Spring_2010_Final_Exam[1] - Accounting 285 Final Exam...

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Accounting 285 – Final Exam – Spring 2010 1. Iowa Industries makes corn oil and corn meal from corn in a joint process. The corn oil can be further processed into margarine, and the corn meal can be further processed into corn muffin mix. The joint cost incurred to process the corn to the split off point was $140,000. Information on the quantities, value, and further processing costs for the joint product appears below: Quantity Sales value at split off Estimated further processing cost Sales value after processing Corn Oil 800,000 lbs. $0.30/lb. $0.15/lb. $0.60/lb. Corn Meal 1,500,000 lbs. $0.15/lb. $0.45/lb. $0.55/lb. Assume that the joint cost is assigned using physical units and that corn oil is assigned $48,696 of joint cost and corn meal is assigned $91,304 of joint cost. Which products should be processed further? a. Corn oil b. Corn meal c. Both d. Neither 2. A company applies overhead based on standard direct labor hours. When is the fixed overhead volume variance favorable? a. When the actual level of activity is greater than was planned when setting the fixed overhead rate. b. When the actual hours worked are less than the standard direct labor hours. c. When the actual hours worked are more than the standard direct labor hours worked. d. When the actual direct labor rate is less than the standard direct labor rate. 4. A company sells its product for $22 per unit, has variable costs of $10 per unit and fixed costs of $84,000 per year. How many units must be sold to break even? a. 8,400 b. 84,000 c. 154,000 d. 7,000
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5. Malkin Manufacturing applies overhead on the basis of machine hours using a normal costing system. For 2010 the budget formula for overhead is OH = $2,000,000 + $10 per machine hour Management expects to work 400,000 machine hours during 2010. What will the overhead application rate be for 2010? a. $10 per machine hour b. $5 per machine hour c. $17 per machine hour d. $15 per machine hour 7. In your Excel project, why did you need logical functions? a. To determine what should be borrowed and repaid on the cash budget. b. To determine how much inventory should be produced on the production budget. c. To determine how much accounts receivable should be on the balance sheet. d. Logical functions were not used on our spreadsheet project. 8. Cyclone Craze is considering an investment in new lawn care equipment for the football field. The equipment will cost a total of $12,000, but it should decrease labor cost by $3,200 annually. The equipment has a 5 year useful life and a salvage value of $3,000. The required rate of return is 10%. What is the net present value of the equipment? a. $5,000 b. $1,993 c. $3,676 d. $12,131 15. A company is planning on making 10,000 pairs of shoes and budgets materials of $50,000 for these shoes. At the end of the period, 11,200 pairs of shoes have been produced and material costs are $56,100. How did the company do on cost control for material? a.
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Spring_2010_Final_Exam[1] - Accounting 285 Final Exam...

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