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ACCT 346 DeVry Entire Course

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ACCT 346 DeVry Entire Course

ACCT 346 DeVry Week 1 Discussion 1 Ethics and Ethical Behavior (graded)

The Sarbanes-Oxley Act of 2002 (SOX) has emphasized the importance of ethical behavior and codes of conduct. Discuss the costs and benefits of the ethical environment. If a poor ethical environment results in costs to an organization, what are they? Conversely, what are the benefits of a good ethical environment?

ACCT 346 DeVry Week 1 Discussion 2 Managerial and Financial Accounting (graded)

Flexibility, timeliness, and forward looking is said to be the prominent trait of modern management accounting, whereas standardization and consistency describe financial accounting. Explain why the focus on these two accounting systems differs.

ACCT 346 DeVry Week 2 Discussion 1: Job Order

The job cost sheet is used to accumulate the three product costs: direct material, direct labor, and factory overhead. Discuss the source documents for determining these amounts (that is, where do we get these numbers, and how we arrive at the overhead?). Why is overhead the most difficult to assign?

ACCT 346 DeVry Week 2 Discussion 2 Process Costing Systems

Describe how the process costing system accumulates and assigns costs by comparing and contrasting to the job order costing system.

ACCT 346 DeVry Week 3 Discussion 1 CVP Analysis and Variable Costing

Discuss the basic assumptions of CVP analysis and how we can use CVP analysis as mangers in making decisions.

ACCT 346 DeVry Week 3 Discussion 2 CVP Analysis and Variable Costing

Discuss the difference between variable costing and full costing. Why would income computed under full costing exceed income computed under variable costing if production exceeds sales?

ACCT 346 DeVry Week 4 Discussion 1 Activity-Based Costing

How does activity-based costing differ from the traditional costing approach? When would it give more accurate costs than traditional costing systems?

ACCT 346 DeVry Week 4 Discussion 2 Incremental Cost Analysis

Only those costs that change need be included in the decision making process. Evaluate this statement and discuss its merits or shortcomings. Week 5 Discussion1 Pricing and Capital Investment Decisions –

ACCT 346 DeVry Week 5 Discussion 1 Pricing Techniques (graded)

Compare target costing and cost-plus pricing. When is each the most appropriate method to use? Provide an example of each.

ACCT 346 DeVry Week 5 Discussion 2 Capital Budgeting Techniques (graded)

Suppose a company has 5 different capital budgeting projects from which to choose, but has constrained funds and cannot implement all of the projects. Explain why comparing the projects’ NPVs is better than comparing their IRRs.

ACCT 346 DeVry Week 6 Discussion 1 – Budgeting (graded)

How does a company effectively use budgets in the planning and control process?

ACCT 346 DeVry Week 6 Discussion 2 Standard Costs and Variance Analysis (graded)

What role do standard costs play in controlling the operations of a business?

ACCT 346 DeVry Week 7 Discussion 1 Responsibility Centers (graded)

Compare and contrast the three types of responsibility centers. What is the best way to evaluate a manager’s performance in each type of center?

ACCT 346 DeVry Week 7 Discussion 2 Financial Statement Analysis (graded)

Why do managers analyze financial statements? What are they looking for?

Course Project on Bravo Baking Company – All 6 tabs completed

Managerial Accounting Project – Bravo Baking Company

Bravo Baking Company began operations in May of 2010 with the production and sales of speciality breads. The company has experienced a good market demand for its high protein, low carbohydrate product called “Hi-Lo”. Hi-Lo’s success has required that Bravo continue to make only this one product, however, Bravo’s customers, the local retailers, have been asking for more specialty breads from the company. The decision to expand will be made in the coming weeks.

Due Week 1: Tab 1 Product vs Period Costs

Due Week 2: Tab 2 Cost of Goods Manufactured Schedule

Due Week 3: Tab 3 Break Even Analysis

Due Week 5: Tab 4 Incremental Analysis

Due Week 6: Tab 5 Capital Budgeting

Due Week 7: Tab 6 Variance Analysis

ACCT 346 DeVry Week 3 Quiz ( Version 1)

1. Question : (TCO 2) Bubba’s Crawfish Processing Company uses a traditional overhead allocation based on direct labor hours. For the current year overhead is estimated at $2,250,000 and direct labor hours are budgeted at 415,000 hours. Actual overhead was $2,200,000 and actual direct labor hours worked were 422,000.

  1. Calculate the predetermined overhead rate.
  2. Calculate the overhead applied.
  3. Determine the amount of overhead that is over/underapplied

2. Question : (TCO 2) Thibodeaux Limousine Corporation is trying to determine a predetermined manufacturing overhead. Estimated overhead for the upcoming year is $776,000. Budgeted machine hours are 105,000 hours, and budgeted labor hours are 17,500 hours at a rate of $10.00 per hour. Compute the predetermined overhead rate based on:

  1. Direct labor dollars
  2. Direct labor hours
  3. Machine hours

3. Question : (TCO 1) List and briefly describe four of the five differences between managerial accounting and financial accounting.

4. Question : (TCO 2) The following information is available for Sappy’s Surgical Shears for the fiscal year ending December 31, 20XX

Beginning balance in Finished Goods $ 17,000

Ending balance in Finished Goods 15,200

Beginning balance in Work in Process 2,500

Ending balance in Work in Process 1,836

Selling expenses 123,000

General and administrative expenses 89,000

Direct material cost 54,500

Direct labor cost 66,000

Manufacturing overhead 21,400

Sales 385,000

Prepare a schedule of cost of goods manufactured.

5. Question: (TCO 2) Match each of the following six terms with the phrase that most closely describes it. Each answer below may be used only once.

______    1.     activity-based costing

______    2.     cost of goods available for sale

______    3.     period costs

______    4.     process costing system

______    5.     just-in-time system

______    6.     work in process

(A) Costs assigned to the goods produced; also known as manufacturing costs

(B) Materials costs that are not traced directly to products produced

(C) System that seeks to minimize Raw Materials Inventory and Work in Process Inventory

(D) Cost of items that are completed and transferred from Work in Process Inventory to Finished Goods Inventory

(E) Costs that are identified with accounting periods rather than with goods produced

(F) Actual overhead is greater than overhead that has been applied to products

(G) Method of assigning overhead costs that uses multiple allocation bases

(H) System that uses job-order sheets to collect costs for each individual job

(I) Cost of all materials and parts that are directly traced to the items produced

(J) Beginning balance in the Finished Goods Inventory plus cost of goods manufactured

(K) Overhead applied to products is greater than the actual overhead costs incurred

(L) Used by companies that produce large quantities of identical items

(M) Cost of all manufacturing activities other than direct material and direct labor

(N) Inventory account that contains the cost of goods that are only partially completed

6. Question : (TCO 2) Far Out Ceramics makes custom macaroni tile and applies job-order costing. The following information relates to the fiscal year ending December 31, 20XX.

Beginning balance in Raw Materials Inventory $ 12,500

Purchases of raw material 189,000

Ending balance in Raw Materials Inventory 14,300

Beginning balance in Work in Process 24,500

Ending balance in Work in Process 23,100

Direct labor cost 89,700

Manufacturing overhead applied 66,200

Actual manufacturing overhead 64,100

Beginning balance in Finished Goods 28,900

Ending balance in Finished Goods 24,300

Sales 432,000

Selling expenses 120,000

General and administrative expenses 86,000

How much is cost of goods sold?

7. Question: (TCO 2) Match each of the six following terms with the phrase that most closely describes it. Each answer may be used only once.

_____                    1. Direct costs

_____                    2. Fixed costs

_____                    3. Incremental costs

_____                    4. Economic Resource Planning system

_____                    5. Noncontrollable costs

_____                    6. Opportunity costs

(A) Costs that increase or decrease in total in response to increases or decreases in the level of business activity

(B) Costs that are directly traceable to a product, activity, or department

(C) Costs that a manager can influence

(D) The difference in costs between decision alternatives

(E) Costs incurred in the past that are not relevant to present decisions

(F) Costs that cannot be influenced by a manager

(G) Financial plans prepared by management accountants

(H) Value of the benefits foregone when one decision alternative is selected over another

(I) Costs that cannot be directly traced to a product, activity, or department or are not worth tracing

(J) Costs that do not change in total with changes in the level of business activity

(K) These systems prepare a master production systems and all the support across the company.

(L) Allows companies and suppliers to share information to improve efficiency in getting inputs.

(M) Allows customer data analysis and support, often in online format for customers.

8. Question : (TCO 3) The Marinade Department began the period with 150,000 units. During the period the department received another 180,000 units from the prior department and at the end of the period 112,000 units remained which were 17% complete. How much are equivalent units in The Marinade Department’s work in process inventory at the end of the period?

12,000

25,500

19,040

30,600

9. Question: (TCO 3)  The Franc Zeppo Venture manufactures a product that goes through two processing departments.  Information relating to the activity in the first department during  April is given below :

• Work in process, April 1: 50,000 units (80% completed for materials and 60% completed for conversion.

• Work in process, April 30: 45,000 units (70% completed for materials and 60% completed for conversion.

The department started 380,000 units into production during the month and transferred 385,000 completed units to the next department.

Compute and calculate the equivalent units of production for the first department for April, assuming the company uses the weighted-average method of accounting for units and costs.

ACCT 346 DeVry Week 3 Quiz (Version 2)

Question 1. Question : Which of the following is not a goal of managerial accounting?

Provide information needed for decision making.

Provide information needed for creditors.

Provide information needed for planning.

Provide information needed for control.

Points Received: 4 of 4

Comments:

Question 2. Question : Which of the following is not a product cost?

Direct materials

Depreciation on finished goods warehouse

Insurance on factory building

Indirect labor

Points Received: 0 of 4

Comments:

Question 3. Question : Which of the following companies would use a job-order costing system?

Construction

Metal producer

Chemical producer

Plastic producer

Points Received: 4 of 4

Comments:

Question 4. Question : Which of the following is an example of a fixed cost?

Materials

Commissions

Depreciation

Direct Labor

Points Received: 0 of 4

Comments:

Question 5. Question : Which of the following costs is expensed as incurred?

Direct materials

Sales salaries

Indirect labor

Factory depreciation

Points Received: 0 of 4

Comments:

Question 6. Question : Which of the following is not a manufacturing cost?

Direct materials

Manufacturing overhead

Accounting department costs

Direct labor

Points Received: 4 of 4

Comments:

Question 7. Question: Which of the following costs is not part of manufacturing overhead?

Electricity for the factory

Depreciation of factory equipment

Salaries for the production supervisors

Health insurance for sales staff

Points Received: 4 of 4

Comments:

Question 8. Question : Variable cost per unit

increases when the number of units produced increases.

does not change when the number of units produced increases.

decreases when the number of units produced increases.

decreases when the number of units produced decreases.

Points Received: 4 of 4

Comments:

Question 9. Question : Which of the following costs does not change when the level of business activity changes?

total fixed costs

total variable costs

total direct materials costs

fixed costs per unit

Points Received: 4 of 4

Comments:

Question 10. Question : The principle that managers follow when they only investigate departures from the plan that appear to be significant is commonly known as

small amounts don’t matter.

management by exception.

only labor and materials deserve attention.

exceptional costs yield exceptional results.

Points Received: 0 of 4

ACCT 346 DeVry Week 4 Midterm Exam (Version-1)

1. Question :(TCO 1) Managerial accounting stresses accounting concepts and procedures that are relevant to preparing reports for

2. Question :TCO 1) Which of the following statements regarding fixed costs is true?

3. Question :(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?

4. Question :(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. Question :(TCO 1) Which of the following is an example of a manufacturing overhead cost?

6. Question :(TCO 1) Which of the following is a period cost?

7. Question :(TCO 1) If the balance in the Finished Goods Inventory account increased by $30,000 during the period and the cost of goods manufactured was $220,000, how much is cost of goods sold?

8. Question :(TCO 2) BCS Company applies manufacturing overhead based on direct labor cost. Information concerning manufacturing overhead and labor for August follows:

Estimated

Actual

9.Question :(TCO 2) During 2011, Madison Company applied overhead using a job-order costing system at a rate of $12 per direct labor hours. Estimated direct labor hours for the year were 150,000, and estimated overhead for the year was $1,800,000. Actual direct labor hours for 2011 were 140,000 and actual overhead was $1,670,000.

What is the amount of under or over applied overhead for the year?

10. Question :(TCO 3) Companies in which of the following industries would not be likely to use process costing?

11. Question :(TCO 3) The Blending Department began the period with 45,000 units. During the period the department received another 30,000 units from the prior department and completed 60,000 units during the period. The remaining units were 75% complete. How much are equivalent units in The Blending Department’s work in process inventory at the end of the period?

12. Question :(TCO 3) During March, the varnishing department incurred costs of $90,250 for direct labor. The beginning inventory was 3,500 units and 10,000 units were transferred to the varnishing department from the sanding department during June. The direct labor cost in the beginning inventory was $27,270. The ending inventory consisted of 2,000 units, which were 25% complete with respect to direct labor. What is the cost per equivalent unit for direct labor?

13. Question :(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?

1. Question :(TCO 4) The margin of safety is the difference between

2. Question :(TCO 4) Allen Company sells homework machines for $100 each. Variable costs per unit are $75 and total fixed costs are $62,000. Allen is considering the purchase of new equipment that would increase fixed costs to $84,000, but decrease the variable costs per unit to $60. At that level Allen Company expects to sell 3,000 units next year. What is Allen’s break-even point in units if it purchases the new equipment?

3.Question :(TCO 4) Paula Corporation sells a single product at a price of $275 per unit. Variable cost per unit is $135 and fixed costs total $356,860. If sales are expected to be $825,000, what is Paula’s margin of safety?

4. Question :(TCO 5) In variable costing, when does fixed manufacturing overhead become an expense?

5. Question :(TCO 5) Variable costing income is a function of:

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

$20

Direct Labor per unit

12

Variable manufacturing overhead per unit

10

Fixed manufacturing overhead per year $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 is cost of goods sold using full costing?

7.Question :(TCO 6) Costs may be allocated to

8. Question :(TCO 5) An allocation base

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:

Production Dept. 1

Production Dept. 2

Square footage

15,000

45,000

Direct labor hours

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?

10. Question :(TCO 7) A company is trying to decide whether to sell partially completed goods in their current state or incur additional costs to finish the goods and sell them as complete units. Which of the following is not relevant to the decision?

11. Question :(TCO 7) BigByte Company has 12 obsolete computers that are carried in inventory at a cost of $13,200. If these computers are upgraded at a cost of $7,500, they could be sold for $15,300. Alternatively, the computers could be sold “as is” for $9,000. What is the net advantage or disadvantage of reworking the computers?

12. Question :(TCO 7) Olde Store has 12,000 cans of crab meat just a week past the expiration date. Each can cost $0.31. The cans could be sold as is for $0.20 each, or relabeled and sold as gourmet cat food. The cost of relabeling the cans would be $0.04 per can and the cans would then sell for $0.29 per can. What should be done with the cans and why?

1. Question :(TCO 3) Describe a process costing system, including the types of companies that commonly use this system. How can process costing information be used in incremental analysis?

2. Question :(TCO 7) Each year, ACE Engines surveys 7,600 former and prospective customers regarding satisfaction and brand awareness. For the current year, the company is considering outsourcing the survey to RBG Associates, who have offered to conduct the survey and summarize results for $50,000. Robert Ace, the president of ACE Engines, believes that RBG will do a higher-quality job than his company has been doing, but is unwilling to spend more than $12,000 above current costs. The head of bookkeeping for ACE has prepared the following summary of costs related to the survey in the prior year.

Prepare an incremental analysis in good form to determine the impact on profit of going outside versus conducting the survey as in the past. Will ACE accept the RBG offer? Why or why not?

3. 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.

ACCT 346 DeVry Week 4 Midterm Exam (Version-2)

1.Question :

(TCO 1) Which of the following is not a difference between financial accounting and managerial accounting?

2. Question :

TCO 1) Which of the following statements regarding fixed costs is true?

3. Question :

(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?

4. Question :

(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. Question :

(TCO 1) Which of the following is an example of a manufacturing overhead cost?

6. Question :

(TCO 1) Product costs

7. Question :

(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?

8. Question :

(TCO 2) BCS Company applies manufacturing overhead based on direct labor hours. Information concerning manufacturing overhead and labor for August follows:

Estimated

Actual

9. Question :

(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?

10. Question :

(TCO 3) Companies in which of the following industries would notbe likely to use process costing?

11.Question :

(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. Question :

(TCO 3) Ranger Glass Company manufactures glass for French doors. At the start of May, 2,000 units were in-process. During May, 11,000 units were completed and 3,000 units were in process at the end of May. These in-process units were 90% complete with respect to material and 50% complete with respect to conversion costs. Other information is as follows:

Calculate the cost per equivalent unit for conversion costs.

13. Question :

(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?

1. Question :

(TCO 4) Which of the following will have no effect on the break-even point in units?

2. Question :

(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?

3. Question :

(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?

4. Question :

(TCO 5) In full costing, when does fixed manufacturing overhead become an expense?

5. Question :

(TCO 5) Variable costing income is a function of:

6. Question :

(TCO 5) Peak Manufacturing produces snow blowers. The selling price per snow blower is $100. Costs involved in production are:

7. Question :

(TCO 6) Which of the following is not a reason that companies allocate costs?

8. Question :

(TCO 6) Which of the following statements about cost pools is not true?

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:

Production Dept. 1

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:

11. Question :

(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?

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?

1. Question :

(TCO 3) What are transferred-in costs? Which departments will never have transferred-in costs?

2. 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.

Computer

Home Office

Equipment

Furniture

3. 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.

ACCT 346 DeVry Week 6 Quiz (Version 1)

1. (TCO 7) Elliot’s Escargots sells commercial and home snail extraction tools and serving pieces. Currently, the snail extraction line of products takes up approximately 50 percent of the company’s retail floor space. The CEO of Elliot’s wants to decide if the company should continue offering snail extraction tools or focus only on serving pieces. If the snail extraction tools are dropped, salaries and other direct fixed costs can be avoided and serving piece sales would increase by 13 percent. Allocated fixed costs are assigned based on relative sales.

Snail Extraction       Serving

Tools                 Pieces                Total

Sales                                                   $1,200,000            $800,000         $2,000,000

Less cost of goods sold                      700,000              500,000           1,200,000

Contribution margin                            500,000              300,000              800,000

Less direct fixed costs:

Salaries                                               175,000              175,000              350,000

Other                                                    60,000                60,000              120,000

Less allocated fixed costs:

Rent                                                    14,118                  9,882                24,000

Insurance                                            3,529                  2,471                  6,000

Cleaning                                              4,117                  2,883                  7,000

Executive salary                                 76,470                53,530              130,000

Other                                                   7,058                  4,942                12,000

Total costs                                           340,292              308,708              649,000

Net income                                         $159,708              ($ 8,708)          $151,000

2. (TCO 4) Paschal’s Parasailing Enterprises has estimated that fixed costs per month are $115,600 and variable cost per dollar of sales is $0.38.

(a) What is the break-even point per month in sales?

(b) What level of sales is needed for a monthly profit of $67,000?

(c) For the month of August, Paschal’s anticipates sales of $585,000. What is the expected level of profit?

3. (TCO 6) Princess Cruise Lines has the following service departments; concierge, valet, and maintenance.  Expense for these departments are allocated to Mediterranean and Trans-Atlantic cruises.  Expenses for the departments are totaled (both variable and fixed components are combined) and as follows:

Concierge         $2,500,000

Valet                 $1,750,000

Maintenance      $4,250,000

The sea miles logged are 6,000,000 for the Mediterranean and 18,000,000 for the Trans-

Atlanticvoyages.

Based upon the sea miles logged, allocate the service department costs.

4. (TCO 9) Thurman Munster, the owner of Adams Family RVs, is considering the addition of a service center his lot.  The building and equipment are estimated to cost $1,100,000 and both the building and equipment will be depreciated over 10 years using the straight-line method. The building and equipment have zero estimated residual value at the end of 10 years. Munster’s required rate of return for this project is 12 percent. Net income related to each year of the investment is as follows:

Revenue                                             $450,000

Less:

Material cost                                       $ 60,000

Labor                                                   100,000

Depreciation                                        110,000

Other                                                   10,000             280,000

Income before taxes                           170,000

Taxes at 40%                                      68,000

Net income                                         $102,000

(a) Determine the net present value of the investment in the service center. Should Munster invest in the service center?

(b) Calculate the internal rate of return of the investment to the nearest ½ percent.

(c) Calculate the payback period of the investment.

(d) Calculate the accounting rate of return.

5. (TCO 5) The following information relates to Vice Versa Ventures for calendar year 20XX, the company’s first year of operations:

Units produced                                                                        20,000

Units sold                                                                               17,000

Selling price per unit                                                                    $35

Direct material per unit                                                                  $5

Direct labor per unit                                                                      $5

Variable manufacturing overhead per unit                                        $2

Variable selling cost per unit                                                         $3

Annual fixed manufacturing overhead                                    $160,000

Annual fixed selling and administrative expense                      $80,000

(a) Prepare an income statement using full costing.

(b) Prepare an income statement using variable costing.

6. (TCO 8) Leekee Shipyards has a new barnacle removing product for ocean going vessels. The company invests $1,200,000 in operating assets and plans to produce and sell 400,000 units per year.  Leekee wants to make a return on investment of 20% each year.  Leekee needs to know what price to charge for this product.

Use the absorption costing approach to determine the markup necessary to make the desired return on investment based on the following information:

Per Unit                                                                                               Total

Direct Materials                                                                       $ 2.00

Direct Labor                                                                                        $ 1.50

Variable Manufacturing Overhead                                                     $ 1.00

Fixed Manufacturing Overhead                                                         $ 100,000

Variable Selling and Administrative Expense                                     $ 0.10

Fixed Selling and Administrative Expense                                         $ 100,000

ACCT 346 DeVry Week 6 Quiz (Version 2)

Question 1. Question : Which of the following costs is not relevant in decision making?

Sunk cost

Incremental cost

Opportunity cost

Differential cost

Question 2. Question : Which of the following does not take the time value of money into account?

Internal rate of return

Net present value

Payback period

None of the above

Question 3. Question : Which of the following is not a capital budgeting decision?

Purchasing new equipment

Replacing old equipment

Producing a film project

Planning for retirement

Question 4. Question : Which of the following is an example of a sunk cost?

Direct materials

Variable overhead

Equipment depreciation

Future cost

Question 5. Question : A revenue that differs between alternatives is called a(n):

Incremental revenue.

Irrelevant revenue.

Joint revenue.

Opportunity revenue.

Question 6. Question : Capital expenditure decisions

are also called capital budgeting decisions.

involve the acquisition of long-lived assets.

have a major, long-term effect on a firm’s operations.

All of the above are correct

Question 7. Question : The rate of return that equates the present value of future cash flows to the investment outlay is the

hurdle rate.

internal rate of return.

payback return.

accounting rate of return.

Question 8. Question : Which of the following is never considered in incremental analysis?

Incremental revenue

Sunk costs

Incremental profit

Differential costs

Question 9. Question : Which of the following is often not a differential cost?

Direct labor

Direct material

Variable manufacturing overhead

Fixed manufacturing overhead

Question 10. Question : The required rate of return used to calculate an investment’s net present value is related to the firm’s

contribution margin.

cost of capital.

depreciation methods.

fixed costs.

ACCT 346 DeVry Week 8 Final Exam (Version 1)

Page 1

Question 1.1. (TCO 4) Assumptions underlying cost-volume-profit analysis include all of the following, except: (Points : 5)

Question 2.2. (TCO 6) Which of the following is true about activity-based costing? (Points : 5)

Question 3.3. (TCO 2) In a traditional job order cost system, the issue of direct materials to a production department increases: (Points : 5)

Question 4.4. (TCO 5) A cost driver is defined as: (Points : 5)

Question 5.5. (TCO 8) Wood Co. has considerable excess manufacturing capacity. A special job order’s cost sheet includes the following applied manufacturing overhead costs: Fixed costs: 25,000…….Variable costs: 36,000…………The fixed costs include a normal $4,500 allocation for in-house design costs, although no in-house design will be done. Instead, the job will require the use of external designers costing $9,250. What is the total amount to be included in the calculation to determine the minimum acceptable price for the job? (Points : 5)

Question 6. 6. (TCO 1) How does managerial and financial accounting differ in terms of the amount of detail presented and nonmonetary and monetary information? (Points : 25)

Question 7. 7. (TCO 2) Wolf Co. estimates that its employees will work 500,000 direct labor hours during the coming year. Total overhead costs are estimated to be $9,600,000 and direct labor costs are estimated to be $12,500,000. Direct Labor hours are actually 450,000…………….If Wolf Co. allocates overhead based on direct labor HOURS, what is the predetermined overhead rate? (Points : 25)

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Question 1. 1. (TCO 3) The Mixing Department is the third department in the MZS Inc. factory. During January, there were 4,000 units of beginning inventory in the Mixing Department, and 90,000 units were transferred in from the prior process. There were 8,000 units in ending inventory. The transferred-in cost in the beginning inventory was $170,000 and there was $600,000 in transferred-in cost during the month……….What is the cost per equivalent unit for transferred-in cost? (Points : 25)

Question 2. 2. (TCO 4) Assume that we are manufacturing a product and assume that the sales price per unit is $60 and the variable cost is $20 per unit and the fixed cost is $80,000; a) how many units would we need to sell to break even? b) How many units would we need to sell to earn a profit of $120,000? c) How many units do we need to sell to double that profit to $240,000? D) Why didn’t the number of units double from Part B to Part C? (Points : 25)

Question 3. 3. (TCO 5) Sivan Co. manufactures and sells one product. For the year, they started with no opening inventory; produced 100,000 units, but only sold 70,000 units. The selling price per each unit is $60……………….(a) Prepare the Income Statement using Absorption Costing. (b) Prepare the Income Statement using Variable Costing. (Points : 25)

Question 4. 4. (TCO 6) At Long Co. electricity cost starts with a minimum fixed cost, and after that, there is a perfectly variable expense. Using estimated machine hours:……………..What is the a) estimated variable cost per machine hour and what is the b) estimated TOTAL fixed cost? (Points : 25)

Question 5. 5. (TCO 7) North Company produces a small part that it uses in the production of its Product H. The company’s unit product cost for the part, based on a production of 100,000 parts per year, is as follows:………………..100% of the traceable or avoidable fixed manufacturing cost is supervisor salaries and other costs that can be ELIMINATED if the parts are purchased. The decision to buy the parts from the outside supplier would have no effect on the common fixed costs of the company, and the space being used to produce the parts would otherwise be idle. Ignore the impact of income taxes in your calculation…….How much would profits increase or decrease as a result of purchasing the parts from the outside supplier rather than making them inside the company? (Points : 25)

Question 6. 6. (TCO 9) Harry Corp buys equipment for $224,888 that will last for 9 years. The equipment will generate cash flows of $36,000 per year and will have no salvage value at the end of its life. Ignore taxes. Use 10% required rate of return…..(a) What is the Present Value (PV) of this investment (at 10%)? (b) What is the NET Present Value (NPV) of this investment?  If you need 10%, should you buy the equipment? (c) What is the Internal Rate of Return (IRR) of this investment? (d) What is the payback period? . (Points : 25)

Question 7. 7. (TCO 10) Tanya Corp sells its products on both credit and cash basis. Monthly sales are sold 20% for cash, 80% for credit. Credit sales are collected 65% in the month of sale and 35% the following month. Sales for the first quarter are BUDGETED as follows: January $200,000; February $300,000; March $300,000. Compute cash collections Budgeted for February. How much cash was collected in the month? (Points : 25)

ACCT 346 DeVry Week 8 Final Exam (Version 2)

Page 1
1. (TCO 1) A difference between actual costs and planned costs (Points : 4)
2. (TCO 1) Which of the following is not likely to be a fixed cost? (Points : 4)
3. (TCO 2) Which of the following is not a manufacturing cost? (Points : 4)
4. (TCO 2) A job-order costing system is likely used by a (Points : 4)
5. (TCO 3) Equivalent units are calculated by (Points : 4)
6. (TCO 3) The Freedom Corporation’s painting department had a beginning inventory of 580 units, which had direct material costs of $22,715. During June, 9,290 units were started and costs of $1,268,085 were incurred for direct material. Ending inventory consists of 1,000 units, which are 35% complete with respect to direct material. What is the cost per equivalent unit for direct material? (Points : 4)
7. (TCO 4) Which of the following is not an assumption of C-V-P analysis? (Points : 4)
8. (TCO 4) The contribution margin per unit is the difference between (Points : 4)
9. (TCO 5) Full costing (Points : 4)
10. (TCO 5) Which of the following is not true when units sold exceed units produced? (Points : 4)
11. (TCO 6) Cost-plus contracts are common in which of the following industries? (Points : 4)
12. (TCO 6) Which of the following is not generally true when a company compares ABC and traditional costing? (Points : 4)
13. (TCO 7) Fixed costs that will be eliminated if a particular course of action is undertaken are called (Points : 4)
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1. (TCO 7) Two or more products that result from common inputs are called (Points : 4)
2. (TCO 8) Activity based pricing seeks to (Points : 4)
3. (TCO 8) When deciding to accept or reject a special order, which of the following costs would most likely not be relevant? (Points : 4)
4. (TCO 9) Present value techniques (Points : 4)
5. (TCO 9) The internal rate of return (Points : 4)
6. (TCO 10) A method of budget preparation that requires all budgeted amounts to be justified by the department, even if the amounts were supported in prior periods, is called (Points : 4)
7. (TCO 10) Which budget is prepared first? (Points : 4)
8. (TCO 10) The difference between standard costs and budgeted costs is that standard costs (Points : 4)
9. (TCO 10) The overhead volume variance indicates that (Points : 4)
10. (TCO 10) A subunit that has responsibility for controlling cost but not revenues is a(n) (Points : 4)
11. (TCO 10) Which of the following is not an advantage of decentralization for a company? (Points : 4)
12. (TCO 10) The ratio that measures the return earned independently of how the firm is financed is the (Points : 4)
Page 3
1. (TCO 1) Distinguish between product costs and period costs. Define both types of costs and provide examples. (Points : 20)
2. (TCO 6) Pacific Airlines has three service departments; ticketing, baggage handling, and aircraft maintenance. Costs of these departments are allocated to two revenue producing departments, domestic and international flights. Costs for the service departments are not separated into fixed and variable and the totals are as follows:
3. (TCO 10) Gina’s Boutique makes custom jewelry. One item, the guru necklace, is a best seller and sales in units for the first quarter are as follows:
4. (TCO 2) Singleton Company is trying to determine a predetermined manufacturing overhead. Estimated overhead for the upcoming year is $600,000. Budgeted machine hours are 120,000 hours, and budgeted labor hours are 15,000 hours at a rate of $20.00 per hour. Compute the predetermined overhead rate based on:
Page 4
1. (TCO 9) A project will require an initial investment of $600,000 and is expected to generate the following cash flows:
2. (TCO 4) Legal Docs Inc is a legal services firm that files incorporation papers for small businesses. They charge $1,000 per application.  This year’s income statement shows the following:
3. (TCO 5) The following data has been taken from Air-Tite company in its first year of business.