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Midterm MA K45 - mnxmnjdbjkjdf
Managerial Accounting (Trường Đại học Kinh tế Thành phố Hồ Chí Minh)
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MID-TERM EXAM MANAGERIAL ACCOUNTING
KIC01-K45-MRS.OANH
Question 1:
In situations where management must decide between accepting or rejecting a one-time-only
special order where there is sufficient idle capacity to fill the order, which one of the following is
NOT relevant in making the decision?
A. Differential costs
B. Absorption costing unit product costs
C. Variable costs
D. Incremental costs
Question 2:
Amy Company makes three products (A, B, & C) with the following characteristics:
Product A
Product B
Prorduct C
Selling price per unit
$25
$40
$50
Variable costs per
$11
$30
$30
unit
Machine hours per
3 machine hours
2 machine hours
5 machine hours
unit
The company has a capacity of 5,000 machine hours, but there is virtually unlimited demand for
each product. In order to maximize profit, how many units of each product should the company
produce?
A. 0 units of A, 2,500 units of B, and 0 units of C
B. 1,667 units of A, 2,500 units of B, and 1,000 units of C
C. 1,667 units of A, 0 units of B, and 0 units of C
D. 0 units of A, 0 units of B, and 1,000 units of C
Question 3:
The Emily Company is considering the addition of a new model calculator, the C-25, to its
current product lines. The expected cost and revenue data for the C-25 calculator are as follows:
Number of units produced and consumed
5,000 units
annually
Unit selling price
$69
Unit variable costs:
Production
$32
Selling
$7
Avoidable fixed costs per year:
Production
$80,000
Selling
$30,000
If the C-25 model is added as a new product line, it is expected that the contribution margin of
other product lines at Emily will drop by $13,000 per year. If the C-25 product line is added next
year, the change in operating income should be:
A. $36,000 increase
B. $36,000 decrease
C. $27,000 decrease
D. $27,000 increase
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Question 4:
All of the following are characteristics of the product of process costing except:
A. Identical amount of direct materials
B. High volume
C. Repetitive operation
D. Different amount of direct materials
Question 5:
Erie Company uses the weighted-average method in its process costing system. The company
has only a single processing department. The company's ending work in process inventory
consisted of 36,000 units. The units in the ending work in process inventory were 50% complete
with respect to materials and 30% complete with respect to labor and overhead. If the costs per
equivalent unit for the current period were $5.50 for materials and $8.50 for labor and overhead,
the total cost assigned to the ending work in process inventory was:
A. $160,200
B. $151,200
C. $190,800
D. $252,000
Question 6:
Product X-547 is one of the joint products in a joint manufacturing process. Management is
studying whether to sell X-547 at the split-off point or to process X-547 further into Xylene. The
following data have been gathered:
(i) Selling price of X-547
(ii) Variable cost of processing X-547 into Xylene
(iii) The avoidable fixed costs of processing X-547 into Xylene
(iv) The selling price of Xylene
(v) The joint cost of the process from which X-547 is produced
Which of the above items are relevant in a decision of whether to sell the X-547 as is or process
it further into Xylene?
A. (ii), (iii), and (v)
B. (i), (ii) and (iv)
C. (i), (ii), (iii) and (iv)
D. (i), (ii), (iii) and (v)
Question 7:
Marlowe, Inc. uses the FIFO method in its process costing system. The following data relate to
operations for a recent month:
Beginning units in process
300 units
Completion with respect to conversion
80 %
Conversion cost in beginning units
$3,164
Units started during the month
26,000 units
Costs added to production during the month:
Conversion cost
$887,626
Ending units in process
800 units
Completion with respect to conversion
40 %
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What was the cost per equivalent unit for conversion costs?
A. $34.50 per unit
B. $35.60 per unit
C. $34.60 per unit
D. $34.70 per unit
Question 8:
Thomas Corporation has provided the following production and average cost data for two levels
of monthly production volume:
Production volume
4,000 units
5,000 units
Direct materials
$99.20 per unit
$99.20 per unit
Direct labor
$45.50 per unit
$45.50 per unit
Manufacturing overhead
$94.00 per unit
$77.60 per unit
The company produces a single product. The best estimate of the total monthly fixed
manufacturing cost is:
A. $388,000
B. $328,000
C. $376,000
D. $954,800
Question 9:
There were 200 units in opening stock of work-in-progress that were 30% complete as to
conversion costs and 100% complete as to materials. 400 units were started during the current
period. 100 units were in closing stock that were 100% complete as to materials and 60%
complete as to conversion costs. Using the FIFO method, what are equivalent units completed
and transferred out from beginning WIP and started and completed?
A. 140 from opening WIP and 300 started and completed
B. 60 from opening WIP and 500 started and completed
C. 60 from opening WIP and 300 started and completed
D. 140 from opening WIP and 400 started and completed
Question 10:
Fixed costs expressed on a per unit basis:
A. Should be ignored in making decisions since they can not change
B. Are not affected by activity
C. Will increase with increases in activity
D. Will decrease with increases in activity
Question 11:
In a make-or-buy decision, relevant costs include:
A. Fixed factory overhead costs applied to products
B. Unavoidable fixed costs
C. Fixed selling and administrative expenses
D. Avoidable fixed costs
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Question 12:
Tony Company produces and sells 10,000 units of Product A each year. Each unit of Product A
sells for $50 and has a variable cost per unit of $40. It is estimated that if Product A is
discontinued, $180,000 of the $310,000 in fixed costs charged to Product A could be eliminated.
These data indicate that if Product A is discontinued, overall company net operating income
should:
A. Increase by $320,000 per year
B. Decrease by $90,000 per year
C. Increase by $80,000 per year
D. Increase by $90,000 per year
Question 13:
The Maxis Company makes wheels that it uses in the production of bicycles. Maxis's costs to
produce 100,000 wheels annually are:
Direct materials
$70,000
Direct labor
$30,000
Variable overhead
$50,000
Fixed overhead
$70,000
An outside supplier has offered to sell Maxis similar wheels for $1.85 per wheel. If the wheels
are purchased from the outside supplier, $30,000 of annual fixed overhead could be avoided and
the facilities now being used could be rented to another company for $20,000 per year. If Maxis
chooses to buy the wheel from the outside supplier, then the change in annual net operating
income due to accepting the offer is a:
A. $20,000 decrease
B. $15,000 increase
C. $10,000 increase
D. $30,000 increase
Question 14:
Anna Corporation wants to set the selling price of a mass product. The accounting department
has provided cost estimations as shown below:
Unit variable costs
Total fixed costs per year
Direct materials
$90
Direct labor
$30
Production overhead
$20
$100,000
Selling, administration and
$10
$60,000
distribution costs
Anna Corporation must invest $1,000,000 to produce and sell 2,000 units of the product each
year. Anna expects to obtain a 20% ROI. What is markup percentage?
A. 100%
B. 90%
C. 120%
D. 110%
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Question 15:
If there is no opening stock of work-in-progress, 100 units in closing stock are 40% complete,
and 300 are units started and completed for $300,000:
A. The weighted-average method would assign less costs than the FIFO method
B. The weighted-average method would assign more costs than the FIFO method
C. The weighted-average method would assign the same costs as the FIFO method
D. The weighted-average method would assign all costs and the FIFO method would assign none
Question 16:
Brown Company makes four products in a single facility. Data concerning these products appear
below:
Product A
Product B
Product C
Product D
Selling price per
$28.20
$26.60
$20.40
$24.70
unit
Variable
$11.40
$7.70
$6.30
$9.30
manufacturing
costs per unit
Variable selling
$3.40
$1.50
$3.50
$1.80
costs per unit
Milling machine
2.5 minutes
3 minutes
1.5 minutes
4 minutes
minutes per unit
Monthly demand
400 units
600 units
300 units
500 units
in units
The milling machines are potentially the constraint in the production facility. A total of 5,000
minutes are available per month on these machines. How many units of product should be
produced to maximize profit?
A. 400 units of A, 516.67 units of B, 300 units of C, 500 units of D
B. 400 units of A, 600 units of B, 300 units of C, 437.5 units of D
C. 400 units of A, 600 units of B, 133.33 units of C, 500 units of D
D. 300 units of A, 600 units of B, 300 units of C, 500 units of D
Question 17:
Brown Company makes four products in a single facility. Data concerning these products appear
below:
Product A
Product B
Product C
Product D
Selling price per
$28.20
$26.60
$20.40
$24.70
unit
Variable
$11.40
$7.70
$6.30
$9.30
manufacturing
costs per unit
Variable selling
$3.40
$1.50
$3.50
$1.80
costs per unit
Milling machine
2.5 minutes
3 minutes
1.5 minutes
4 minutes
minutes per unit
Monthly demand
400 units
600 units
300 units
500 units
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in units
The milling machines are potentially the constraint in the production facility. A total of 5,000
minutes are available per month on these machines. Which product makes the MOST profitable
use of the milling machines?
A. Product C
B. Product B
C. Product D
D. Product A
Question 18:
When a multi-product factory operates at full capacity, decisions must be made about what
products to emphasize. In making such decisions, products should be ranked based on:
A. Contribution margin per unit
B. Contribution margin per unit of the constraining resource
C. Unit sales volume
D. Selling price per unit
Question 19:
Alex Company is considering the introduction of a new product. The company uses the
absorption costing approach to cost-plus pricing and has gathered the following information:
Number of units to be produced and sold each
20,000 units
year
Unit product costs
$50
Projected annual selling and administrative
$150,000
expenses
Estimated investment required by the
$1,125,000
company
Desired return on investment (ROI)
12%
The markup percentage required to achieve the desired ROI is:
A. 24%
B. All answers are incorrect
C. 20%
D. 30%
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