201-Midterm 2-S'11-Ver1-SOL
3 Pages

201-Midterm 2-S'11-Ver1-SOL

Course Number: MGMT 201, Spring 2012

College/University: Purdue

Word Count: 3235

Rating:

Document Preview

Name Seat Number Recitation Section Number The following information applies to Questions 1 and 2: Osawa Inc. manufactured 200,000 units in its first year of operations. Variable manufacturing costs were $30 per unit, and fixed manufacturing costs were $600,000. Selling and administrative costs were $2 per unit sold plus $160,000 in total fixed selling and administrative costs. Osawa sold 120,000 units at a...

Unformatted Document Excerpt
Coursehero >> Indiana >> Purdue >> MGMT 201

Course Hero has millions of student submitted documents similar to the one
below including study guides, practice problems, reference materials, practice exams, textbook help and tutor support.

Course Hero has millions of student submitted documents similar to the one below including study guides, practice problems, reference materials, practice exams, textbook help and tutor support.

Seat Name Number Recitation Section Number The following information applies to Questions 1 and 2: Osawa Inc. manufactured 200,000 units in its first year of operations. Variable manufacturing costs were $30 per unit, and fixed manufacturing costs were $600,000. Selling and administrative costs were $2 per unit sold plus $160,000 in total fixed selling and administrative costs. Osawa sold 120,000 units at a selling price of $40 per unit. 1. Osawa's net income using absorption costing would be: A. $200,000. B. $440,000. C. $600,000. D. $840,000. E. None of the above. Register to View AnswerAbsorption cost per unit = $30 +$600,000/200,000 = $33 NI = ($40 - $33)120,000 ($2)(120,000) - $160,000 = $440,000 MIDTERM 2 - SOLUTION Management 201 - Spring 2011 1. 2. 3. This examination consists of 30 multiple-choice questions. Each question is worth 5 points. You must sit in your assigned seat to take the exam. If you are not in the correct seat, you will lose 5 points. Print and code your name, ID number, and your section number on the computer answer sheet; please enter your section number as listed below. In the blank for TEST, please write the version number below. Be sure to use a number 2 pencil and sign the answer sheet. You will have 1.5 hours to complete the exam. The exam will end at 9:30 p.m. All multiplechoice questions must be coded on the answer sheet before the end of the examination period at 9:30. Your score on these questions is based only on the coded answers. Please help us collect exams promptly when the exam is over. Use of unauthorized written materials, receiving or giving verbal or written assistance from or to another person during an exam is considered cheating. Any student discovered cheating in an examination will be given a grade of F for the course. In all problems answers are rounded to the nearest dollar or cent as indicated in the problem. Thus if you compute an answer to be $1.333333333333 and an answer of $1.33 is given; the $1.33 is the correct answer. Similarly, if you compute an answer to be $432.897654, all answers are rounded to the nearest dollar, and the answer $433 is provided; $433 is the correct answer. Section 0003 0004 0005 0006 0007 0008 0009 0010 0011 0012 0013 0014 Instructor Gerardo Baltodano Brian Bobo Krystal Miller Gerardo Baltodano Brian Bobo Krystal Miller Gerardo Baltodano Krystal Miller Krystal Miller Brian Bobo Krystal Miller Gerardo Baltodano Day and Time F 11:30 AM 12:20 PM F 10:30 AM 11:20 AM F 10:30 AM 11:20 AM F 12:30 PM 1:20 PM F 11:30 AM 12:20 PM F 2:30 PM 3:20 PM F 1:30 PM 2:20 PM F 12:30 PM 1:20 PM F 9:30 AM 10:20 AM F 9:30 AM 10:20 AM F 1:30 PM 2:20 PM F 2:30 PM 3:20 PM Room RAWL 1057 RAWL 1011 RAWL 1057 RAWL 1057 RAWL 1011 RAWL 1011 RAWL 1057 RAWL 1011 RAWL 1057 RAWL 1011 RAWL 1011 RAWL 1057 4. 2. Osawa's net income using variable costing would be: A. $200,000. B. $440,000. C. $600,000. D. $840,000. E. None of the above. Register to View AnswerVariable cost per unit = $30. NI = ($40 - $30)120,000 - $600,000 ($2)(120,000) - $160,000 = $200,000 5. 6. 3. Gyro Gear Company produces a special gear used in automatic transmissions. Each gear sells for $28, and the company sells approximately 500,000 gears each year. Unit cost data are presented below: Direct material Direct labor Manufacturing overhead Selling and administrative costs Variable $ 6.00 5.00 2.00 1.00 Fixed $ 7.00 4.00 Recitation Sections: The unit product or manufacturing cost of gears under variable costing is: A. $ 11. B. $ 14. C. $ 17. D. $ 20. E. None of the above. Register to View AnswerVariable cost per unit = $6 + $5 + $2 = $13. Work hard and best of luck. Version 1 (Green) 4. Variable expenses for Alpha Company are 40% of sales. What are sales at the break-even point, assuming that fixed costs total $150,000 per year: A. $ 60,000. B. $ 250,000. C. $ 300,000. D. $ 375,000. E. None of the above. Register to View AnswerIf variable costs are 40% of sales, the CM ratio is 60%. Thus break-even sales are: 0 = .6(S) - $150,000, or S = $250,000 2 1 5. The following information pertains to Nova Company's cost-volume-profit relationship: Break-even point in units sold Variable manufacturing cost per unit Total fixed costs st 1,000 units $100/unit $150,000 How much will be contributed to net income by the 1,001 unit sold? That is, how much will income st increase through the production and sale of the 1,001 unit? A. $ 550. B. $ 500. C. $ 150. D. $ 50. E. None of the above. Register to View AnswerFrom the break-even results, one can find the CM per unit: 0 = (CM per unit)(1,000) - $150,000, or CM per unit = $150. st Thus, the 1001 unit contributes $150 to income. 6. In using the cost-volume-profit (CVP) model, which of the following assumptions are commonly made? I. No quantity discounts. II. Units produced and sold are the same. III. The sales mix is constant. A. I and II. B. I and III. C. II and III. D. I, II and III. E. III only. Register to View AnswerAll of these are assumptions of the CVP model. 7. In the middle of the year, the price of Lake Corporation's major raw material increased by 8%. How would this increase affect the company's break-even point and margin of safety? Break-even point Margin of safety A. Increase Increase B. Increase Decrease C. Decrease Decrease D. Decrease Increase Register to View AnswerThe increase in the raw material cost will reduce the CM/unit and thus reduce income; the reduction in income will decrease the margin of safety. The smaller CM/unit will also mean that more units will need to be produced for the company to break-even. 8. Last year, Rose Corporation had income of $50,000 using variable costing. Beginning and ending inventories were 13,000 units and 18,000 units, respectively. If the fixed manufacturing overhead cost was $2.00 per unit, what would have been the net income using absorption costing? A. $ 40,000. B. $ 50,000. C. $ 76,000. D. $ 86,000. E. None of the above. Register to View Answer5,000 units were added to the inventory; using absorption costing each unit had $2 in FOH that was deferred to the inventory (instead of being expensed, as with variable costing); thus, absorption income is $10,000 higher or is $50,000 + $10,000 = $60,000. 3 4 9. A single-product company prepares income statements using both absorption and variable costing methods. Manufacturing overhead cost per unit was the same in 2015 as in 2014. The 2015 variable costing statement reported a profit whereas the 2015 absorption costing statement reported a loss. The difference in reported income could be explained by units produced in 2015 being: A. Less than units sold in 2015. B. Less than the activity level used for allocating overhead to the product. C. In excess of the activity level used for allocating overhead to the product. D. In excess of units sold in 2015. Register to View AnswerAbsorption income is less than variable income so sales were greater than production--some units out of inventory were sold. 13. Fox Company's contribution margin ratio is 20%. If the operating leverage factor is 15 at the $225,000 sales level, net income at the $225,000 sales level must equal: A. $ 2,250. B. $ 6,750. C. $ 3,000. D. $ 5,063. E. Some other number. Register to View AnswerCM/Sales = CM ratio, or .2 = CM/$225,000, CM = $45,000 Degree of operating leverage = CM/Income, or 15 = $45,000/Income, Income = $3,000 14. 10. Charivari Dress Manufacturers specializes in manufacturing a limited number of dress styles. Each dress has the same variable manufacturing cost of $15 to make, but the price for each dress style is different. For the spring, three styles are offer: Style A will sell for $50, Style B will sell for $40 and Style C will sell for $30. Charivari expects 50% of the units sold to be of Style A, 30% to be Style B and 20% to be Style C. If the product mix remains constant, and all fixed costs are $322,000, how many dresses of each style must Charivari sell to break-even? (All units are rounded to the nearest whole unit.) Style A Style B Style C A. 3,067 4,293 7,155 B. 6,000 3,600 2,400 C. 5,367 3,220 2,147 D. 5,750 3,450 2,300 E. Some other answer Register to View AnswerWeighted-average CM = .5($50 - $15) + .3($40 - $15) + .2($30 - $15) = $28 0 = $28T - $322,000; T = 11,500 Style A = .5(11,500) = 5,750; Style B = 3,450; Style C = 2,300 The Clyde Company's variable costs are 35% of sales. Clyde Company is contemplating an advertising campaign that will cost $25,000. If sales are expected to increase $75,000 due to the extra advertising, the company's net income will increase by: A. $ 26,250. B. $ 23,750. C. $ 1,250. D. $ 65,000. E. Some other number. Register to View AnswerSales are up $75,000; costs are up $25,000 plus .35($75,000) = $26,250. Thus, net income will increase by: $75,000 - $25,000 - $26,250 = $23,750. 15. 11. The Herald Company manufactures and sells a single product, Product G. Product G sells for $50 per unit and has a contribution margin ratio of 30%. The company's monthly fixed expenses are $25,000. If Herald desires a monthly target net income equal to 20% of sales dollars, sales in units will have to be (to the nearest unit): A. 2,500 units. B. 1,666 units. C. 5,000 units. D. 1,000 units. E. Some other number. Register to View AnswerLet S = total sales dollars; .2S = .3S - $25,000; S = $250,000 Units = $250,000/$50 = 5,000. If sales volume increases and all other factors remain constant, then the A. contribution margin ratio will increase. B. break-even point will decrease. C. net income will decrease. D. all of the above. E. none of the above. Register to View AnswerSales volume does not affect the CM ratio nor the break-even point. It will result in higher net income, so E is correct. 16. 12. Clarkson Industries produces an electronic calculator that sells for $75 per unit. Variable costs are $45 per unit and fixed costs are $150,000 annually. The company has been averaging an annual income of $100,000 over the past five years. The break-even point in annual unit sales for Clarkson Industries would be: A. 2,000 units B. 3,333 units C. 10,000 units D. 5,000 units E. Some other number. Register to View Answer0 = ($75 - $45)X - $150,000; X = 5,000 units. The following describes several different decisions; for each decision a cost is listed. In all cases but one, the cost information is useful in making the decision. In which case is the cost information irrelevant? Decision to be made Cost information A. The decision to establish an in-house legal The cost of hiring a full-time staff attorney. department or retain the services of a prominent law firm. B. A firm's decision to stay at its current location or The cost to remodel the existing office space. move to a new building. C. A decision to raise the price of a baseball ticket The long-term salary costs demanded by Joe Torrez (a superstar) and Rip Moran (an average player) in baseball contract negotiations D. A decision by an airline company to expand its The cost to improve the airline's Web site. airline service to Salt Lake or City Phoenix E. A company's decision about how to pay its The commission that could be earned by a salespersons. salesperson. Register to View AnswerThe decision to expand airline service does not depend on the cost of improving the web site. 5 6 17. Which of the following costing methods is required by U.S. GAAP (Generally Accepted Accounting Principles) for financial reporting: A. Absorption costing B. Variable costing C. Throughput costing D. Direct costing E. Absorption or Variable costing Register to View AnswerFinancial reporting requires that absorption costing be used for financial reporting. 21. Two months ago, Victory purchased 4,500 pounds of Hydrol, paying $15,300. The demand for this product has been very strong since Victory's purchase, with the market price jumping to $4.05 per pound. (Victory can buy or sell Hydrol at this price.) The company recently received a special-order inquiry, one that would require the use of 4,200 pounds of Hydrol. Which of the following is (are) relevant in deciding whether to accept the special order? A. The 300-pound remaining inventory of Hydrol. B. The $4.05 market price. C. The $3.40 purchase price. D. 4,500 pounds of Hydrol. E. More than one of the above factors are relevant. Register to View AnswerThe cost of using the Hydrol in the special order is the market price of $4.05. 18. In early July, Mike Gottfried purchased a $70 ticket to the December 15 game of the Chicago Titans. (The Titans belong to the Midwest Football League and play their games outdoors on the shore of Lake Michigan.) Parking for the game was expected to cost approximately $22, and Gottfried would probably spend another $15 for a souvenir program and food. It is now December 14. The Titans were having a miserable season and the temperature was expected to peak at 5 degrees on game day. Mike therefore decided to skip the game and took his wife to the movies, with tickets and dinner costing $50. The sunk cost associated with this decision situation is: A. $20. B. $50. C. $70. D. $107. E. some other amount. Register to View AnswerThe $70 ticket was purchased in July; on December 14 this cost a sunk cost. 22. 19. Susan is contemplating a job offer with an advertising agency where she will make $54,000 in her first year of employment. Alternatively, Susan can begin to work in her father's business where she will earn an annual salary of $38,000. If Susan decides to work with her father, the opportunity cost would be: A. $0. B. $38,000. C. $54,000. D. $92,000. E. irrelevant in deciding which job offer to accept. Register to View AnswerTo work with her father, Susan gave up the job offer with an advertising agency where she would have made $54,000. 23. Snider, Inc., which has capacity to make 12,000 units, received a special order for 3,000 units at a price of $17 per unit. Currently, production and sales are anticipated to be 10,000 units without considering the special order. Budget information for the current year follows. Sales $ 190,000 Less: Cost of goods sold 145,000 Gross margin $ 45,000 Less: Commissions (10% of sales) 19,000 Less: Fixed selling and administrative costs 10,000 Net income $ 16,000 Cost of goods sold includes $40,000 of fixed manufacturing cost. Commissions are paid on all orders. If the special order is accepted, the company's cash income will: A. increase by $7,800. B. increase by $19,500. C. increase by $14,400. D. decrease by $12,900. E. change by some other amount. Register to View AnswerBenefits revenue 3,000($17) $ 51,000 Costs V man. costs 3,000($10.50*) (31,500) Costs Commissions 10%($51,000) (5,100) Opportunity cost 1,000($19 - $10.50 1.90) (6,600) Net benefits of order $ 7,800 V man costs per unit = ($145,000 - $40,000)/10,000 = $10.50/unit 20. A factory that makes a part has significant idle capacity. The factory's opportunity cost of making this part is equal to: A. the variable manufacturing cost per unit. B. the fixed manufacturing cost per unit. C. the semi-variable cost per unit. D. the total manufacturing cost per unit. E. zero Register to View AnswerSince the factory making a part has idle capacity, the part can be made without giving up any production; hence, the opportunity cost of making this part is zero. Many companies have switched from absorption costing to variable costing for internal reporting: A. To comply with external reporting requirements. B. To increase bonuses for managers. C. To reduce the undesirable incentive for managers to build-up inventories. D. To reduce the cost per unit. Register to View AnswerWith absorption costing a manager (or CEO) can increase income by increasing production and putting some of the costs in the inventory. This is not desirable for the company. 7 8 24. Song, a division of Carolina Enterprises, currently makes 100,000 units of a product that has created a number of manufacturing problems. Song's costs follow. Manufacturing costs: Variable $ 540,000 Fixed 180,000 Allocated corporate administrative cost 60,000 If Song were to discontinue production, fixed manufacturing costs would be reduced by 70%. The relevant cost of deciding whether the division should purchase the product from an outside supplier (that is, the costs that could be saved if the product is purchased from the outside) is: A. $ 540,000. B. $ 594,000. C. $ 666,000. D. $ 720,000. E. Some other amount. Register to View AnswerRelevant costs are the variable manufacturing costs of $540,000 and 70% of the $180,000 fixed manufacturing costs, totaling $666,000. 27. Lido manufactures A and B from a joint process. Five thousand pounds of A can be sold at split-off for $20 per pound or processed further at an additional cost of $20,000 and then sold for $25. Ten thousand pounds of B can be sold at split-off for $15 per pound. At what level for the joint costs is Lido indifferent to making products A and B; that is, at what level of the joint costs would Lido just break-even on the manufacture and sale of A and B? A. $100,000 B. $150,000 C. $250,000 D. $255,000 E. some other amount. Register to View AnswerIf A is sold at the split-off point, Lido gets $20(5,000) = $100,000; if A is processed further, Lido gets $25(5,000) - $20,000 = $105,000. B is sold at the split-off point for $15(10,000) = $150,000. Since the total profits to be made are $255,000 ($105,000 + $150,000), with joint costs of $255,000, Lido will just break-even on its production and sale of A and B. 28. 25. Coastal Airlines has a significant presence at the San Jose International Airport and therefore operates the Emerald Club, which is across from gate 36 in terminal 1. The Emerald Club provides food and business services for the company's frequent flyers. Consider the following selected costs of Club operation: 1. Receptionist and supervisory salaries 2. Catering 3. Terminal depreciation (based on square footage) 4. Airport fees (computed as a percentage of club revenue) 5. Allocated Coastal Airlines administrative overhead Management is exploring whether to close the club and expand the seating area for gate 36. Which of the preceding expenses would the airline classify as unavoidable? A. 3 B. 4 C. 5 D. 3 and 5 E. The correct answer is not listed. Register to View AnswerTerminal depreciation is an allocated cost which is not affected by the Club operation; similarly, the allocated administrative overhead is not affected by the Club operation. 29. 26. The Shoe Department at the Baton Rouge Department Store is being considered for closure. The following information relates to shoe activity: Sales revenue $ 350,000 Variable costs: Cost of goods (merchandise) sold 280,000 Sales commissions 30,000 Fixed operating costs 90,000 If 70% of the fixed operating costs are avoidable, should the Shoe Department be closed? A. Yes, Baton Rouge would be better off by $23,000. B. Yes, Baton Rouge would be better off by $50,000. C. No, Baton Rouge would be worse off by $13,000. D. No, Baton Rouge would be worse off by $40,000. E. None of these. Register to View AnswerIf the Shoe Department is closed, the sales revenue of $350,000 will be lost, while the COGS ($280,000), the sales commissions ($30,000) and 70%($90,000) of fixed operating costs will be saved. In total Baton Rouge will be better off by $23,000. Smith Manufacturing has 27,000 labor hours available for producing X and Y. Consider the following information: Product X Product Y Required labor time per unit (hours) 2 hours 3 hours Maximum demand (units) 6,000 units 8,000 units Contribution margin per unit $5.00/unit $6.00/unit Contribution margin per labor hour $2.50/labor hour $2.00/labor hour If Smith chooses the amount to produce of each product to maximize its cash flows, which of the following production schedules should the company set? Product X Product Y A. 0 units 8,000 units B. 1,500 units 8,000 units C. 6,000 units 0 units D. 6,000 units 5,000 units E. 6,000 units 8,000 units Register to View AnswerSince Product X has the larger CM per labor hour one would make all that will sell or 6,000 units; this leaves 27,000 2(6,000) = 15,000 hours. With 15,000 hours, the company can make 15,000/3 = 5,000 units. Adverial Company keeps records using both absorption costing and throughput costing. The following information was noted about the inventory values: Ending Inventory values Ending Inventory values Date using Absorption costing using Throughput costing 1/1/2011 $190,000 $97,000 12/31/2011 $154,000 $75,000 Is absorption costing income larger or smaller than throughput costing income? By how much? A. Throughput costing income is larger by $36,000. B. Throughput costing income is larger by $22,000. C. Absorption costing income is larger by $36,000. D. Absorption costing income is larger by $22.000. E. None of the above. Register to View AnswerWith absorption costing $36,000 in costs were removed from the inventory; with throughput costing $22,000 in costs were removed from the inventory. Thus, $14,000 in extra cost was expensed (as part of COGS) using absorption costing, or throughput costing is larger by $14,000. 9 10 30. Chariots makes 5 products with the following data about costs and prices: Product A Product B Product C Product D Product E Price per unit $ 50 $ 100 $70 $80 $100 Direct materials 20 30 25 17 21 Direct labor 10 20 10 12 14 Overhead 10 30 10 17 30 All overhead is fixed; it is allocated to the products according to the machine hours used by the products. If machine hours are scarce, in which order should the products be produced--from most profitable to least A. E, D, B, C, A B. E, D, C, B, A C. A, B, E, D, C D. C, D, E, A, B E. Some other order Register to View AnswerProduct A Product B Product C Product D Product E CM/unit $ 20 $ 50 $ 35 $51 $65 CM/$OH* 2 1.67 3.5 3 2.17 Thus, the order from most profitable to least is: C, D, E, A, B *It is not possible to find the MH per unit, but it is proportional to the number of machine hours that are required to make each product. Thus, one can use the $OH as a "measure" of the number of machine hours used. 11

Find millions of documents on Course Hero - Study Guides, Lecture Notes, Reference Materials, Practice Exams and more. Course Hero has millions of course specific materials providing students with the best way to expand their education.

Below is a small sample set of documents:

Purdue - MGMT - 201
Name Seat NumberRecitation Section NumberThe following information applies to Questions 1 and 2: Osawa Inc. manufactured 200,000 units in its first year of operations. Variable manufacturing costs were $30 per unit, and fixed manufacturing costs were $6
Purdue - MGMT - 201
Name Seat NumberRecitation Section Number1.MIDTERM 2 - SOLUTION Management 201 - Fall 2011 1. 2. 3. This examination consists of 30 multiple-choice questions. Each question is worth 5 points. You must sit in your assigned seat to take the exam. If you
Purdue - MGMT - 201
Name Seat NumberRecitation Section Number1.MIDTERM 2 Management 201 - Fall 2011 1. 2. 3. This examination consists of 30 multiple-choice questions. Each question is worth 5 points. You must sit in your assigned seat to take the exam. If you are not in
Purdue - MGMT - 201
How to purchase your Managerial Accounting text from McGraw Hill.1) Choose your package option:Hardcover Text with Connect Plus code card with eBook = $103.00 net Looseleaf Text with Connect Plus code card with eBook = $88.00 net No Print Book / Connect
Purdue - MGMT - 201
NameRecitation Section: Quiz 1 Version 1 (Yellow) Management 201 Spring 2011A.FREEPERSON, INC.Freeperson, Inc., manufactures wheels for in-line skates, skateboards, luggage, etc. In May, some records for the month were lost. Freeport uses a normal cos
Purdue - MGMT - 201
NameRecitation Section: Quiz 1 Version 1 (Yellow) Management 201 Spring 2011A.FREEPERSON, INC.Freeperson, Inc., manufactures wheels for in-line skates, skateboards, luggage, etc. In May, some records for the month were lost. Freeport uses a normal cos
Purdue - MGMT - 201
NameRecitation Section: Quiz 1 Version 2 (Blue) Management 201 Spring 2011A.TERNE CORPORATIONAt the beginning of the month Terne Corporation had no finished jobs that were unsold, but had two jobs in process with the following costs assigned from prev
Purdue - MGMT - 201
NameRecitation Section: Quiz 1 Version 2 (Blue) Management 201 Spring 2011A.TERNE CORPORATIONAt the beginning of the month Terne Corporation had no finished jobs that were unsold, but had two jobs in process with the following costs assigned from prev
Purdue - MGMT - 201
NameRecitation Section: Quiz 1 Version 3 (Pink) Management 201 Spring 2011A.FRACTIONS, INC.Fractions, Inc., is a large custom printer. Fractions uses normal costing in its financial records. On December 31, 2012, the only job not completed was Job No.
Purdue - MGMT - 201
NameRecitation Section: Quiz 1 Version 3 (Pink) Management 201 Spring 2011A.FRACTIONS, INC.Fractions, Inc., is a large custom printer. Fractions uses normal costing in its financial records. On December 31, 2012, the only job not completed was Job No.
Purdue - MGMT - 201
NameRecitation Section: Quiz 2 Version 1 (Yellow) - SOLUTION Management 201 Spring 2011A.BARTLESBY BICYCLES Bartlesby Bicycles recently set up business manufacturing and selling two types of bicycles-Cheap and Expensive. Results for its first year were
Purdue - MGMT - 201
NameRecitation Section: Quiz 2 Version 1 (Yellow)Management 201 Spring 2011A.BARTLESBY BICYCLES Bartlesby Bicycles recently set up business manufacturing and selling two types of bicycles-Cheap and Expensive. Results for its first year were disappointi
Purdue - MGMT - 201
NameRecitation Section: Quiz 2 Version 2 (Green) - SOLUTIONS Management 201 Spring 2011A.DUO COMPANY Duo Company manufactures two products, Uno and Dos. Financial information for the firm follows: Unit sales price: Costs: Direct materials per unit Dire
Purdue - MGMT - 201
NameRecitation Section: Quiz 2 Version 2 (Green)Management 201 Spring 2011A.DUO COMPANY Duo Company manufactures two products, Uno and Dos. Financial information for the firm follows: Unit sales price: Costs: Direct materials per unit Direct labor per
Purdue - MGMT - 201
NameRecitation Section: Quiz 2 Version 3 (Blue) - SOLUTIONS Management 201 Spring 2011A.WATERWEAR PRODUCTS Waterwear Products has the capacity to produce 4,000 swimming suits (units) per year. Its predicted operations for Year 1 are as follows: Sales (
Purdue - MGMT - 201
NameRecitation Section: Quiz 2 Version 3 (Blue)Management 201 Spring 2011A.WATERWEAR PRODUCTS Waterwear Products has the capacity to produce 4,000 swimming suits (units) per year. Its predicted operations for Year 1 are as follows: Sales (3,000 units @
Purdue - MGMT - 201
NameRecitation Section: Quiz 3 Version 1 Management 201 Fall 2010A.BETTERTON CORPORATIONBetterton Corporation manufactures automobile headlight lenses and uses a standard cost system. At the beginning of the year, the following standards were establis
Purdue - MGMT - 201
NameRecitation Section: Quiz 3 Version 2 Management 201 Fall 2010A.CAJUN CANDY CORPORATION - ComputationsCajun Candy Corporation manufactures giant gourmet suckers. The 20X3 production cost standards developed by Cajun are as follows. Manufacturing ov
Purdue - MGMT - 201
NameRecitation Section: Quiz 3 Version 3 Management 201 Fall 2010A.NOLTON PRODUCTS -ComputationsNolton Products is a manufacturer of low cost, moderate quality desk lamps. The market for inexpensive desk lamps is very competitive; hence, Nolton is ver
Purdue - MGMT - 201
Name Quiz 3 Version 1 (Yellow) Management 201 Spring 2011Recitation Section:A.LAUGHLIN COMPANYLaughlin Company produces automatic coffee makers. Laughlin manufactures all parts necessary for the assembly of the coffee makers, including the tempered gl
Purdue - MGMT - 201
NameRecitation Section: Quiz 3 Version 2 (Blue) - SOLUTIONS Management 201 Spring 2011GARDEN BAY, INC. Garden Bay, Inc., produces hydraulic hoists that hospitals use to move bedridden patients. The costs to manufacture and market the hydraulic hoists at
Purdue - MGMT - 201
NameRecitation Section: Quiz 3 Version 2 (Blue)Management 201 Spring 2011GARDEN BAY, INC. Garden Bay, Inc., produces hydraulic hoists that hospitals use to move bedridden patients. The costs to manufacture and market the hydraulic hoists at the company'
Purdue - MGMT - 201
NameRecitation Section: Quiz 3 Version 3 (Pink) - SOLUTIONS Management 201 Spring 2011A. `EXTRA CORPORATION Extra Corporation can manufacture three types of candy bars at its plant. The plant capacity is limited to 120,000 machine hours per year. Cost
Purdue - MGMT - 201
NameRecitation Section: Quiz 3 Version 3 (Pink)Management 201 Spring 2011A. `EXTRA CORPORATION Extra Corporation can manufacture three types of candy bars at its plant. The plant capacity is limited to 120,000 machine hours per year. Cost data are as f
Purdue - MGMT - 201
!"#$%$&'#()$!*!+,$!*-",$!*-.$%$/0#!$ /1234516/$ $ $ 789:;<=$!*!+$ >;?@ABCADE$F9@G@$ $EXERCISE 2-28 (20 MINUTES) 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. Tire costs: Product cost, variable, direct material Sales commissions: Period cost, variable Wood glue:
Purdue - MGMT - 201
!"#$%$&'!()$!*+,-$!*.+-$!*./$%$01#!$ 023456270$ $ 89:;<=>$!*+,$ ?:@A=@A$:B$BC@D@ECD<$FADA=>=@AF$D@G$9=H:9AF$ $PROBLEM 2-37 (20 MINUTES) 1. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. Income statement Balance sheet Income statement Income statement Cost-of-goods-m
Purdue - MGMT - 201
Mgmt. 201 Spring 2012 CHECK FIGURES FOR RECITATION PROBLEMS Recitation Problems R(1): 2-28, 2-30, 2-36 2-28 2-30 2-36 3. 4. 11. Hourly wages of security guards in the refinery: Product cost, step-fixed costs, OH. Plant insurance: Product cost, fixed costs
Purdue - MGMT - 201
MGMT 201 MANAGERIAL ACCOUNTING I Spring 2012 RECITATION SESSION INFORMATIONRecitation Section Number Recitation Instructor E-mail for Recitation InstructorPlease use my e-mail address for:Recall, one can get help with the material and solving the probl
Purdue - MGMT - 201
!"#$%$&'()$&*+,-$./01('2&$%$&0(+*304&$5$6'7$#$ #%!89$#%!:9$#%!;$$.<=>?@A$#%!8$ 4BACDE$BFGCHCGC@I$CD$B$HB?J@$FKBCD$ $ $1-23 Some activities in the value chain of a manufacturer of cotton shirts are as follows: (a) Growing and harvesting cotton (b) Trans
Purdue - MGMT - 201
!"#$%$&'()$&*+,-$./01('2&$%$&0(*+304&$5$6'7$!$ !%!89$!%:;9$!%<"$ $ .=>?@AB$!%!8$ )C@CDE$CD$FGA$BCHHCDE$IB>JDF$CD$FGA$CDKADF>=L$AMJIFC>D$ $EXERCISE 2-24 (10 MINUTES) The general formula for solving all three cases is as follows:!.=>?@AB$!%:;$ N>BOJFCDE$
Purdue - MGMT - 201
!"#$%$&'()$&*+,-$./01('2&$%$&0(+*304&$5$6'7$8$ 8%8"9$8%:89$8%:;$ $.<=>?@A$8%:8$ 0I@<C@JD$<JK@LM$N=E<OJ?$@OK<P@L$PROBLEM 3-43 (20 MINUTES) 1..<=>?@A$8%8"$ &BC@DE?@$=F$G0H2$ $EXERCISE 3-30 (30 MINUTES) 1. CRUNCHEM CEREAL COMPANY SCHEDULE OF COST OF GOOD
Purdue - MGMT - 201
!"#$%$&'()$&*+,-$./01('2&$%$&0(+*304&$5$6'7$8$ 9%:";$<%98$$PROBLEM 3-60 (CONTINUED) 4. New product costs: Basic System $ 400 300 130 390 210 _ _ $1,040 70 $1,560 Advanced System $ 800 300.=>?@AB$9%:"$ .@CDE%FGHA$IA=JKJ$HALC=EBADE$PROBLEM 3-60 (50 MINU
Purdue - MGMT - 201
!"#$%$&'()$&*+,-$./01('2&$%$&0(+*304&$5$6'7$8$ 9%!:$9%!;:$9%<"$ $ .=>?@AB$9%!$ C=DEFGHI$J>KL$?AFDMG>=$EDLLA=HK$EXERCISE 6-22 (40 MINUTES) 1. Cost of food:EXERCISE 6-22 (CONTINUED) 2. Cost of salaries and fringe benefits for administrative staff:Cost pe
Purdue - MGMT - 201
!"#$%$&'()$&*+,-$./01('2&$3$&0(+*405&$3$6'7$8$ 8%!"9$8%!:9$8%!89$8%!;9$8%<=$ $ .>?@ABC$8%!"$ DEBFGH?I$J@?EG$KHLLB>BIG$M?CNJIHBF$OHGP$FJCB$)Q$JIK$RQ$ $7-20 The low-price company must have a larger sales volume than the high-price company. By spreading its
Purdue - MGMT - 201
!"#$%$&'()$&*+,-$./01('2&$%$&0(+*304&$5$6'7$8$ 8%#9:$8%!;$$.<=>?@A$8%!;$ OI<FI>?@$IGJ$I>C=<DEF=G$FGN=A@$CEIE@A@GEC$$.<=>?@A$8%#9$ B>C=<DEF=G:$HI<FI>?@$IGJ$EK<=LMKDLE$N=CEFGM$EXERCISE 8-14 (10 MINUTES)PROBLEM 8-25 (40 MINUTES) 1. Cost per unit: (a) A
Purdue - MGMT - 201
!"#$%$&'()$&*+,-$./01('2&$%$&0(+*304&$5$6'7$8$ #9%:$ $ .;<=>?@$#9%:$ ,;<AABCD$E$A;<FGHI$>BC?$ $EXERCISE 14-33 (15 MINUTES) The owner's analysis incorrectly includes the following allocated costs that will be incurred regardless of whether the ice cream c
Purdue - MGMT - 201
!"#$%$&'()$&*+,-$./01('2&$3$&0(+*405&$%$6'7$#"$ #8%89:$#8%;<$ $ .=>?@AB$#8%89$ 2CDA$>=$?EF$ $ $PROBLEM 14-49 (20 MINUTES) The analysis prepared by the engineering, manufacturing, and accounting departments of CTR was not correct. However, their recommend
Purdue - MGMT - 201
!"#$%$&'()$&*+,-$./01('2&$3$&0(+*405&$%$6'7$#!$ 8%9":$8%9!:$8%9;$ $ .<=>?@A$8%9"$ 1BCD@E@C$FGHIHJGI?$KEIE@A@HEKL$<@EIG?@<$ $EXERCISE 9-30 (30 MINUTES) 1. Budgeted cash collections for December: Month of Sale November . December . Total cash collections .
Purdue - MGMT - 201
201 - SELF STUDY PROBLEMS SOLUTIONS - WEEK 13 10-7, 10-8, 10-9, 10-10 Problem 10-7, 10-8, 10-9, 10-10 Meaning of DM price variance Who affects DM price variance Meaning of DM quantity variance Who affects DM quantity variance 10-7 An unfavorable direct-m
Purdue - MGMT - 201
!"#$%$&'()$&*+,-$./01('2&$3$&0(+*405&$%$6'7$#8$ #%!9:$#%!;:$#%8<$ $ .=>?@AB$#%!9$ &C=DEFGC%H>=ID=J$K>BLMCDCE>N$>H$>OA=GADJ$OD=EDNKAP$ $EXERCISE 11-26 (20 MINUTES) 1. a. Variable-overhead spending variance = = = b. Variable-overhead efficiency variance =
Purdue - MGMT - 201
!"#$%$&'()$&*+,-$./01('2&$3$&0(+*405&$%$6'7$#8$ #9%:!;$#9%:8$ .<=>?@A$#9%:!$ /04$BCD$/@EFDGB?$4CH=A@I$FCJ@EKA@CK$@JB?GBKF=C$$ $PROBLEM 13-42 (CONTINUED) Corporate management would probably favor the acquisition. Megatronoics has been earning a 13% retur
Purdue - MGMT - 201
MGMT 201 - MANAGEMENT ACCOUNTING I - SYLLABUS Spring 2012 BASIC INFORMATIONProfessor: Dr. Lynda Thoman (thoman@purdue.edu - to be used only for administrative questions about the lectures or the general course) Office hours: Monday and Wednesdays 10:00 A
Purdue - MGMT - 201
Mgmt. 201 Managerial Accounting Weeks 1 & 2Introduction to the course and basic cost termsProfessor ThomanPage 1Definition of accounting: Systematic processing and organizing of financial information-costs, revenues, cash flows, capital expenditures
Purdue - MGMT - 201
V. Additional problemsProblem 1: MARIETTA BRUIN - Identification of costs: Last year after graduating from Indiana University with a B.A. in English, Marietta Bruin found it difficult to find a job. She is currently working as a sales clerk at the Ann Ta
Purdue - MGMT - 201
Mgmt. 201 Managerial Accounting Week 3Cost Allocations Product Costing SystemsProfessor Lynda ThomanProduct costing page 1In the last handout we talked about "applying" (adding) the manufacturing costs to the WIP inventory so we can keep track of all
Purdue - MGMT - 201
III. Additional problemsA. MILAN PASTA (adapted from Zimmerman, 2nd ed. P11-4, Exam I, S'99) At its Lyle Avenue plant, Milan Pasta produces two types of pasta: spaghetti and fettuccine. The two pastas are produced on the same machines, with different set
Purdue - MGMT - 201
Mgmt. 201 Managerial Accounting Week 4Activity Based CostingProfessor Lynda ThomanChap. 5 - page 1ACTIVITY BASED COSTING (ABC) Chapter 5 In Chapter 5 we will, I. Learn about Activity Based Costing (ABC) systems and what makes them different from tradi
Purdue - MGMT - 201
V. ABC Extra problemsA. NESTLE COMPANY Henri Nestle founded the Nestle Company (www.nestle.com) in 1866 with the introduction of baby formula. Today Nestle is "the undisputed leader in the food industry with more than 470 factories around the world." Nes
Purdue - MGMT - 201
Mgmt. 201 Managerial Accounting Week 5Cost Behavior Cost EstimationProfessor ThomanOverview of Chapter 6 Cost behavior and estimationIn Chapter 6 we will: I. Learn terms that describe cost behavior Review the meaning of variable costs, fixed costs, an
Purdue - MGMT - 201
Mgmt. 201 Managerial Accounting Week 6Review for Exam IProfessor Thoman!page 1Topics for the exam1. 2. 3. 4. 5. Cost accounting definitions Flow of costs, Statement of Cost of Goods Manufactured, Statements of Cost of Goods Sold, Inventory Equation,
Purdue - MGMT - 201
Mgmt. 201 Managerial Accounting Week 7Cost Volume Profit (CVP) Model Predicting a firm's earningsProfessor ThomanChap. 8 - page 1Part 2 of the course DECISION MAKING A. Making the decision: Using the accounting information to make good choices. How do
Purdue - MGMT - 201
Mgmt. 201 Managerial Accounting Week #8Absorption Costing versus Variable Costing versus Throughput CostingProf. Thomanpage 1Absorption costing versus Variable costingFor financial reporting how was the product costing done?For cost-volume-profit mo
Purdue - MGMT - 201
Mgmt. 201 - Managerial Accounting Week #9-10Using the Firm's Costing Numbers To Make DecisionsProfessor Thomanpage 1Part 2 DECISION MAKING A. Making the decision: Using the accounting information to make good choices. How does a manager make informed
Purdue - MGMT - 201
Mgmt. 201 Managerial Accounting Week 11Review for Exam IIProfessor Thomanpage 1Topics for the exam1. CVP models (all 3 of them) Margin of safety, operating leverage 2. Absorption costing, variable costing, and throughput costing Why does income diffe
Purdue - ECONOMICS - 251
What is Economics? Chapter 11DefinitionsEconomics : social science that studies the choices that individuals, businesses, governments, and entire societies make as we cope with scarcity and the incentives that influence and reconcile our choices Scarci
Purdue - ECONOMICS - 251
What is Economics? Chapter 11DefinitionsEconomics : social science that studies the choices that individuals, businesses, governments, and entire societies make as we cope with scarcity and the incentives that influence and reconcile our choices Scarci
Purdue - ECONOMICS - 251
The Economic Problem Chapter 21Differing SpecialtiesConsider the following problem:Brain surgeon's BMW 335i needs an engine repairTwo individuals could complete the repairBrain Surgeon could fix in 1 hourAs a Surgeon he makes $1000 an hour As a Mec
Purdue - ECONOMICS - 251
Demand and Supply Chapter 3DemandDemand: maximum quantity a consumer is willing and able to purchase at various prices Law of demand: Inverse relationship between price and quantity demanded; i.e. higher price, less demanded Generally we assume a linear
Purdue - ECONOMICS - 251
ElasticityChapter 41ElasticityElasticity: measure of responsivenessIf you change something such as the price, how does the quantity respondP PD D Q Q 2Price Elasticity of DemandPrice Elasticity of Demand: A measure of the responsiveness of the qu
Purdue - ECONOMICS - 251
Efficiency and EquityChapter 51EfficiencyAllocative Efficiency: resources are used where they are the most highly valued What measures value? Demand = Marginal Benefit What measures the value of the best alternative?Supply = Marginal Cost (Opportunit
Purdue - ECONOMICS - 251
Government Actions in MarketsChapter 61Price ControlsPrice Ceiling: Maximum legal price (the highest price at which a good can legally be sold)Examples: caps, rent controls, salary caps, utilities Creates the following: A shortage Increased Search