ACCT321 quiz 1 , 2 and quiz 3 latest 2015 november [ all 3 quizes ]

Quiz 1 (Cost Accounting)//Fall 2015//Instructor: Chris Montano

Enter your responses on the answer sheet provided (next tab).

(Multiple Choice)

1. Following are the operating results of the two segments of Parklin Corporation:

Segment A Segment B Total

Sales $10,000 $15,000 $25,000

Variable costs of goods sold 4,000 8,500 12,500

Fixed costs of goods sold 1,500 2,500 4,000

Gross margin 4,500 4,000 8,500

Variable selling and administrative 2,000 3,000 5,000

Fixed selling and administrative 1,500 1,500 3,000

Operating income (loss) $1,000 ($500) $500

Variable costs of goods sold are directly related to the operating segments. Fixed costs of goods sold are allocated to each segment based on the number of employees. Fixed selling and administrative expenses are allocated equally. If Segment B is eliminated, $1,500 of fixed costs of goods sold would be eliminated.

Assuming Segment B is closed, the effect on operating income would be

a. an increase of $500.

b. an increase of $2,000.

c. a decrease of $2,000.

d. a decrease of $2,500.

(Short Answer)

2. Greg Morrison recently graduated from mortuary school. He is considering opening his own funeral home. A funeral home is a high-fixed cost business, as it requires considerable expenditures for facilities, labor, and equipment, no matter how many families are served. Assume the annual fixed cost of operations is $800,000. Further assume that the only significant variable cost relates to burial containers like urns and caskets. An average casket costs $1,200. Greg's banker has asked a variety of questions in contemplation of providing a loan for this business.

a. If the average family is charged $6,000 for services and a burial container, how many families must be served to clear the break-even point?

b. If the banker believes Greg will only serve 100 families during the first year in business, how much will the business lose during its first year of operation?

c. If Greg believes his profits will be at least $100,000 during the first year, how much is he anticipating for total revenue?

d. The banker has suggested that Greg can reduce his fixed costs by $150,000 if he will not buy any vehicles. Greg can instead rent vehicles as needed. The variable cost of renting is $700 per family served. Will this suggestion help Greg reach the break-even point sooner?

(Multiple Choice)

3. Which is the best cost accumulation procedure to use when there is a continuous mass production of like units?

A. Process.

B. Standard.

C. Job order.

D. ABC.

E. None of these.

(Multiple Choice)

4. An equivalent unit of material is equal to:

A. the amount of material necessary to complete one unit of production.

B. a unit of work in process inventory.

C. the amount of material necessary to start a unit of production into work in process.

D. fifty percent of the material cost of a unit of finished goods.

E. None of these.

(True or False)

5. To apply process costing, there is no need to decide on a specific methods such as FIFO or weighted-average.

(Short Answer )

6. Explain the difference between contribution margin and gross margin.

Prepare a schedule showing the allocation of total cost between finished goods and ending work in process.

Cost Per Equivalent Unit: