Burien allocates building depreciation

profilexoon
final_course.xls
Home>Business & Finance homework help>Accounting homework help>Burien allocates building depreciation

Question 1

FUNDAMENTAL ACCOUNTING PRINCIPLES II
ACC 212 (SP11)
FINAL EXAM-PART II SCORE:
QUESTION 1 (10 POINTS)
A Contribution margin per unit
B Fixed cost
C Mixed cost
D Curvilinear cost
E Variable cost
F Step-wise cost
G Relevant range of operations
H Estimated line of cost behavior
I Least-squares regression
J Cost-volume-profit analysis
1. A cost that remains constant over limited ranges of volumes of activities
but changes by a lump sum when volume changes occur outside these limited ranges.
2. The amount that the sale of one unit contributes toward recovering fixed costs
and earning profits.
3. A cost that remains unchanged in total amount even when the volume of activitiy varies.
4. A cost that includes both fixed and variable costs.
5. A cost that changes in proportion to changes in volume of activity
6. A statistical method for deriving an estimated line of cost behavior that is more
precise that the high-low method or a scatter diagram.
7. Useful in business planning; includes predicting the volume of activity, the costs
incurred, sales earned, and profits received.
8. A company's normal operating range; excludes extremely high and low volumes that
are not likely to be encountered
9. A cost that changes with volume, but not at a constant rate.
10. A line drawn on a graph to fit the past relation between cost and sales.
Match the following terms or phrases (A through J) with the definitions below (1 through 10) by placing the appropriate letter in the space beside the matching definition.

Question 2

PRINCIPLES OF ACCOUNTING II
ACC 212 (SP11)
FINAL EXAM-PART II SCORE
QUESTION 2 (20 POINTS)
BURIEN, INC.
Departmental Income Statement
For Year Ended December 31
Dept. A Dept. B Combined
Sales $180,000 $200,000 $380,000
Direct expenses 129,900 142,870 272,770
Contributions to overhead $50,100 $57,130 $107,230
Indirect expenses:
Depreciation--Building 10,000 11,760 21,760
Maintenance 1,600 1,700 3,300
Utilities 6,200 6,320 12,520
Office expenses 1,800 2,000 3,800
Total indirect expenses $19,600 $21,780 $41,380
Net income $30,500 $35,350 $65,850
BURIEN, INC.
Departmental Income Statement (Pro Forma)
For Year Ended December 31
Dept. A Dept. B Dept. C Combined
Sales
Direct expenses
Contributions to overhead
Indirect expenses:
Depreciation–building
Maintenance
Utilities
Office expenses
Total indirect expenses
Net income
Indirect Expense Allocations:
Department Sq. Ft. Percent Depreciation Allocated Maintenance Allocated Utilities Allocated
A
B
C
Total
Department Sales Percent Office Expense Allocated
A
B
C
Total
Burien, Inc., operates a retail store with two departments, A and B. Its departmental income statement for the current year follows:
Burien allocates building depreciation, maintenance, and utilities on the basis of square footage. Office expenses are allocated on the basis of sales. Management is considering an expansion to a three-department operation. The proposed Department C would generate $120,000 in additional sales and have a 17.5% contribution to overhead. The company owns its building. Opening Department C would redistribute the square footage to each department as follows: A, 19,040; B, 21,760 sq. ft.; C, 13,600. Increases in indirect expenses would include: maintenance, $500; utilities, $3,800; and office expenses, $1,200. Complete the following departmental income statements, showing projected results of operations for the three sales departments. (Round amounts to the nearest whole dollar.) Also show your calculations for the allocation of indirect expenses in the tables below the Departmental Income Statement.

Question 3

PRINCIPLES OF ACCOUNTING II
ACC 212 (SP11)
FINAL EXAM-PART II SCORE
QUESTION 3 (15 POINTS)
Current Break-Even Point (in Units)
Calculations:
New Break-Even Point (in Units)
Calculations:
Hess Co. manufactures a product that sells for $12 per unit. Total fixed costs are $96,000 and variable costs are $7 per unit. Hess can buy a newer production machine that will increase total fixed costs by $22,800 but variable costs will be decreased by $0.40 per unit. REQUIRED: Calculate the current break-even point in units and the break-even point in units if the new production machine is purchased. Show your answers in the spaces provided and use the space below the answer blocks to show your calculations.

Question 4

PRINCIPLES OF ACCOUNTING II
ACC 212 (SP11)
FINAL EXAM-PART II SCORE
QUESTION 4 (15 POINTS)
SLIM CORP.
Cash Budget
July - September
July August September
Beginning balance
Cash receipts
Cash disbursements
Interest paid
Preliminary balance
Loan advances
Loan repayments
Ending balance
Loan balance, end of month
Slim Corp. requires a minimum $8,000 cash balance. If necessary, loans are taken to meet this requirement at a cost of 1% interest per month (paid monthly on the loan balance at the end of the previous month). Loans are repaid at month's end from any excess cash. The cash balance on July 1 is $8,400. Cash receipts other than for loans received for July, August, September are forecasted as $24,000, $32,000, and $40,000, respectively. Payments other than for loan or interest payments for the same period are planned at $28,000, $30,000, and $32,000, respectively. At July 1, there are no outstanding loans. REQUIRED: Prepare a cash budget for July, August, and September. Use the template below for your answer.

Extra Credit

PRINCIPLES OF ACCOUNTING II
ACC 212 (SP11) SCORE:
FINAL EXAM-PART II
EXTRA CREDIT (10 POINTS)
Thomas Co. provides the following fixed budget data for 2009: THOMAS COMPANY
Flexible Budget Performance Report
Sales (20,000 units) $ 600,000 For the Year Ended December 31, 2009
Cost of goods sold:
Direct materials $ 200,000 Favorable (F)
Direct labor 160,000 or
Variable overhead 60,000 Budgeted Actual Variance Unfavorable (U)
Fixed overhead 80,000 500,000 Units
Gross profit $ 100,000 Sales
Operating expenses Variable costs:
Fixed $ 12,000 Direct materials
Variable 40,000 52,000 Direct labor
Income from operations $ 48,000 Variable overhead
Variable operating expenses
Total variable costs
The company's actual activity for 2009 follows: Contribution margin
Fixed costs:
Sales (21,000 units) $ 651,000 Fixed overhead costs
Cost of goods sold: Fixed operating expenses
Direct materials $ 231,000 Total fixed costs
Direct labor 168,000 Income from operations
Variable overhead 73,500
Fixed overhead 77,500 550,000
Gross profit $ 101,000
Operating expenses:
Fixed $ 12,000
Variable 39,500 51,500
Income from operations $ 49,500
REQUIRED: Prepare a flexible budget performance report for the year using the contribution margin format. Use the template at the right for your answer.