Acct 346 Final Exam

Acct 346 Final Exam

Author: Christine Farr


1. (TCO 4) Assumptions underlying cost-volume-profit analysis include all of the following, except:
2. (TCO 6) A basic assumption of activity-based costing (ABC) is that
3. (TCO 2) In a traditional job order cost system, the use of direct labor on jobs increases
4. (TCO5) Cost drivers are:
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?
6. (TCO 1) Who are the users of managerial accounting information? How does their use of accounting information differ from the users of financial accounting information?
7. (TCO 2) Wolf Co. estimates
that its employees will work 400,000 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?
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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 80,000 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?
2. (TCO 4) Assume that we are manufacturing a product and assume that the sales price per unit is $80, the variable cost is $20 per unit, and the fixed cost is $90,000; 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?
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.

The variable costs per unit were:
Direct materials.........................7
Direct Labor .............................6
Variable manufacturing overhead ....5
Variable selling and administrative…6
Fixed costs per year:
Fixed manufacturing Overhead ................$700,000
Fixed Selling and Administrative expenses.. $300,000

(a) Prepare the Income Statement using Absorption Costing.
(b) Prepare the Income Statement using Variable Costing
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:

Machine hours Cost
50,000 $102,000
60,000 $122,000

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