ACCT 349 Week 4 Midterm Exam Latest

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ACCT 349 Week 4 Midterm Exam Latest

ACCT 349 Week 4 Midterm Exam Latest

ACCT349

ACCT 349 Week 4 Midterm Exam Latest

Question 1 (TCO 5)

Flipping Tidley Works’ production budget for the year ended November 2012 was based on 200,000 units. Each unit requires 2 standard hours of labor for completion. Total O/H was budgeted at \$900,000 for the year, and the fixed O/H rate was estimated to be \$3.00 per unit. Both fixed and variable O/H are assigned to the product on the basis of direct labor hours. Moreover, Flipping analyzes O/H variances on a four-way basis. The actual data for the year ended November 30, 2012 are presented below.

Actual production in units 198,000

Actual direct labor hours 440,000

Actual variable O/H \$352,000

Actual fixed O/H \$575,000

Flipping’s variable O/H efficiency variance for the year is

\$33,000 unfavorable.

\$35,520 favorable.

\$66,000 unfavorable.

\$33,000 favorable.

Question 2. (TCO 5)

Unlike the traditional full-absorption cost system, activity-based costing (ABC) assigns

costs to individual products based only on nonfinancial variables.

costs to individual products based on various activities involved.

overhead to individual products based on some common measure of production volume.

only costs that can be directly traced to individual products.

Question 3. (TCO 1)

Daisy Bakes Order Co. applied the high-low method of cost estimation to customer order data for the first 4 months of the year. What is the estimated variable order-filling cost component per order?

Month Number of Orders Costs

January 1,200 \$3,120

February 1,300 \$3,185

March 1,800 \$4,320

April 1,700 \$3,895

\$2.00

\$2.42

\$2.48

\$2.50

Question 4. (TCO 1)

For a simple regression analysis model that is used to allocate factory overhead, an internal auditor finds that the intersection of the line of best fit for the overhead allocation with the y-axis is \$5,000. The slope of the trend line is .20. The independent variable, factory wages, amounts to \$900,000 for the month. What is the estimated amount of factory overhead to be allocated for the month?

\$180,000

\$230,000

\$92,500

\$185,000

Question 5. (TCO 2)

The relevance of a particular cost to a decision is determined by the

size of the cost.

riskiness of the decision.

potential effect on the decision.

accuracy and verifiability of the cost.

Question 6. (TCO 2)

When only differential manufacturing costs are taken into account for special-order pricing, an essential assumption is that

manufacturing fixed and variable costs are linear.

selling and administrative fixed and variable costs are linear.

acceptance of the order will not affect regular sales.

acceptance of the order will not cause unit selling and administrative variable costs to increase.

Question 7. (TCO 5)

The TooToo Company manufactures components for use in producing one of its finished products. When 12,000 units are produced, the full cost per unit is \$35, separated as follows.

Direct materials \$5

Direct labor 15

The BooHoo Company has offered to sell 12,000 components to TooToo for \$37 each. If TooToo accepts the offer, some of the facilities presently being used to manufacture the components can be rented out as warehouse space for \$40,000. However, \$3 of the fixed overhead applied to each component would have to be covered by TooToo’s other products. What is the differential cost to the TooToo Company of purchasing the components from the BooHoo Company?

\$8,000

\$20,000

\$24,000

\$44,000

Question 8. (TCO 2)

Bieber Company has excess capacity on two machines, 24 hours on Machine 105 and 16 hours on Machine 107. To use this excess capacity, the company has two products, known as Product D and Product F, that must use both machines in manufacturing. Both have excess product demand, and the company can sell as many units as it can manufacture. The company’s objective is to maximize profits.

Product D has an incremental profit of \$6 per unit, and each unit utilizes 2 hours of time on Machine 105 and then 2 hours of time on Machine 107. Product F has an incremental profit of \$7 per unit, and each unit utilizes 3 hours of time on Machine 105 and then 1 hour of time on machine 107. Let D be the number of units for Product D, F be the number of units for product F, and P be the company’s profit.

The equations 2D + 3F < 24, D > 0, and F > 0 are

objective functions.

inequalities.

deterministic functions.

constraints.

Question 9. (TCO 4)

Nonfinancial performance measures are important to engineering and operations managers in assessing the quality levels of their products. Which of the following indicators can be used to measure product quality?

I. Returns and allowances

II. Number and types of customer complaints

III. Production cycle time

I and II only

I and III only

II and III only

I, II, and III

Question 10. (TCO 6)

The sales quantity variance equals

actual units x (budgeted weighted-average UCM for planned mix – budgeted weighted-average UCM for actual mix).

(actual units – master budget units) x budgeted weighted-average UCM for the planned mix.

budgeted market share percentage x (actual market size in units – budgeted market size in units) x budgeted weighted-average UCM.

(actual market share percentage – budgeted market share percentage) x actual market size in units x budgeted weighted-average UCM.

Question 11. (TCO 6)

The following are relevant data for calculating sales variances for Lumber Co., which sells its sole product in two countries.

John Quincy Total

Budgeted selling price per unit \$6.00 \$10.00 NA

Budgeted variable cost per unit 3.00 7.50 NA

Budgeted contribution margin per unit \$3.00 \$ 2.50 NA

Budgeted unit sales 300 200 500

Budgeted mix percentage 60% 40% 100%

Actual units sold 260 260 520

Actual selling price per unit \$6.00 \$9.50 NA

The sales quantity variance for John and Quincy is

\$156 U.

\$30 F.

\$56 F.

\$100F.

Question 12. (TCO 4)

In a quality control program, which of the following is (are) categorized as internal failure costs?

I. Rework

II. Responding to customer complaints

III. Statistical quality control procedures

I only

II only

III only

I, II, and III

Question 13. (TCO 6)

For a single-product company, the sales volume variance is

the difference between actual and master budget sales volume, times actual unit contribution margin.

the difference between flexible budget and actual sales volume, times master budget unit contribution margin.

the difference between flexible budget and master budget sales volume, times actual budget unit contribution margin.

the difference between flexible budget and master budget sales volume, times master budget unit contribution margin.

Question 14. (TCO 5)

Under the three-variance method for analyzing factory O/H, which of the following is used in the computation of the spending variance?

Actual Factory Overhead Budget Allowance Based on Actual Hours

No Yes

No No

Yes No

Yes Yes

Question 15. (TCO 1)

Given demand in excess of capacity, no spoilage or waste, and full use of a constant number of assembly hours, the number of components needed for an assembly operation with an 80% learning curve should

I. increase for successive periods; or

II. decrease per unit of output.

I. only

II only

Both I and II

Neither I nor II

Question 1. (TCO 3) How do companies determine target costs?

Question 2. (TCO 2) How and why are capacity constraints relevant when trying to decide which products to produce?

Question 3. (TCO 1) Describe the different types of linear costs functions.