1. Question
: (TCO A) Wages paid to an assembly line worker in a
factory are a
Prime Cost YES.....Conversion Cost NO.
Prime Cost YES.....Conversion Cost YES.
Prime Cost NO....Conversion Cost NO.
Prime Cost NO.....Conversion Cost YES.
Points
Received: 6 of 6
2. Question : (TCO A) A cost
incurred in the past that is not relevant to any current decision is classified
as a(n)
period cost.
incremental cost.
opportunity cost.
None of the above
Points
Received: 6 of 6
3. Question : (TCO A) Property
taxes on a company's factory building would be classified as a(n)
sunk cost.
opportunity cost.
period cost.
variable cost.
manufacturing cost.
Points Received: 6 of 6
4. Question : (TCO A) Within the relevant range, variable costs can be
expected to
vary in total in direct proportion to changes
in the activity level.
remain constant in total as the activity level
changes.
increase on a per-unit basis as the activity
level increases.
increase on a per-unit basis as the activity
level decreases.
None of the above
Points
Received: 6 of 6
5. Question : (TCO F) Which of
the following statements is true?
I. Overhead application may be made slowly as a job is
worked on.
II. Overhead application may be made in a single application
at the time of completion of the job.
III. Overhead application should be made to any job not
completed at year end in order to properly value the work in process inventory.
Only statement I is true.
Only statement II is true.
Both statements I and II are true.
Statements I, II, and III are all true.
Points Received: 6 of 6
6. Question : (TCO F) Under a
job-order costing system, the product being manufactured
is homogeneous.
passes
from one manufacturing department to the next before being completed.
can be custom
manufactured.
has a unit cost that is easy to calculate by
dividing total production costs by the units produced.
Points
Received: 6 of 6
7. Question : (TCO F) The FIFO
method only provides a major advantage over the weighted-average method in that
the calculation
of equivalent units is less complex under the FIFO method.
the FIFO method treats units in the beginning
inventory as if they were started and completed during the current period.
the FIFO method
provides measurements of work done during the current period.
the
weighted-average method ignores units in the beginning and ending
work-in-process inventories.
Points Received: 6 of 6
8. Question : (TCO B) The
contribution margin equals
sales - expenses.
sales - cost of goods sold.
sales - variable costs.
sales - fixed costs.
Points Received: 6 of 6
9. Question : (TCO B) To obtain
the break-even point in terms of dollar sales, total fixed expenses are divided
by which of the following?
Variable expense per unit
Variable expense per unit/Selling price per
unit
Fixed expense per unit
(Selling price per unit - Variable expense per
unit) /Selling price per unit.
Points Received: 6 of 6
10. Question : (TCO E) In an income statement prepared using the variable
costing method, fixed manufacturing overhead would
not be used.
be used in the
computation of the contribution margin.
be used in the computation of net operating
income but not in the computation of the contribution margin.
be treated the same as variable manufacturing
overhead.
Points Received: 6 of 6
1. Question : (TCO A) The following data (in thousands of dollars) have
been taken from the accounting records of Larop Corporation for the just-completed
year:
Sales.................................................................................
$910
Purchases of raw
materials................................................ $225
Direct
labor....................................................................... $245
Manufacturing
overhead.................................................... $265
Administrative
expenses.................................................... $150
Selling
expenses................................................................ $140
Raw materials inventory,
beginning..................................... $15
Raw materials inventory,
ending......................................... $45
Work-in-process inventory,
beginning................................. $20
Work-in-process inventory,
ending..................................... $55
Finished goods inventory,
beginning................................... $100
Finished goods inventory,
ending....................................... $135
Required: Prepare a Schedule of Cost of Goods Manufactured
in the text box below.
Points
Received: 15 of 15
2. Question
: (TCO F) The Illinois 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 1 150,000 75% 55%
Work in process, Jun 30 145,000 85% 75%
The department started 475,000 units into production during
the month and transferred 480,000 completed units to the next department.
Required: Compute the equivalent units of production for the
first department for June, assuming that the company uses the weighted-average
method of accounting for units and costs.
Points
Received: 20 of 20
3. Question : (TCO B) A tile manufacturer has supplied the following
data:
Boxes of tile produced and sold 625,000
Sales revenue
$2,975,000
Variable manufacturing expense $1,720,000
Fixed manufacturing expense $790,000
Variable selling and admin expense $152,000
Fixed selling and admin expense $133,000
Net operating income
$180,000
Required:
a. Calculate the company's unit contribution margin.
b. Calculate the company's unit contribution ratio.
c. If the company increases its unit sales volume by 5%
without increasing its fixed expenses, what would the company's net operating
income be?
Points Received: 25 of 25
4. Question
: (TCO E) Maffei Company, which
has only one product, has provided the following data concerning its most
recent month of operations:
Selling price $
175
Units in beginning inventory
0
Units produced 9,500
Units sold 8,000
Units in ending Inventory
1,500
Variable costs per unit:
Direct materials
$
55
Direct labor $
38
Variable manufacturing overhead $
2
Variable selling and admin
$
10
Fixed costs:
Fixed manufacturing overhead
$ 300,000
Fixed selling and admin
$
125,000
Required:
a. What is the unit product cost for the month under
variable costing?
b. What is the unit product cost for the month under
absorption costing?
c. Prepare an income statement for the month using the
variable costing method.
d. Prepare an income statement for the month using the
absorption costing method.
Points Received: 30 of 30
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