Accounting 611 Midterm Exam-Spring
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accounting_611_midterm_exam-spring_solution.xlsxSolution 1
| a. | Merchandise Inventory | Purchases | 210,000 |
| Cost of goods sold | 223,000 | ||
| Beginning balance | 41,000 | ||
| Ending balance | 28,000 | ||
| b. | Direct Materials | Beginning balance | 7,000 |
| Ending balance | 14,000 | ||
| Purchases | 48,000 | ||
| Direct materials used | 41,000 | ||
| c. | Work-in-process Inventory | Ending balance | 22,000 |
| Cost of goods manufactured | 21,000 | ||
| Beginning balance | 8,000 | ||
| Current manufacturing costs | 7,000 | ||
| d. | Finished Goods Inventory | Cost of goods manufactured | 62,000 |
| Ending balance | 20,000 | ||
| Cost of goods sold | 61,000 | ||
| Beginning balance | 19,000 |
Solution 2
| X | Y | ||
| Selling price per unit | 30 | 20 | |
| Variable cost per unit | 20 | 5 | |
| Fixed Cost | 292500 | ||
| X | Y | ||
| A) | Contribution Margin | 10 | 15 |
| B) | X | Y | |
| Ratio | 3 | 1 | |
| Fixed cost | 219375 | 73125 | |
| Breakeven unit | 21937.5 | 4875 | |
| C) | X | Y | |
| Ratio | 2 | 3 | |
| Fixed cost | 117000 | 175500 | |
| Breakeven Units | 11700 | 11700 | |
| Revenue | 351000 | 234000 |
Solution 3
| Number of | Number of | Number of | |||
| Product | Setups | Components | Direct Labor Hours | ||
| Standard | 3 | 30 | 650 | ||
| Deluxe | 7 | 50 | 150 | ||
| Overhead costs | 40,000 | 120,000 | 160,000 | ||
| Traditional Costing | Overhead | ||||
| A) | Standard | 130000 | |||
| B) | Deluxe | 30000 | |||
| Activity Based Costing | |||||
| Setups | Components | Total | |||
| Standard | 12000 | 45000 | 57000 | ||
| Deluxe | 28,000 | 75,000 | 103000 |
Solution 4
| Problem Title | ||
| Inventory | EOQ Model | |
| Input Data | ||
| Demand rate, D | 25000 | |
| Ordering cost, Cs | $80.00 | |
| Carrying cost, Ch | $25.00 | (fixed amount) |
| Daily demand rate, d | 100 | |
| Lead time (in days), L | 10 | |
| Results | ||
| Economic order quantity, Q* | 400.00 | Part A) |
| Maximum inventory | 400.00 | |
| Average inventory | 200.00 | |
| Number of orders | 62.50 | |
| Total holding cost | $5,000.00 | |
| Total ordering cost | $5,000.00 | |
| Total purchase cost | $0.00 | |
| Total cost | $10,000.00 | |
| Reorder point, ROP | 1000 | Part B) |
| Part C) | Lead Time | 20 |
| Max Demand | 125 | |
| Max Stock | 2500 | |
| Stock in Inv | 1000 | |
| Safety Stock | 1500 |
Solution 5
| Sales: | 24000 | $ 50.00 | ||
| Expected and actual production: | 30000 | |||
| Manufacturing costs incurred: | ||||
| Variable: | 525,000 | |||
| Fixed: | 372,000 | |||
| Nonmanufacturing costs incurred: | ||||
| Variable: | 144,800 | |||
| Fixed: | 77,400 | |||
| Beginning inventories: | 0 | |||
| Variable Costing Approach | ||||
| Variable cost | 669,800 | |||
| Units produced | 30000 | |||
| Cost per Unit | 22.3266666667 | |||
| Revenue | $ 1,500,000.00 | |||
| Operating Income | $ 830,200.00 | |||
| Absorption Costing Approach | ||||
| Fixed cost | 449,400 | |||
| Operating Income | $ 380,800.00 |
Solution 6
| Sales (1,000 televisions) | 900,000 | |||
| Cost of goods sold | 400,000 | |||
| Store manager's salary per year | 70,000 | |||
| Operating costs per year | 157,000 | |||
| Advertising and promotion per year | 15,000 | |||
| Commissions (4% of sales) | 36,000 | |||
| 1) | Variable cost | 436,000 | ||
| Number of Units | 1000 | |||
| Variable cost per unit | 436 | |||
| 2) | Fixed Cost | 242,000 | ||
| 3) | Units | 3000 | ||
| Variable cost | 1308000 | |||
| Fixed Cost | 242,000 | |||
| Total Cost | 1,550,000 | |||
| 4) | the account analysis method |
