2007FL Final Exam Review w ans

2007FL Final Exam Review w ans - ACCT 2302 FINAL EXAM...

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Unformatted text preview: ACCT 2302 FINAL EXAM REVIEW SHEET 2007FL COMPLETION STATEMENTS I. 1. The difference between the target price and the desired profit is the _________________ cost of the product. 2. In the cost-plus pricing formula, the target selling price equals cost + (________________ × cost). 3. The _______________ pricing approach’s major advantage is it is simple to compute. 4. Under the time and material pricing approach, the material charge is based on the cost of direct materials used and a material __________________ for related overhead costs. 5. The transfer of goods between divisions of a company is termed _____________ sales. 6. The three approaches for determining a transfer price are negotiated, ________________ based, and _________________ based transfer prices. 7. To ensure that the selling division attempts to control its costs, the transfer price should be based on _________________ cost instead of actual cost. 8. The formula for the minimum transfer price is: Minimum transfer price = Variable cost + ___________________. 9. _________________ involves contracting with an external party to provide a good or service, rather than performing the work internally. 10. The __________________ approach is consistent with generally accepted accounting principles because it defines the cost base as the manufacturing cost. Answers 1. target 2. markup percentage 3. cost-plus 4. loading charge 5. internal 6. cost, market 7. standard 8. opportunity cost 9. outsourcing 10. absorption cost MATCHING II . Match the items in the two columns below by entering the appropriate code letter in the space provided. A. Cost-plus pricing E. Outsourcing B. Market-based transfer price F. Target selling price C. Markup G. Time and material pricing D. Negotiated transfer price H. Virtual companies ____ 1. Contracting with an external party to provide a good or service. ____ 2. An approach to cost-plus pricing that uses two pricing rates. ____ 3. Product's selling price is determined by adding a markup to a cost base. ____ 4. Transfer price is determined by agreement of division managers. ____ 5. Companies that have no manufacturing facilities. ____ 6. Percentage applied to a product's cost. ____ 7. Price that will provide the desired profit on a product. ____ 8. Transfer price is based on existing prices of competing products. Answers to Matching 1. E 5. H 2. G 6. C 3. A 7. F 4. D 8. B III . Talia Corp. produces digital cameras. For each camera produced, direct materials are $24, direct labor is $16, variable manufacturing overhead is $12, fixed manufacturing overhead is $28, variable selling and administrative expenses are $8, and fixed selling and administrative expenses are $24....
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2007FL Final Exam Review w ans - ACCT 2302 FINAL EXAM...

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