ACCT 304 Final Exam 100% Correct Answers.docx

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<p>ACCT 304 Final Exam 100% Correct Answers Get this Tutorial Copy &amp; Paste above URL Into Your Browser Hit Us Email for Any Inquiry at: Lancehomework@gmail.comVisit our Site for More Tutorials: ( )</p> <p>ACCT 304 Final Exam 100% Correct AnswersACTIVITY BASED COSTING1. If a predetermined overhead rate is not employed and the volume of production is increased over the level planned, the cost per unit would be expected toA. Decrease for fixed costs and remain unchanged for variable costs.B. Remain unchanged for fixed costs and increase for variable costs.C. Decrease for fixed costs and increase for variable costs.D. Increase for fixed costs and increase for variable costs.1. If fixed costs decrease while variable cost per unit remains constant, the contribution margin will beA. Unchanged C. HigherB. Lower D. Indeterminate1. The high-low method is criticized because itA. is not a graphical method.B. is a mathematical method.C. ignores much of the available data by concentrating on only the extreme points.D. does not provide reasonable estimates.1. [i]. The controller of Jema Company has requested a quick estimate of the manufacturing supplies that it needs for the month of July when the expected production are 470,000 units. Below are the actual data from the prior three months of operations.Production in unitsManufacturing supplies</p> <p>March450,000P723,060</p> <p>April540,000853,560</p> <p>May480,000766,560</p> <p>Using these data and the high-low method, what is the reasonable estimate of the cost of manufacturing supplies that would be needed for July? (Assume that this activity is within the relevant range.)A. P 805,284 C. P 755,196B. P1,188,756 D. P 752,0601. [ii]. Almond Company wishes to determine the fixed portion of its maintenance expense (a semi-variable expense), as measured against direct labor hours for the first Malayan three months of the year. The inspection costs are fixed; however, the adjustments necessitated by errors found during inspection account for the variable portion of the maintenance costs. Information for the first Malayan quarter is as follows:Direct Labor HoursMaintenance Costs</p> <p>January34,000P61,000</p> <p>February31,00058,500</p> <p>March34,00061,000</p> <p>What is the fixed portion of Almond Companys maintenance expense, rounded to the nearest pesos?A. P28,330 C. P37,200B. P32,677 D. P40,8001. [iii]. If there were 30,000 pounds of raw material on hand on January 1, 60,000 pounds are desired for inventory at December 31, and 180,000 pounds are required for annual production, how many pounds of raw material should be purchased during the year?A. 150,000 pounds C. 120,000 poundsB. 240,000 pounds D. 210,000 pounds1. [iv]. The Avelina Company has the following historical pattern on its credit sales.70 percent collected in month of sale15 percent collected in the first month after sale10 percent collected in the second month after sale4 percent collected in the third month after sale2 percent uncollectibleThe sales on open account have been budgeted for the last six months of 2007 are shown below:July P 60,000August 70,000September 80,000October 90,000November 100,000December 85,000The estimated total cash collections during the fourth calendar quarter from sales made on open account during the fourth calendar quarter would beA. P172,500 C. P265,400B. P230,000 D. P251,4001. [v]. Harem Corporation consists of two divisions, Mining and Builders. The Mining makes black steel, a product that can be used in the product that the Builders division makes. Both divisions are considered profit centers. The following data are available concerning black steel and the two divisions:MiningBuilders</p> <p>Average units produced150,000</p> <p>Average units sold150,000</p> <p>Variable mfg cost per unitP2</p> <p>Variable finishing cost per unitP5</p> <p>Fixed divisional costsP75,000P125,000</p> <p>The Mining Division can sell all of its output outside the company for P4 per unit. The Builders Division can buy the black steel from other firms for P4. The Builders Division sells its product for P12.What is the optimal transfer price in this case?A. P2 per unit C. P7 per unitB. P4 per unit D. P9 per unit1. The sequence that reflects increasing breadth of responsibility isA. cost center, investment center, profit centerB. cost center, profit center, investment centerC. profit center, cost center, investment centerD. investment center, cost center, profit center1. In responsibility accounting the most relevant classification of costs isA. fixed and variable C. discretionary and committedB. incremental and nonincremental D. controllable and noncontrollable1. If a firm operates at capacity, the transfer price should be the:A. external market price. C. actual cost.B. differential cost. D. standard cost.1. The basic methods used in transfer pricing areA. variable or full costs C. market price or negotiated priceB. dual prices D. all of the above1. Market-based transfer prices are best for theA. company when the selling division is operating below capacity.B. company when the selling division is operating at capacity.C. buying division if it is operating at capacity.D. buying division.Assume that Steel Division has a product that can be sold either to outside customers on an intermediate market or to Fabrication Division of the same company for use in its production process. The managers of the division are evaluated based on their divisional profits.Steel Division:Capacity in units 200,000Number of units being sold on the intermediate market 200,000Selling price per unit on the intermediate market P90Variables costs per unit (including P3 of avoidable selling expense if sold internally) 70Fixed costs per unit (based on capacity) 13Fabrication Division:Number of units needed for production 40,000Purchase price per unit now being paid to an outside supplier P86The appropriate transfer price should be:A. P90 C. P70B. P87 D. P86Use the following data to answer questions 11 through 13.N &amp; R Company transfers a product from division N to division R. Variable cost of this product is anticipated to be P40 a unit and total fixed costs amount to P8,000. A total of 100 units are anticipated to be produced. Actual cost, however, amounts to P50 for variable costs. Fixed costs were same as budget. However, actual output was twice as many.1. [vi]. Actual cost per unit amounts toA. P90 C. P115B. P92 D. P1201. [vii]. The transfer price based on actual variable costs plus 130% markup amounts toA. P90 C. P115B. P92 D. P1201. [viii]. The transfer price based on budgeted full cost plus 30% markup amounts toA. P117 C. P150B. P140 D. P1561. Given the following notations, what is the breakeven sales level in units?SP = selling price per unitFC = total fixed costVC = variable cost per unitA. SP / (FC/VC) C. VC/(SP FC)B. FC/(VC/SP) D. FC/(SP VC) Bobadilla1. If variable cost as a percentage of sales increases, theA. contribution margin percentage increases.B. selling price increases.C. break-even point in pesos increases.D. fixed costs decrease. Bobadilla1. As volume increases, average cost per unitA. increases.B. decreases.C. remains constant.D. increases in proportion to the change in volume. Bobadilla1. [ix].The following is the Lux Corporations contribution format income statement for last month:Sales P2,000,000Less variable expenses 1,400,000Contribution margin 600,000Less fixed expenses 360,000Net income P 240,000The company has no beginning or ending inventories. A total of 40,000 units were produced and sold last month. What is the companys degree of operating leverage?A. 0.12 C. 2.50B. 0.40 D. 3.30 Bobadilla1. [x]. Galactica Company has fixed costs of P100,000 and breakeven sales of P800,000. Based on this relationship, what is its projected profit at P1,200,000 sales?A. P 50,000 C. P150,000B. P200,000 D. P400,000 Bobadilla1. [xi]. The following information pertains to Hennin Corporation for the year ending December 31, 2006:Budgeted sales P1,000,000Breakeven sales 700,000Budgeted contribution margin 600,000Cashflow breakeven 200,000The margin of safety for the Hennin Corporation is:A. P300,000 C. P500,000B. P400,000 D. P800,000 Bobadilla1. Which of the following is an example of a committed fixed costs?A. direct materials C. supervisors salaryB. depreciation on a factory building D. insurance on a building1. [xii]. ABC Company had a total overhead of P360,000 and selling and administrative expense of P140,000 for the year. 1,000 units of A and 3,000 units of B were produced. A requires 3 machine hours and B requires one machine hour per unit. What is overhead chargeable per unit of AA. P 60 C. P120B. P 90 D. P1801. [xiii]. If estimated annual factory overhead is P800,000, estimated annual direct labor hours are 400,000, actual June factory overhead is P82,000, and actual June direct labor hours are 38,000, then overhead is:A. P6,000overapplied C. P1,800 underappliedB. P1,800overapplied D. P6,000 underapplied1. [xiv]. Britney Company has unit costs of P10 for materials and P30 for conversion costs. If there are 2,500 units in ending work in process, 40% complete as to conversion costs, and fully complete as to materials cost, the total cost assignable to the ending work in process inventory isA. P 45,000 C. P 75,000B. P 55,000 D. P100,0001. [xv]. The Amor Companys accounting records reflected the following data for April 2003. The company accounts its production using First-in, First-out cost flow method:Work in process, March 31,2003, 60% completed as to materials and conversion costs? units</p> <p>Work in process, April 30, 2003, 30% completed as to materials and conversion costs24,000 units</p> <p>Equivalent units of production for April 200364,000</p> <p>Units started and completed in April50,000</p> <p>How many units were in the beginning work-in-process?A. 6,800 C. 17,000B. 11,333 D. 24,0001. [xvi]. Had the company used the weighted-average method of accounting for its production, the equivalent units should beA. 74,200 C. 81,000B. 57,200 D. 53,8001. Worker training is a(n)A. appraisal cost. C. internal failure cost.B. external failure cost. D. prevention cost.1. The quality costs that are incurred to determine whether particular units of product meet quality standards areA. appraisal costs. C. internal failure costs.B. external failure costs. D. prevention costs.1. A company has a bottleneck operation that slows production. Which of the following tools or approaches could the firm use to determine the most cost-effective ways to eliminate this problem?A. Linear programming.B. Theory of constraints.C. Decision-tree diagrams.D. Payoff matrices.E. Strategic path analysis (SPA).1. Job no. C12 was completed in November at a cost of $18,500, subdivided as follows: direct material, $3,500; direct labor, $6,000; and manufacturing overhead, $9,000. The journal entry to record this information is:A.Finished-Goods Inventory18,500</p> <p>Work-in-Process Inventory18,500</p> <p>B.Work-in-Process Inventory18,500</p> <p>Finished-Goods Inventory18,500</p> <p>C.Work-in-Process Inventory18,500</p> <p>Raw-Material Inventory3,500</p> <p>Wages Payable6,000</p> <p>Manufacturing Overhead9,000</p> <p>D.Cost of Goods Sold18,500</p> <p>Finished-Goods Inventory18,500</p> <p>E.Finished-Goods Inventory18,500</p> <p>Cost of Goods Sold18,500</p> <p>1. Which of the following represents the cost-plus pricing formula?A. Price = cost + (markup percentage x cost).B. Price = cost + markup percentage.C. Price = markup percentage x cost.D. Price = cost markup percentage.E. Price = cost + (markup percentage + cost).1. A service department includes which of the following?PayrollProduction</p> <p>a.yes no</p> <p>b.yes yes</p> <p> yes</p> <p> no</p> <p>1. A service department provides specific functional tasks for other internal units. Which of the following activities would not be engaged in by a service department?a.Purchasing</p> <p>b.Warehousing</p> <p>c.Distributing</p> <p>d.Manufacturing</p> <p>1. Which of the following is not a method for allocating service department costs?a.step method</p> <p>b.indirect method</p> <p> method</p> <p>d.algebraic method</p> <p>1. Which service department cost allocation method assigns costs directly to revenue-producing areas with no other intermediate cost pools or allocations?a.step method</p> <p>b.indirect method</p> <p>c.algebraic method</p> <p> method</p> <p>1. Which of the following methods of assigning indirect service department costs recognizes on a partial basis the reciprocal relationships among the departments?a.step method</p> <p> method</p> <p>c.indirect method</p> <p>d.algebraic method</p> <p>1. The most accurate method for allocating service department costs is thea.step method.</p> <p> method.</p> <p>c.algebraic method.</p> <p>d.none of the above.</p> <p>Diller Corporation has three production departments A, B, and C. Diller Corporation also has two service departments, Administration and Personnel. Administration costs are allocated based on value of assets employed, and Personnel costs are allocated based on number of employees. Assume that Administration provides more service to the other departments than does the Personnel Department.Dept.Direct CostsEmployeesAsset Value</p> <p>Admin.$900,00025$450,000</p> <p>Personnel350,00010600,000</p> <p>A700,00015300,000</p> <p>B200,0005150,000</p> <p>C250,00010800,000</p> <p>1. Refer to Diller Corporation. Using the direct method, what amount of Administration costs is allocated to A (round to the nearest dollar)?a.$216,000</p> <p>b.$150,000</p> <p>c.$288,000</p> <p>d.$54,000</p> <p>1. Refer to Diller Corporation. Using the step method, what amount of Administration costs is allocated to Personnel (round to the nearest dollar)?a.$72,973</p> <p>b.$291,892</p> <p>c.$145,946</p> <p>d.$389,189</p> <p>1. Refer to Diller Corporation. Using the step method, what amount of Administration costs is allocated to C (round to the nearest dollar)?a.$389,189</p> <p>b.$145,946</p> <p>c.$291,892</p> <p>d.$72,973</p> <p>Grant Corporation distributes its service department overhead costs directly to producing departments without allocation to the other service departments. Information for January is presented here.MaintenanceUtilities</p> <p>Overhead costs incurred$18,700$9,000</p> <p>Service provided to:</p> <p>Maintenance Dept.10%</p> <p>Utilities Dept.20%</p> <p>Producing Dept. A40%30%</p> <p>Producing Dept. B40%60%</p> <p>1. Refer to Grant Corporation. Assume that Grant Corporation distributes service department overhead costs based on the algebraic method. What would be the formula to determine the total maintenance costs?a.M = $18,700 + .10U</p> <p>b.M = $9,000 + .20U</p> <p>c.M = $18,700 + .30U + .40A + .40B</p> <p>d.M = $27,700 + .40A + .40B</p> <p>1. Which of the following has sales value?By-productsWaste</p> <p> no</p> <p>b.yes no</p> <p>c.yes yes</p> <p> yes</p> <p>1. A product may be processed beyond the split-off point if management believes thata.its marketability will be enhanced.</p> <p>b.the incremental cost of further processing will be less than the incremental revenue of further processing.</p> <p>c.the joint cost assigned to it is not already greater than...</p>