Key_Practice Exam 2 Fall11

Key_Practice Exam 2 Fall11 - Practice Exam MID TERM # 2...

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MID TERM # 2 Practice Exam
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Cost Accounting, Tracing, Allocation & Systems 2. JP Manufacturing Co. produces two products. The products' identified costs are as follows: The company's overhead costs of $68,000 are allocated based on direct material cost . Assume 4,000 units of product A are produced and 5,000 units of Product B are produced. What is the total amount of production costs that will be accumulated for Product A? A. $28,000 B. $34,000 C. $36,000 D. $64,000 (1) OH Allocation rate = $68,000 / $34,000 = $2 (2) OH Allocation to A = $2 x $18,000 = $36,000 = 34,000 + Total cost = DM + DL + MOH Product A Product B Direct Materials $18,000 $16,000 Direct Labor $10,000 $28,000 Production cost for A = 18,000 + 10,000 + 36,000 = $64,000
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Cost Accounting, Tracing, Allocation & Systems 4. Joint products A and B emerge from common processing that costs $2000 and yields 300 units of Product A and 100 units of Product B. Product A can be sold as-is for $5 per unit or processed further and sold later for $12 per unit. Product B can be sold as-is for $25 per unit or processed further and sold later for $30 per unit. The additional per unit processing costs for Product A and B total $5 and $8, respectively. How much joint costs will be assigned to Product B if joint costs are allocated on the basis of units produced ? A) $ 360 B) $ 500 C) $750 D) $1,000 (1) Allocation rate = $2,000 / 400 units = $ 5 / unit (2) Allocation to A = 300 units x $5 =1,500 Allocation to B = 100 units x $5 = 500
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Cost Accounting, Tracing, Allocation & Systems 5. Joint products A and B emerge from common processing that costs $2000 and yields 300 units of Product A and 100 units of Product B. Product A can be sold as-is for $5 per unit or processed further and sold later for $12 per unit. Product B can be sold as-is for $25 per unit or processed further and sold later for $30 per unit. The additional per unit processing costs for Product A and B total $5 and $8, respectively. How much joint costs will be assigned to Product A if joint costs are allocated on the basis of relative sales values ? A) $ 1,080 B) $ 500 C) $750 D) $1,250 MV = # units x SP @ split off point MV of A = 300 units x $5 SP = $1,500 MV of B = 100 units x $25 SP = $2,500 (1) Allocation rate = $2,000 / $4,000 =$ 0.5 (2) Allocation to A = $1,500 x $ 0.5 = $ 750 Allocation to B = $2,500 x $ 0.5 = $ 1,250
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Cost Management in an Automated Business Environment 9. Vardalos Company produces several lines of storage boxes. The plant is highly automated and uses an activity-based costing system to allocate overhead costs to its various products. The costs and cost drivers associated with four activity cost pools are given below: Activities Unit Level Batch Level Product Level Facility Level Cost $100,000 $40,000 $20,000 $240,000 Cost Driver 2000 labor hrs 40 set ups % of use 12,000 units Production of 800 units of its popular over-stuffed box required 200 labor hours, 6 setups, and consumed 15% of the product sustaining activities. What amount of unit-level costs will be allocated to the product? A)$40,000 B)$16,000 C)$10,000 D)$6,000 (1) Allocation Rate = $100,000 / 2000 LH= $50 (2) Allocated to box = 50 x 200 = 10,000
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Cost Management in an Automated Business Environment 10. Vardalos Company produces several lines of storage boxes. The plant is highly automated and uses an activity-based costing system to allocate overhead costs to its various products. The costs and cost drivers
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Key_Practice Exam 2 Fall11 - Practice Exam MID TERM # 2...

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