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DeVry ACCT 505 Week 4 Midterm Exam Latest

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DeVry ACCT 505 Week 4 Midterm Exam Latest

DeVry ACCT 505 Week 4 Midterm Exam Latest

ACCT505

DeVry ACCT 505 Week 4 Midterm Exam Latest

DeVry ACCT 505 Week 4 Midterm Exam Latest

Page: 1

Question 1.Question :(TCO A) The variable portion of advertising costs is a

  • Conversion YES… Period NO.
  • Conversion YES …. Period YES.
  • Conversion NO…. Period NO.
  • Conversion NO…. Period YES.

Question 2. Question: (TCO A) Total fixed costs

  • will increase with increases in activity.
  • will decrease with increases in activity.
  • are not affected by activity.
  • should be ignored in making decisions because they can never change.

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

  • variable cost.
  • opportunity cost.
  • period cost.
  • product cost.

Question 4. Question: (TCO C) When the activity level is expected to decrease within the relevant range, what effects would be anticipated with respect to each of the following?

Fixed cost per unit                              Variable cost per unit

  • Increase                                              No change
  • Increase                                              Increase
  • Decrease                                            No change
  • No change                                          Increase

Question 5. Question: (TCO B) When manufacturing overhead is applied to production, it is added to

the cost of goods sold account.

the raw materials account.

the direct labor account.

None of the above

Question 6. Question: (TCO B) A job-order cost system is employed in those situations when

  • many different products, jobs, or batches of production are being produced each period.
  • manufacturing involves a single, homogeneous product that flows evenly through the production process on a continuous basis.
  • the product moves from department to department before being completed.
  • the unit cost of production is computed by dividing the total production costs by the number of units produced.

Question 7. Question: (TCO B) The FIFO method only provides a major advantage over the weighted-average method in that

  • the calculation of equivalent units is less complex under the FIFO method.
  • the FIFO method treats units in the beginning inventory as if they were started and completed during the current period.
  • the FIFO method provides measurements of work done during the current period.
  • the weighted-average method ignores units in the beginning and ending work-in-process inventories.

Question 8. Question: (TCO C) The contribution margin ratio always increases when the

  • fixed expenses increase.
  • fixed expenses decrease.
  • variable expenses as a percentage of net sales increase.
  • variable expenses as a percentage of net sales decrease.

Question 9. Question: (TCO C) The unit sales needed to attain the target profit is found by

  • dividing fixed costs by the contribution margin.
  • adding variable expenses to fixed expenses and dividing the total by the contribution margin.
  • adding target profit to the fixed expenses and then dividing the total by the contribution margin.
  • adding target profit to the fixed expenses and then dividing the total by the unit contribution margin.

Question 10. Question: (TCO D) Under variable costing,

  • inventory costs will be lower than under absorption costing.
  • inventory costs will be higher than under absorption costing.
  • net operating income will always be lower than under absorption costing.
  • net operating income will always be higher than under absorption costing.

 

Page 2

Question 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 $225
Manufacturing overhead $220
Administrative expenses $180
Selling expenses $140
Raw materials inventory, beginning $90
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

Prepare a Schedule of Cost of Goods Manufactured statement in the text box below.

Question 2.Question: (TCO B) The Alabama Company manufactures a product that goes through three processing departments. Information relating to activity in the first department during June is given below.

Percentage Completed
Units Materials Conversion
Work in process, June 1 75,000 65% 45%
Work in process, Jun 30 72,500 75% 70%

The department started 237,500 units into production during the month and transferred 240,000 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.

Question 3. Question: (TCO C) A tile manufacturer has supplied the following data.

Boxes of tile produced and sold 625,000
Sales revenue $2,975,000
Variable manufacturing expense $1,720,000
Fixed manufacturing expense $790,000
Variable selling and admin expense $152,000
Fixed selling and admin expense $133,000
Net operating income $180,000

Required:

Calculate the company’s unit contribution margin.

Calculate the company’s contribution margin ratio.

If the company increases its unit sales volume by 5% without increasing its fixed expenses, what would the company’s net operating income be?

Question 4. Question: (TCO D) The Hampton 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 25,000
Units sold 22,000
Variable costs per unit:
Direct materials $150
Direct labor $75
Variable manufacturing overhead $25
Variable selling and admin $15
Fixed costs:
Fixed manufacturing overhead $275,000
Fixed selling and admin $200,000

Required:

Compute the cost of a single unit of product under both the absorption costing and variable costing approaches.

Prepare an income statement for the year using absorption costing.

Prepare an income statement for the year using variable costing.

DeVry ACCT 505 Week 4 Midterm Exam Latest

DeVry ACCT 505 Week 4 Midterm Exam Latest

 

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