ACCT 344 FINAL EXAM LATEST 2014 DEVRY

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ACCT 344 FINAL EXAM

LATEST 2014 - DEVRY
(TCO 2) WHICH COST IS NOT A PERIOD
COST? (POINTS : 5)
Lumber for furniture
Executive administrative assistant salary
Depreciation on sales staff's cars
Sales commission
Question 2.2.(TCO 2) Which product would use job-order costing? (Points :
5)

Ink pens
Custom boot maker
Soda pop
Horse saddles
Question 3.3.(TCO 3) As production occurs, materials, direct labor, and
applied manufacturing overhead are recorded in (Points : 5)

cost of goods sold.

work-in-process.
materials.
finished goods.
Question 4.4.(TCO 8) A company keeps 60 days of materials inventory on
hand to avoid shutdowns due to materials shortages. Carrying costs

average $5,000 per day. A competitor keeps 30 days of inventory on hand,

and the competitor's carrying costs average $2,000 per day. The valueadded costs are (Points : 5)

$300,000.
$150,000.
$60,000.
$0.
Question 5.5.(TCO 8) Which is a value-added activity?(Points : 5)

Moving
Inspection
Processing
Waiting
Question 6.6.(TCO 1) The break-even point is (Points : 5)

the volume of activity where all fixed costs are recovered.

where fixed costs equal total variable costs.
where total revenues equal total costs.
where total costs equal total contribution margin.
Question 7.7.(TCO 1) The Kringel Company provides the following
information.

Sales (200,000 units) $500,000

Manufacturing costs
Variable $170,000
Fixed $30,000
Selling and administrative costs
Variable $80,000
Fixed $20,000
Which is the break-even point in units for Kringel? (Points : 5)
33,334 units
100,000 units
40,000 units
200,000 units

Question 8.8.(TCO 7) Which would be the most appropriate base for

allocating the costs of the maintenance department? (Points : 5)

Machine hours
Direct labor hours
Number of employees
Square feet
Question 9.9.(TCO 7) Yo Department Store incurred $8,000 of indirect
advertising costs for its operations. The following data have been
collected for 2013 for its three departments.
Shoes

Cosmetics

Crafts

Sales

$120,000

$100,000

$100,000

Direct advertising costs

$9,000

$7,000

$4,000

Newspaper ad space

60%

20%

20%

How much of the indirect advertising costs will be allocated to the

Cosmetics Department if newspaper ad space is the activity driver?
(Points : 5)
$8,000
$1,600
$1,400
$6,400
Question 10.10.(TCO 5) Which best describes zero-base budgeting? (Points
: 5)

A budget that is developed for a single level of activity

A budget that analyzes existing activities (and continuation of that
activity must be justified and resources needed must be justified by
each manager)
A budget that is based solely on prior period information, adjusted
for inflation
A budget that is continuous or rolling
Question 11.11.(TCO 5) Bug Company manufactures buggies.
Manufacturing a buggy takes 20 units of wood and 1 unit of steel.
Scheduled production of buggies for the next 2 months is 500 and 600

units, respectively. Beginning inventory is 4,000 units of wood and 30

units of steel. The ending inventory of wood is planned to decrease 500
units in each of the next 2 months, and the steel inventory is expected to
increase 5 units in each of the next 2 months.
How many units of wood are expected to be used in production during the
second month?(Points : 5)

12,500
10,000
15,000
12,000

units
units
units
units

Question 12.12.(TCO 4) Which statement is true? (Points : 5)

Absorption costing net income exceeds variable costing

when units produced and sold are equal.
Variable costing net income exceeds absorption costing
when units produced exceed units sold.
Absorption costing net income exceeds variable costing
when units produced are less than units sold.
Absorption costing net income exceeds variable costing
when units produced are greater than units sold

net income
net income
net income
net income

Question 13.13.(TCO 6) Using more highly skilled direct laborers might

affect which variance?(Points : 5)

Direct materials usage variance

Direct labor efficiency variance
Variable manufacturing overhead efficiency variance
All of the above
Question 14.14.(TCO 6) Which equation measures the total budget
variance? (Points : 5)

AQ x (AP - SP).
SP x (AQ - SQ).
SQ x (AP - SP).
(AQ x AP) - (SQ x SP).
(TCO 1) George Corporation has an estimated monthly sales of 12,000 units
for $80 per unit. Variable costs include manufacturing costs of $50 and

distribution costs of $20. Fixed costs are $60,000 per month.

Required:
Determine each of the following values.
a. Unit contribution margin
b. Monthly break-even unit sales volume
Create a contribution margin-based income statement.(Points : 30)
Question 2.2.(TCO 7) Darling Manufacturing
Inc
. manufactures two products, A and B, from a joint process. A single
production costs $5,000 and results in 200 units of A and 800 units of B. To be
ready for sale, both products must be processed further, incurring seperable
costs of $3 per unit for A and $4 per unit for B. The market price for Product A
is $15 and for Product B is $10.
Required: Allocate joint production costs to each product using the net
realizable value method.(Points : 30)
Question 3.3.(TCO 6) Santa Inc. manufactures toys based on the following
information.

Standard costs
Materials (4 ounces at $4)

$16

Direct labor (1 hour per unit)

$7

Variable overhead (based on direct labor hours)

$3.50

Fixed overhead budget

Materials purchased

$16,000

Actual results and costs

Units

10,000

Cost

$38,500

Materials used in production

Finished product units

2,200

Raw material (ounces)

9,500

Direct labor hours

2,200

Direct labor cost

$18,000

Variable overhead costs

$8,400

Fixed overhead costs

$16,200

Required:
Compute the following variances (show calculations).
a. Materials usage variance
b. Labor rate variance
-c. Fixed overhead budget variance

(Points : 30)
Question 4.4.(TCO 4) Toshi Company incurred the following costs in
manufacturing desk calculators.
Direct materials $14
Indirect materials (variable) 4
Direct labor 8
Indirect labor (variable) 6
Other variable factory overhead 10
Fixed factory overhead 28
Variable selling expenses 20
Fixed selling expenses 14

During the period, the company produced and sold 1,000 units.
a. What is the inventory cost per unit using absorption costing?
b. What is the inventory cost per unit using variable costing?(Points : 30)
Question 5.5.(TCO 8) Musical Instruments Company manufactures two
products (trumpets and trombones). Overhead costs ($175,000) have been
divided into three cost pools that use the following activity drivers.

Product

Number of setups

Machine hours

Packing orders

Trumpets

50

1,500

150

Trombones

50

4,500

250

Cost per pool

$60,000

$90,000

$25,000

Required (show all calculations)

a. What is the allocation rate for trumpets per setup using activity-based
costing?

b. What is the allocation rate for trumpets per machine hours using
activity-based costing?
c. What is the allocation rate for trumpets per packing order using
activity-based costing?

(Points : 30)

$25.00

Required:

Prepare a performance report for all costs, showing flexible budget

variances (indicate F or U).