cost YES…. Prime Cost NO.
Conversion Cost YES…. Prime Cost YES.
Conversion Cost NO…. Prime Cost YES.

2. Question 2.2. (TCO A) Total fixed costs (Points : 6)
will increase with increases in activity.
will decrease with increases in activity.
are not affected by activity.
should be ignored in making decisions because they can never change.
Question 3.3. (TCO A) Property taxes on a company’s
factory building would be classified as a(n) (Points : 6)
variable cost.
opportunity cost.
period cost.
product cost.
Question 4.4. (TCO C) When the activity level is
expected to increase within the relevant range, what
effects would be anticipated with respect to each of the
following? (Points : 6)
Fixed costs per unit decrease and variable costs per unit do not change.
Fixed costs per unit increase and variable costs per unit do not change.
Fixed costs per unit do not change and variable costs per unit do not change.
Fixed costs per unit do not change and variable costs per unit increase.

3. Question 5.5. (TCO B) Which of the following
statements is true?
I. Overhead application may be made slowly as a job is
worked on.
II. Overhead application may be made in a single
application at the time of completion of the job.
III. Overhead application should be made to any job
not completed at year end in order to properly value
the work in process inventory. (Points : 6)
Only statement I is true.
Only statement II is true.
Both statements I and II are true.
Statements I, II, and III are true.
Question 6.6. (TCO B) Under a job-order costing
system, the product being manufactured (Points : 6)
is homogeneous.
passes from one manufacturing department to the next before being completed.
can be custom manufactured.
has a unit cost that is easy to calculate by dividing total production costs by the
units produced.
Question 7.7. (TCO F) Equivalent units for a process
costing system using the FIFO method would be equal

4. to (Points : 6)
units completed during the period, plus equivalent units in the ending work-in-
process inventory.
units started and completed during the period, plus equivalent units in the ending
work-in-process inventory.
units completed during the period and transferred out.
units started and completed during the period, plus equivalent units in the ending
work-in-process inventory, plus work needed to complete units in the beginning
work-in-process inventory.
Question 8.8. (TCO C) The contribution margin
equals (Points : 6)
sales – expenses.
sales – variable costs.
sales – cost of goods sold.
sales – fixed costs.
Question 9.9. (TCO C) Which of the following
would not affect the break-even point? (Points : 6)
Variable expense per unit
Number of units sold
Total fixed expenses
Selling price per unit

5. Question 10.10. (TCO D) Under variable
costing, (Points : 6)
inventory costs will be lower than under absorption costing.
inventory costs will be higher than under absorption costing.
net operating income will always be lower than under absorption costing.
net operating income will always be higher than under absorption costing.
 (TCO A)The following data (in thousands of dollars) have been taken from the
accounting records of Larop Corporation for the just-completed year.
Sales $950
Purchases of raw materials $225
Direct labor $250
Manufacturing overhead $295
Administrative expenses $150
Selling expenses $140
Raw materials inventory, beginning $30
Raw materials inventory, ending $45
Work-in-process inventory, beginning $20
Work-in-process inventory, ending $55
Finished goods inventory, beginning $100
Finished goods inventory, ending $135

6. Prepare a Schedule of Cost of Goods Manufactured statement in the text box
below. (Points : 15)
Question 2.2. (TCO B) The Nebraska Company manufactures a product that
goes through three processing departments. Information relating to activity in the
first department during June is given below.
Percentage Completed
Units Materials Conversion
Work in
process, June
1
140,000 65% 45%
Work in
process, Jun
30
120,000 75% 65%
The department started 580,000 units into production during the month and
transferred 600,000 completed units to the next department.
Required: Compute the equivalent units of production for the first department for
June, assuming that the company uses the weighted-average method of
accounting for units and costs.(Points : 20)
Question 3.3. (TCO C) A tile manufacturer has supplied the following data.
Boxes of tile produced and sold 625,000
Sales revenue $2,975,000
Variable manufacturing expense $1,720,000
Fixed manufacturing expense $790,000

7. Variable selling and admin expense $152,000
Fixed selling and admin expense $133,000
Net operating income $180,000
Required:
Calculate the company’s unit contribution margin.
Calculate the company’s contribution margin ratio.
If the company increases its unit sales volume by 5% without increasing its fixed
expenses, what would the company’s net operating income be? (Points : 25)
Question 4.4. (TCO D) The Hampton Company produces and sells a single
product. The following data refer to the year just completed.
Selling price $450
Units in beginning inventory 0
Units produced 25,000
Units sold 22,000
Variable costs per unit:
Direct materials $150
Direct labor $75
Variable manufacturing overhead $25
Variable selling and admin $15
Fixed costs:
Fixed manufacturing overhead $275,000
Fixed selling and admin $200,000

8. Required:
Compute the cost of a single unit of product under both the absorption costing
and variable costing approaches.
Prepare an income statement for the year using absorption costing.
Prepare an income statement for the year using variable costing. (Points : 30)
(TCO A) Wages paid to an assembly line worker in a factory are a
(TCO A) A cost incurred in the past that is not relevant to any current decision is
classified as a(n)
(TCO A) Depreciation of office buildings and office equipment is also known as
(TCO A) When the activity level is expected to increase within the relevant range,
what effects would be anticipated with respect to each of the following?
(TCO F) Which of the following statements is true?
(TCO F) A job-order cost system is employed in those situations where

9. (TCO F) The FIFO method only provides a major advantage over the weighted-
average method in that
(TCO B) The contribution margin ratio always decreases when the
(TCO B) Which of the following would not affect the break-even point?
(TCO E) In an income statement prepared using the variable costing method,
variable selling and administrative expenses would
(TCO F) The Illinois Company manufactures a product that goes through three
processing departments. Information relating to activity in the first department
during June is given below.
Percentage Completed
Units Materials Conversion
Work in process, June 1 150,000 75% 55%
Work in process, Jun 30 145,000 85% 75%
The department started 475,000 units into production during the month and
transferred 480,000 completed units to the next department.
Required: Compute the equivalent units of production for the first department for
June, assuming that the company uses the weighted-average method of
accounting for units and costs.
(TCO B) A tile manufacturer has supplied the following data:
Boxes of tile produced and sold 625,000
Sales revenue $2,975,000

10. Variable manufacturing expense $1,720,000
Fixed manufacturing expense $790,000
Variable selling and admin expense $152,000
Fixed selling and admin expense $133,000
Net operating income $180,000
Required:
 Calculate the company’s unit contribution margin.
 Calculate the company’s unit contribution ratio.
 If the company increases its unit sales volume by 5% without increasing its
fixed expenses, what would the company’s net operating income be?
(TCO E) Lehne Company, which has only one product, has provided the
following data concerning its most recent month of operations:
Selling price $ 125
Units in beginning inventory 600
Units oroduced 3000
Units sold 3500
Units in ending inventory 100
Variable costs per unit:
Direct materials $ 15
Direct labor $ 50
Variable manufacturing overhead $ 8

11. Variable selling and admin $ 12
Fixed costs:
Fixed manufacturing overhead $ 75,000
Fixed selling and admin $ 20,000
The company produces the same number of units every month, although the
sales in units vary from month to month. The company’s variable costs per unit
and total fixed costs have been constant from month to month.
Required:
 What is the unit product cost for the month under variable costing?
What is the unit product cost for the month under absorption costing?
c. Prepare an income statement for the month using the variable costing
method.
d. Prepare an income statement for the month using the absorption costing
method.
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