ACCT346 Final Exam Complete Solution v1 Complete Solution Answers

Question: #9283

ACCT346 Final Exam v.1 A++ Graded Answers 1. Question : (TCO 1) The principle managers follow when they only investigate significant departures from the plan is commonly known as small amounts don't matter only materials and labor deserve attention management by exception exceptional costs yield exception results 2. Question : (TCO 1) Which of the following is not likely to be a fixed cost? Direct materials Rent Depreciation Salary of the human resources director 3. Question : (TCO 2) Which of the following is not a manufacturing cost? Manufacturing overhead Direct materials Direct labor Administrative expenses 4. Question : (TCO 2) An allocation base is a common characteristic that jobs share, which is used to spread the overhead costs among the various jobs. the minimum amount of overhead assigned to a job. used to determine how many labor hours were needed to complete a job. used to authorize the release of materials from the storeroom to the production area. 5. Question : (TCO 3) Equivalent units are calculated by taking the units needed to complete the beginning inventory, adding units started and taking the equivalent units in ending inventory taking the units completed plus the equivalent units in ending inventory. taking the total units to account for and subtracting equivalent units in ending inventory taking units started plus units transferred out. 6. Question : (TCO 3) In the assembly department, all the direct materials are added at the beginning of the processing. Beginning Work in Process inventory consists of 2,000 units with a direct materials cost of $31,860. During the period, 15,000 units are started and direct materials costing $250,000 are charged to the department. If there are 1,000 units in ending inventory, what is the cost per equivalent unit? $15.93 $15.63 $14.83 $16.58 7. Question : (TCO 4) Regression analysis uses all the available data points to estimate a cost equation can be performed by many spreadsheet programs provides an equation that can be used to estimate total costs at different levels all of the above 8. Question : (TCO 4) The number of units that must be sold to exactly cover its fixed and variable costs is the contribution margin break-even point relevant range margin of safety 9. Question : (TCO 5) Which of the following is treated as a product cost in variable costing? Sales commissions Administrative salaries Fixed manufacturing overhead Direct labor 10. Question : (TCO 5) If the number of units sold is less than the number of units produced full costing and variable costing will yield the same net income. full costing will assign some fixed manufacturing overhead to the units in the ending inventory. net income will be higher under variable costing than under full costing. inventory levels will decrease. 11. Question : (TCO 6) A contract which specifies that the suppler will be paid for the cost of production as well as some fixed amount or percentage of cost is called a(n) approved overrun. cost-plus contract. allocation plan. indirect cost budget. 12. Question : (TCO 6) Which of the following is not generally true when a company compares ABC and traditional costing? ABC uses more cost drivers ABC allocates cost based solely on production volume ABC is more expensive ABC is less likely to undercost complex, low volume products 13. Question : (TCO 7) Fixed costs that will be eliminated if a particular course of action is undertaken are called optional costs opportunity costs direct costs avoidable costs 1. Question : (TCO 7) Common costs are fixed costs that are not directly traceable to an individual product line. normally not avoidable. Both A and B are true. Neither A nor B is true. 2. Question : (TCO 8) Target costing starts with the features a customer wants and what they will pay for them. is used after the product is designed. focuses on including all features in a product that a customer may want. all of the above. 3. Question : (TCO 8) Which of the following are relevant in deciding whether to accept or reject a special order? The impact the order will have on existing business. The price that will be charged on the special order. The incremental cost of filling the special order. All of the above. 4. Question : (TCO 9) Present value techniques ignore cash flows that will occur more than ten years in the future. are a way of converting future dollars into equivalent current dollars. provide more conservative results than similar time value of money computations. treat dollars received today the same as dollars received in the future. 5. Question : (TCO 9) The internal rate of return takes into account the time value of money. is the rate of return that equates the present value of future cash flows to the initial investment. both A and B neither A nor B 6. Question : (TCO 10) A method of budget preparation that requires all budgeted amounts to be justified by the department, even if the amounts were supported in prior periods, is called variance budgeting. flexible budgeting. current period budgeting. zero base budgeting. 7. Question : (TCO 10) Which budget is prepared first? Cash disbursement budget Production budget Capital budget Sales budget 8. Question : (TCO 10) The standard cost is same as actual cost the cost that should have been incurred to produce an item or service useful only to manufacturing firms calculated after production is completed 9. Question : (TCO 10) In general, an unfavorable material variance arises from using more material than planned. paying a higher price for material than planned. Both A and B None of the above 10. Question : (TCO 10) The type of center that has responsibility for generating revenue as well as controlling costs is a(n) investment center. cost center. business center. profit center. 11. Question : (TCO 10) Responsibility accounting holds managers responsible for all costs charge to their department. all direct cost of their department plus part of the allocated company costs. only costs they have personally approved. only costs they can control. 12. Question : (TCO 10) Which ratio measures the rate earned on total capital provided by the owners? Return on assets Return on stockholders' equity Earnings per share Price earnings ratio 1. Question : (TCO 1) Distinguish managerial accounting from financial accounting. Include a brief discussion of the differences in the types of information provided to users as well as the differences of the users of the accounting information. 2. Question : (TCO 6) Booth Financial Services, LLC has two revenue producing departments, Financial Planning and Business Consulting. The accounting department is trying to determine the best method to allocate $1,000,000 of common costs (secretarial staff, reception personnel, etc), either by salary or number of employees. Information on the revenue departments are as follows: Department Employees Salaries Financial Planning 150 employees $10,000,000 Business Consulting 50 employees $5,000,000 (a) Allocate the $1,000,000 common costs to the two revenue departments using both methods. (b) Why are allocations called arbitrary? 3. Question : (TCO 10) Charlie Corp sells it products on both credit and cash basis. Monthly sales are sold 20% for cash, 80% for credit. Credit sales are collected 40% in the month of sale and 60% the following month. Sales for the first quarter are as follows: January $100,000 February $150,000 March $125,000 Compute cash collections for February. 4. Question : (TCO 2) Acme Fireworks uses a traditional overhead allocation based on direct labor hours. For the current year overhead is estimated at $1,000,000 and direct labor hours are budgeted at 200,000 hours. Actual hours worked were 195,000 and actual overhead was $978,000. (a) Compute the predetermined manufacturing overhead rate. (b) Compute the applied manufacturing overhead. (c) Compute the amount of over/under applied manufacturing overhead. 1. Question : (TCO 9) An investment of $185,575 is expected to generate returns of $65,000 per year for each of the next four years. What is the investment's internal rate of return? 2. Question : (TCO 4) Legal Docs Inc is a legal services firm that files incorporation papers for small businesses. They charge $1,000 per application. This year's income statement shows the following: Sales $1,295,000 Variable Expenses $1,023,000 Contribution margin $272,000 Fixed costs $250,000 Profit $22,000 Required: (a) Compute the break-even point in units. (b) Compute the contribution margin ratio. (c) Compute the current margin of safety. (d) How many applications must the company sell to make a profit of $350,000? 3. Question : (TCO 5) The following data has been taken from Air-Tite company in its first year of business. Units produced 100,000 Units sold 80,000 Units in ending inventory 20,000 Fixed manufacturing overhead $400,000 (a) Compute the amount of fixed manufacturing overhead that would be expensed in the current year if full absorption costing is used. (b) Compute the amount of fixed manufacturing overhead that would be expensed in the current year if variable costing is used. (c) Compute the amount of fixed manufacturing overhead that would be included in ending inventory under full absorption costing.

Solution: #9320

ACCT346 Final Exam Complete Solution Answers

A+ Please look at the attach...