Test _1 - Fall 2008

# Test _1 - Fall 2008 - University of Toronto Joseph L Rotman...

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University of Toronto Joseph L. Rotman School of Management October 27, 2008 RSM222H1F Managerial Accounting Duration: 2 hours Aids allowed: Non-programmable calculator Instructions: Please print your name and student number in the spaces provided below . There are 14 multiple choice and 3 problems. Please use the space provided below for your answer to the multiple choice questions. You must use a pen. Do not use WHITEOUT . Clearly show all computations in the test paper in order to obtain full marks for the problems. Tests written in pencil will not be considered for remarking. ------------------------------------------------ --------------------------------------------- Student name (LAST NAME FIRST) Student number Marks: Answers to the Multiple Choice Questions Part A (14 marks) 1.______ 8.______ Part B (20 marks) 2.______ 9.______ Part C (10 marks) 3.______ 10.______ Part D (10 marks) 4.______ 11.______ Total (54 marks) 5.______ 12.______ 6.______ 13.______ 7.______ 14.______

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Part A ( 14 marks – 1 mark each) 1. The margin of safety in the Flaherty Company is \$24,000. If the company's sales are \$120,000 and its variable expenses are \$80,000, what must its fixed expenses be? a) \$ 8,000. b) \$32,000. c) \$24,000. d) \$16,000. 2. Gerber Company is planning to sell 200,000 units for \$2.00 a unit and will just break even at this level of sales. The contribution margin ratio is 25%. What are the company's fixed expenses? 3. Strap Company uses the weighted-average method in its process costing system. The company has only one processing department. The ending work-in-process inventory consists of 10,000 units, 60% complete with respect to materials. The total dollar value of this inventory is \$38,000. The costs per equivalent unit are \$5.00 for materials and \$4.00 for conversion costs for the period. With respect to conversion costs, what is the ending work-in-process inventory?
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