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Key_Practice Exam 2 Fall11

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

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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
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
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 Cost...

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