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ACCT 346 Final Exam Guide (New
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Multiple Choice 5
Short 9
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
Variable manufacturing overhead ....5
Variable selling and administrative…6
Fixed costs per year:
Fixed manufacturing Overhead ................$700,000
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?
Comments: good!
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?
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ACCT 346 Managerial Accounting Course Project on Bravo
Baking Company (DEVRY)
Tutorial Purchased: 3 Times, Rating: A
This course has a six-part project with deliverables due in six of the
eight weeks.
The course project takes a new company through hypothetical scenarios
to reinforce the TCOs. By using a single entity, in a variety of business
situations, you will see the practical application of a number of
managerial accounting concepts taught in this course.
You will have access to an interactive Excel Template in Doc
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ACCT 346 Managerial Accounting Entire Course (DEVRY)

Tutorial Purchased: 5 Times, Rating: A+
Week 1 DQ 1 Ethics and Ethical Behavior
Week 1 DQ 2 Managerial and Financial Accounting
Week 2 DQ 1 Job Order Costing
Week 2 DQ 2 Process Costing
Week 3 DQ 1 Cost-Volume-Profit Analysis
Week 3 DQ 2 Variable Costing and Full Costing
Week 4 DQ 1 Activity Based Costing
Week 4 DQ 2 Incremental Cost Analysis
Week 5 DQ 1 Pricing Techniques
Week 5 DQ 2 Capital Budgeting Techniques
Week 6 DQ 1 Budgeting
Week 6 DQ 2 Standard Costs and Variance Analysis
Week 7 DQ 1 Responsibility Centers

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ACCT 346 Midterm Exam All 4 Sets
Details of All Questions Included in these midterms could be found on
this link
ACCT 346 Midterm Set 1 (New)
ACCT 346 Week 4 Midterm 1

ACCT 346 Week 4 Midterm 2
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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
Overhead cost $174,000 $171,000
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)
4. (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
Factory overhead costs $6,400,000
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)
5. (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)
6. (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.
7. (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)
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Multiple Choice 10
Short 4
Grade Details - All Questions
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
Overhead cost $174,000 $171,000

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
Factory overhead costs $6,400,000
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;
What is the cost of goods manufactured? Please show your work
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ACCT 346 Week 1 Homework Assignment
1. Identify whether each of the items below is a Product Cost or
Period Cost:
2. Identify whether each of the items below is a Direct Cost or Indirect
Cost: 3. Identify whether each of the below is a Fixed Cost or Variable
Cost: 4. Classify each as direct material, direct labor, indirect labor,
indirect labor, other manufacturing overhead or period cost, and then
answer the 5 questions below:

Factory insurance
Company president's salary
Eggs, salt, water used for baking
Depreciation expense on bake ovens
Paper wrappers for bread
Factory lease
Advertising costs
Factory supervisor salaries
Sales commissions
Flour used in baking bread
2. Identify whether each of the items below is a Direct Cost or Indirect
Cost: (1/2 point each, total 5 points)
Factory insurance
Baker's wages
Eggs used for baking
Depreciation expense on bake ovens

Paper wrappers for bread
Cleaning materials for bake ovens
Utilities used in factory
Factory supervisor salaries
Lubricant for factory equipment
Flour used in baking bread
3. Identify whether each of the items below is a Fixed Cost or Variable
Cost: (1/2 point each, total 5 points)
Shipping costs for bread
Cost of fuel for delivery truck fleet
Factory rent
Factory insurance
Maintenance on delivery trucks
Sales commissions
Wages paid to part-time (hourly) baker's assistant
Oven depreciation
Cost of fruit for cake topping

Factory utilities
Question 4 General Instructions: For this baking operation, you'll need
to first classify each expense below as direct material, direct labor,
indirect material, indirect labor, other manufacturing overhead or period
cost, and then answer the calculation questions in Parts 4b - 4e.
a. Depreciation expense on factory forklifts ......
b. Property tax on corporate marketing office ....
c. Company president's salary .....,,......
d. Factory janitor wages ...............
e. Accounting department salaries .....
f. Bakers’ health insurance ..............
g. Assorted baking ingredients............
h. Depreciation expense on administrative office equipment......
i. Bakers’ wages ...........
j. Factory utilities ..........
k. Production supervisors’ salaries .....
l. Flour ..........................

m. Factory equipment lubricants ............
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ACCT 346 Week 1-7 All Discussion Questions
Week 1 DQ 1 Ethics and Ethical Behavior
Week 1 DQ 2 Managerial and Financial Accounting
Week 2 DQ 1 Job Order Costing
Week 2 DQ 2 Process Costing
Week 3 DQ 1 Cost-Volume-Profit Analysis
Week 3 DQ 2 Variable Costing and Full Costing
Week 4 DQ 1 Activity Based Costing
Week 4 DQ 2 Incremental Cost Analysis
Week 5 DQ 1 Pricing Techniques

Week 5 DQ 2 Capital Budgeting Techniques
Week 6 DQ 1 Budgeting
Week 6 DQ 2 Standard Costs and Variance Analysis
Week 7 DQ 1 Responsibility Centers
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1. Biltz Company uses a predetermined manufacturing overhead
rate based on direct labor hours to allocate (apply or charge)
manufacturing overhead costs to jobs. During the year, the company
actually incurred manufacturing overhead costs of $582,000 and
135,000 direct labor hours were worked. The company originally
estimated that it would incur $525,000 of manufacturing overhead
during the year and that 150,000 direct labor hours would be worked.

2. The following account balances at the beginning of January were
selected from the general ledger of Ocean City Manufacturing
Company:
Work-in-Process (WIP) inventory $0
Raw materials inventory $28,000
Finished goods inventory $40,000
Additional data:
1) Actual manufacturing overhead for January amounted to $62,000.
2) Total direct labor cost for January was $63,000.
3) The predetermined manufacturing overhead rate is based on direct
labor cost. The budget for the year called for $250,000 of direct labor
cost and $350,000 of manufacturing overhead costs.
4) The only job unfinished on January 31 was Job No. 151, for which
total direct labor charges were $5,200 (800 direct labor hours) and total
direct material charges were $14,000.
5) Cost of direct materials placed in production during January totaled
$123,000. There were no indirect material requisitions during January.

3. Vintage Fun reproduces old-fashioned style roller skates and
skateboards. The annual production and sales of roller skates is 950
units, while 1,750 skateboards are produced and sold. The company has
traditionally used direct labor hours to allocate its overhead to products.
Roller skates require 2.5 direct labor hours per unit, while skateboards
require 1.25 direct labor hours per unit. The total estimated overhead for
the period is $114,300. The company is looking at the possibility of
changing to an activity-based costing system for its products. If the
company used an activity-based costing system, it would have the
following three activity cost pools:
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1. Beginning WIP inventory is 15,500 units, 75% complete for
materials. During the month, 90,000 units were started; 87,000 were
finished; and ending WIP was 18,500 units that were 50% complete for
materials.

How many equivalent units should be used to allocate costs for
materials? (Assume that the weighted average method is used, not
FIFO.)
2. During a period, 38,200 units were completed and 4,200 units were in
ending WIP inventory. Ending WIP was 75% complete for direct
materials and 50% complete for conversion
costs.
2a. What are the equivalent units for direct
materials?
Completed Units $38,200
$38,200
Ending Units $4200 (75% complete)
$3,150
All Units $42,400 $41,350 Direct Materials
Equivalent Units

2b. What are the equivalent units for conversion costs?
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ACCT 346 Week 3 Quiz (2 Sets)
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1.MountainAir Company has the following selected data for the past
year:
Units sold during year 30,000
Units produced during year 45,000
Units in ending inventory 15,000
Variable manufacturing cost per unit $ 4.50
Fixed manufacturing overhead (in total) $ 20,250
Selling price per unit $ 12.00
Variable selling and administrative expense per unit $ 1.00
Fixed selling and administrative expenses (in total) $ 4,000
There were no units in beginning inventory.
Required:
a. Prepare an income statement for last year using absorption (full)
costing.
b. Calculate the total value of the ending inventory using absorption
(full) costing.

c. Prepare an income statement for last year using variable costing (i.e.,
contribution margin income statement).
d. Calculate the total value of the ending inventory using variable
costing.
Answer:
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ACCT 346 Week 4 Midterm 1 (DEVRY)
Tutorial Purchased: 3 Times, Rating: A+
1. Question :
(TCO 1) Managerial accounting stresses accounting concepts and
procedures that are relevant to preparing reports for
2. Question :

TCO 1) Which of the following statements regarding fixed costs is true?
3. Question :
(TCO 1) You own a car and are trying to decide whether or not to trade
it in and buy a new car. Which of the following costs is an opportunity
cost in this situation?
4. Question :
(TCO 1) Shula’s 347 Grill has 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;
for $14.00 each. How much is the budgeted variable cost per unit
5. Question :
(TCO 1) Which of the following is an example of a manufacturing
overhead cost?
6. Question :
(TCO 1) Which of the following is a period cost?
7. Question :
(TCO 1) If the balance in the Finished Goods Inventory account
increased by $30,000 during the period and the cost of goods
manufactured was $220,000, how much is cost of goods sold?
8. Question :
(TCO 2) BCS Company applies manufacturing overhead based on direct
labor cost. Information concerning manufacturing overhead and labor
for August follows:

Estimated
Actual
9.Question :
(TCO 2) During 2011, Madison Company applied overhead using a job-
order costing system at a rate of $12 per direct labor hours. Estimated
direct labor hours for the year were 150,000, and estimated overhead for
the year was $1,800,000. Actual direct labor hours for 2011 were
140,000 and actual overhead was $1,670,000.
What is the amount of under or over applied overhead for the year?
10. Question :
(TCO 3) Companies in which of the following industries would not be
likely to use process costing?
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ACCT 346 Week 4 Midterm 2 (DEVRY)
http://www.tutorialrank.com/ACCT/ACCT-346-
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Tutorial Purchased: 1 Times, Rating: B+
1.Question :
(TCO 1) Which of the following is not a difference between financial
accounting and managerial accounting?
2. Question :
TCO 1) Which of the following statements regarding fixed costs is true?
3. Question :
(TCO 1) You own a car and are trying to decide whether or not to trade
it in and buy a new car. Which of the following costs is an opportunity
cost in this situation?
4. Question :
(TCO 1) Shula’s 347 Grill has 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;
for $14.00 each. How much is the budgeted variable cost per unit?
5. Question :
(TCO 1) Which of the following is an example of a manufacturing
overhead cost?
6. Question :
(TCO 1) Product costs

7. Question :
(TCO 1) At December 31, 2010, WDT Inc. has a balance in the Work in
Process Inventory account of $62,000. At January 1, 2010, 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?
8. Question :
(TCO 2) BCS Company applies manufacturing overhead based on direct
labor hours. Information concerning manufacturing overhead and labor
for August follows:
Estimated
Actual
9. Question :
(TCO 2) Citrus Company incurred manufacturing overhead costs of
$300,000. Total overhead applied to jobs was $306,000. What was the
amount of overapplied or underapplied overhead?
10. Question :
(TCO 3) Companies in which of the following industries would notbe
likely to use process costing?
11.Question :
(TCO 3) The Blending Department began the period with 20,000 units.
During the period the department received another 80,000 units from the
prior department and at the end of the period 30,000 units remained,
which were 40% complete. How much are equivalent units in The
Blending Department’s work in process inventory at the end of the
period?

12. Question :
(TCO 3) Ranger Glass Company manufactures glass for French doors.
At the start of May, 2,000 units were in-process. During May, 11,000
units were completed and 3,000 units were in process at the end of May.
These in-process units were 90% complete with respect to material and
50% complete with respect to conversion costs. Other information is as
follows:
Calculate the cost per equivalent unit for conversion costs.
13. Question :
(TCO 4) Clearance Depot has total monthly costs of $8,000 when 2,500
units are produced and $12,400 when 5,000 units are produced. What is
the estimated total monthly fixed cost?
1. Question :
(TCO 4) Which of the following will have no effect on the break-even
point in units?
2. Question :
(TCO 4) Circle K Furniture has a contribution margin ratio of 16%. If
fixed costs are $176,800, how many dollars of revenue must the
company generate in order to reach the break-even point?
3. Question :

(TCO 4) Randy Company produces a single product that is sold for $85
per unit. If variable costs per unit are $26 and fixed costs total $47,500,
how many units must Randy sell in order to earn a profit of $100,000?
4. Question :
(TCO 5) In full costing, when does fixed manufacturing overhead
become an expense?
5. Question :
(TCO 5) Variable costing income is a function of:
6. Question :
(TCO 5) Peak Manufacturing produces snow blowers. The selling price
per snow blower is $100. Costs involved in production are:
7. Question :
(TCO 6) Which of the following is not a reason that companies allocate
costs?
8. Question :
(TCO 6) Which of the following statements about cost pools is not
true?
9. Question :
(TCO 6) The building maintenance department for Jones Manufacturing
Company budgets annual costs of $4,200,000 based on the expected
operating level for the coming year. The costs are allocated to two
production departments. The following data relate to the potential
allocation bases:
Production Dept. 1

10. Question :
(TCO 7) A company is currently making a necessary component in
house (the company is producing the component for its own use). The
company has received an offer to buy the component from an outside
supplier. A machine is being rented to make the component. If the
company were to buy the component, the machine would no longer be
rented. The rent on the machine, in relation to the decision to make or
buy the component, is:
11. Question :
(TCO 7) Ricket Company has 1,500 obsolete calculators that are carried
in inventory at a cost of $13,200. If these calculators are upgraded at a
cost of $9,500, they could be sold for $22,500. Alternatively, the
calculators could be sold "as is" for $9,000. What is the net advantage or
disadvantage of reworking the calculators?
12. Question :
(TCO 7) YXZ Company’s market for the Model 55 has changed
significantly, and YXZ has had to drop the price per unit from $275 to
$135. There are some units in the work in process inventory that have
costs of $160 per unit associated with them. YXZ could sell these units
in their current state for $100 each. It will cost YXZ $10 per unit to
complete these units so that they can be sold for $135 each.
When the incremental revenues and expenses are analyzed, what is the
financial impact?
1. Question :
(TCO 3) What are transferred-in costs? Which departments will never
have transferred-in costs?

2. Question :
(TCO 7) Computer Boutique sells computer equipment and home office
furniture. Currently, the furniture product line takes up approximately
50% of the company's retail floor space. The president of Computer
Boutique is trying to decide whether the company should continue
offering furniture or just concentrate on computer equipment. If
furniture is dropped, salaries and other direct fixed costs can be avoided.
In addition, sales of computer equipment can increase by 13%.
Allocated fixed costs are assigned based on relative sales.
Computer
Home Office
Equipment
Furniture
3. Question :
(TCO 4) The following monthly data are available for RedEx, which
produces only one product that it sells for $84 each. Its unit variable
costs are $28 and its total fixed expenses are $64,960. Sales during April
totaled 1,600 units.

==============================================
=
1. Palmer's Gourmet Chocolates produces and sells assorted boxed
chocolates. The unit selling price is $50 per box, unit variable costs are
$25 per box, and total fixed costs for the company are $2,000.
1a. How many boxes of chocolates must Palmer's Gourmet Chocolates
sell to break even?
1b. What are breakeven sales in dollars?

2. Extreme Sports received a special order for 1,000 units of its extreme
motorbike at a selling price of $250 per motorbike. Extreme Sports has
enough extra capacity to accept the order. No additional selling costs
will be incurred. Unit costs to make and sell this product are as follows:
direct materials, $100; direct labor, $50; variable manufacturing
overhead, $14; fixed manufacturing overhead, $10.
2a. List the relevant costs for the decision of whether or not to accept the
special order.
2b. What will be the change (difference) in operating income if Extreme
Sports accepts the special order?
c. Should Extreme Sports accept the special order? Why or why not?
3. Totally Technology manufactures two product lines: Cameras and
Video Recorders. The company's product line income statement follows:
Management is considering discontinuing the Video Recorder product
line. Accountants for the company estimate that discontinuing the Video
Recorder line will decrease fixed cost of goods sold by $10,000 and
fixed marketing and administrative expenses by $4,000.
repare an analysis supporting your opinion about whether or not the
Video Recorder product line should be discontinued.

===============================================
1. Cave Hardware's forecasted sales for April, May, June, and July are
$200,000, $230,000, $190,000, and $240,000, respectively. Sales are
65% cash and 35% credit, with all accounts receivable collected in the
month following the sale. Cost of goods sold is 75% of sales and ending
inventory is maintained at $60,000 plus 10% of the following month's
cost of goods sold. All inventory purchases are paid 22% in the month of
purchase and 78% in the following month.
What are the total cash collections budgeted for June?
2. Madden Corporation manufactures T-shirts (its only product). The
company’s standards for manufacturing T-shirts are as follows:
2a. What is the direct labor rate variance for the month? Is it favorable or
unfavorable?

2b. What is the direct labor efficiency variance for the month? Is it
favorable or unfavorable?
===============================================
===============================================

1.Gomez Corporation is considering two alternative investment
proposals with the following data:
a. How long is the payback period for Proposal X?
b. What is the accounting rate of return for Proposal Y?
2. You have been awarded a scholarship that will pay you $500 per
semester at the end of each of the next 8 semesters that you earn a GPA
of 3.5 or better. You are a very serious student and you anticipate
receiving the scholarship every semester. Using a discount rate of 3%
per semester, which of the following is the correct calculation for
determining the present value of the scholarship?
PLEASE STATE WHY YOU CHOSE THE ANSWER THAT YOU
DID.
3. Maersk Metal Stamping is analyzing a special investment project.
The project will require the purchase of two machines for $30,000 and
$8,000 (both machines are required). The total residual value at the end
of the project is $1,500. The project will generate cash inflows of
$11,000 per year over its 8-year life. If Maersk requires a 6% return,
what is the net present value (NPV) of this project? (Use present value
tables or Excel.)

4. Hincapie Manufacturing is evaluating an investment in a new metal
stamping machine costing $30,924. Hincapie estimates that it will
realize $12,000 in annual cash inflows for each year of the machine's 3-
year useful life. Approximately, what is the internal rate of return (IRR)
for the investment? (Use present value tables or Excel.)
===============================================
ACCT 346 Week 8 Final Exam
1.Question :
(TCO 1) The principle managers follow when they only investigate
significant departures from the plan is commonly known as
Points Received:
4 of 4
2.Question :

(TCO 1) Which of the following is not likely to be a fixed cost?
Points Received:
4 of 4
3.Question :
(TCO 2) Which of the following is not a manufacturing cost?
Points Received:
4 of 4
4.Question :
(TCO 2) An allocation base is
Points Received:
4 of 4
5.Question :
(TCO 3) Equivalent units are calculated by
Points Received:
4 of 4
6.Question :
(TCO 3) In the assembly department, all the direct materials are added at
the beginning of the processing. Beginning Work in Process inventory
consists of 2,000 units with a direct materials cost of $31,860. During
the period, 15,000 units are started and direct materials costing $250,000

are charged to the department. If there are 1,000 units in ending
inventory, what is the cost per equivalent unit?
Points Received:
4 of 4
7.Question :
(TCO 4) Regression analysis
Points Received:
4 of 4
8.Question :
(TCO 4) The number of units that must be sold to exactly cover its fixed
and variable costs is the
Points Received:
4 of 4
9.Question :
(TCO 5) Which of the following is treated as a product cost in variable
costing?
Points Received:
4 of 4
10.Question :

(TCO 5) If the number of units sold is less than the number of units
produced
Points Received:
4 of 4
11.Question :
(TCO 6) A contract which specifies that the suppler will be paid for the
cost of production as well as some fixed amount or percentage of cost is
called a(n)
Points Received:
4 of 4
12.Question :
(TCO 6) Which of the following is not generally true when a company
compares ABC and traditional costing?
Points Received:
4 of 4
13.Question :
(TCO 7) Fixed costs that will be eliminated if a particular course of
action is undertaken are called
Points Received:
4 of 4

Page:
1.Question :
(TCO 7) Common costs
Points Received:
4 of 4
2.Question :
(TCO 8) Target costing
Points Received:
4 of 4
3.Question :
(TCO 8) Which of the following are relevant in deciding whether to
accept or reject a special order?
Points Received:
4 of 4
4.Question :
(TCO 9) Present value techniques
Points Received:
4 of 4
5.Question :

(TCO 9) The internal rate of return
Points Received:
4 of 4
6.Question :
(TCO 10) A method of budget preparation that requires all budgeted
amounts to be justified by the department, even if the amounts were
supported in prior periods, is called
Points Received:
4 of 4
7.Question :
(TCO 10) Which budget is prepared first?
Points Received:
4 of 4
8.Question :
(TCO 10) The standard cost is
Points Received:
4 of 4
9.Question :(TCO 10) In general, an unfavorable material variance arises
from
Points Received:

4 of 4
10.Question :(TCO 10) The type of center that has responsibility for
generating revenue as well as controlling costs is a(n)
Points Received:
4 of 4
11.Question :(TCO 10) Responsibility accounting holds managers
responsible for
Points Received:
4 of 4
12.Question :(TCO 10) Which ratio measures the rate earned on total
capital provided by the owners?
Points Received:
4 of 4
Page:
1.Question :(TCO 1) Distinguish managerial accounting from financial
accounting. Include a brief discussion of the differences in the types of
information provided to users as well as the differences of the users of
the accounting information.
Points Received:
20 of 20

2.Question :(TCO 6) Booth Financial Services, LLC has two revenue
producing departments, Financial Planning and Business Consulting.
The accounting department is trying to determine the best method to
allocate $1,000,000 of common costs (secretarial staff, reception
personnel, etc), either by salary or number of employees. Information on
the revenue departments are as follows:
Department
Employees
Salaries
Financial Planning
150 employees
$10,000,000
Business Consulting
50 employees
$5,000,000
(a) Allocate the $1,000,000 common costs to the two revenue
departments using both methods.
(b) Why are allocations called arbitrary?
Points Received:
25 of 25
3.Question :

(TCO 10) Charlie Corp sells it products on both credit and cash basis.
Monthly sales are sold 20% for cash, 80% for credit. Credit sales are
collected 40% in the month of sale and 60% the following month. Sales
for the first quarter are as follows:
January $100,000
February $150,000
March $125,000
Compute cash collections for February.
Points Received:
25 of 25
4.Question :
(TCO 2) Acme Fireworks uses a traditional overhead allocation based
on direct labor hours. For the current year overhead is estimated at
$1,000,000 and direct labor hours are budgeted at 200,000 hours. Actual
hours worked were 195,000 and actual overhead was $978,000.
(a) Compute the predetermined manufacturing overhead rate.
(b) Compute the applied manufacturing overhead.
(c) Compute the amount of over/under applied manufacturing overhead.
Points Received:
25 of 25
Page:
1 2 3 4

1.Question :
(TCO 9) An investment of $185,575 is expected to generate returns of
$65,000 per year for each of the next four years. What is the
investment's internal rate of return?
Points Received:
25 of 25
2.Question :
(TCO 4) Legal Docs Inc is a legal services firm that files incorporation
papers for small businesses. They charge $1,000 per application. This
year's income statement shows the following:
Sales $1,295,000
Variable Expenses $1,023,000
Contribution margin $272,000
Fixed costs $250,000
Profit $22,000
Required:
(a) Compute the break-even point in units.
(b) Compute the contribution margin ratio.
(c) Compute the current margin of safety.
(d) How many applications must the company sell to make a profit of
$350,000?
Points Received:
25 of 25

3.Question :(TCO 5) The following data has been taken from Air-Tite
company in its first year of business
(a) Compute the amount of fixed manufacturing overhead that would be
expensed in the current year if full absorption costing is used.
(b) Compute the amount of fixed manufacturing overhead that would be
expensed in the current year if variable costing is used.
(c) Compute the amount of fixed manufacturing overhead that would be
included in ending inventory under full absorption costing.
Points Received:
25 of 25
===============================================

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