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ACCT 349 Week 4 Midterm Exam

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ACCT 349 Week 4 Midterm Exam

Page 1

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

Actual factory overhead

$15,000

Fixed overhead expenses, actual

$7,200

Fixed overhead expenses, budgeted

$7,000

Actual hours

3,500

Standard hours

3,800

Variable overhead rate per direct labor hour

$2.50

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.

Highest

Lowest

Cost per month

$39,200

$32,000

Machine hours

24,000

15,000

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

(Points : 11)

$447,360

$384,000

$240,000

$230,400

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

Coefficient

Y intercept

2,500

B

5.0

r-squared = .70

Direct materials weight

Y intercept

4,600

B

2.6

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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