2. | Question : | (TCO A) A cost incurred in the past that is not relevant to any current decision is classified as a(n) |
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3. | Question : | (TCO A) Depreciation of office buildings and office equipment is also known as |
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4. | Question : | (TCO A) When the activity level is expected to increase within the relevant range, what effects would be anticipated with respect to each of the following? |
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5. | Question : | (TCO F) 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 |
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6. | Question : | (TCO F) Which of the following statements about the process-costing system is incorrect? |
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7. | Question : | (TCO F) The FIFO method only provides a major advantage over the weighted-average method in that |
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8. | Question : | (TCO B) The contribution margin equals |
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9. | Question : | (TCO B) To obtain the break-even point in terms of dollar sales, total fixed expenses are divided by which of the following? |
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10. | Question : | (TCO E) In an income statement prepared using the variable costing method, fixed manufacturing overhead would |
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1. | Question : | (TCO A) The following data (in thousands of dollars) have been taken from the accounting records of Larden Corporation for the just-completed year. | Sales | $950 | | Purchases of raw materials | $170 | | Direct labor | $210 | | Manufacturing overhead | $220 | | Administrative expenses | $180 | | Selling expenses | $140 | | Raw materials inventory, beginning | $70 | | Raw materials inventory, ending | $80 | | Work-in-process inventory, beginning | $30 | | Work-in-process inventory, ending | $20 | | Finished goods inventory, beginning | $100 | | Finished goods inventory, ending | $70 |
Required: Prepare a Schedule of Cost of Goods Manufactured statement in the text box below. |
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2. | Question : | (TCO F) The Illinois 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 1 150,000 75% 55% Work in process, Jun 30 145,000 85% 75% The department started 475,000 units into production during the month and transferred 480,000 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. |
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3. | Question : | (TCO B) 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: a. Calculate the company's unit contribution margin. b. Calculate the company's unit contribution ratio. c. If the company increases its unit sales volume by 5% without increasing its fixed expenses, what would the company's net operating income be? |
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4. | Question : | (TCO E) The Dean Company produces and sells a single product. The following data refer to the year just completed: Selling price | | $450 | | | | Units in beginning Inventory | | 0 | Units produced | | 25,000 | Units sold | | 22,000 | | | | | | | Variable costs per unit: | | | Direct materials | | $ 200 | Direct labor | | $ 50 | Variable manufacturing overhead | | $ 30 | Variable selling and admin | | $ 15 | | | | Fixed Costs: | | | Fixed manufacturing overhead | | $ 275,000 | Fixed selling and admin | | $ 230,000 |
Assume that direct labor is a variable cost. Required: a. Compute the cost of a single unit of product under both the absorption costing and variable costing approaches. b. Prepare an income statement for the year using absorption costing. c. Prepare an income statement for the year using variable costing. |
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