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ACCT 505 WEEK 4 MIDTERM - NEW 2016 1. (TCO A) The variable portion of advertising costs is a 2. (TCO A) The costs of staffing and operating the accounting department at Central Hospital would be considered by the department of surgery to be 3. (TCO A) Property taxes on a company's factory building would be classified as a(n) 4. (TCO C) Within the relevant range, variable costs can be expected to 5. (TCO B) Emco Company uses direct labor cost as a basis for computing its predetermined overhead rate. In computing the predetermined overhead rate for last year, the company included in direct labor cost a portion of indirect labor. The effect of this misclassification will be to 6. (TCO B) A job-order cost system is employed in those situations when 7. (TCO B) The weighted-average method of process costing differs from the FIFO method of process costing in that the weighted-average method 8. (TCO C) The contribution margin ratio always increases when the 9. (TCO C) To obtain the break-even point in terms of dollar sales, total fixed expenses are divided by which of the following? 10. (TCO D) In an income statement prepared using the variable costing method, fixed manufacturing overhead would 11. (TCO A) The following data (in thousands of dollars) have been taken from the accounting records of Larop Corporation for the just-completed year. Sales $950 Purchases of raw materials $225 Direct labor $250 Manufacturing overhead $295 Administrative expenses $150 Selling expenses $140 Raw materials inventory, beginning $30 Raw materials inventory, ending $45 Work-in-process inventory, beginning $20 Work-in-process inventory, ending $55 Finished goods inventory, beginning $100 Finished goods inventory, ending $135 Prepare a Schedule of Cost of Goods Manufactured statement in the text box below. 12. (TCO B) The Florida Company manufactures a product that goes through three processing departments. Information relating to activity in the first department during June is given below.
Percentage Completed Units Materials Conversion Work in process, June 1 160,000 65% 45% Work in process, Jun 30 130,000 75% 65% The department started 650,000 units into production during the month and transferred 680,000 completed units to the next department. Required: Compute the equivalent units of production for the first department for June, assuming that the company uses the weighted-average method of accounting for units and costs. 13. (TCO C) A cement manufacturer has supplied the following data. Tons of cement produced and sold 220,000 Sales revenue $924,000 Variable manufacturing expense $297,000 Fixed manufacturing expense $280,000 Variable selling and admin expense $165,000 Fixed selling and admin expense $82,000 Net operating income $100,000 Required: Calculate the company's unit contribution margin. Calculate the company's contribution margin ratio. If the company increases its unit sales volume by 5% without increasing its fixed expenses, what would the company's net operating income be? 14. (TCO D) Johnson Company, which has only one product, has provided the following data concerning its most recent month of operations. Selling price $175 Units in beginning inventory 0 Units produced 9,500 Units sold 8,000 Units in ending Inventory 1,500 Variable costs per unit: Direct materials
$50 Direct labor $36 Variable manufacturing overhead $2 Variable selling and admin $10 Fixed costs: Fixed manufacturing overhead $300,000 Fixed selling and admin $100,000 Required: What is the unit product cost for the month under variable costing? What is the unit product cost for the month under absorption costing? Prepare an income statement for the month using the variable costing method. Prepare an income statement for the month using the absorption costing method.