Exam 2 Spring 2011

Exam 2 Spring 2011 - P l : - ~ 4'. . ‘ r a, or i .\ g}, m...

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Unformatted text preview: P l : - ~ 4'. . ‘ r a, or i .\ g}, m fig ’2. ' Use the following information to answer questions 1 ~ 4: The controller of GOPOKES, Inc. has asked you to complete a production report based on the following information provided for the finishing department. The finishng department is the second of two departments in a production system using. The controller realizes the format and figures in this report are incorrect but needs the correct figures as soon as possible. GOPOKES, Inc. uses the weighted average method for process costing. Production Remrt Finishing Department costs: Work in process inventory, April 1 , 450 units Materials 100% complete; Conversion 80% complete ......................... .. $ 8,208 * Costs transferred in during the month from the preceding department; 1,950 units ................................................ .. $ 17,940 Materials cost added during the month (materials are added when processing is 50% complete in the Finishing Department) ............. .. $ 6,210 Conversion costs incurred during the month .............................................. . . $13 ,920 Total departmental costs ................................................................... .. $46,27 8 Finishing Department costs assigned to: Units completed and transferred to finished goods, 1,800 units at $25.71 per unit .................................................... .. $ 46,278 Work in process inventory, April 30, 600 units Materials 0% complete; Conversion 40% complete ........................... .. $ 0 Total departmental costs assigned ....................................................... .. $ 46,278 * Consists of cost transferred in from Molding ($4,068), materials cost ($1,980), and conversion cost ($2,160). ______________—__—_._——————-——-—_—— X What is the correct total number of equivalent units of production (EU) with respect to conversion cost? A) 1,800 EU B) 2,010 EU C) 2,040 EU D) 2,400 EU What is the correct cost per equivalent unit with respect to conversion cost? ‘ A) $6.55 / EU B) $7.88 / EU C) $8.00 / EU D) $8.10 / EU 3:. What is the correct total cost per equivalent unit? ‘ A) $21.27 / EU B) $21.48 / EU C) $21.60 / EU x1} D) $21.72 / EU What is the correct total amount of cost transferred to Finished Goods? ’ M A) $37,780 B) $38,880 é: C) $39,096 D) $46,278 SP0903030901 - Page 1 5. Which of the following types of entities would be most likely to use a process costing system? A) An orthopedic specialty hospital B) An large aircraft manufacturer C) A nutritional supplement manufacturer D) An attorney 6. CodFish Company is considering implementing an Activity—Based Costing system. Activity-based P costing: 5‘ A) Traces costs to products and then to activities. B) Measures the number of direct labor hours worked by a company. C) Uses cycle time to assign costs to products by skipping the Stage 1 allocation. D) Traces costs to activities and then to products. Use the followingi_nformation to complete questions 7 — 8: Receiving unloaded 600 crates and processed 7,500 items through the department in the last year. Receiving has three activities: unloading, counting goods, and inspecting. Unloading uses a forklift that is leased for $14,000 per year. The forklift is used only for unloading. The fuel for the forklift is $1,400 per year. Other operating costs (maintenance) for the forklift total $1,500. Inspection uses some special testing equipment that has a depreciation of $2,800 per year and an operating cost of $2,500. Receiving has three employees who have an average salary of $40,000 per year. The work distribution matrix for the receiving personnel is as follows: Percentage of Time Activity on Each Actiyity (%) Unloading 50 Counting 15 Inspecting 35 No other resources are used for these activities. X What is the cost of the unloading activity? A) $76,900 B) $81,400 C) $88,350 D) $91,550 X What is the cost of the inspecting activity? A) $37,400 B) $41,500 C) $47,300 D) $55,900 SP0903030901 — Page 2 Use the following information to resp_ond to questions 9 — 12: Suppose that GOPOKES Manufacturing has two classes of distributors: JH‘ distributors and non—J IT distributors. The J IT distributor places small, frequent orders, and the non—J 1T distributor tends to place larger, less frequent orders. Both types of distributors are buying the same product. GOPOKES Manufacturing provides the following information about customer—related activities and costs for the last quarter of 2008. JIT Distributors Non—JIT Distributors Cost Drivers: Sales Orders 200 20 ’ Sales Calls 150 150 300 Service Calls 900 100 to 00 Average order size 50 500 Manufacturing cost/unit $100 $100 Customer Costs: Processing sales orders $880,000 (‘2 "a ‘3?" 1‘ 30, 0?" Selling goods $320,000 '40, 000 “at, Servicing goods $300 000 Total ‘51,.501-830 1W) i— in Q! (3535; Unit selling price is cost plus 100 percent (equals $200). 9. Using the listed cost drivers to allocate customer costs with Activity—Based Costing, how much customer cost would be allocated to the Non—J 1T distributors (round to the nearest whole dollar)? A) $139,566 B) $260,879 C) $270,000 D) $340,000 10. Which customer type (J IT or Non-J IT) is more profitable when Activity—Based Costing is used to allocate customer costs? Note: Profit may be defined in this case as Revenue — Allocated Customer Costs A) J IT Distributors B) N on-J lT Distributors C) Neither — both are equally profitable D) Not enough information to respond 11. Which customer type (J IT or Non—J IT) is more profitable when revenues are used as the allocation base for customer costs? ‘ Note: Profit may be defined in this case as Revenue — Allocated Customer Costs A) J IT Distributors B) Non—JIT Distributors C) Neither —— both are equally profitable D) Not enough information to respond 12. What is the income (defined as Revenue — Allocated Customer Costs) of the Non-J IT distributors when Activity—Based Costing is used as the allocation method for customer costs (round to the nearest whole dollar)? A) $ 730,000 B) $ 820,000 C) $ 1,730,000 D) $ 2,010,000 SP0903030901 ~ Page 3 13. 17. 16. The production budget describes: A) the frequency of sales orders a company will need in order to meet demand for its best products. B) the number of units a company plans to sell in order to meet the demands of its best customers. C) how many units must be produced in order to meet sales needs and satisfy ending inventory requirements. D) the preparation of a sales forecast. DeepSea Company manufactures and sells a large toy for $27 to J IT retailers. DeepSea requires 250 pounds of raw materials plastic to meet the production needs of the toy. The company currently has 150 pounds of plastic in inventory. DeepSea management desires to have an ending inventory of 200 pounds of plastic. How many pounds of plastic should be budgeted for purchase during the coming period? A) 100 pounds B) 200 pounds C) 300 pounds D) 400 pounds Walleye Company plans on selling 550 units this quarter. The selling price per unit is $12 and the variable cost per unit is $6. Walleye predicts total fixed costs for the company are $12,500 per quarter. Walleye has 200 units in beginning inventory, and the company would like to have 155 units in ending inventory. How many units should Walleye produce for the coming quarter? A) 105 units B) 205 units C) 405 units D) 505 units Which of the following might be included as a disbursement (a disbursement is a cash expense) on a cash budget? Factory Purchase of Equipment Jet Fuel Raw Depreciation Expense for Materials Expense company let A) Yes Yes No B) Yes No Yes C) No Yes Yes D) Yes Yes Yes Halibut Company is estimating the following sales: July ................... ..$45 ,000 August ................ . . $50 .000 September ............ ..$75 ,000 October ............... .1880 ,000 November ............ ..$95 ,000 December ............. ..$80,000 Sales at Halibut are normally collected as follows: 20% in the month of sale; 50% in the month following the sale; and the remaining 30% in the second month following the sale. On December 31, what amount will the balance of accounts receivable be as shown on the company’s balance sheet (in other words. . .how much money do customers owe Halibut at the end of the year)? A) $79,500 B) $86 500 C) $89 ,500 D) $92,500 SP0903030901 — Page 4 18. The sales budget is: / A) a forward—looking assessment of the frequency and extent to which the viability of the company remains sound. B) driven primarily by the ability of the company to effectively analyze each product in the company” s production forecast. C) the projection approved by the budget committee that describes expected sales in units and dollars. D) the retroactive analysis of sales by a company’s sales department. 19. Salmon, Inc. produces fishy—spaghetti in bowls. The sales budget for the first six months of the year is as ‘ follows: Unit Sales Dollar Sales ($) January ................... .. 300,000 450,000 February ................. .. 400,000 600,000 March .................... .. 350,000 525 ,000 April ...................... .. 200,000 300,000 May ....................... .. 100,000 150,000 June ....................... .. 800,000 1,200,000 Salmon, Inc. policy requires that ending inventories for each month be 35 percent of the next month’s sales. At the beginning of January, the inventory of spaghetti is 85,000 bowls. How many bowls should Salmon, Inc. produce in January? A) 355 ,000 bowls B) 365 ,000 bowls C) 395 ,000 bowls D) 405 ,000 bowls 20. SwordFish Company has a cash balance of $8 500 on April 1. The company must maintain a minimum cash balance of $4,000. During April, cash receipts of $52,000 are planned. Cash disbursements during the month are expected to total $62,000. Ignoring interest payments, during April the company will need to borrow: A) $2,500 B) $3 ,500 C) $4,500 D) $5 ,500 SP0903030901 —— Page 5 Use the following to answer questions 21-22: GreatWhiteShark Company will open a new store on January 1. Based on experience from its other retail outlets, GreatWhiteShark Company is making the following sales projections: Cash Sales Credit Sales January ............ .. $80,000 $95,000 February............. $40,000 $60,000 March ............. . . $75 ,000 $55 ,000 April .............. .. $50,000 $90,000 GreatWhiteShark Company estimates that 65% of the credit sales will be collected in the month following the month of sale with the balance (the remaining 35%) collected in the second month following the month of sale (January credit sales will be collected in February and March, February credit sales will be collected in March and April, etc .). f 21. Based on these data, the balance in accounts receivable on January 31 will be (how much is the company owed by customers at the end of J anuary?): A) $59,650 B) $65 ,235 C) $88,450 D) $95,000 \/22. How much total cash will be collected in the month of April? A) $56,750 B) $88,550 C) $98,050 D) $106,750 / 23. When computing standard materials cost variances, the difference between actual and standard price multiplied by actual quantity yields a(n): A) combined price and quantity variance. B) efficiency variance. ‘ C) price variance. D) usage variance. J 24. The standard price per unit of materials is used in the calculation of which of the following variances? Materials Materials Usage Price Variance Variance A) No No B) No Yes C) Yes No D) Yes Yes SP0903030901 — Page 6 25 . The following materials standards have been established for a particular raw material used in Perch / Company's sole product: Standard quantity per unit of output. . . . . . 2.0 pound Standard price ................................ .. $16.20 per pound The following data pertain to operations concerning the product for the last month: Actual materials purchased ................ . . 3,100 pounds Actual cost of materials purchased ....... .. $64,650 Actual materials used in production ..... .. 2,800 pounds Actual output ............................... .. 2,200 units What is the materials usage variance for the month? A) $23 ,320 F B) $25 ,920 F C) $23,320 U D) $25 ,920 U i/ 26. The following materials standards have been established for a particular raw material used in BlueGill Company's sole product: Standard quantity per unit of output. .. . . . 0.2 pounds Standard price ................................ .. $28.40 per pound The following data pertain to operations concerning the product for the last month: Actual materials purchased ................ . . 9,700 pounds Actual cost of materials purchased ....... .. $112,230 Actual materials used in production ..... . . 3 ,500 pounds Actual output ............................... .. 65 ,500 units What is the materials price variance for the month? A) $139,450 F B) $163 ,250 F C) $139,450 U D) $163 ,250 U SP0903030901 — Page 7 9 /l7 . The following labor standards have been established for a particular product: Standard labor—hours per unit of output .......... .. 5 .9 hours Standard labor rate .................................. .. $15 .65 per hour The following data pertain to operations concerning the product for the last month: Actual hours worked .......... .. 4,200 hours Actual total labor cost ........ .. $45,000 Actual output .................. .. 800 units What is the labor efficiency variance for the month? A) $8,138 F B) $9,300 F C) $8,138 U D) $9,300 U V/ 28. The following labor standards have been established for a particular product: Standard labor-hours per unit of output .......... .. 3 .6 hours Standard labor rate .................................. .. $7 .45 per hour The following data pertain to operations concerning the product for the last month: Actual hours worked .......... .. 5 ,700 hours Actual total labor cost ........ .. $52,860 Actual output .................. .. 2,400 units What is the labor rate variance for the month? A) $10,395 F B) $44,605 F C) $10,395 U D) $44,605 U V/ 29. The following information pertains to Pike Company‘s direct labor for March: Standard direct labor hours ................ .. 14,000 Actual direct labor hours ................... .. 20,000 Favorable direct labor rate variance ...... .. $5 ,400 Standard direct labor rate per hour ....... .. $7.30 What was Pikes’ total actual direct labor cost for March? A) $1 17,600 B) $128 ,600 C) $138,600 D) $140,600 / 30. When attending a football contest at Boone Pickens Stadium, what color are you most likely to see? A) Orange B) Mauve C) Pink D) Lavender SP0903030901 —— Page 8 ...
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Exam 2 Spring 2011 - P l : - ~ 4'. . ‘ r a, or i .\ g}, m...

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