Last Name |_|_|_|_|_|_|_|_|_|_|_|_| First Name |_|_|_|_|_|_|_|_|_|_|_|_| Accounting & MIS 3300 Exam II Spring 2014 Instructions: 1. Read each question carefully and answer fully. Ignore income tax unless instructed to consider it. Variances are isolated at earliest possible point. 2. Problems not supported by relevant and readable computations are subject to point loss. Where appropriate, terms like “unfavorable,” “favorable,” “better off,” “worse off,” etc. must be included with number answers. Dollar amounts should include a dollar sign; unit amount should include an indication of the unit. 3. Budget your time carefully. It is generally better to finish half of each problem than to complete all of half the problems. Students who start early or continue to work on exams after instructed to stop will receive penalties as outlined in the syllabus. 4. It is the student's responsibility to verify that all the listed problems and pages are contained is this booklet. Unanswered questions receive zero points regardless of reason. Approximate Points Approximate Time Problem Pages I 2 35 12 – 17 minutes II 3 30 14 – 19 minutes III 4-5 35 14 – 19 minutes 100 40 – 55 minutes Total Page 2 of 5 PROBLEM I Aster Company has the following per-unit standards for 20x1: Direct Materials Direct Labor Variable Manu. Overhead 7 lbs. @ $6.50 per lb. 4 direct-labor hours @ $14.00 per direct-labor hour 3 machine hours @ $7.00 per machine hour Budgeted fixed manufacturing overhead was $414,000. Aster used a denominator level of 12,000 units. Actual production was 13,000 units using 37,500 machine hours, and the following occurred: Direct Materials: Direct Labor: Manu. Overhead: Purchased 98,000 lbs. for $622,300 and used 98,000 lbs. Paid $711,360 for 49,400 direct-labor hours Incurred $674,000 of all manufacturing overhead Required: Compute the seven (7) variances requested and place in boxes below. Direct Material Price Variance Direct Labor Price Variance Manufacturing Overhead Spending Variance Manufacturing OH Production-Volume Variance Direct Material Efficiency Variance Direct Labor Efficiency Variance Manufacturing Overhead Efficiency Variance X X Page 3 of 5 PROBLEM II The Baxter Company produced 3,200 units including the following standards: Direct Materials Direct Labor Variable Manu. OH $7.50 per kilo 5 hours @ $10.00 per hr. $4.40 per direct-labor hour and the following results: Direct Materials Price Variance Direct Materials Efficiency Variance Average Actual Price per kilo Kilos Used Direct Labor Efficiency Variance Average Actual Wage Rate per hour Actual Fixed Manufacturing Overhead Fixed Manu. Overhead Spending Variance Fixed Manufacturing Overhead Total Manu. Overhead Flex. Budget Variance $1,470 F $1,500 F $7.36 11,000 $12,000 U $10.74 $137,500 $11,500 U $3,100 underallocated $14,200 U Calculate the ten (10) items requested below: Standard Kilos Var. Manu. OH Allowed per unit Spending Variance Kilos Purchased Var. Manu. OH Efficiency Variance Direct Labor Hours Actual Total Used Variable Manu. OH Direct Labor Price Budgeted Fixed Variance Manu. Overhead Denominator Level Production Volume in Units Variance Page 4 of 5 PROBLEM III The Catter Company began operations in March of 20x1 and decided to use weightedaverage for inventory calculations. The following is known: March 20x1 April 20x1 Production 800 units 700 units Sales (@ $140 per unit) 600 units 800 units Budgeted Direct Materials $24 per unit $24 per unit Budgeted Other Variable Manufacturing $36 per unit $36 per unit Budgeted Fixed Manufacturing $31,500 per month $31,500 per month Variable Operating Costs $8 per unit sold $8 per unit sold Fixed Operating Costs $10,000 per month $10,000 per month The firm uses a denominator level of 750 per month and there are no price, spending, or efficiency variances in either month. Required: Present the April 20x1 income statement in good form under the specified costing methods. Actual Absorption Normal Absorption with variances closed to Cost of Goods Sold Page 5 of 5 Actual Variable Costing Actual Throughput Costing