View the step-by-step solution to: 1. (TCO A) Wages paid to the factory maintenance supervisor are

I have some questions in Accounting that I need answered by 2/24/2011, 9pm eastern time or 8pm central time. I have attached the questions.
CourseheroAcct.Questions.docx

1. (TCO A) Wages paid to the factory maintenance supervisor are considered an example of: (Points: 5)
Direct Labor - yes, Period Cost - yes
Direct Labor - yes, Period Cost - No
Direct Labor - no , Period Cost - yes
Direct Labor - no , Period Cost - no

2. (TCO A) Machinery Depreciation on a manufacturing plant is an element of: (Points: 5)
Conversion cost - yes, period cost - no
Conversion cost - yes, period cost - yes
Conversion cost - no, period cost - yes
Conversion cost - no, period cost - no

3. (TCO B) Evergreen Corp. has provided the following data:
Sales per period
Selling price
Variable manufacturing cost
Selling expenses
Administrative expenses

1,000 units
$40 per unit
$12 per unit
$5,100 plus 5% of selling price
$3,000 plus 20% of selling price

The number of units needed to achieve a target net operating income of $63,900 would be:

(Points: 5)
4,000 units
3,950 units
4,150 units
4,050 units

4. (TCO B) Garth Company sells a single product. If the selling price per unit and the variable expense
per unit both increase by 12% and fixed expenses do not change, then: (Points: 5)
Contribution Margin Per Unit - Increases, Contribution Margin Ratio - Increases, Break-Even in Units
- Decreases
Contribution Margin Per Unit - No Change, Contribution Margin Ratio - No Change, Break-Even in
Units - No Change
Contribution Margin Per Unit - No Change, Contribution Margin Ratio-Increases, Break-Even in Units
- No Change
Contribution Margin Per Unit - Increases, Contribution Margin Ratio - No Change, Break-Even in
Units - Decreases

5. (TCO E) Rebel Company manufactures a single product and has the following cost structure:
Variable costs per unit:
Production................................................. $5
Selling and administrative........................... $3
Fixed costs in total:
Production................................................. $32,000
Selling and administrative........................... $16,000

Last year there were no beginning inventories, 8,000 units were produced, and 7,800 units were sold.
Under variable costing, the unit product cost would be:

(Points: 5)
$5
$8
$9
$11

6. (TCO F) Vagon Corporation has provided data concerning the company's Manufacturing Overhead
account for the month of September. Prior to the closing of the overapplied or underapplied balance to
Cost of Goods Sold, the total of the debits to the Manufacturing Overhead account was $76,000 and the
total of the credits to the account was $86,000. Which of the following statements is true? (Points: 5)
Manufacturing overhead transferred from Finished Goods to Cost of Goods Sold during the month
was $76,000
Actual manufacturing overhead incurred during the month was $66,000
Manufacturing overhead applied to Work in Process for the month was $76,000
Manufacturing overhead for the month was overapplied by $10,000

7. (TCO G) An investment project for which the net present value is $300 would result in which of the following
conclusions? (Points: 5)
the net present value is too small; the project should be rejected
the investment project promises slightly more than the required rate of return
the net present value method is not suitable for evaluating this project; the internal rate of return method should
be used
the investment project should only be accepted if net present value is zero; a positive net present value
indicates an error(s) in the estimates associated with the analysis of this investment.

8. (TCO G) The Gomez Company is considering two projects, T and V. The following information has been
gathered on these projects:
Project T
Project V
Initial investment needed..............................$112,500
$75,000
Present value of future cash inflows.............. $168,000
$107,000
Useful life.................................................... 10 years
10 years
Based on this information, which of the following statements is (are) true?
I. Project T has the highest ranking according to the project profitability index criterion.
II. Project V has the highest ranking according to the net present value criterion.

(Points: 5)
Only I
Only II
Both I and II
Neither I nor II

9. (TCO B) Variable expenses for Alpha Company are 25% of sales. What are sales at the break-even point,
assuming that fixed expenses total $150,000 per year: (Points: 5)
$200,000
$375,000
$600,000
$150,000

10. (TCO F) Monica Company uses a predetermined overhead rate based on machine-hours to apply manufacturing
overhead to jobs. The company manufactures tools to customer specifications. The following data pertain to Job
1501:
Direct materials used: $4,200
Direct labor hours worked : 400
Direct labor rate per hour: $7.50
Machine hours used: 200
Predetermined overhead rate per machine hour :$15.00
What is the total manufacturing cost recorded on Job 1501?

(Points: 5)
$8,800
$10,200
$10,300
$11,100

1. (TCO C) The following overhead data are for a department of a large company.
Actual costs
Incurred
360

Static
budget
340

Activity level (in units)
Variable costs:
Indirect materials
$4,182
$4,148
Electricity
$2,536
$2,414
Fixed costs:
Administration
$6,540
$6,500
Rent
$6,310
$6,400
Required: Construct a flexible budget performance report that would be useful in assessing how well costs were
controlled in this department.
2. (TCO D) Lindon Company uses 5,000 units of Part X each year as a component in the assembly of one of its
products. The company is presently producing Part X internally at a total cost of $80,000 as follows:
Direct Materials...............................................$18,000
Direct Labor......................................................20,000
Variable Manufacturing Overhead................... 12,000
Fixed Manufacturing Overhead....................... 30,000
Total Costs.......................................................80,000
An outside supplier has offered to provide Part X at a price of $13 per unit. If Lindon stops producing the part
internally, one-third of the manufacturing overhead would be eliminated.
Required: Prepare a make or buy analysis showing the annual advantage or disadvantage of accepting the outside
supplier's offer.
3. (TCO E) Duif Company's absorption costing income statement for the last year of operations is presented
below:
Sales.........................................................$70,000
Less cost of goods sold:

Beginning inventory.............................................. 0
Add cost of goods manufactured..................48,000
Goods available for sale...............................48,000
Less ending inventory....................................6,000
Cost of goods sold......................................42,000
Gross margin..............................................28,000
Less selling & admin. expenses....................25,000
Net operating income................................$ 3,000
Data on units produced and sold for the year are given below:
Units in beginning inventory...................................0
Units produced..............................................8,000
Units sold......................................................7,000
Fixed factory overhead totaled $16,000 for the year. This overhead was applied to products at a rate of $2 per unit.
Variable selling and administrative expenses were $3 per unit sold.
Required: Prepare a new income statement for the year using variable costing. Comment on the differences between
the absorption costing and the variable costing income statements.
4. (TCO A) The following data (in thousands of dollars) have been taken from the accounting records of Karmana
Corporation for the just completed year.
Sales ...............................................................$950
Raw materials inventory, beginning .....................$10
Raw materials inventory, ending .........................$30
Purchases of raw materials ...............................$120
Direct labor ......................................................$200
Manufacturing overhead ...................................$230
Administrative expenses ...................................$100
Selling expenses ...............................................$140
Work in process inventory, beginning ..................$70
Work in process inventory, ending ......................$40
Finished goods inventory, beginning ..................$100
Finished goods inventory, ending ........................$80
Use these data to prepare (in thousands of dollars) a schedule of Cost of Goods Manufactured and a Schedule of
Cost of Goods Sold for the year. In addition, elaborate on the relationship between these schedules as they relate to
the flow of product costs in a manufacturing company.
1. (TCO F) Maverick Corporation uses the weighted-average method in its process costing system. Data concerning
the first processing department for the most recent month are listed below:
Work in process, beginning:
Units in beginning work in process inventory 400
Materials costs $6,900
Conversion costs $2,500
Percent complete for materials 80%
Percent complete for conversion 15%
Units started into production during the month 6,000
Units transferred to the next department during the month 5,600
Materials costs added during the month $112,500
Conversion costs added during the month $210,300
Ending work in process:
Units in ending work in process inventory 800
Percent complete for materials 70%
Percent complete for conversion 30%

Required: calculate the equivalent units for materials for the month in the first processing department.
2. (TCO F) Hill Corporation uses the weighted-average method in its process costing system. This month, the
beginning inventory in the first processing department consisted of 700 units. The costs and percentage completion
of these units in beginning inventory were:
Materials costs $9,100 -- 80% complete
Conversion costs $5,400 -- 25% complete
A total of 7,000 units were started, and 6,600 units were transferred to the second processing department during the
month. The following costs were incurred in the first processing department during the month:
Materials costs $96,700
Conversion costs $180,700
The ending inventory was 80% completed for materials and 80% completed for conversion costs.
Required: Calculate the equivalent units for conversion costs for the month in the first processing department.
3. (TCO G) - (Ignore income taxes in this problem.) Axillar Beauty Products Corporation is considering the
production of a new conditioning shampoo which will require the purchase of new mixing machinery. The
machinery will cost $375,000, is expected to have a useful life of 10 years, and is expected to have a
salvage value of $50,000 at the end of 10 years. The machinery will also need a $35,000 overhaul at the
end of year 6. A $40,000 increase in working capital will be needed for this investment project. The
working capital will be released at the end of the 10 years. The new shampoo is expected to generate net
cash inflows of $85,000 per year for each of the 10 years. Axillar's discount rate is 16%.
Required:
a.
What is the net present value of this investment opportunity?
b.
Based on your answer to (a) above, should Axillar go ahead with the new conditioning shampoo?

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