2023 ACC 349 Final EXAM 2 1 At the end of the year manufacturing overhead has been overapplied What

1) At the end of the year, manufacturing overhead has been overapplied. What occurred to create this situation?

2) Luca Company overapplied manufacturing overhead during 2006. Which one of the following is part of the year end entry to dispose of the overapplied amount assuming the amount is material?

3) Why is factory overhead applied to products and jobs by manufacturing companies?

4) In a job order cost accounting system, the Work in Process account is

5) Which one of the following is an important feature of a job order cost system?

6) Which of the following represents the two basic types of cost accounting systems?

7) Which of the following represents the correct order in which inventories are reported on a manufacturer’s balance sheet?

8) Which one of the following is indirect labor considered?

9) Which of the following is an element of manufacturing overhead?

10) Which of the following is NOT typical of traditional costing systems?

11) An activity that has a direct cause-effect relationship with the resources consumed is a(n)

12) A well-designed activity-based costing system starts with

13) What sometimes makes implementation of activity-based costing difficult in service industries is

14) Which of the following is a nonvalue-added activity?

15) Each of the following is a limitation of activity-based costing EXCEPT

16) Poodle Company manufactures two products, Mini A and Maxi B. Poodle’s overhead costs consist of setting up machines, $800,000; machining, $1,800,000; and inspecting, $600,000. Information on the two products is:

Overhead applied to Mini A using activity-based costing is

17) Which of the following factors would suggest a switch to activity-based costing?

18) Poodle Company manufactures two products, Mini A and Maxi B. Poodle’s overhead costs consist of setting up machines, $800,000; machining, $1,800,000; and inspecting, $600,000. Information on the two products is:

Overhead applied to Maxi B using traditional costing using direct labor hours is

19) Seran Company has contacted Truckel Inc. with an offer to sell it 5,000 of the wickets for $18 each. If Truckel makes the wickets, variable costs are $11 per unit. Fixed costs are $12 per unit; however, $5 per unit is avoidable. Should Truckel make or buy the wickets?

20) Max Company uses 10,000 units of Part A in producing its products. A supplier offers to make Part A for $7. Max Company has relevant costs of $8 a unit to manufacture Part A. If there is excess capacity, the opportunity cost of buying Part A from the supplier is

21) Rosen, Inc. has 10,000 obsolete calculators, which are carried in inventory at a cost of $20,000. If the calculators are scrapped, they can be sold for $1.10 each (for parts). If they are repackaged, at a cost of $15,000, they could be sold to toy stores for $2.50 per unit. What alternative should be chosen, and why?

22) Disney’s variable costs are 30% of sales. The company is contemplating an advertising campaign that will cost $22,000. If sales are expected to increase $40,000, by how much will the company’s net income increase?

23) H55 Company sells two products, beer and wine. Beer has a 10 percent profit margin and wine has a 12 percent profit margin. Beer has a 27 percent contribution margin and wine has a 25 percent contribution margin. If other factors are equal, which product should H55 push to customers?

24) Hartley, Inc. has one product with a selling price per unit of $200, the unit variable cost is $75, and the total monthly fixed costs are $300,000. How much is Hartley’s contribution margin ratio?

25) Which cost is charged to the product under variable costing?

26) Orbach Company sells its product for $40 per unit. During 2005, it produced 60,000 units and sold 50,000 units (there was no beginning inventory). Costs per unit are: direct materials $10, direct labor $6, and variable overhead $2. Fixed costs are: $480,000 manufacturing overhead, and $60,000 selling and administrative expenses. The per unit manufacturing cost under absorption costing is

27) Which cost is NOT charged to the product under variable costing?

28) If standard costs are incorporated into the accounting system,

29) The difference between a budget and a standard is that

30) A standard cost is

31) The standard rate of pay is $5 per direct labor hour. If the actual direct labor payroll was $19,600 for 4,000 direct labor hours worked, the direct labor price (rate) variance is

32) A company developed the following per-unit standards for its product: 2 pounds of direct materials at $6 per pound. Last month, 2,000 pounds of direct materials were purchased for $11,400. The direct materials price variance for last month was

33) The total variance is $10,000. The total materials variance is $4,000. The total labor variance is twice the total overhead variance. What is the total overhead variance?

34) Which of the following statements is FALSE?

35) The overhead volume variance relates only to

36) If the standard hours allowed are less than the standard hours at normal capacity, the volume variance

37) During December, the capital budget indicates a $280,000 purchase of equipment. The ending November cash balance is budgeted to be $40,000. Cash receipts are $840,000, and cash disbursements are $610,000 during December. The company wants to maintain a minimum cash balance of $20,000. What is the minimum cash loan that must be planned to be borrowed from the bank during December?

38) Waco’s Widgets plans to sell 22,000 widgets during May, 19,000 units in June, and 20,000 during July. Waco keeps 10% of the next month’s sales as ending inventory. How many units should Waco produce during June?

39) At January 1, 2004, Barry, Inc. has beginning inventory of 4,000 widgets. Barry estimates it will sell 35,000 units during the first quarter of 2004 with a 10% increase in sales each quarter. Barry’s policy is to maintain an ending inventory equal to 25% of the next quarter’s sales. Each widget costs $1 and is sold for $1.50. How much is budgeted sales revenue for the third quarter of 2004?

40) Prices are set by the competitive market when

41) In cost-plus pricing, the markup percentage is computed by dividing the desired ROI per unit by the

42) The cost-plus pricing approach’s major advantage is