https://brainytermpapers.com/wp-content/uploads/2019/10/logo.png 0 0 Brainy https://brainytermpapers.com/wp-content/uploads/2019/10/logo.png Brainy2020-11-26 21:11:422020-11-26 21:11:42COMPREHENSIVE FINAL EXAMINATION (Chapters 1 - 13; Chapter 7 Omitted) Approximate Problem Topic Points Minutes I Multiple Choice 50 45 II Matching 16
COMPREHENSIVE FINAL EXAMINATION(Chapters 1 – 13; Chapter 7 Omitted)ApproximateMinutesIMultiple Choice5045IIMatching1620IIIVariance Analysis1825IVMiscellaneous Managerial Mini-Problems 16 20100110Checking Work 10120EXAMINATION INSTRUCTIONS – READ COMPLETELY AND CAREFULLY!•This examination is a “take home” examination.•This examination must be completed individually, by you!oIf it is discovered that your work on this examination was copied or plagiarized, you will receive an “F” grade (0%), as fully stated in the syllabus. No exceptions!•This examination must be completed in typed format and spell checked!oYour name, in the box at the top of this page, must be typed.oHandwritten exams will not be accepted, as fully stated in the syllabus!•Note: You must show computations for all problems except the multiple choice questions!•This examination, in its entirety, must be turned in with your answers, starting with this page!•If you need additional space, please attach any work after its associated problem (not attached to the back) with your name clearly present on every page!oNote: If you have handwritten notes working out problems, attach those after the last page of this examination with your name clearly present on every page.•You will have until the next class session to complete the examination (see due date and time below). Emailed examinations will not be accepted, as fully stated in the syllabus!oIf your completed and STAPLED examination is not brought to class on Monday, May 3, 2010 by 12:25pm, you will receive an “F” grade. No exceptions!•No makeup of this examination will be given, as fully stated in the syllabus.Problem I — Multiple Choice (50 points)On your computer, bold, highlight, underline or box the one best answer.1.A responsibility center that incurs costs (and expenses) and generates revenues is classified as a(n)a.cost center.b.revenue center.c.profit center.d.investment center.2.The most useful measure for evaluating a manager’s performance in controlling revenues and costs in a profit center isa.contribution margin.b.contribution net income.c.contribution gross profit.d.controllable margin.3.Ramsey Corporation desires to earn target net income of $90,000. If the selling price per unit is $30, unit variable cost is $24, and total fixed costs are $360,000, the number of units that the company must sell to earn its target net income isa.30,000.b.75,000.c.45,000.d.60,000.4.Shane Corporation uses a process cost accounting system. Given the following data, compute the number of units transferred out during the current period.Beginning Work in Process20,000 units (1/2 complete)Ending Work in Process25,000 units (1/3 complete)Started into Production150,000 unitsa.125,000b.141,667c.145,000d.150,0005.Given the following information for Hett Company, compute the company’s ROI:Sales$1,000,000Controllable Margin$120,000Average Operating Assets$500,000a.40%b.50%c.12%d.24%6.The following data has been collected for use in analyzing the behavior of maintenance costs of Ridell Corporation:MonthMaintenance CostsMachine HoursJanuary$121,00020,000February125,00023,000March128,00024,000April159,00034,000May168,00036,000June178,00038,000July181,00040,000Using the high-low method to separate the maintenance costs into their variable and fixed cost components, these components area.$5 per hour plus $20,000.b.$5 per hour plus $30,000.c.$4 per hour plus $41,000.d.$3 per hour plus $61,000.7.Given the following data for Glennon Company, compute (A) total manufacturing costs and (B) costs of goods manufactured:Direct materials used$120,000Beginning work in process$20,000Direct labor50,000Ending work in process10,000Manufacturing overhead150,000Beginning finished goods25,000Operating expenses175,000Ending finished goods15,000(B)a.$310,000$330,000b.$320,000$310,000c.$320,000$330,000d.$330,000$340,0008.The production cost report shows both quantities and costs. Costs are reported in three sections: (1) costs accounted for, (2) unit costs, and (3) costs charged to department. The sections are listed in the following order:a.(1), (2), (3).b.(1), (3), (2).c.(2), (1), (3).d.(2), (3), (1).9.The starting point of a master budget is the preparation of thea.cash budget.b.sales budget.c.production budget.d.budgeted balance sheet.10.The most useful measure for evaluating the performance of the manager of an investment center isa.contribution margin.b.controllable margin.c.return on investment.d.income from operations.11.Which of the following capital budgeting techniques explicitly takes the time value of money into consideration?a.Annual rate of returnb.Internal rate of returnc.Net present valued.Both (b) and (c) aboveUse the following information for questions 12 and 13.Grant Company estimates its sales at 60,000 units in the first quarter and that sales will increase by 6,000 units each quarter over the year. It has, and desires, a 25% ending inventory of finished goods. Each unit sells for $25. 40% of the sales are for cash. 70% of the credit customers pay within the quarter. The remainder is received in the quarter following sale.12.Cash collections for the third quarter are budgeted ata.$1,017,000.b.$1,476,000.c.$1,773,000.d.$2,052,000.13.Production in units for the third quarter should be budgeted ata.73,500.b.69,000.c.91,500.d.72,000.14.A flexible budgeta.is also called a static budget.b.can be considered a series of related static budgets.c.can be prepared for sales or production budgets, but not for an operating expense budget.d.typically uses an activity index different from that used in developing the predetermined overhead rate.15.Carey Company’s equipment account increased $800,000 during the period; the related accumulated depreciation increased $60,000. New equipment was purchased at a cost of $1,400,000 and used equipment was sold at a loss of $40,000. Depreciation expense was $200,000. Proceeds from the sale of the used equipment werea.$420,000.b.$500,000.c.$560,000.d.$640,000.16.Which of the following combinations presents correct examples of liquidity, profitability, and solvency ratios, respectively?LiquidityProfitabilitySolvencya.Inventory turnoverInventory turnoverTimes interest earnedb.Current ratioInventory turnoverDebt to total assetsc.Receivables turnoverReturn on assetsTimes interest earnedd.Quick ratioPayout ratioReturn on assets17.A company’s planned activity level for next year is expected to be 100,000 machine hours. At this level of activity, the company budgeted the following manufacturing overhead costs:VariableFixedIndirect materials$60,000Depreciation$25,000Indirect labor80,000Taxes5,000Factory supplies10,000Supervision20,000A flexible budget prepared at the 90,000 machine hours level of activity would allow total manufacturing overhead costs ofa.$135,000.b.$180,000.c.$185,000.d.$150,000.18.A company developed the following per unit materials standards for its product: 3 gallons of direct materials at $5 per gallon. If 4,000 units of product were produced last month and 12,500 gallons of direct materials were used, the direct materials quantity variance wasa.$1,500 favorable.b.$2,500 unfavorable.c.$1,500 unfavorable.d.$2,500 favorable.19.The standard direct labor cost for producing one unit of product is 5 direct labor hours at a standard rate of pay of $8. Last month, 5,000 units were produced and 24,500 direct labor hours were actually worked at a total cost of $180,000. The direct labor quantity variance wasa.$4,000 unfavorable.b.$6,000 unfavorable.c.$6,000 favorable.d.$4,000 favorable.20.Under the time-and-material-pricing approach, the charges for any particular job include each of the following except thea.labor charge.b.charge for materials.c.material loading charge.d.overhead charge.21.The transfer pricing approach that does not reflect the selling division’s true profitability is thea.cost-based approach.b.market-based approach.c.negotiated price approach.d.time-and-material-pricing approach.Use the following information for questions 22 and 23.Robot Toy Company manufactures two products: X-O-Tron and Mechoman. Robot’s overhead costs consist of setting up machines, $200,000; machining, $450,000; and inspecting, $150,000 Additional information on the two products is:X-O-TronMechomanDirect labor hours15,00025,000Machine setups600400Machine hours24,00026,000Inspections80070022.Overhead applied to Mechoman using traditional costing isa.$320,000.b.$384,000.c.$416,000.d.$500,000.23.Overhead applied to X-O-Tron using activity-based costing isa.$300,000.b.$384,000.c.$416,000.d.$480,000.24.An appropriate cost driver for an assembling cost pool is the number ofa.purchase orders.b.setups.c.parts.d.direct labor hours.25.Which of the following is included in the cost of goods manufactured under absorption costing but not under variable costing?a.Direct materialsb.Variable factory overheadc.Fixed factory overheadd.Direct laborProblem II — Matching (16 points)Instructions: Designate the terminology that best represents the definition or statement given below by placing the identifying letter(s) in the space provided. Note: No terminology should be used more than once.A.Activity-based costingN.Job cost sheetB.Annual rate of returnO.Noncontrollable costsC.Budgetary controlP.Non-value-added activityD.Contribution marginQ.Operating budgetsE.Contribution margin ratioR.Overhead controllable varianceF.Controllable costsS.Overhead volume varianceG.Absorption costingT.Physical unitsH.Cost accountingU.Process cost systemsI.Cost centersV.Product costsJ.Cost of capitalW.Profit centerK.Equivalent units of productionX.Value-added activityL.Fixed costsY.Variable costsM.Free cash flowZ.Variances____1.Costs that a manager has the authority to incur within a given period of time.____2.A form used to record the costs chargeable to a job.____3.A responsibility center that incurs costs and also generates revenues.____4.The amount of revenue remaining after deducting variable costs.____5.Used to apply costs to similar products that are mass produced in a continuous fashion.____6.Costs that vary in total directly and proportionately with changes in the activity level.____7.The differences between actual costs and standard costs.____8.Determines profitability of a capital expenditure by dividing expected net income by the average investment.____9.The rate a company must pay to obtain funds from creditors and stockholders.____10.Costs that are an integral part of producing the finished product.____11.Allocates overhead to multiple cost pools and assigns the cost pools to products by means of cost drivers.____12.A measure of the work done during the period, expressed in fully completed units.____13.A costing approach in which all manufacturing costs are charged to the product.____14.Increase the worth of a product or service to customers.____15.The amount of cash from operations after deducting capital expenditures and cash dividends paid.____16.Individual budgets that culminate in a budgeted income statement.Problem III — Variance Analysis (18 points)The Olson Company developed the following standard costs for its product in 2008:Standard Cost CardUnit Standard CostDirect materials(5 pounds @ $4 per pound)$20Direct labor(4 hours @ $8 per hour)32Manufacturing overheadVariable(4 hours @ $4 per hour)16Fixed(4 hours @ $3 per hour) 12$80The company planned to work 100,000 direct labor hours and produce 25,000 units of product in 2008. Actual results for 2008 are as follows:•24,000 units of product were produced.•Actual direct materials purchased and used during the year amounted to 122,000 pounds at a cost of $475,800.•Actual direct labor costs were $779,000 for 95,000 direct labor hours worked.•Total actual manufacturing overhead incurred amounted to $685,500.InstructionsCalculate the following variances and you must show computations to support your answers! Note: You must also indicate if the variances are favorable (F) or unfavorable (U).(a)Direct materials price and direct materials quantity variances.(b)Direct labor price and direct labor quantity variances.Problem IV — Miscellaneous Managerial Mini-Problems (16 points)Carson Corporation manufactures paper shredding equipment. You are requested to “audit” a sampling of computations made by Carson’s internal accountants via your independent recalculation of the information.Instructions: Compute the requested information for each of the following independent situations. Note: You must show all computations to support your answers!(a)Carson uses a process costing system. 2,000 units were in process at the beginning of the period, 60% complete. 20,000 units were started into production during the period; 1,000 were in process at the end of the period, 60% complete. Compute equivalent units for conversion costs.(b)Carson sells each unit for $500. Variable costs per unit equal $300. Total fixed costs equal $800,000. Carson is currently selling 5,000 units per period and would like to earn net income of $400,000. Compute: (1) break-even point in dollars; (2) sales units necessary to attain desired income; and (3) margin of safety ratio for current operations.(1)Break-even point= $________________________________________________.(2)Desired sales= _____________________________________________ units.(3)Margin of safety= _______________________________________________ %.
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