practicemidtermIsolution - UGBA102B - Practice Midterm 1...

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UGBA102B - Practice Midterm 1 (Solutions) Questions 1-18 (multiple choice questions): 3 points each Question 19 (open-ended work-out problem): 6 points 1. Which of the following is more likely to make use of Spruce Company&s managerial account- ing information? (a) government taxing authority (b) an individual contemplating an investment in Spruce Company (e) government regulatory agencies such as the Securities and Exchange Commission (SEC) 2. Which cost(s) listed below should always be ignored in decision making? (a) Opportunity cost (b) Sunk cost* (c) Fixed cost (d) Marginal cost (e) Both (b) and (c) 3. Which of the following costs is both a prime cost and a conversion cost? (a) direct labor* (b) administrative costs (c) direct materials (d) marketing costs (e) manufacturing overhead 4. Full absorption costing (a) includes marketing costs into cost of goods sold (b) treats direct manufacturing costs as a period cost (c) includes ±xed manufacturing overhead as a product cost* (d) is required for internal reports to managers (e) can generate illusion of greater pro±tability when production is less than sales 1
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(a) will increase to $28 per unit (b) will remain at $14 per unit (c) will decrease to $7 per unit* (d) will total $280,000 (e) none of the above is true unit sold contribute to before-tax income ? (a) $0 (b) $0.50* (c) $1 (d) $1.50 (e) none of the above unit CM. CM per unit= total FC BE units = $200 400 =$0.5 months of 2007: Machine Hours Production Costs January 15,100 $11,092 February 13,500 $10,800 March 11,500 $ 9,580 April 15,000 $11,070 May 14,800 $11,692 June 12,100 $ 9,922 production cost estimate using the high-low method? (Round to the nearest dollar) (a) $ 4750* (b) $ 5460 (c) $ 10210 (d) $ 10400 (e) Some other answer VC per unit = (11092-9580) (15100-11500)=.42 Fixed costs = 11092-15100 ± .42=4750 (using the high point) or Fixed costs = 9580-11500 ± .42=4750 (using the low point) 2
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8. The following information is for Barnett Corporation: Product X: Price per unit $10.00 Variable cost per unit $2.50
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practicemidtermIsolution - UGBA102B - Practice Midterm 1...

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