ACCT 349 Week 4 Midterm Exam

ACCT 349 Week 4 Midterm Exam

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ACCT 349 Week 4 Midterm Exam

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ACCT 349 Week 4 Midterm Exam

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1.      (TCO 5) The following information is available from the Taylor Company.

Actual factory overhead


Fixed overhead expenses, actual


Fixed overhead expenses, budgeted


Actual hours


Standard hours


Variable overhead rate per direct labor hour


Assuming that Taylor uses a three-way analysis of overhead variances, what is the spending variance?

(Points : 11)

     $750 favorable

$750 unfavorable

$950 favorable

$200 unfavorable

2. (TCO 5) In an activity-based costing system, what should be used to assign a department’s manufacturing overhead costs to products produced in varying lot sizes? (Points : 11)

A single cause-and-effect relationship

     Multiple cause-and-effect relationships

Relative net sales value of the products

A product’s ability to bear cost allocations



3. (TCO 1) An examination of Boener Company’s past maintenance records disclosed the following costs and volume measures the following.




Cost per month



Machine hours



Using the high-low technique, estimate the annual fixed cost for maintenance expenditures.

(Points : 11)





4. (TCO 1) Serendipity Co. uses regression analysis to develop a model for prediction overhead costs. Two different cost drivers (machine hours and direct materials weight) are under consideration as the independent variable. Relevant data were run on a computer using one of the standard regression programs, with the following results.

Machine hours


Y intercept




r-squared = .70


Direct materials weight


Y intercept




r-squared = .50


Which regression equation should be used?

(Points : 11)

     y = 2.500 + 5.0x

y = 2500 + 3.5x

y = 4,600 + 2.6x

y = 4,600 + 1.3x

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