Grading Summary
These are the automatically computed results Date Taken:
of your exam. Grades for essay questions,
Time Spent:
and comments from your instructor, are in the
Points Received:
"Details" section below.
170 / 170 (100%)
Question Type:
# Of Questions:
# Correct:
Multiple Choice
25
25
Short
1
N/A
Essay
2
N/A
Grade Details - All Questions
Page:
1 2 3
1.
Question :
Student Answer:
(TCO 1) Which of the following is not a difference between
financial accounting and managerial accounting?
Financial accounting is primarily concerned with
reporting the past, while managerial accounting is more
concerned with the future.
Managerial accounting uses more nonmonetary
information than is used in financial accounting.
Managerial accounting is primarily concerned with
providing information for external users while financial
accounting is concerned with internal users.
Financial accounting must follow GAAP while managerial
accounting is not required to follow GAAP.
Instructor Explanation:
Points Received:
Chapter 1, Page 7
4 of 4
Comments:
2.
Question :
Student Answer:
TCO 1) Which of the following statements regarding fixed
costs is true?
When production increases, fixed cost per unit
increases.
When production decreases, total fixed costs decrease.
When production increases, fixed cost per unit
decreases.
When production decreases, total fixed costs increase.
Instructor Explanation:
Points Received:
Chapter 1, Page 9
4 of 4
Comments:
3.
Question :
Student Answer:
(TCO 1) You own a car and are trying to decide whether or
not to trade it in and buy a new car. Which of the following
costs is an opportunity cost in this situation?
the trip to Cancun that you will not be able to take if
you buy the car
the cost of the car you are trading in
the cost of your books for this term
the cost of your car insurance last year
Instructor Explanation:
Points Received:
Chapter 1, Page 9
4 of 4
Comments:
4.
Question :
Student Answer:
(TCO 1) Shula’s 347 Grill has budgeted the following costs
for a month in which 1,600 steak dinners will be produced
and sold: materials, $4,080; hourly labor (variable),
$5,200; rent (fixed), $1,700; depreciation, $800; and other
fixed costs, $600. Each steak dinner sells for $14.00 each.
How much is the budgeted variable cost per unit?
$5.80
$7.74
$6.68
$3.25
Instructor
Explanation:
Chapter 1, Page 8
($4,080 + $5,200) / 1,600 = $5.80
Points Received:
4 of 4
Comments:
5.
Question :
Student Answer:
(TCO 1) Which of the following is an example of a
manufacturing overhead cost?
security at the manufacturing plant
fabric used to produce shirts
cost of shipping product to customers
the salary of the president of the company
Instructor Explanation:
Points Received:
Chapter 2, Page 37
4 of 4
Comments:
6.
Question :
Student Answer:
(TCO 1) Product costs
are also called manufacturing costs.
are considered an asset until the finished goods are
sold.
become an expense when the goods are sold.
All of the above answers are correct.
Instructor Explanation:
Points Received:
Chapter 2, Page 38
4 of 4
Comments:
7.
Question :
Student Answer:
(TCO 1) At December 31, 2010, WDT Inc. has a balance in
the Work in Process Inventory account of $62,000. At
January 1, 2010, the balance was $55,000. Current
manufacturing costs for the year are $292,000, and cost of
goods sold is $284,000. How much is cost of goods
manufactured?
$292,000
$299,000
$277,000
$285,000
Instructor
Explanation:
Chapter 2, Page 43
$55,000 + $292,000 - $62,000 = $285,000
Points Received:
4 of 4
Comments:
8.
Question :
(TCO 2) BCS Company applies manufacturing overhead
based on direct labor hours. Information concerning
manufacturing overhead and labor for August follows:
Overhead cost
Direct labor
hours
Direct labor
cost
Estimated
$174,000
Actual
$171,000
5,800
5,900
$87,000
$89,975
How much overhead should be applied in total during
August?
Student Answer:
177,000
179,950
171,100
168,200
Instructor
Explanation:
Chapter 2, Page 54
($174,000 / 5,800) x 5,900 = 177,000
Points Received:
4 of 4
Comments:
9.
Question :
Student Answer:
(TCO 2) Citrus Company incurred manufacturing overhead
costs of $300,000. Total overhead applied to jobs was
$306,000. What was the amount of overapplied or
underapplied overhead?
$7,000 overapplied
$6,000 overapplied
$6,000 underapplied
$13,000 underapplied
Instructor Explanation:
Chapter 2, Page 55
$306,000 - $300,000 = $6,000 overapplied
Points Received:
4 of 4
Comments:
10.
Question :
(TCO 3) Companies in which of the following industries
would not be likely to use process costing?
Student Answer:
cereals
paints
cosmetics
auto body shop
Instructor Explanation:
Points Received:
Chapter 3, Page 84
4 of 4
Comments:
11.
Question :
Student Answer:
(TCO 3) The Blending Department began the period with
20,000 units. During the period the department received
another 80,000 units from the prior department and at the
end of the period 30,000 units remained, which were 40%
complete. How much are equivalent units in The Blending
Department’s work in process inventory at the end of the
period?
12,000
28,000
40,000
52,000
Instructor Explanation:
Chapter 3, Page 88
30,000 x 40% = 12,000
Points Received:
4 of 4
Comments:
12.
Question :
(TCO 3) Ranger Glass Company manufactures glass for
French doors. At the start of May, 2,000 units were inprocess. During May, 11,000 units were completed and
3,000 units were in process at the end of May. These inprocess units were 90% complete with respect to material
and 50% complete with respect to conversion costs. Other
information is as follows:
Work in process, May 1:
Direct material
Conversion costs
Costs incurred during May:
$36,000
$45,000
Direct material
Conversion costs
$186,000
$255,000
Calculate the cost per equivalent unit for conversion costs.
Student Answer:
$24.00
$4.09
$21.43
$20.40
Chapter 3, Page 89
Instructor
Explanation:
($45,000 + $255,000) / [11,000 + (3,000 x 50%)] = $24.00
Points Received:
4 of 4
Comments:
13.
(TCO 4) Clearance Depot has total monthly costs of $8,000
when 2,500 units are produced and $12,400 when 5,000
units are produced. What is the estimated total monthly
fixed cost?
Question :
Student Answer:
$4,400
$6,580
$3,600
$8,800
Instructor
Explanation:
Chapter 4, Page 127
Estimated variable cost = ($12,400 - $8,000) / (5,000 - 2,500) = $1.76 per unit
Estimated fixed cost = $8,000 - ($1.76 x 2,500) = $3,600
Points Received:
4 of 4
Comments:
Page:
1 2 3
Page:
1 2 3
1.
Question :
(TCO 4) Which of the following will have no effect on the
break-even point in units?
Student Answer:
The selling price increases
The variable cost per unit increases
The sales volume increases
Total fixed costs increase
Instructor Explanation:
Points Received:
Chapter 4, Page 131
4 of 4
Comments:
2.
(TCO 4) Circle K Furniture has a contribution margin ratio of
16%. If fixed costs are $176,800, how many dollars of
revenue must the company generate in order to reach the
break-even point?
Question :
Student Answer:
$1,105,000
$282,880
$1,060,800
$208,476
Instructor Explanation:
Chapter 4, Page 133
$176,800 / 16% = $1,105,000
Points Received:
4 of 4
Comments:
3.
Question :
Student Answer:
(TCO 4) Randy Company produces a single product that is
sold for $85 per unit. If variable costs per unit are $26 and
fixed costs total $47,500, how many units must Randy sell in
order to earn a profit of $100,000?
1,735
618
890
2,500
Instructor
Explanation:
Chapter 4, Page 132
($100,000 + $47,500) / ($85 - $26) = 2,500 units
Points Received:
4 of 4
Comments:
4.
Question :
Student Answer:
(TCO 5) In full costing, when does fixed manufacturing
overhead become an expense?
In the period when other fixed costs are at the highest
level
In the period when the product is sold
In the period when the expense is incurred
When the controller decides that the expense should be
recognized
Instructor Explanation:
Points Received:
Chapter 5, Page 168
4 of 4
Comments:
5.
Question :
Student Answer:
(TCO 5) Variable costing income is a function of:
Units sold only.
Units produced only
Both units sold and units produced.
Neither units sold nor units. produced
Instructor Explanation:
Points Received:
Chapter 5, Page 169
4 of 4
Comments:
6.
Question :
(TCO 5) Peak Manufacturing produces snow blowers. The
selling price per snow blower is $100. Costs involved in
production are:
Direct Material per unit
Direct Labor per unit
Variable manufacturing overhead per
unit
Fixed manufacturing overhead per
year
$20
12
10
$148,500
In addition, the company has fixed selling and administrative
costs of $150,000 per year. During the year, Peak produces
45,000 snow blowers and sells 30,000 snow blowers. How
much fixed manufacturing overhead is in ending inventory
under full costing?
Student Answer:
$0
$49,500
$148,500
$99,000
Instructor
Explanation:
Chapter 5, Pages 172-174
($148,500 / 45,000) x (45,000 - 30,000) = $49,500
Points Received:
4 of 4
Comments:
7.
Question :
Student Answer:
(TCO 6) Which of the following is not a reason that
companies allocate costs?
To calculate the full cost of products for financial
reporting purposes
To discourage managers from using external suppliers
To reduce the frivolous use of company resources
To provide information needed by managers to make
appropriate decisions
Instructor Explanation:
Points Received:
Chapter 6, Page 198
4 of 4
Comments:
8.
Question :
Student Answer:
(TCO 6) Which of the following statements about cost pools
is not
true?
The costs in each of the cost pools should be
homogeneous or similar.
Managers must make a cost-benefit decision when
determining how many cost pools are appropriate.
Only four different kinds of costs may be included in a
single cost pool.
More cost pools usually provide more accurate
information, but are more expensive.
Instructor Explanation:
Points Received:
Chapter 6, Page 202
4 of 4
Comments:
9.
Question :
(TCO 6) The building maintenance department for Jones
Manufacturing Company budgets annual costs of $4,200,000
based on the expected operating level for the coming year.
The costs are allocated to two production departments. The
following data relate to the potential allocation bases:
Square footage
Direct labor
hours
Production Dept.
1
15,000
Production Dept.
2
45,000
25,000
50,000
If Jones assigns costs to departments based on square
footage, how much total costs will be allocated to Production
Department 1?
Student Answer:
$1,400,000
$1,050,000
$1,575,000
$2,100,000
Instructor
Explanation:
Chapter 6, Pages 213-214
Cost per square foot = $4,200,000/ ($15,000 + $45,000) = $70
Production Department I Cost = $70 x 15,000 = $1,050,000
Points Received:
4 of 4
Comments:
10.
Question :
(TCO 7) A company is currently making a necessary
component in house (the company is producing the
component for its own use). The company has received an
offer to buy the component from an outside supplier. A
machine is being rented to make the component. If the
company were to buy the component, the machine would no
longer be rented. The rent on the machine, in relation to the
decision to make or buy the component, is:
Student Answer:
sunk and therefore not relevant.
avoidable and therefore not relevant.
avoidable and therefore relevant.
unavoidable and therefore relevant.
Instructor Explanation:
Points Received:
Chapter 7, Pages 252-254
4 of 4
Comments:
11.
Question :
Student Answer:
(TCO 7) Ricket Company has 1,500 obsolete calculators that
are carried in inventory at a cost of $13,200. If these
calculators are upgraded at a cost of $9,500, they could be
sold for $22,500. Alternatively, the calculators could be sold
"as is" for $9,000. What is the net advantage or
disadvantage of reworking the calculators?
$13,000 advantage
$4,000 advantage
$9,200 disadvantage
$200 disadvantage
Instructor Explanation:
Chapter 7, Pages 251-252
($22,500 - $9,000) - ($9,500 - $0) = $4,000
Points Received:
4 of 4
Comments:
12.
Question :
(TCO 7) YXZ Company’s market for the Model 55 has
changed significantly, and YXZ has had to drop the price per
unit from $275 to $135. There are some units in the work in
process inventory that have costs of $160 per unit
associated with them. YXZ could sell these units in their
current state for $100 each. It will cost YXZ $10 per unit to
complete these units so that they can be sold for $135 each.
When the incremental revenues and expenses are analyzed,
what is the financial impact?
Student Answer:
$25 per unit profit if the units are completed
$125 per unit if the units are completed
$65 per unit loss if the units are completed
$150 per unit loss if the units are completed
Instructor Explanation:
Chapter 7, Pages 251-252
($135 - $100) - ($10 - $0) = $25
Points Received:
4 of 4
Comments:
Page:
1 2 3
Page:
1 2 3
1.
Question :
Student Answer:
Instructor Explanation:
2.
(TCO 3) What are transferred-in costs? Which departments
will never have transferred-in costs?
Transferred-in costs are those costs that are incurred in one department then
transferred to the next processing department.The department where processing
begins would never have transferred-in costs.
Transferred-in costs are costs incurred in one processing
department that are transferred to the next processing
department. The department where the processing begins will
never have transferred-in costs.
Points Received:
20 of 20
Comments:
right
Question :
(TCO 7) Computer Boutique sells computer equipment and
home office furniture. Currently, the furniture product line
takes up approximately 50% of the company's retail floor
space. The president of Computer Boutique is trying to
decide whether the company should continue offering
furniture or just concentrate on computer equipment. If
furniture is dropped, salaries and other direct fixed costs can
be avoided. In addition, sales of computer equipment can
increase by 13%. Allocated fixed costs are assigned based
on relative sales.
Equipment
$1,200,000
Home
Office
Furniture
$800,000
Total
$2,000,000
700,000
500,000
1,200,000
500,000
300,000
800,000
Computer
Sales
Less cost of goods
sold
Contribution
margin
Less direct fixed
costs:
Salaries
Other
Less allocated
fixed costs:
Rent
Insurance
Cleaning
President's
salary
Other
Total costs
Net Income
175,000
60,000
175,000
60,000
350,000
120,000
14,118
3,529
4,117
9,882
2,471
2,883
24,000
6,000
7,000
76,470
53,350
130,000
7,058
340,292
$159,708
4,942
380,708
($ 8,708)
12,000
649,000
$151,000
Prepare an incremental analysis to determine the
incremental effect on profit of discontinuing the furniture
line.
Student Answer:
Incremental Decrease in Revenue ($800,000) Incremental cost savings: Cost of
sales $500,000 Salaries $175,000 Other $60,000 Incremental Increase in
computer equipment($1,200,000*13%) $156,000 Incremental Decrease in
computer equipment VC ($700,000*13%) ($91,000) Incremental Increase in profit
$0
Instructor Explanation:
Incremental drop in revenue
Incremental cost savings:
Cost of sales
Salaries
Other
Incremental increase in computer
equipment
(13% x $1,200,000)
Incremental increase in computer
equipment
variable costs (13% x $700,000)
Incremental increase in profit
3.
($800,000)
500,000
175,000
60,000
156,000
$
(91,000)
0
Points Received:
25 of 25
Comments:
on target!
Question :
(TCO 4) The following monthly data are available for RedEx,
which produces only one product that it sells for $84 each.
Its unit variable costs are $28 and its total fixed expenses
are $64,960. Sales during April totaled 1,600 units.
(a) How much is the breakeven point in sales dollars for
RedEx?
(b) How many units must RedEx sell in order to earn a profit
of $24,640?
(c) A new employee suggests that RedEx sponsor a company
softball team as a form of advertising. The cost to sponsor
the team is $1,792. How many more units must be sold to
cover this cost?
Student Answer:
Instructor Explanation:
a) BEP in sales dollars =Fixed costs/Contribution margin ratio (CMR) Unit
contribution margin (UCM) =($84-$28)=$56 CMR=$56/$84=66.67% BEP in sales
dollars =$64,960/66.67%=$97,440 b) =($64,960/$24,640) /UCM
=($64,960/24,640) /$56 =$1,600 Units c) =$1792/$56 =32 Units
(a) 84X – 28X – 64,960 = 0
X = 1,160 units
X = 1,160 × $84 = $97,440
(b) ($24,640 + $64,960) / ($84 - $28) = 1,600 units
(c) $1,792 / ($84 - $28) = 32 units
Points Received:
25 of 25
Comments:
perfect!