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ACCT 386 - Week 4 - Test 2

ACCT 386 - Week 4 - Test 2
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ACCT 386 - Week 4 - Test 2

1. The following information pertains to Yap Company's Grinding Department for the month of April: 

 

Units

Materials Costs

  Beginning work in process

21,000      

$14,500     

  Started in April

41,500      

$27,000     

  Units completed and transferred out

44,000      

 

  Ending work in process

18,500      

 

  All materials are added at the beginning of the process. Using the weighted-average method, the cost per equivalent unit for materials is closest to:

  • $0.65
  • $1.00
  • $0.66
  • $0.94

 

2. Borwan Company uses the weighted-average method in its process costing system. The Assembly Department started the month with 5,200 units in its beginning work in process inventory that were 80% complete with respect to conversion costs. An additional 62,000 units were transferred in from the prior department during the month to begin processing in the Assembly Department. There were 2,200 units in the ending work in process inventory of the Assembly Department that were 25% complete with respect to conversion costs. What were the equivalent units for conversion costs in the Assembly Department for the month?

  • 65,000
  • 66,650
  • 65,550
  • 67,200

 

3. Sanchez Corporation uses the weighted-average method in its process costing system. The Fitting Department is the second department in its production process. The data below summarize the department's operations in March.

 

Units

Percent Complete with Respect to Conversion

  Beginning work in process inventory

7,500 

65%

  Transferred in from the prior department during   March

52,700 

 

  Ending work in process inventory

4,300 

90%

  The Fitting Department's cost per equivalent unit for conversion cost for March was $8.66. How much conversion cost was assigned to the units transferred out of the Fitting Department during March?

  • $517,608
  • $484,094
  • $456,382
  • $521,332

 

4. In February, one of the processing departments at Whisenhunt Corporation had beginning work in process inventory of $39,000 and ending work in process inventory of $12,000. During the month, the cost of units transferred out from the department was $500,000. In the department's cost reconciliation report for February, the total cost to be accounted for would be:

  • $51,000
  • $551,000
  • $512,000
  • $539,000

 

5. Chae Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 550 units. The costs and percentage completion of these units in beginning inventory were:

Cost

Percent Complete

 

  Materials costs

$6,400     

60%           

  Conversion costs

$5,400     

15%           

A total of 8,600 units were started and 7,750 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month: 

  Materials costs

$136,400 

  Conversion costs

$322,400 

  The ending inventory was 80% complete with respect to materials and 80% complete with respect to conversion costs. 

What are the equivalent units for conversion costs for the month in the first processing department?

  • 9,150 Units
  • 7,750 Units
  • 1,120 Units
  • 8,870 Units

 

6. Chae Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 550 units. The costs and percentage completion of these units in beginning inventory were: 

 

Cost

Percent Complete

  Materials costs

$15,400     

75%           

  Conversion costs

$7,960     

25%           

A total of 8,200 units were started and 7,700 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month: 

  Materials costs

$114,408 

  Conversion costs

$322,692 

  The ending inventory was 80% complete with respect to materials and 70% complete with respect to conversion costs. 

The total cost transferred from the first processing department to the next processing department during the month is closest to: (Round your cost per equivalent unit answers to 2 decimal places.)

  • $418,880
  • $466,507
  • $481,121
  • $453,707

 

7. Nando Company uses the weighted-average method in its process costing system. Department J is the second of three sequential processes at the company. During October, Department J collected the following data: 

 

 

Labor and Overhead

 

Units

Percentage Complete

  Work in process, October 1

8,000  

70%            

  Units started

39,000  

 

  Completed and transferred

34,000  

 

  Work in process, October 31

13,000  

20%            

 

  Costs for October

Transferred In

Materials

Labor and Overhead

  Work in process, October 1 

$38,000      

$17,900    

$  32,400         

  Added during the month

$93,600      

$123,100    

$425,100         

All materials are added at the beginning of the process. 

The total cost assigned to ending work in process inventory was: (Round your intermediate calculations to 2 decimal places.)

  • $107,900
  • $75,400
  • $73,000
  • $159,300

 

 

8. Darth Company sells three products. Sales and contribution margin ratios for the three products follow:

 

Product X

Product Y

Product Z

  Sales in dollars

$22,000  

$42,000  

$102,000  

  Contribution margin ratio

36% 

31% 

6% 

 Given these data, the contribution margin ratio for the company as a whole would be: (Round your intermediate calculations to 2 decimal places. Round your answer to whole percentage.) 

  • 16%
  • 34%
  • 24%
  • it is impossible to determine from the data given.

 

9. Cindy, Inc. sells a product for $20 per unit. The variable expenses are $14 per unit, and the fixed expenses total $34,900 per period. By how much will net operating income change if sales are expected to increase by $40,000?

  • $6,900 decrease
  • $20,670 increase
  • $5,100 increase
  • $12,000 increase

 

10. Pool Company's variable expenses are 32% of sales. Pool is contemplating an advertising campaign that will cost $19,600. If sales increase by $79,600, the company's net operating income should increase by:(Do not round intermediate calculations.)

  • $9,408
  • $34,528
  • $67,456
  • $25,472

 

11. Kendall Company has sales of 1,600 units at $50 a unit. Variable expenses are 35% of the selling price. If total fixed expenses are $42,000, the degree of operating leverage is: 

  • 5.20
  • 2.97
  • 8.00
  • 2.80

 

12. At a sales level of $101,000, Blue Company's contribution margin is $13,000. If the degree of operating leverage is 5 at a $101,000 sales level, net operating income must equal:

  • $10,400
  • $17,600
  • $20,200
  • $2,600

 

13. Mark Corporation produces two models of calculators. The Business model sells for $40, and the Math model sells for $20. The variable expenses are given below:

Model

  Variable production costs per unit    $19      $20   

  Variable selling and administrative expenses per unit          $  9      $ 6   

The fixed expenses are $79,000 per month. The expected monthly sales of each model are: Business, 1,400 units; Math, 900 units.

The contribution margin ratio for the Business model is: (Do not round intermediate calculations.) 

  • 30%
  • 20%
  • 59%
  • 41%

 

14. Mark Corporation produces two models of calculators. The Business model sells for $42, and the Math model sells for $35. The variable expenses are given below:

Model

  Variable production costs per unit    $11      $15  

  Variable selling and administrative expenses per unit          $11      $  5  

The fixed expenses are $75,200 per month. The expected monthly sales of each model are: Business, 1,250 units; Math, 500 units.

The break-even point in unit sales for the expected sales mix is closest to: (Do not round intermediate calculations.) 

  • 2,892 Business Model and 1,157 Math Model
  • 2,892 of each product
  • 1,157 Business Model and 2,892 Math Model
  • 1,157 of each product

 

 

15.

 

Product
L40O

Product
Y27L

  Sales

$22,900     

$49,900    

  Variable expenses

8,931     

18,520    

  Contribution margin

$13,969     

$31,380    

If the sales mix were to shift toward Product L40O with total dollar sales remaining constant, the overall break-even point for the entire company: 

  • would decrease.
  • would increase.
  • would not change.
  • could increase or decrease.

 

16. Sproles Inc. manufactures a variety of products. Variable costing net operating income was $90,500 last year and its inventory decreased by 3,500 units. Fixed manufacturing overhead cost was $6 per unit. What was the absorption costing net operating income last year?

  • $90,500
  • $21,000
  • $69,500
  • $111,500

 

 

17. Carr Company produces a single product. During the past year, Carr manufactured 32,210 units and sold 26,700 units. Production costs for the year were as follows:

  Fixed manufacturing overhead

$418,730 

  Variable manufacturing overhead

$251,238 

  Direct labor

$157,829 

  Direct materials

$241,575 

Sales totaled $1,241,550, variable selling expenses totaled $138,840, and fixed selling and administrative expenses totaled $199,702. There were no units in beginning inventory. Assume that direct labor is a variable cost.

The contribution margin per unit would be: (Do not round intermediate calculations.) 

  • $22.80
  • $26.30
  • $21.10
  • $16.80

 

18. Kilihea Corporation produces a single product. The company's absorption costing income statement for July follows:

The company's variable production costs are $24.50 per unit and its fixed manufacturing overhead totals $149,400 per month.

The break-even point in units for the month under variable costing is (Round your intermediate calculations and final answer to nearest whole number):

  • 13,980 units
  • 15,730 units
  • 12,080 units
  • 12,880 units

 

19. Eagle Corporation manufactures a picnic table. Shown below is Eagle's cost structure:

            Variable cost

per table          Total fixed cost

for the year

  Manufacturing cost   $63      $213,370    

  Selling and administrative    $11                  $32,567    

In its first year of operations, Eagle produced and sold 11,230 tables. The tables sold for $155 each.

How would Eagle's variable costing net operating income be affected in its first year if only 9,900 tables were sold instead of 11,230?

  • net operating income would have been $54,530 lower
  • net operating income would have been $107,730 lower
  • net operating income would have been $113,730 lower
  • net operating income would have been $97,090 lower

 

20. The marketing department believes that a promotional campaign for Store H costing $10,500 will increase the store's sales by $22,300. If the campaign is adopted, overall company net operating income should: 

  • decrease by $7,359
  • decrease by $8,095
  • increase by $4,441
  • increase by $11,800

 

 

21. Olds Inc., which produces a single product, has provided the following data for its most recent month of operations:

  Number of units produced

10,700 

  Variable costs per unit:

 

  Direct materials

$108 

  Direct labor

$51 

  Variable manufacturing overhead

$7 

  Variable selling and administrative expenses

$9 

  Fixed costs:

 

  Fixed manufacturing overhead

$417,300 

  Fixed selling and administrative expenses

$834,600 

There were no beginning or ending inventories. The absorption costing unit product cost was: 

  • $159
  • $205
  • $166
  • $292

 

22. A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations:

  Selling price

$150 

 

 

  Units in beginning inventory

150 

  Units produced

7,300 

  Units sold

6,900 

  Units in ending inventory

550 

 

 

  Variable cost per unit:

 

  Direct materials

$48 

  Direct labor

$43 

  Variable manufacturing overhead

$8 

  Variable selling and administrative

$4 

  Fixed costs:

 

  Fixed manufacturing overhead

$233,600 

  Fixed selling and administrative expenses

$82,800 

What is the total period cost for the month under variable costing?

  • $233,600
  • $110,400
  • $316,400
  • $344,000

 

23. A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations: 

  Selling price

$135 

 

 

  Units in beginning inventory

  Units produced

2,770 

  Units sold

2,550 

  Units in ending inventory

220 

 

 

  Variable cost per unit:

 

  Direct materials

$49 

  Direct labor

$16 

  Variable manufacturing overhead

$13 

  Variable selling and administrative

$12 

  Fixed costs:

 

  Fixed manufacturing overhead

$94,180 

  Fixed selling and administrative expenses

$17,850 

The total gross margin for the month under absorption costing is:

  • $58,650
  • $10,200
  • $103,950
  • $114,750

 

24. Carr Company produces a single product. During the past year, Carr manufactured 30,140 units and sold 24,600 units. Production costs for the year were as follows:

  Fixed manufacturing overhead

$572,660 

  Variable manufacturing overhead

$223,036 

  Direct labor

$147,686 

  Direct materials

$253,176 

Sales totaled $1,242,300, variable selling expenses totaled $140,220, and fixed selling and administrative expenses totaled $217,008. There were no units in beginning inventory. Assume that direct labor is a variable cost. 

Under variable costing, the net income for the year would be:

  • $33,240 lower than under absorption costing
  • $33,240 higher than under absorption costing
  • $105,260 lower than under absorption costing
  • $105,260 higher than under absorption costing

 

25. DeAnne Company produces a single product. The company's variable costing income statement for August appears below:

DeAnne Company
Income Staement
For the month ended August 31

  Sales ($18 per unit)

$ 738,000  

 

 


 

  Variable expenses:

 

 

  Variable cost of goods sold

410,000  

 

  Variable selling expense

123,000  

 

  


 

  Total variable expenses

533,000  

 

  


 

  Contribution margin

205,000  

 

  


 

  Fixed expenses:

 

 

  Fixed manufacturing

141,280  

 

  Fixed selling and administrative

35,320  

 

  


 

  Total fixed expenses

176,600  

 

    


 

  Net operating income

$ 28,400  

 

 



 

The company produced 35,320 units in August and the beginning inventory consisted of 8,490 units. Variable production costs per unit and total fixed costs have remained constant over the past several months.

Under absorption costing, the ending inventory for the month ended August 31 would be reported at: 

  • $28,100
  • $47,770
  • $39,340
  • $52,770