Spring06_Midterm1-2_soln

Spring06_Midterm1-2_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. 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. 2. The accounting records of Bronco Company revealed the following information: Raw materials used $ 60,000 Direct labor 125,000 Manufacturing overhead 360,000 Work-in-process inventory, 1/1 50,000 Finished-goods inventory, 1/1 189,000 Work-in-process inventory, 12/31 76,000 Finished-goods inventory, 12/31 140,000 Bronco's cost of goods manufactured is: A) $519,000. B) $522,000. C) $568,000. D) $571,000. E) some other amount. 3. 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. 4. 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. Version 2 Page 1
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5. Dreyfus Manufacturing sells a number of goods whose selling price is heavily influenced by cost. A recent study of product no. 519 revealed a traditionally-derived total cost of $1,019, a selling price of $1,850 based on that figure, and a newly computed activity-based total cost of $1,215. Which of the following statements is true? A) All other things being equal, the company should consider a drop in its sales price. B) The company may have been excessively competitive in the marketplace from a price perspective. C) Product no. 519 could be labeled as being overcosted by the firm's traditional costing procedures. D) If product no. 519 is undercosted by traditional accounting procedures, then all of the company's other products must be undercosted as well. E) Generally speaking, the activity-based cost figure is "less accurate" than the traditionally-derived cost figure. 6. 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. 7. 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 2 Page 2
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8. 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
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Spring06_Midterm1-2_soln - Section I: Do on SCANTRON sheet....

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