310final2 - ACCT310 Final Exam Part 2 S2007 Name: _ Date: _...

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ACCT310 Final Exam Part 2 S2007 Name: __________________________ Date: _____________ Use the following to answer question 1: (Ignore income taxes in this problem.) Evans Company is considering rebuilding and selling used alternators for automobiles. The company estimates that the net cash flows (sales less cash operating expenses) arising from the rebuilding and sale of the used alternators would be as follows: Years 1-10 . ...... $100,000 Year 11 . ........... $(30,000) Year 12 . ........... $110,000 In addition, Evans Company would need to purchase equipment costing $275,000. The equipment would have a 12-year life and a $25,000 salvage value. The company's required rate of return is 10%. 1. The net present value of the project is closest to: A) $364,090 B) $372,065 C) $339,090 D) $389,090 Use the following to answer question 2: The following data (in thousands of dollars) have been taken from the accounting records of Karsten Corporation for the just completed year. Sales . ..................................................................... $990 Raw materials inventory, beginning . .................... $70 Raw materials inventory, ending. .......................... $30 Purchases of raw materials. ................................... $100 Direct labor. ........................................................... $200 Manufacturing overhead . ...................................... $160 Administrative expenses . ...................................... $180 Selling expenses. ................................................... $150 Work in process inventory, beginning . ................. $40 Work in process inventory, ending . ...................... $70 Finished goods inventory, beginning . ................... $150 Finished goods inventory, ending . ........................ $130 Use these data to answer the following series of questions. Page 1
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ACCT310 Final Exam Part 2 S2007 2. The cost of goods sold for the year (in thousands of dollars) was: A) $490 B) $450 C) $620 D) $600 3. The plant manager's salary is an example of a: A) Unit-level activity. B) Batch-level activity. C) Product-level activity. D) Organization-sustaining activity. 4. Gamach Corporation is a wholesaler that sells a single product. Management has provided the following cost data for two levels of monthly sales volume. The company sells the product for $104.50 per unit. Sales volume (units). .............................................. 5,000 6,000 Cost of sales. .......................................................... $295,000 $354,000 Selling, general, and administrative costs. ............. $186,000 $202,800 The best estimate of the total monthly fixed cost is: A) $102,000 B) $518,900 C) $556,800 D) $481,000 Use the following to answer question 5: Selected data for Marton Company follow: Year 2 Year 1 Preferred stock, par value $50, 10% . .................... $100,000 $100,000 Common stock, par value $20. .............................. $400,000 $400,000 Additional paid-in capital--common stock . .......... $100,000
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310final2 - ACCT310 Final Exam Part 2 S2007 Name: _ Date: _...

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