Management_122_Exam_1_-Fall_2009_Solutions

Management_122_Exam_1_-Fall_2009_Solutions - Management 122...

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Management 122 Fall 2009 Danny S. Litt EXAM 1 Solutions I agree to have my grade posted by Student ID Number ________________ _________________ (Signature) (Student ID Number) Name: ________________ Section: _______ PROBLEM POINTS SCORE 1 20 2 20 3 20 4 20 5 20 6 20 7 20 8 20 9 20 10 20 TOTAL 200
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M ANAGEMENT 122 N AME : __________________________ Page | 1 Answer Sheet: Problem 1 Direct Labor Cost ($) $780 Manufacturing Overhead Cost ($) $101 Problem 2 Weighted-Average Method Material Conversion Equivalent units of production for materials and conversion costs (EU) 6,400 5,800 Cost per equivalent unit for materials and conversion costs ($/EU) 3.00 1.25 Problem 3 FIFO Method Material Conversion Equivalent units of production for materials and conversion costs (EU) 5,650 5,100 Cost per equivalent unit for materials and conversion costs ($/EU) 2.83 1.14 Problem 4 Underapplied/(Overapplied) manufacturing overhead ($) $68,894 Underapplied Problem 5 Service Department Operating Department Administration IT Emergency Room Intensive Care Total Total costs after allocation $ $ 0 $517,145 $468,938 $986,083 Problem 6 Linear regression the formula for overhead cost Y = $1,336.61 + $12.3551X Problem 7 High-low method cost formula for overhead cost Y = $1,238.93 + $13.1413X Problem 8 Variable costing net operating income ($) $53,140 Absorption costing net operating income ($) $123,765 Problem 9 Break-even dollar sales for the month ($) $904,255 or $892,857 Margin of safety($) $795,745 or $807,143 Operating leverage 2.14 Problem 10 Zedian Wedding Cake Order ($) $204.63 Towry Wedding Cake Order($) $378.58
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M ANAGEMENT 122 N AME : __________________________ Page | 2 Problem 1 A direct labor worker at Vorwald Corporation is paid $14 per hour for regular time and time and a half for all work in excess of 40 hours per week. The company's fringe benefits cost $6 for each hour of em- ployee time (both regular and overtime). Last week this employee worked 43 hours but was idle for 4 hours due to material shortages. The company treats all fringe benefits relating to direct labor as added direct labor cost and the remainder as part of manufacturing overhead. Requirements Determine how much of the worker's wages for the week would be classified as direct labor cost and how much would be classified as manufacturing overhead cost. Show your work. Direct Labor Cost ($) $780 Manufacturing Overhead Cost ($) $101 Direct Labor Rate Hours Wages 14.00 $ 39 546.00 $ Fringe Benefits 6.00 $ 39 234.00 $ Total direct labor 780.00 $ Manufacturing Overhead Idle time 14.00 $ 4 56.00 $ Overtime premium 7.00 $ 3 21.00 $ Fringe benefits 6.00 $ 4 24.00 $ Total manufacturing overhead 101.00 $
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M ANAGEMENT 122 N AME : __________________________ Page | 3 Problem 2 Green Earth Cleaners makes an environmentally sound household cleaner. The following data is availa- ble for the month of October. Beginning Work in Process Direct Materials 75% Conversion Costs 70% Ending Work in Process Direct Materials 80% Conversion Costs 60% Cost in Beginning Work in Process Direct Materials 3,200 $ Conversion Costs 1,450 $ Additional Information: Work in processing beginning: Units in process 1,000 Units started into production 6,000 Units completed and transferred out 4,000 Work in process, ending: Units in process 3,000 Material costs added 16,000 $ Conversion costs 5,800 $ 21,800 $ Requirements Using the weighted-average method, determine the following: Weighted-Average Method Material Conversion
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This note was uploaded on 12/06/2009 for the course MGMT 122 taught by Professor Saouma during the Spring '08 term at UCLA.

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Management_122_Exam_1_-Fall_2009_Solutions - Management 122...

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