DeVry ACCT 505 Week 4 Midterm

 

1.Question :(TCO A)  Wages paid to an assembly line worker in a factory are a

Student Answer: Prime Cost YES…..Conversion Cost NO.   Prime Cost YES…..Conversion Cost YES.   Prime Cost NO….Conversion Cost NO.   Prime Cost NO…..Conversion Cost YES.

 

2.Question :(TCO A)  A cost incurred in the past that is not relevant to any current decision is classified as a(n)
Comments:

 

     

3.Question :(TCO A) Depreciation of office buildings and office equipment is also known as

 

 

4.Question :(TCO A)  When the activity level is expected to increase within the relevant range, what effects would be anticipated with respect to each of the following?

Student Answer: Fixed costs per unit increase and variable costs per unit increase.   Fixed costs per unit decrease and variable costs per unit do not change.   Fixed costs per unit do not change and variable costs per unit do not change.   Fixed costs per unit do not change and variable costs per unit increase.

 

     

5.Question :(TCO F)  Which of the following statements is true?I. Overhead application may be made slowly as a job is worked on.II. Overhead application may be made in a single application at the time of completion of the job.III. Overhead application should be made to any job not completed at year end in order to properly value the work in process inventory.

 

 

6.Question :(TCO F)  A job-order cost system is employed in those situations where

Student Answer:many different products, jobs, or batches of production are being produced each period.   manufacturing involves a single, homogeneous product that flows evenly through the production process on a continuous basis.   the product moves from department to department before being completed.   the unit cost of production is computed by dividing the total production costs by the number of units produced.

 

     

7.Question :(TCO F)  The FIFO method only provides a major advantage over the weighted-average method in that

 

     

8.Question :(TCO B)  The contribution margin ratio always decreases when the

 

     

9.Question :(TCO B)  Which of the following would not affect the break-even point?

 

     

10.Question :(TCO E) In an income statement prepared using the variable costing method, variable selling and administrative expenses would

1.Question :(TCO A) The following data (in thousands of dollars) have been taken from the accounting records of Larop Corporation for the just-completed year: Sales………………………………………………………………………$910 Purchases of raw materials…………………………………………$225 Direct labor……………………………………………………………..$245 Manufacturing overhead…………………………………………….$265 Administrative expenses…………………………………………….$150 Selling expenses……………………………………………………….$140 Raw materials inventory, beginning……………………………….$15 Raw materials inventory, ending…………………………………..$45 Work-in-process inventory, beginning……………………………$20 Work-in-process inventory, ending……………………………….$55 Finished goods inventory, beginning……………………………..$100 Finished goods inventory, ending…………………………………$135Required: Prepare a Schedule of Cost of Goods Manufactured in the text box below.

………………………………….$670

Points Received:15 of 15 Comments:outstanding

 

     

2.Question :(TCO F) The Illinois Company manufactures a product that goes through three processing departments. Information relating to activity in the first department during June is given below.                                                                        Percentage Completed                                                    Units            Materials     Conversion Work in process, June 1              150,000             75%          55% Work in process, Jun 30              145,000             85%          75%The department started 475,000 units into production during the month and transferred 480,000 completed units to the next department.Required: Compute the equivalent units of production for the first department for June, assuming that the company uses the weighted-average method of accounting for units and costs.

 

     

3.Question :(TCO B) A tile manufacturer has supplied the following data:Boxes of tile produced and sold                                      625,000Sales revenue                                                               $2,975,000Variable manufacturing expense                                    $1,720,000Fixed manufacturing expense                                         $790,000Variable selling and admin expense                                $152,000Fixed selling and admin expense                                    $133,000Net operating income                                                    $180,000Required:a. Calculate the company’s unit contribution margin.b. Calculate the company’s unit contribution ratio.c. If the company increases its unit sales volume by 5% without increasing its fixed expenses, what would the company’s net operating income be?

 

     

4.Question : (TCO E) Lehne Company, which has only one product, has provided the following data concerning its most recent month of operations:Selling price  $         125   Units in beginning inventory 600Units oroduced 3000Units sold 3500Units in ending inventory 100   Variable costs per unit:  Direct materials  $           15Direct labor  $           50Variable manufacturing overhead  $             8Variable selling and admin  $           12   Fixed costs:  Fixed manufacturing overhead  $      75,000Fixed selling and admin  $      20,000The company produces the same number of units every month, although the sales in units vary from month to month. The company’s variable costs per unit and total fixed costs have been constant from month to month.Required: a. What is the unit product cost for the month under variable costing? b. What is the unit product cost for the month under absorption costing? c. Prepare an income statement for the month using the variable costing method. d. Prepare an income statement for the month using the absorption costing method.