Midterm exam F2003 - Concordia University John Molson...

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Concordia University Comm 305/2 Fall 2003 John Molson School of Business Midterm Examination 2 QUESTION 1 Multiple Choice (20 marks) 1. Which costs will change with a decrease in activity within the relevant range? (1 mark) A. Total fixed costs and total variable costs B. Unit variable cost and unit fixed cost C. Unit fixed cost and total variable costs D. Unit fixed cost and total fixed costs. 2. Which of the following statements reflects a key concept of a JIT production system? (1 mark) A. The raw materials, work-in-process, and finished goods inventories of manufacturing companies act as buffers so that operations can proceed smoothly, even if suppliers are late with deliveries or departments are unable to operate for a brief period due to breakdowns or other reasons. B. The use of many suppliers ensures rapid delivery of materials for production. C. The maintenance of a stock of raw materials allows defective materials to be replaced quickly so as to maintain a high rate of productivity. D. Inventories are costly to carry and can be kept to minimum levels or eliminated completely with careful planning. 3. If prime cost = $50,000, conversion cost = $82,000, manufacturing overhead = $57,000, the cost for Direct Materials and Total Manufacturing Cost is: (1 mark) Direct materials Total Mfg. Cost A. $25,000 $107,000 B. $23,000 $132,000 C. D. $105,000 4. Rossiter Company failed to record a credit sale at the end of the year, although the reduction in finished goods inventories was correctly recorded when the goods were shipped to the customer. Which one of the following statements is correct? (2 marks) A. Accounts receivable was not affected, inventory was not affected, sales were understated, and cost of goods sold was understated. B. Accounts receivable was understated, inventory was overstated, sales were understated, and cost of goods sold was overstated. C. Accounts receivable was not affected, inventory was understated, sales were understated, and cost of goods sold was understated. D. Accounts receivable was understated, inventory was not affected, sales were understated, and cost of goods sold was not affected.
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Concordia University Comm 305/2 Fall 2003 John Molson School of Business Midterm Examination 3 Use the following information to answer questions 5 – 7. The following data have been provided by a retailer that sells a single product: This Year Last Year Units Sold 200,000 150,000 Sales Revenue $1,000,000 $750,000 Less: Cost of Goods Sold $ 700,000 $525,000 Gross Margin $ 300,000 $225,000 Less: Operating Expenses 222,000 $210,000 Net Income 78,000 15,000 5. What is the best estimate of the company's variable operating expenses per unit? A. $0.24 per unit B. $0.71 per unit C. $0.90 per unit D. $4.17 per unit. 6. What is the best estimate of the company's total fixed operating expenses per year? A. $ 0 B. $ 44,000 C. $ 80,000 D. $174,000. 7. What is the best estimate of the company's contribution margin for this year?
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This note was uploaded on 04/01/2010 for the course JMSB comm 305 taught by Professor Marivot during the Winter '10 term at Concordia Canada.

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Midterm exam F2003 - Concordia University John Molson...

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