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Keller ACCT 505 Week 4 Midterm Exam Answers(2018)

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Keller ACCT 505 Week 4 Midterm Exam Answers(2018)

  1. (TCO A)  Direct material cost is a part of
  2. (TCO A)  Total fixed costs

  3. (TCO A) The cost of lubricants used to grease a production machine in a manufacturing company is an example of a(n)

  4. (TCO A) Depreciation expense of office equipment in a company's sales office would be categorized under:

  5.  

    (TCO C) When the business activity level of a production company increases within the relevant range, which one of the following statements would typically be true of the cost behavior?

  6.  

    (TCO B) A job-order cost system is typically employed in production environments where:

  7.  

    (TCO C) Which of the following is a variable cost?

  8.  

    (TCO C) The contribution margin equals

  9.  

    (TCO C) To calculate the break-even point in terms of sales dollars for an operation, we can simply divide the total fixed costs by which of the following values?

  10.  

    (TCO D) On a variable costing income statement versus an absorption (full) costing income statement for a company, which of the following costs would be treated (accounted for) differently?

  11.  

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

    Sales

    $950

    Purchases of raw materials

    $170

    Direct labor

    $225

    Manufacturing overhead

    $220

    Administrative expenses

    $180

    Selling expenses

    $140

    Raw materials inventory, beginning

    $90

    Raw materials inventory, ending

    $80

    Work-in-process inventory, beginning

    $30

    Work-in-process inventory, ending

    $20

    Finished goods inventory, beginning

    $100

    Finished goods inventory, ending

    $70

    Required: Calculate the Cost of Goods Manufactured for the year and be sure to show all of your computational work.

  12.  

    (TCO B) The Florida 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

    160,000

    65%

    45%

     

    Work in process, Jun 30

    130,000

    75%

    65%

     


    The department started 650,000 units into production during the month and transferred 680,000 completed units to the next department.


    Required: Compute the total equivalent units of production with respect to materials for Department A for June (applying the weighted-average method) and be sure to display all of your calculation work.

  13.  

    (TCO C) Yoder's Yo-Yo Company has supplied the following data for its latest fiscal year of operation:

    Number of yo-yos 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

     

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

  14.  

    (TCO D) Johnson Company produces and sells only one type of product and has provided the following data for its most recent month of operations.

    Selling price per unit

    $175

     

     

    Units in beginning inventory

    0

    Units produced

    10,000

    Units sold

    8,000

    Units in ending Inventory

    2,000

     

     

    Variable costs (PER UNIT):

     

    Direct materials

    $50

    Direct labor

    $36

    Variable manufacturing overhead

    $2

    Variable selling and admin

    $10

     

     

    Fixed costs (TOTAL):

     

    Fixed manufacturing overhead

    $300,000

    Fixed selling and admin

    $100,000


     
    Required: 
    1. What is the unit product cost for the month applying variable costing? 
    2. What is the unit product cost for the month applying absorption (full) costing? 
    3. Which of the two types of income statement, variable costing or absorption (full) costing, will display a higher net income for the month, and by how much? Please be sure to show your calculations.

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