Spring06_Midterm1-4_soln

Spring06_Midterm1-4_soln - Section I: Do on SCANTRON sheet....

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Section I: Do on SCANTRON sheet. ONLY SCANTRON circles graded (15 x 1=15 points). ===================================================================== 1. Armaggio Industries reported the following data for the year just ended: sales revenue, $950,000; cost of goods sold, $420,000; cost of goods manufactured, $330,000; and selling and administrative expenses, $170,000. Assuming no other expenses, Armaggio's income would be: A) $30,000 B) $200,000 C) $360,000 D) $530,000 E) $620,000 2. The salary that is sacrificed by a college student who pursues a degree full time is a(n): A) sunk cost. B) out-of-pocket cost. C) opportunity cost. D) differential cost. E) marginal cost. 3. Under a traditional costing system, which of the following costs would likely be classified as indirect with respect to the various products manufactured? A) Plant maintenance. B) Factory supplies. C) Utilities. D) Machinery depreciation. E) All of the above would be considered indirect costs. 4. Baxter Company, which pays a 10% commission to its salespeople, reported sales revenues of $210,000 for the period just ended. If the commission is the only variable sales expense, and if fixed and variable sales expenses totaled $56,000, what would they total at sales of $168,000? A) $16,800. B) $35,000. C) $44,800. D) $51,800. E) some other amount. Version 4 Page 1
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5. Which of the following is the correct method to calculate a predetermined overhead rate? A) Budgeted total manufacturing cost ÷ budgeted amount of cost driver. B) Budgeted overhead cost ÷ budgeted amount of cost driver. C) Budgeted amount of cost driver ÷ budgeted overhead cost. D) Actual overhead cost ÷ budgeted amount of cost driver. E) Actual overhead cost ÷ actual amount of cost driver. 6. An accountant recently debited Work-in-Process Inventory and credited Manufacturing Overhead. The accountant was: A) applying a predetermined overhead amount to production. B) recognizing receipt of the factory utilities bill. C) recording a year-end adjustment for an insignificant amount of underapplied overhead. D) recognizing actual overhead incurred during the period. E) recognizing the completion of production. 7. Conversion costs are: A) direct material, direct labor, and manufacturing overhead. B) direct material and direct labor. C) direct labor and manufacturing overhead. D) prime costs. E) period costs. 8. Electricity costs that were incurred by a company's factory machines should be debited to which of the following? [Hint: Be careful. Think about this carefully.] A) Selling & Administrative Expense. B) Accounts Payable. C) Cash. D) Manufacturing Overhead. E) Work-in-Process Inventory. Version 4 Page 2
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9. Maher, Inc., applies manufacturing overhead at the rate of $60 per machine hour. Budgeted machine hours for the current period were anticipated to be 80,000; however,
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Spring06_Midterm1-4_soln - Section I: Do on SCANTRON sheet....

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