Fall 2006 - Exam Solutions

Fall 2006 - Exam Solutions - Managerial Accounting Acct...

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Managerial Accounting Acct 2301 Fall 2006 Exam 1 Name: 1. Which of the following is an example of a factory overhead cost? a. Repair and maintenance cost on the administrative building b. Factory heating and lighting cost c. Insurance premiums on salespersons’ automobiles d. President’s salary e. All of the above are factory overhead costs 2. The Wry Company has sales of $100,000 with variable costs totaling $80,000, fixed costs of $40,000, and an operating loss of $20,000. By how much would sales have to increase to achieve a breakeven point? a. $20,000 BE = FC / CM Ratio b. $40,000 BE = $40,000 / 20% c. $100,000 BE = $200,000 d. $200,000 At $100,000, sales must increase $100,000 to e. None of the above have BE sales of $200,000 3. Putman Manufacturing began operations on August 1, 2006. During August, Putman had the following transactions: purchased $ 5,000 of raw materials; paid the President of the company $20,000; paid production workers $ 12,000 ; and paid rent of $ 3,000 for the factory. The company produced 5,000 units and sold 3,500 units. What is the amount of cost of goods sold for August? a. $20,000 5,000 + 12,000 + 3,000 = $20,000 b. $14,000 $20,000 / 5,000 = $4 * 3,500 = $14,000 c. $28,000 d. $6,000 e. None of the above 4. During its first year of operations, the Brittain Company paid $ 12,000 for direct materials and $ 13,000 in wages for production workers. Lease payments and utilities on the production facilities amount to $ 5,000 . General, selling, and administrative expenses amounted to $6,000. The company produced 6,000 units and sold 5,000 units at a price of $15.00 per unit. The product cost per unit is which of the following amounts? a. $5.00 $ 12,000 + 13,000 + 5,000 = $30,000 b. $6.00 $30,000 / 6,000 = $5 c. $7.50 d. $9.00 e. None of the above
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5. To portray a more favorable financial position than actually exists, management can a. misclassify a product cost as a general, selling, and administrative cost in a period when units sold exceed units produced. b. misclassify a product cost as a general, selling, and administrative cost in a period when units sold are less then units produced. c. misclassify general, selling, and administrative cost as a product cost in a period when units sold exceed units produced. d. misclassify general, selling, and administrative cost as a product cost in a period when units sold are less then units produced. (Doing so “traps” some costs that would normally be expensed in inventory… and inventory is not expensed.) e. None of the above 6. The following information relates to Pfeiffer Company’s 2005 accounting period: (1.) Production supervisor salary $ 20,000 (2.) Raw materials used $ 12,000 (3.) Rent paid on admin office $ 8,000 (4.) Rent of production machinery $ 5,000 (5.) Production Wages $ 18,000 (6.) Utilities – admin building $ 6,000 (7.) Sales Revenue $66,000 (8.) Units produced 5,500 (9.) Units sold 3,500 Based on this information, what is the amount of net income/(loss) for the
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Fall 2006 - Exam Solutions - Managerial Accounting Acct...

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