ACC 349 Final Exam
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will cost $22,000. If sales are expected to increase $40,000, by how much will the company's net income increase? 25) Variable costing 26) Which cost is NOT charged to the product under variable costing? 27) 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 28) Which of the following is NOT considered an advantage of using standard costs? 29) The difference between a budget and a standard is that 30) If a company is concerned with the potential negative effects of establishing standards, they should 31) The per-unit standards for direct materials are 2 gallons at $4 per gallon. Last month, 11,200 gallons of direct materials that actually cost $42,400 were used to produce 6,000 units of product. The direct materials quantity variance for last month was 32) The standard number of hours that should have been worked for the output attained is 8,000 direct labor hours and the actual number of direct labor hours worked was 8,400. If the direct labor price variance was $8,400 unfavorable, and the standard rate of pay was $18 per direct labor hour, what was the actual rate of pay for direct labor? 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) Manufacturing overhead costs are applied to work in process on the basis of 35) The overhead volume variance relates only to 36) If the standard hours allowed are less than the standard hours at normal capacity 37) Gottberg Mugs is planning to sell 2,000 mugs and produce 2,200 mugs during April. Each mug requires 2 pounds of resin and a half hour of direct labor. Resin costs $1 per pound and employees of the company are paid $12.50 per hour. Manufacturing overhead is applied at a rate of 120% of direct labor costs. Gottberg has 2,000 pounds of resin in beginning inventory and wants to have 2,400 pounds in ending inventory. How much is the total amount of budgeted direct labor for April? 38) Lewis Hats is planning to sell 600 straw hats. Each hat requires a half pound of straw and a quarter hour of direct labor. Straw costs $0.20 per pound and employees of the company are paid $22 per hour. Lewis has 80 pounds of straw and 40 hats in beginning inventory and wants to have 50 pounds of straw and 60 hats in ending inventory. How many units should Lewis Hats produce in April? 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) In most cases, prices are set by the 41) A company must price its product to cover its costs and earn a reasonable profit in 42) The cost-plus pricing approach's major advantage is 43) What does cost accounting measure, record, and report 44) Why is factory overhead applied to products and jobs by manufacturing companies? 45) In a job order cost accounting system, the Work in Process account is 46) Managerial accounting 47) A well-designed activity-based costing system starts with 48) Which of the following is a value-added activity? 49) Which of the following is a nonvalue-added activity? 50) Each of the following is a limitation of activity-based costing EXCEPT 51) Ace Company sells office chairs with a selling price of $25 and a contribution margin per unit of $15. It takes 3 machine hours to produce one chair. How much is the contribution margin per unit of limited resource? 52) Walton, Inc. is unsure of whether to sell its product assembled or unassembled. The unit cost of the unassembled product is $16, while the cost of assembling each unit is estimated at $17. Unassembled units can be sold for $55, while assembled units could be sold for $71 per unit. What decision should