Accounting for Managers
Complete the following exam by answering the questions and compiling your answers into a word-processing document. Be certain to indicate the proper question number before each of your answers. Remember to show your work if an answer requires a mathematical solution.
Answer each of the following 20 questions. Each answer is worth 5 points.
Question 1:
At an activity level of 8,800 units, Pember Corporation’s total variable cost is $146,520 and its total fixed cost is $219,296. For the activity level of 8,900 units, compute the following values.
Required:
The total variable cost
The total cost
The average variable cost per unit
The average fixed cost per unit
The average total cost per unit
Note: Assume that the activity level is within the relevant range.
Question 2:
Job 397 was recently completed. The following data have been recorded on its job cost sheet.
Direct materials$59,400Direct labor-hours1,254 DLHsDirect labor wage rate$11 per DLHNumber of units completed3,300 units
The company applies manufacturing overhead on the basis of direct labor-hours. The predetermined overhead rate is $37 per direct labor-hour.
Required:
What’s the unit product cost that would appear on the job cost sheet for this job?
Question 3:
Carver, Inc. uses the weighted-average method in its process costing system. The following data concern the operations of the company’s first processing department for a recent month.
Work in process, beginning: Units in process700Percent complete with respect to materials50%Percent complete with respect to conversion40%Units started into production during the month23,000
Work in process, ending: Units in process200Percent complete with respect to materials80%Percent complete with respect to conversion40%
Required:
Using the weighted-average method, what are the equivalent units of production for materials and for conversion costs?
Question 4:
Hayek Corporation uses the FIFO method in its process costing. The following data concern the company’s mixing department for the month of August.
MaterialsConversionWork in process, August 1$31,734$30,320Cost added to production in the mixing department during August$91,332$81,864Equivalent units of production for August7,7407,580
Required:
What are the cost per equivalent unit for materials and the cost per equivalent for conversion for the mixing department for August using the FIFO method?
Question 5:
Maddaloni International, Inc. produces and sells a single product. The product sells for $160.00 per unit, and its variable expense is $46.40 per unit. The company’s monthly fixed expense is $219,248.
Required:
What’s the monthly break-even in total dollar sales?
Question 6:
Mitchel Corporation manufactures a single product. Last year, variable costing net operating income was $55,000. The fixed manufacturing overhead costs released from inventory under absorption costing amounted to $24,000.
Required:
What’s the absorption costing net operating income from last year?
Question 7:
Calder Corporation manufactures and sells one product. The following information pertains to the company’s first year of operations:
Variable cost per unit: Direct materials$92Fixed costs per year: Direct labor$720,000Fixed manufacturing overhead$3,264,000Fixed selling and administrative$1,935,000
The company doesn’t have any variable manufacturing overhead costs or variable selling and administrative costs. During its first year of operations, the company produced 48,000 units and sold 45,000 units. The company’s only product sells for $258 per unit.
Required:
What is the net operating income?
Question 8:
Mouret Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products.
Activity Cost PoolsActivity RateSetting up batches$92.68 per batchProcessing customer orders$95.08 per customer orderAssembling products$3.41 per assembly hour
Last year, Product N79A required 28 batches, 6 customer orders, and 712 assembly hours.
Required:
How much total overhead cost would be assigned to Product N79A using the company’s activity-based costing system?
Question 9:
The manufacturing overhead budget of Paparella Corporation is based on budgeted direct labor-hours. The November direct labor budget indicates that 6,000 direct labor-hours will be required in that month. The variable overhead rate is $2.00 per direct labor-hour. The company’s budgeted fixed manufacturing overhead is $79,200 per month, which includes depreciation of $21,000. All other fixed manufacturing overhead costs represent current cash flows.
Required:
Determine the cash disbursements for manufacturing overhead for November.
Determine the predetermined overhead rate for November.
Question 10:
Sund Corporation bases its budgets on the activity measure “customers served.” During April, the company plans to serve 38,000 customers. The company has provided the following data concerning the formulas it uses in its budget