acct 434 midterm exam

8/19/2019 ACCT 434 Midterm Exam

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DeVry ACCT 434 Midterm Exam

Click on the link below for the solution:

https://devryfinalexams.com/products/acct-434-midterm-exam/

1. Question : (TCO 1) Which of the following is a sign that an ABC system may beuseful?Student Answer: Operations staff agrees with accountants about the costs ofmanufacturing and marketing products and services.There are small amounts of indirect costs.

Products make diverse demands on resources because of differences in volume, process steps, batch size, or complexity.Products a company is less suited to produce and sell show small profits.

Question 2. Question : (TCO 1) Merriamn Company provides the following ABC costinginformation:Activities Total Costs Activity-cost driversAccount inquiry hours$400,000 10,000 hoursAccount billing lines $280,000 4,000,000 linesAccount verification accounts$150,000 40,000 accounts

Correspondence letters $ 50,000 4,000 lettersTotal costs $880,000The above activities are used by Department A and B as follows:

Department A Department BAccount inquiry hours2,000 hours 4,000 hoursAccount billing lines 400,000 lines 200,000 linesAccount verification accounts10,000 accounts 8,000 accountsCorrespondence letters 1,000 letters 1,600 lettersHow much of the inquiry cost will be assigned to Department A?

Student Answer: $80,000$400,000$160,000 None of the above

Question 3. Question : (TCO 2) Budgeting provides all of the following EXCEPT

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Student Answer: a means to communicate the organization’s short-term goals to itsmembers.support for the management functions of planning and coordination.a means to anticipate problems.an ethical framework for decision making.

Question 4. Question : (TCO 2) White planned to use $82 of material per unit but actuallyused $80 of material per unit, and planned to make 1,200 units but actually made 1,000 units.The flexible-budget variance isStudent Answer: $2,000 favorable.$14,000 unfavorable.$16,400 unfavorable.$2,400 favorable.

Question 5. Question : (TCO 3) Which of the following does NOT represent a cause-and-effect relationship?Student Answer: It makes sense that if a complex product has a large number of parts, it will take longer to assemble than a simple product with fewer parts.Material costs increase as the number of units produced increases.A company is charged 40 cents for each brochure printed and mailed.Utility costs increase at the same time that insurance costs increase.

Question 6. Question : (TCO 4) Relevant costs in a make-or-buy decision of a part includeStudent Answer: setup overhead for the manufacture of the product using theoutsourced part.currently used manufacturing capacity that has alternative uses.annual plant insurance that will remain the same.corporate office costs that will be allocated differently.

Question 7. Question : (TCO 5) The theory of constraints is used for cost analysis whenStudent Answer: a manufacturing company produces multiple products and usesmultiple manufacturing facilities and/or machines.using a long-term time horizon.operating costs are assumed fixed.All of the above

Question 8. Question : (TCO 5) Jensen Company has relevant costs of $80 per unit tomanufacture Part A. A current supplier offers to make Part A for $70 per unit. If capacity isconstrained, the opportunity cost of buying Part A from the supplier isStudent Answer: 0.$10,000.


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$70,000.indeterminable.

Question 9. Question : (TCO 3) For January, the cost components of a picture frame

include $0.35 for the glass, $0.65 for the wooden frame, and $0.80 for assembly. The assemblydesk and tools cost $400. A total of 1,000 frames is expected to be produced in the coming year.What cost function best represents these costs?Student Answer: y = 1.80 + 400Xy = 2.20 + 1,000Xy = 400 + 1.80Xy = 1.00 + 400X

Question 10. Question : (TCO 4) Sunk costsStudent Answer: are future costs.

are past costs.have future implications.are relevant to all decisions.1. Question : (TCO 1) For each of the following activities, identify an appropriateactivity-cost driver.a. machine maintenance

b. machine setup

c. quality control

d. material ordering

e. production scheduling

f. warehouse expense

g. engineering design

Question 2. Question : (TCO 2) Lubriderm Corporation has the following budgeted salesfor the next six-month periodMonth Unit Sales

June 90,000

July 120,000

August 210,000

September 150,000


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October 180,000

November 120,000

There were 30,000 units of finished goods in inventory at the beginning of June. Plans are tohave an inventory of finished products that equal 20% of the unit sales for the next month.

Five pounds of materials are required for each unit produced. Each pound of material costs $8.Inventory levels for materials are equal to 30% of the needs for the next month. Materialsinventory on June 1 was 15,000 pounds.

Prepare a purchases budget in pounds for July, August, and September, and give total purchasesin both pounds and dollars for each month.

Question 3. Question : (TCO 3) The Wildcat Company has provided the following

information:Units of Output 30,000 Units 42,000 Units

Direct materials $180,000 $252,000

Workers’ wages 1,080,000 1,512,000

Supervisors’ salaries 312,000 312,000

Equipment depreciation 151,200 151,200

Maintenance 81,600 110,400

Utilities 384,000 528,000

Total $2,188,800 $2,865,600

Using the high-low method and the information provided above, identify the linear cost functionequation.

Question 4. Question : (TCO 5) Kirkland Company manufactures a part for use in its production of hats. When 10,000 items are produced, the costs per unit are:Direct materials $0.60

Direct manufacturing labor 3.00

Variable manufacturing overhead 1.20

Fixed manufacturing overhead 1.60


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Total $6.40

Mike Company has offered to sell to Kirkland Company 10,000 units of the part for $6.00 perunit. The plant facilities could be used to manufacture another item at a savings of $9,000 ifKirkland accepts the offer. In addition, $1.00 per unit of fixed manufacturing overhead on the

original item would be eliminated.

a. What is the relevant per unit cost for the original part?

b. Which alternative is best for Kirkland Company? By how much?

DeVry ACCT 434 Midterm Exam

Click on the link below for the solution:

https://devryfinalexams.com/products/acct-434-midterm-exam/
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acct 434 midterm exam

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