國立彰化師範大學九十四學年度碩士班招生考試試題
系所：會計學系
科目： 管理會計(含成本會計學)
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共 6 頁，第 1 頁
Problem (100%) ※Attention: you cannot get any point without computation.
1. The Angela Company is considering two new colors for glove products: pink and blue. Either can be
produced using present facilities. Each product requires an increase in annual fixed costs of
$300,000. The products have the same $10 selling price and the same $7 variable cost per unit.
Management, after analyzing past experience with similar products, has prepared the following
probability distribution:
Units Demanded
50,000
100,000
200,000
300,000
400,000
500,000
Pink Glove
0.0
x
2x
0.4
0.2
0.1
Probability for
Blue Glove
0.3
0.1
0.1
y
0.4
0.1
Required:
(1) What is the breakeven point in units for Blue Glove? (4%)
(2) Compute margin of safety in dollars for Pink Glove? (4%)
(3) Which product should be chosen, assuming the objective of the Angela is to maximize expected
operating income? (4%)
2. Jolin, the financial manager at the Miracle hotel, is examining if there is any relationship between
newspaper advertising and sales revenues at the hotel. She obtains the following data:
Month
March
April
May
June
July
August
September
October
November
December
Revenues
$ 50,000
70,000
55,000
65,000
50,000
65,000
45,000
60,000
55,000
80,000
Advertising Costs
$ 2,000
3,000
1,500
3,500
1,000
2,000
1,500
2,500
2,500
4,000
Required:
(1) Use the high-low method to compute the cost function. (5%)
(2) What is the increase in revenues for each $2,000 spent on advertising within the relevant range
when Jolin decides to adopt regression analysis method? (6%)
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國立彰化師範大學九十四學年度碩士班招生考試試題
系所：會計學系
科目： 管理會計(含成本會計學)
☆☆請在答案紙上作答☆☆
共 6 頁，第 2 頁
3. ATi Company produces component parts. One product, Rz, has annual sales of 50,000 units and sells
for $40.6 per unit. ATi incurs no marketing, distribution, or customer-service costs. ATi includes all
R&D and design costs in engineering costs. ATi’s direct costs including long-run fixed cost of
machine capacity dedicated to Rz are:
Direct material costs (DMC; variable)
$850,000
Direct manufacturing labor costs (DMLC; variable) 300,000
Direct machining costs (fixed, 50,000hours)
150,000
ATi adopts activity-based costing, and has the following data:
Activity
Setup
Testing
Engineering
Cost driver
Setup-hours
Testing-hours
Complexity of product and process
Cost per unit of cost driver
$25
$2
Costs assigned to products by special study
Over a long-run horizon, management views indirect costs as variable with respect to their chosen
cost drivers. Additional data for Rz are:
Production batch size
Setup time per batch
Testing and inspection time per unit of product produced
Engineering costs
500 units
12 hours
2.5hours
$170,000
Due to competitive pressures, ATi decides to reduce the price of Rz to $34.8. The new price will not
affect its current unit sales. If ATi does not reduce price, it will lose sales. Obviously, the challenge for
ATi is to cut the cost of Rz. Engineers have proposed product design and process improvements for the
“New Rz” to replace Rz. The expected effects of the new design relative to Rz are:
A. DMC for New Rz are expected to decrease by $3 per unit.
B. DMLC for New Rz are expected to decrease by $0.75 per unit.
C. New Rz will take 6 setup-hours for each setup.
D. Time required for testing each unit of New Rz is expected to reduce by 0.5 hour.
E. Engineering costs will be unchanged.
Assume that the batch sizes are the same for New Rz as for Rz. Assume further that the cost per
unit of each cost driver for New Rz is the same as for Rz. If ATi requires additional resources to
implement the new design, it can acquire these resources in the quantities needed.
Required:
(1) Compute the full cost per unit for Rz adopting activity-based costing. (5%)
(2) What is the markup percentage on the full cost per unit for Rz? (5%)
(3) What is ATi’s target cost per unit for New Rz if it is to maintain the same markup percentage on
the full cost per unit as for Rz? (5%)
(4) What price will ATi charge for New Rz if it uses the same markup percentage on the full cost per
unit for New Rz as for Rz? (5%)
-2-
國立彰化師範大學九十四學年度碩士班招生考試試題
系所：會計學系
科目： 管理會計(含成本會計學)
☆☆請在答案紙上作答☆☆
共 6 頁，第 3 頁
4. Winchester Company sells women’s clothing. Winchester’s strategy is to offer a wide choice of
clothes and excellent customer service and to charge a premium price. Winchester provides the data
for 2003 and 2004. To simplify, assume that each customer buys one piece of clothing.
1. Pieces of clothing purchased and sold
2. Average selling price
3. Average cost per piece of clothing
4. Selling and customer-service capacity
5. Selling and customer-service costs
6. Purchasing and administrative capacity
7. Purchasing and administrative costs
8. Purchasing and administrative capacity
cost per distinct design
2003
40,000
$60
$40
51,000 customers
$357,000
980
$245,000
$250
2004
40,000
$59
$41
43,000 customers
$296,700
850
$204,000
$240
Total selling and customer-service costs depend on the number of customers that Winchester has
created capacity to support, not the actual number of customers that Winchester serves. Total
purchasing and administrative costs depend on purchasing and administrative capacity that Winchester
has created (defined in terms of the number of distinct clothing designs that Winchester can purchase
and administer). Purchasing and administrative costs do not depend on the actual number of distinct
clothing designs purchased. Winchester respectively purchased 930 and 820 distinct designs in 2003
and 2004.
Required:
(1) Is Winchester’s strategy one of cost leadership or product differentiation? Explain. (3%)
(2) Please compute the growth, price-recovery and productivity components of changes in operating
income between 2003 and 2004. (12%)
5. Berkshire Corporation produces gears using turning machines. In 2004, Berkshire’s turning
machines operated for 80,000 hours. The company employed four workers in its repair and
maintenance area to repair machines that broke down. In 2004, each worker was paid a fixed
annual salary of $30,000 for 250 days of work at 8 hours per day. During 2004, the workers spent
6,500 hours doing repairs and maintenance.
Required:
(1) Compute the cost of unused repair and maintenance capacity in 2004 if we assume that the costs
are engineered costs. (6%)
-3-
國立彰化師範大學九十四學年度碩士班招生考試試題
系所：會計學系
科目： 管理會計(含成本會計學)
☆☆請在答案紙上作答☆☆
共 6 頁，第 4 頁
6. Sasa Chemicals has a Mixing Department and a Refining Department. Its process-costing system in
the Mixing Department has two direct materials cost categories (Chemical T and Chemical R) and
one conversion costs pool. The following data pertain to the Mixing Department for July 2004:
Units
Work in process, July 1
Units started
Completed and transferred to Refining Department
0
50,000
35,000
Costs
Chemical T
Chemical R
Conversion costs
$250,000
70,000
135,000
Chemical T is introduced at the start of operations in the Mixing Department, and chemical R is
added when the product is three-fourths completed in the Mixing Department. Conversion costs are
added evenly during the process. The ending work in process in the Mixing Department is two-thirds
complete.
Required:
(1) Compute the equivalent units in the Mixing Department for July 2004 for each cost category. (6%)
7. The Media Group has three divisions: (1) Newspapers which owns leading newspapers on four
continents, (2) Television which owns major television networks on three continents, and (3) Film
studios which owns one of the five largest film studios in the world. The following table provides
summary financial data (in millions) for each division in 2002 and 2003.
Operating Income
Revenues
2002
2003
2002
2003
2002
2003
$900
$1,100
$4,500
$4,600
$4,400
$4,900
Television
130
160
6,000
6,400
2,700
3,000
Film studios
220
210
1,600
1,650
2,500
2,600
Newspapers
Total Assets
Division managers have an annual bonus plan based on their own divisional ROI (defined as
operating income divided by total assets). Senior executives from divisions reporting increases in ROI
from the prior year are automatically eligible for a bonus. However, if they report a decline in the
division ROI, they need to provide persuasive explanations for the decline to be eligible for a limited
bonus. John, manager of the Newspapers Division, is considering a project to invest $260 million in
fast-speed printing presses with color-print options. He expects that the operating income in 2004
-4-
國立彰化師範大學九十四學年度碩士班招生考試試題
系所：會計學系
科目： 管理會計(含成本會計學)
☆☆請在答案紙上作答☆☆
共 6 頁，第 5 頁
would increase about $30 million. The Media Group has a 12% required rate of return for investments
in all divisions.
Required:
(1) Please explain differences among the divisions in their ROIs for 2003 by adopting the DuPont
method of profitability analysis. Use total assets in 2003 as the investment base. (5%)
(2) Compute the residual income (RI) of the Film studios Division in 2003. (5%)
(3) Would adoption of a RI measure reduce John’s reluctance to employ the investment project?
(5%)
8. The Hope Company adopts a flexible budget and standard costs to help planning and control of its
machining manufacturing operations. Its normal-costing system for manufacturing has two
direct-cost categories (direct materials and direct manufacturing labor- both costs are variable) and
two indirect-cost categories (variable manufacturing overhead and fixed manufacturing overhead,
both allocated using direct manufacturing labor-hours). At the 40,000 budgeted direct manufacturing
labor-hour level for April, budgeted direct manufacturing labor costs are $800,000, budgeted
variable manufacturing overhead is $480,000, and budgeted fixed manufacturing overhead is
$640,000. The following actual results are for April:
Direct materials price variance (based on purchases)
Direct materials efficiency variance
Direct manufacturing labor costs incurred
Variable manufacturing overhead flexible-budget variance
Variable manufacturing overhead efficiency variance
Fixed manufacturing overhead incurred
Fixed manufacturing overhead spending variance
$176,000F
69,000U
522,750
10,350U
18,000U
597,460
42,540F
The standard cost per pound of direct materials is $11.50. The standard allowance is three pounds
of direct materials for each unit of product. During April 30,000 units of product were produced. There
was no beginning inventory of direct materials. There was no beginning or ending work in process. In
April, the direct materials price variance was $1.10 per pound. In March, labor unrest caused a major
slowdown in the pace of production, resulting in an unfavorable direct manufacturing labor efficiency
variance of $45,000. There was no direct manufacturing labor price variance. Labor unrest persisted
into April. Some workers quit. Their replacements had to be hired at higher rates, which had to be
extended to all workers. The actual average wage rate in April exceeded the standard average wage rate
by $0.5 per hour.
-5-
國立彰化師範大學九十四學年度碩士班招生考試試題
系所：會計學系
科目： 管理會計(含成本會計學)
☆☆請在答案紙上作答☆☆
共 6 頁，第 6 頁
Required:
(1) Compute total number of pounds of excess direct materials used for April. (5%)
(2) Compute production volume variance for April. (5%)
(3) Compute total number of actual direct manufacturing labor-hours used for April. (5%)
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