devry acct 505 week 4 midterm
(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
$210
Manufacturing overhead
$220
Administrative expenses
$180
Selling expenses
$140
Raw materials inventory, beginning
$70
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: Prepare a Schedule of Cost of Goods Manufactured statement in the text box below.
Question 2. Question :
(TCO F) The Indiana 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 70,000 65% 45%
Work in process, Jun 30 60,000 75% 65%
The department started 290,000 units into production during the month and transferred 300,000 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.
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Question 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 contribution margin 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?
Question 4. Question :
(TCO E) Lehne Company, which has only one product, has provided the following data concerning its most recent month of operations:
Selling price
$ 125
Units in beginning inventory
600
Units oroduced
3000
Units sold
3500
Units in ending inventory
100
Variable costs per unit:
Direct materials
$ 15
Direct labor
$ 50
Variable manufacturing overhead
$ 8
Variable selling and admin
$ 12
Fixed costs:
Fixed manufacturing overhead
$ 75,000
Fixed selling and admin
$ 20,000
The company produces the same number of units every month, although the sales in units vary from month to month. The company's variable costs per unit and total fixed costs have been constant from month to month.
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.
Time (US & Canada)
(TCO A) The variable portion of advertising costs is a
Conversion YES... Period NO.
Conversion YES .... Period YES.
Conversion NO.... Period YES.
Conversion NO.... Period NO.
Question 2. Question :
(TCO A) The costs of staffing and operating the accounting department at Central Hospital would be considered by the Department of Surgery to be
direct costs.
sunk costs.
incremental costs.
None of the above
Question 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.
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Question 4. Question :
(TCO A) When the activity level is expected to increase within the relevant range, what effects would be anticipated with respect to each of the following?
Fixed cost per unit Variable cost per unit
Increase No change
Increase Increase
Decrease No change
No change Increase
Question 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.
Question 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.
Question 7. Question :
(TCO F) Equivalent units for a process costing system using the FIFO method would be equal to
: units completed during the period, plus equivalent units in the ending work-in-process inventory.
units started and completed during the period, plus equivalent units in the ending work-in-process inventory.
units completed during the period and transferred out.
units started and completed during the period, plus equivalent units in the ending work-in-process inventory, plus work needed to complete units in the beginning work-in-process inventory.
Question 8. Question :
(TCO B) The contribution margin equals
sales - expenses.
sales - cost of goods sold.
sales - variable costs.
sales - fixed costs.
Question 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.
Question 10. Question :
(TCO E) Under variable costing
net operating income will tend to move up and down in response to changes in levels of production.
inventory costs will be lower than under absorption costing.
net operating income will tend to vary inversely with production changes.
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Solution: devry acct 505 week 4 midterm