Keller ACCT 505 Midterm Exam Answers

Keller ACCT 505 Midterm Exam Answers

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Keller ACCT 505 Midterm Exam Answers

1. (TCO A) The variable portion of advertising costs is a

2. (TCO A)  The costs of staffing and operating the accounting department at Central Hospital would be considered by the department of surgery to be

3. (TCO A) Property taxes on a company's factory building would be classified as a(n)

4. (TCO C) Within the relevant range, variable costs can be expected to

5. (TCO B) 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. (TCO B) A job-order cost system is employed in those situations when

7. (TCO B) The weighted-average method of process costing differs from the FIFO method of process costing in that the weighted-average method

8. (TCO C) The contribution margin equals

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

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

11. (TCO A) The following data (in thousands of dollars) have been taken from the accounting records of Larklin Corporation for the just-completed year.

Sales	$920
Purchases of raw materials	$215
Direct labor	$170
Manufacturing overhead	$275
Administrative expenses	$180
Selling expenses	$140
Raw materials inventory, beginning	$100
Raw materials inventory, ending	$65
Work-in-process inventory, beginning	$75
Work-in-process inventory, ending	$35
Finished goods inventory, beginning	$130
Finished goods inventory, ending	$165

12. 
Prepare a Schedule of Cost of Goods Manufactured statement in the text box below.

13. (TCO B) The Nebraska 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	140,000	75%	65%
Work in process, Jun 30	120,000	65%	45%

14. 
The department started 580,000 units into production during the month and transferred 600,000 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.

15. (TCO C) A tile manufacturer has supplied the following data.

Tons of cement produced and sold	220,000
Sales revenue	$924,000
Variable manufacturing expense	$297,000
Fixed manufacturing expense	$280,000
Variable selling and admin expense	$165,000
Fixed selling and admin expense	$82,000
Net operating income	$100,000

16. 
 
Required: 
Calculate the company's unit contribution margin. 
Calculate the company's contribution margin ratio. 
If the company increases its unit sales volume by 5% without increasing its fixed expenses, what would the company's net operating income be?

17. (TCO D) Johnson Company, which has only one product, has provided the following data concerning its most recent month of operations.

Selling price	$175
Units in beginning inventory	0
Units produced	9,500
Units sold	8,000
Units in ending Inventory	1,500
Variable costs per unit:
Direct materials	$50
Direct labor	$36
Variable manufacturing overhead	$2
Variable selling and admin	$10
Fixed costs:
Fixed manufacturing overhead	$300,000
Fixed selling and admin	$100,000

18. 
 
Required: 
What is the unit product cost for the month under variable costing? 
What is the unit product cost for the month under absorption costing? 
Prepare an income statement for the month using the variable costing method. 
Prepare an income statement for the month using the absorption costing method.