ACCT 346 ALL EXAMS

# ACCT 346 ALL EXAMS

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ACCT 346 ALL EXAMS

ACCT 346 Final Exam Guide

Question 1.      Question :        (TCO 4) Assumptions underlying cost-volume-profit analysis include all of the following,

Question 2.      Question :        (TCO 6) A basic assumption of activity-based costing (ABC) is that:

Question 3.      Question :        (TCO 2) In a traditional job order cost system, the use of direct labor on jobs increases:

Question 4.      Question :        (TCO5) Cost drivers are:

Question 5.      Question :        (TCO 8) Wood Co. has considerable excess manufacturing capacity. A special job order's cost sheet includes the following applied manufacturing overhead costs:

Fixed costs: 25,000

Variable costs: 36,000

The fixed costs include a normal \$4,500 allocation for in-house design costs, although no in-house design will be done. Instead, the job will require the use of external designers costing \$9,250. What is the total amount to be included in the calculation to determine the minimum acceptable price for the job?

Question 6.      Question :        (TCO 1) Who are the users of managerial accounting information? How does their use of accounting information differ from the users of financial accounting information?

Question 7.      Question :        (TCO 2) Wolf Co. estimates

that its employees will work 400,000 direct labor hours during the coming year. Total overhead costs are estimated to be \$9,600,000 and direct labor costs are estimated to be \$12,500,000. Direct Labor hours are actually 450,000.

If Wolf Co. allocates overhead based on direct labor HOURS, what is the predetermined overhead rate?

Question 1.      Question :        (TCO 3) The Mixing Department is the third department in the MZS Inc. factory. During January, there were 4,000 units of beginning inventory in the Mixing Department, and 80,000 units were transferred in from the prior process. There were 8,000 units in ending inventory. The transferred-in cost in the beginning inventory was \$170,000 and there was \$600,000 in transferred-in cost during the month.

What is the cost per equivalent unit for transferred-in cost?

Question 2.      Question :        (TCO 4) Assume that we are manufacturing a product and assume that the sales price per unit is \$80, the variable cost is \$20 per unit, and the fixed cost is \$90,000; a) how many units would we need to sell to break even? b) How many units would we need to sell to earn a profit of \$120,000? c) How many units do we need to sell to double that profit to \$240,000? D) Why didn't the number of units double from Part B to Part C?

Question 3.      Question :        (TCO 5) Sivan Co. manufactures and sells one product. For the year, they started with no opening inventory; produced 100,000 units, but only sold 70,000 units. The selling price per each unit is \$60.

The variable costs per unit were:

Direct materials.........................7

Direct Labor .............................6

Fixed costs per year:

Fixed Selling and Administrative expenses.. \$300,000

(a) Prepare the Income Statement using Absorption Costing.

(b) Prepare the Income Statement using Variable Costing.

Question 4.      Question :        (TCO 6) At Long Co., electricity cost starts with a minimum fixed cost, and after that, there is a perfectly variable expense. Using estimated machine hours:

Machine hours             Cost

50,000                             \$102,000

60,000                             \$122,000

What is the a) estimated variable cost per machine hour and what is the b) estimated TOTAL fixed cost?

Question 5.      Question :        (TCO 7) North Company produces a small part that it uses in the production of its Product "H". The company's unit product cost for the part, based on a production of 100,000 parts per year, is as follows:

.................................................Per part ....................Total

parts to the North Company for only \$21.25 per part.(it appears to the President of the company that he could save \$2.75 per unit.

100 percent of the traceable or avoidable fixed manufacturing cost is supervisor salaries and other costs that can be ELIMINATED if the parts are purchased. The decision to buy the parts from the outside supplier would have no effect on the common fixed costs of the company, and the space being used to produce the parts would otherwise be idle. Ignore the impact of income taxes in your calculation.

How much would profits increase or decrease as a result of purchasing the parts from the

outside supplier rather than making them inside the company?

Question 6.      Question :        (TCO 9) Harry Corp buys equipment for \$194,000 that will last for 9 years. The equipment will generate cash flows of \$36,000 per year and will have no salvage value at the end of its life. Ignore taxes. Use 10% required rate of return.

(a) What is the Present Value (PV) of this investment (at 10%)?

(b) What is the NET Present Value (NPV) of this investment Should you buy the equipment if you need 10%?

(c) What is the Internal Rate of Return (IRR) of this investment?

(d) What is the payback period?

Question 7.      Question :        (TCO 10)  Tanya Corp sells its products on both credit and cash basis. Monthly sales are sold 20% for cash, 80% for credit. Credit sales are collected 65% in the month of sale and 35% the following month. Sales for the first quarter are BUDGETED as follows: January \$300,000; February \$200,000; March \$300,000.

Compute cash collections budgeted for February. How much cash was collected in the month?

ACCT 346 Midterm

Multiple Choice          10

Short   4

1. (TCO 1) Which of the following is NOT a difference between Financial Accounting and Managerial Accounting? (Points : 7)

Financial Accounting is concerned with the past, while Managerial Accounting is concerned with the future.

Managerial Accounting uses more non-monetary information than Financial Accounting.

Question 2.2. (TCO1) Josie’s Grill budgeted the following costs for a month in which 1,500 steak dinners will be produced and sold: materials, \$4,080; hourly labor (variable), \$5,200; rent (fixed), \$1,700; depreciation, \$800; and other fixed costs, \$600. Each steak dinner sells for \$14.00 each. How much is the budgeted variable cost per unit? (Points : 7)

Question 3.3. (TCO 1) Which of the following is NOT a period cost? (Points : 7)

Question 4.4. (TCO 1) On December 31, 2015, GLE Inc. has a balance in the Work-in-Process Inventory account of \$62,000. On January 1, 2015, the balance was \$55,000. Current manufacturing costs for the year are \$292,000, and cost of goods sold is \$284,000. How much is cost of goods manufactured? (Points : 7)

Question 5.5. (TCO 2) Paul Company applies manufacturing overhead based on direct labor cost. Information concerning manufacturing overhead and labor for August follows.

Estimated                     Actual

Direct labor hours                           5,800                             5,900

Direct labor cost                        \$90,155                          \$87,000

How much is the predetermined overhead rate? (Points : 7)

Question 6.6. (TCO 2) During 2015, Michael Company applied overhead using a job-order costing system at a rate of \$15 per direct labor hours. Estimated direct labor hours for the year were 150,000, and estimated overhead for the year was \$2,250,000. Actual direct labor hours for 20x1 were 140,000, and actual overhead was \$2,400,000.

What is the amount of under- or over-applied overhead for the year? (Points : 7)

1. (TCO 1) Which of the following topics is the focus of managerial accounting? (Points : 7)

Question 2.2. (TCO 6) Smile Labs develops 35mm film using a four-step process that moves progressively through four departments. The company specializes in overnight service and has the largest drug store chain as its primary customer. Currently, direct labor, direct materials, and overhead are accumulated by department. The cost accumulation system that best describes the system that Smile Labs is using is: (Points : 7)

Question 3.3. (TCO 3) Kerner Manufacturing uses a process cost system to manufacture laptop computers. The following information summarizes operations relating to laptop computer model #KJK20 during the quarter ending March 31:

Units                   Direct Labor

Work-in-process inventory, January 1                             100                    \$50,000

Started during the quarter                                              500

Completed during the quarter                                         400

Work-in-process inventory, March 31                              200

Costs added during the quarter                                                               \$720,000

Beginning work-in-process inventory was 50% complete for direct labor costs. Ending work-in-process inventory was 75% complete for direct labor costs. What is the equivalent unit of production using the weighted-average unit cost inventory valuation method? (Points : 7)

1. (TCO 2) Sweet Co. uses budgeted overhead rates to apply overhead to individual jobs. They use a system based on direct labor hours. Last year, the company made the following estimates for this year.

Direct labor costs                 \$48,000,000

Direct Labor Hours                     80,000

Machine Hours                          110,000

(a) What is the budgeted overhead rate for the company?

(b) If Job #34567 had the following:

Material costs were \$500,000;

Direct labor costs were \$450,000;

Direct labor hours were 25,000; and

Machine hours were 36,000,

then what is the total cost of Job #34567? (Points : 30)

1. (TCO 3) Adnan Company uses process costing. At the beginning of the month, there were 8,000 units in process, 90% complete with respect to material and 80% complete with respect to conversion costs. 40,000 units were started during the month and 40,000 units were completed. The units in ending Work-In-Process Inventory were 70% complete with respect to material and 10% complete with respect to conversion costs. How many equivalent units will be used in calculating the cost per unit for materials?(Points : 30)

1. (TCO 6) Handy Display Company manufactures display cases to be sold to retail stores. The cases come in three sizes: large, medium, and small. Currently, Handy Display Company uses a single plant-wide overhead rate to allocate its \$3,357,800 of annual manufacturing overhead. Of this amount, \$820,000 is associated with the Large Case line, \$1,276,800 is associated with the Medium Case line, and \$1,261,000 is associated with the Small Case line. Handy Display Company is currently running a total of 33,000 machine hours: 10,000 in the Large Case line, 13,300 in the Medium Case line, and 9,700 in the Small Case line. Handy Display Company uses machine hours as the cost driver for manufacturing overhead costs.

1. (TCO 2)

Fred Co. incurred costs of \$800,000 for direct materials (raw) purchased. Direct labor was \$5,000 and factory overhead was \$15,000 for March.

Inventories were as follows:

Raw materials beginning \$2,000; raw materials ending \$4,000;

Work-in-process beginning \$210,000; work-in-process ending \$190,000;

Finished goods beginning \$13,000; finished goods ending \$12,500;

What is the cost of goods manufactured? Please show your work. (Points : 30)

ACCT 346 Midterm

Multiple Choice          10

Short   4

Page:  1  2

Question 1.      Question :        (TCO 1) The goal of managerial accounting is to provide information that managers need for which of the below?

Question 2.      Question :        (TCO 1) Josie’s Grill budgeted the following costs for a month in which 1,600 steak dinners will be produced and sold: materials, \$4,080; hourly labor (variable), \$5,200; rent (fixed), \$1,700; depreciation, \$800; and other fixed costs, \$600. Each steak dinner sells for \$14.00 each. How much is the budgeted variable cost per unit?

Question 3.      Question :        (TCO 1) Which of the following is NOT a period cost?

Question 4.      Question :        (TCO 1) On December 31, 2015, GLE Inc. has a balance in the Work-in-Process Inventory account of \$62,000. At January 1, 2015, the balance was \$47,000. Current manufacturing costs for the year are \$292,000, and cost of goods sold is \$284,000. How much is cost of goods manufactured?

Question 5.      Question :        (TCO 2) Paul Company applies manufacturing overhead based on direct labor cost. Information concerning manufacturing overhead and labor for August follows.

Estimated                         Actual

Direct labor hours                          5,800                       5,900

Direct labor cost                        \$87,000                        \$89,975

How much is the predetermined overhead rate?

Question 6.      Question :        (TCO 2) During 2015, Michael Company applied overhead using a job-order costing system at a rate of \$15 per direct labor hours. Estimated direct labor hours for the year were 150,000, and estimated overhead for the year was \$2,250,000. Actual direct labor hours for 20x1 were 140,000, and actual overhead was \$2,400,000.

What is the amount of under- or over-applied overhead for the year?

Question 7.      Question :        (TCO 2) Manufacturers follow four steps to implement a manufacturing overhead allocation system. What is the first step?

Question 1.      Question :        (TCO 1) Which of the following topics is the focus of managerial accounting?

Question 2.      Question :        (TCO 6) Smile Labs develops 35mm film using a four-step process that moves progressively through four departments. The company specializes in overnight service and has the largest drug store chain as its primary customer. Currently, direct labor, direct materials, and overhead are accumulated by department. The cost accumulation system that best describes the system that Smile Labs is using is:

Question 3.      Question :        (TCO 3) Kerner Manufacturing uses a process cost system to manufacture laptop computers. The following information summarizes operations relating to laptop computer model #KJK20 during the quarter ending March 31:

Units                   Direct Labor

Work-in-process inventory, January 1                             100                    \$50,000

Started during the quarter                                              500

Completed during the quarter                                         400

Work-in-process inventory, March 31                              200

Costs added during the quarter                                                               \$720,000

Beginning work-in-process inventory was 50% complete for direct labor costs. Ending work-in-process inventory was 75% complete for direct labor costs. What is the equivalent unit of production using the weighted-average unit cost inventory valuation method?

Question 4.      Question :        (TCO 2) Sweet Co. uses budgeted overhead rates to apply overhead to individual jobs. They use a system based on direct labor hours. Last year, the company made the following estimates for this year.

Direct labor costs                 \$48,000,000

Direct Labor Hours                     80,000

Machine Hours                          110,000

(a) What is the budgeted overhead rate for the company?

(b) If Job #34567 had the following:

Material costs were \$500,000;

Direct labor costs were \$450,000;

Direct labor hours were 25,000; and

Machine hours were 36,000,

then what is the total cost of Job #34567?

Question 5.      Question :        (TCO 3) Adnan Company uses process costing. At the beginning of the month, there were 8,000 units in process, 90% complete with respect to material and 80% complete with respect to conversion costs. 40,000 units were started during the month and 40,000 units were completed. The units in ending Work-In-Process Inventory were 70% complete with respect to material and 10% complete with respect to conversion costs. How many equivalent units will be used in calculating the cost per unit for materials?

Question 6.      Question :        (TCO 6) Handy Display Company manufactures display cases to be sold to retail stores. The cases come in three sizes: large, medium, and small. Currently, Handy Display Company uses a single plant-wide overhead rate to allocate its \$3,357,800 of annual manufacturing overhead. Of this amount, \$900,000 is associated with the Large Case line, \$1,404,480 is associated with the Medium Case line, and \$1,350,000 is associated with the Small Case line. Handy Display Company is currently running a total of 39,600 machine hours: 12,000 in the Large Case line, 15,960 in the Medium Case line, and 12,000 in the Small Case line. Handy Display Company uses machine hours as the cost driver for manufacturing overhead costs.

Requirement: Calculate the departmental overhead rate for each of the three departments listed.

Question 7.      Question :        (TCO 2)

Fred Co. incurred costs of \$700,000 for direct materials (raw) purchased. Direct labor was \$5,000 and factory overhead was \$20,000 for March.

Inventories were as follows:

Raw materials beginning \$6,000; raw materials ending \$8,000;

Work-in-process beginning \$230,000; work-in-process ending \$210,000;

Finished goods beginning \$16,000; finished goods ending \$15,500;