accounting - ACCT 3327 Cost Accounting Final Exam Fall 2011...

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ACCT 3327 – Cost Accounting Final Exam Fall 2011 Name_________________________ Instructions: Once you have read this exam, you must not discuss the exam with anyone else, especially your class mates. If you have questions, however, fell free to call or email me. In addition, you may use your textbook, class notes, in-class problems or prior homework as resources to assist you with the exam if necessary. A hard copy of your answers to the exam is due to me on Monday, December 5 by 4:00 PM.
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Problem 1 (50 Points Total) Local Markets, Inc., operates three stores in a large metropolitan area. A segmented absorption costing income statement for the company for the last quarter is given below: Local Markets, Inc. Income Statement For the Quarter Ended June 30 The Wallingford Store has consistently shown losses over the past two years. For this reason, management is giving consideration to closing the store. The company has asked you to make a recommendation as to whether the store should be closed or kept open. The following additional information is available for your use: a. The breakdown of the selling and administrative expenses is as follows: b. The lease on the building housing the Wallingford Store can be broken with no penalty. c. The fixtures being used in the Wallingford Store would be transferred to the other two stores if Wallingford were closed. d. The general manager of the Wallingford Store would be retained and transferred to another positive in the company if Wallingford Store were closed. She would be filling a position that would otherwise be filled by hiring a new employee at a salary of $11,500 per quarter (This position is currently filled but will become open July 1). The general manager of the Wallingford Store would be retained at her normal salary of $12,600 per quarter. All other employees in the store would be discharged. e. The company has one delivery crew that serves all three stores. One delivery person could be discharged if the Wallingford Store were closed. This person’s salary is $4,200 per quarter. The delivery equipment would be distributed to the other stores. The equipment does not wear out through use, but does eventually become obsolete. f.
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accounting - ACCT 3327 Cost Accounting Final Exam Fall 2011...

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