These are the automatically

computed results of your exam.

Grades for essay questions, and
comments from your instructor, are
in the "Details" section below.
Date Taken: 8/2/2011
Time Spent: 2 h , 23 min , 35 secs
Points Received: 127 / 150 (84.7%)
Question Type: # Of Questions: # Correct:
Multiple Choice 10 7
Short 1 N/A
Essay 3 N/A


Grade Details

Page:
1 2
1. Question :
(TCO A) Wages paid to an assembly line worker in a factory are a:
Student Answer:

Prime Cost YES.....Conversion Cost NO


Prime Cost YES.....Conversion Cost YES


Prime Cost NO....Conversion Cost NO


Prime Cost NO.....Conversion Cost YES
Instructor
Explanation:
Chapter 2


Points Received: 6 of 6

Comments:

2. Question :
(TCO A) A cost incurred in the past that is not relevant to any current
decision is classified as a(n):
Student Answer:

period cost.


incremental cost.


opportunity cost.


none of the above.
Instructor
Explanation:
Chapter 2


Points Received: 6 of 6

Comments:

3. Question :
(TCO A) Property taxes on a company's factory building would be classified as
a(n):
Student Answer:

sunk cost


opportunity cost


period cost


variable cost


manufacturing cost
Instructor
Explanation:
Chapter 2


Points Received: 0 of 6

Comments:

4. Question :
(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?
Fixed Cost Per Unit Variable Cost Per Unit
Student Answer:

Increase No Change


Increase Increase


decrease No Change


No Change Increase
Instructor
Explanation:
Chapter 5


Points Received: 0 of 6

Comments:

5. Question : (TCO F) 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.
Student Answer:

Only statement I is true


Only statement II is true


Both statements I and II are true


Statements I, II, and III are all true
Instructor
Explanation:
Chapter 3


Points Received: 6 of 6

Comments:

6. Question :
(TCO F) Which of the following statements about process costing system
isincorrect?
Student Answer:

In a process costing system, each processing department has a work in
process account


In a process costing system, equivalent units are separately computed for
materials and for conversion costs


In a process costing system, overhead can be under- or overapplied just as
in job-order costing


In a process costing system, materials costs are traced to units of products
Instructor
Explanation:
Chapter 4


Points Received: 6 of 6

Comments:

7. Question :
(TCO F) Equivalent units for a process costing system using the FIFO
method would be equal to:
Student Answer:

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
Instructor
Explanation:
Chapter 4


Points Received: 6 of 6

Comments:

8. Question :
(TCO B) The contribution margin ratio always increases when the:
Student Answer:

break-even point increases


break-even point decreases


variable expenses as a percentage of net sales decreases


variable expenses as a percentage of net sales increases
Instructor
Explanation:
Chapter 6


Points Received: 6 of 6

Comments:

9. Question :
(TCO B) Which of the following would not affect the break-even point?
Student Answer:

number of units sold


variable expense per unit


total fixed expenses


selling price per unit
Instructor
Explanation:
Chapter 6


Points Received: 0 of 6

Comments:

10. Question :
(TCO E) In an income statement prepared using the variable costing method,
variable selling and administrative expenses would:
Student Answer:

be used in the computation of the contribution margin


be used in the computation of net operating income but not in the
computation of the contribution margin


be treated differently from variable manufacturing expenses


not be used
Instructor
Explanation:
Chapter 7


Points Received: 6 of 6

Comments:

Page:
1 2

* Times are displayed in (GMT-07:00) Mountain Time (US & Canada)


Grading Summary

These are the automatically
computed results of your exam.
Grades for essay questions, and
comments from your instructor, are
in the "Details" section below.
Date Taken: 8/2/2011
Time Spent: 2 h , 23 min , 35 secs
Points Received: 127 / 150 (84.7%)
Question Type: # Of Questions: # Correct:
Multiple Choice 10 7
Short 1 N/A
Essay 3 N/A


Grade Details

Page:
1 2
1. Question :
(TCO A) The following data (in thousands of dollars) have been taken
from the accounting records of Larden Corporation for the just
completed year.

Sales $950

Purchases of raw materials $170

Direct labor $210

Manufacturing overhead $220

Administrative expenses $180

Selling expenses $140

Raw materials inventory, beginning $70

Raw materials inventory, ending $80

Work in process inventory, beginning $30

Work in process inventory, ending $20

Finished goods inventory, beginning $100

Finished goods inventory, ending $70

Required: Prepare a Schedule of Cost of Goods Manufactured statement
in the text box below.
Student Answer:

Raw materials, inventory, beginning $70.00 add Purchases of Raw
Materials 170.00 -------- Total goods available to manufacture
240.00 Less Raw Materials invty, end 80.00 -------- Raw materials
used in production 160.00 Direct Labor 210.00 Manufacturing
Overhead 220.00 ------- Total manufacturing cost 590.00 Add Work
in Process invty. Beg 30.00 --------- 620.00 Less Work in process
invty end 20.00 ------ Cost of goods manufactured 600.00
Instructor
Explanation:
Schedule of Cost of Goods Manufactured for the Larden Corp.
Direct Materials:
Beginning raw materials inventory $70
Add: purchases raw material 170
Raw materials available for use 240
Deduct ending raw materials 80
Raw materials used in production 160
Direct Labor 210
Manufacturing Overhead: 220
Total Manufacturing Costs 590
Add beginning work in process inventory 30
620
Deduct ending work in process inventory 20
Cost Of Goods Manufactured 600

Points Received: 15 of 15

Comments:

2. Question :
(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:
Percent 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.
Student Answer:

Percent Complete Units Materials Conversion Beginning work in
process 150000 0.75 0.55 Units started into production 475000
"Units completed during June and transferred to the next
department" 325000 Ending work in process 145000 0.85 0.75
Materials Conversion Units transferred to the next dept 325000
325000 Ending work in process Materials 145000x85% complete
123250 Conversion 145000x75% complete 108750 Equivalent
units of production 448250 433750
Instructor
Explanation:
Equivalent Units
Materials Conversion Units transferred to the next department 480,000 480,000
Ending Work in process:
Materials 145000 x 85% 123,250
Conversion 145000 x 75% 108,750
Equivalent units of production 603,250 588,750

Points Received: 15 of 20

Comments:

3. Question :
(TCO B) Drake Company's income statement for the most recent year
appears below:
Sales (45,000 units) $1,350,000
Less: Variable expenses 750,000
Contribution margin 600,000
Less: Fixed expenses 375,000
Net operating income $225,000
Required:
a. calculate the unit contribution margin
b. calculate the break-even point in dollars
Student Answer:

The Unit Contribution Margin (C) is Unit Revenue (Price, P) minus
Unit Variable Cost (V): C = P V Price: $1350000 divided by
45,000 units =- $30 price per unit Variable cost per unit
$750,000/45000= 16.67 Unit contribution margin: $13.33 b. Break
even point in dollars Break-even Point in Sales $ = Total Fixed
Expenses Contribution Margin Ratio Total Fixed
Expenses:$375000 Contribution Margin Ratio =
$600,000/$1350000=.44 Break even point in dollars =$843,750
Instructor
Explanation:
a. Total CM / total units = $600,000 /45,000 units = $1.33 per unit b. Breakeven =
FC / CM per unit = $375,000 /$1.33 = 281,955 units x $30 per unit* = $8,458,650
* Sales at $1,350,000 /45,000units = $30 per unit

Points Received: 25 of 25

Comments:

4. Question :
(TCO E) The Dean 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

25000
Units sold

22000


Variable Costs per unit:

Direct materials

$ 200
Direct labor

$ 50
Variable manufacturing overhead

$ 30
Variable selling and admin

$ 15

Fixed Costs:

Fixed manufacturing overhead

$ 275,000
Fixed selling and admin

$ 230,000

Assume that direct labor is a variable cost.
Required:
a. Compute the cost of a single unit of product under both the absorption costing
and variable costing approaches.
Student Answer:

DM 200 DL 50 Var OH 30 Variable cost per unit 280 Direct
Materials 200 Direct Labor 50 Variable Manufacturing Overhead 30
Fixed manufacturing overhead $275000/25000 11 Cost of single unit
of product using absorption costing 291
Instructor
Explanation:
a and b:


Variable costing:

Direct materials

$ 200

Direct labor

$ 50

Variable manufacturing overhead

$ 30


$ 280


Absorption costing:

Direct materials

$ 200

Direct labor

$ 50

Variable manufacturing overhead

$ 30

Fixed manufacturing overhead

$ 11 (275,000 / 25,000)

$ 291

c:

Absorption costing income statement:

Sales

$ 9,900,000
Less cost of goods sold (22,000 x $291.00)

$ 6,402,000
Gross margin

$ 3,498,000
Selling and administrative expenses:

Variable selling and admin

$ 330,000

Fixed selling and admin

$ 230,000 $ 560,000

$ 2,938,000

d:

Variable costing income statement:

Sales

$ 9,900,000
Less variable expenses:

Product costs (22,000 x $280)

$ 6,160,000

Variable selling and admin

$ 330,000 $ 6,490,000
Contribution margin

$ 3,410,000
Less fixed expenses:

Fixed manufacturing overhead

$ 275,000

Fixed selling and admin

$ 230,000 $ 505,000

$ 2,905,000

Points Received: 30 of 30