Spring06_Midterm1-1_soln

Spring06_Midterm1-1_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. 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. 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. 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 4. 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. Version 1 Page 1
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5. The fixed costs per unit are $10 when a company produces 10,000 units of product. What are the fixed costs per unit when 12,500 units are produced? A) $4. B) $6. C) $8. D) $10. E) Some other amount. 6. Gopher charges manufacturing overhead to products by using a predetermined application rate, computed on the basis of machine hours. The following data pertain to the current year: Budgeted manufacturing overhead: $360,000 Actual manufacturing overhead: $315,000 Budgeted machine hours: 15,000 Actual machine hours: 10,000 Overhead applied to production totaled: A) $210,000. B) $240,000. C) $472,500. D) $540,000. E) some other amount. 7. The variable costs per unit are $4 when a company produces 10,000 units of product. What are the variable costs per unit when 8,000 units are produced? A) $4.00. B) $4.50. C) $5.00. D) $5.50. E) Some other amount. Version 1 Page 2
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8. 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, a lengthy strike resulted in actual machine hours being worked of only 65,000. Budgeted and actual manufacturing overhead figures for the year were $4,800,000 and $4,180,000, respectively. On the basis of this information, the company's year-end overhead was: A) overapplied by $280,000. B) underapplied by $280,000.
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Spring06_Midterm1-1_soln - Section I: Do on SCANTRON sheet....

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