ACCT 505 Final with Answers (ACCT505)

Exam (elaborations) ACCT 505 Final with Answers (ACCT505) 1. (TCO F) Sandler Corporation bases its predetermined overhead rate on the estimated machine hours for the upcoming year. Data for the upcoming year appear below. Estimated machine hours 73,000 Estimated variable manufacturing overhead $3.49 per machine hour Estimated total fixed manufacturing overhead $838,770 Required: Compute the company's predetermined overhead rate. (Points : 25) Answer Computer Overhead Rate Fixed Manuf OH Var Manuf OH (3.46x73000) Per Direct Lab H 3.46 Direct Lab Hours 73000 Est Manuf OH (+) Direct Lab Hours 73000 OH Rate 14.95 (/73000) 2. (TCO C) Enciso Corporation is preparing its cash budget for November. The budgeted beginning cash balance is $31,000. Budgeted cash receipts total $135,000 and budgeted cash disbursements total $141,000. The desired ending cash balance is $50,000. The company can borrow up to $100,000 at any time from a local bank, with interest not due until the following month. Required: Prepare the company's cash budget for November in good form. (Points : 25) Answer Cash Budget for November Beginning Cash balance $31,000.00 Cash Receipts $135,000.00 Total Cash Available $166,000.00 (31000+) Less: Cash Disbursement $141,000.00 Excess Cash $25,000.00 (-) This study source was downloaded by from CourseH on 09-06-2021 08:47:26 GMT -05:00 This study resource was shared via CourseH ACCT 505 Final with Answers Borrow $25,000.00 () Cash Ending $50,000.00 1. (TCO C) The following overhead data are for a department of a large company. Actual Costs Incurred Static Budget Activity level (in units) 500 450 Variable costs: Indirect materials $5,950 $5,382 Electricity $1,112 $1,008 Fixed costs: Administration $2,770 $2,800 Rent $5,120 $5,100 Required: Construct a flexible budget performance report that would be useful in assessing how well costs were controlled in this department. (Points : 30) Answer Department of a large company Flexible Budget Performance Report Actual costs incurred Flexible budget Variance Activity level (in units) 500 500 Variable costs: Indirect materials $5,950 5,980 $30 F Electricity 1,112 1,120 $8 F Total variable costs $7,062 $7,100 Fixed Costs: Administration 2,770 2,800 $30 F Rent 5,120 5,100 -$20 U Total fixed costs 7,890 7,900 Total costs $14,952 $15,000 $48 F double check $48 This study source was downloaded by from CourseH on 09-06-2021 08:47:26 GMT -05:00 This study resource was shared via CourseH Actual activity level (units) 500 Static budget 450 Difference 50 Ramp up static budget by 11.111% Test: 500 (TCO D) Mr. Earl Pearl, accountant for Margie Knall, Inc. has prepared the following product-line income data. PRODUCT Total A B C Sales................................................$ 100,000........$50,000.........$20,000...........$30,000 Variable expenses.............................. 60,000..........30,000............10,000.............20,000 Contribution margin............................. .40,000..........20,000............10,000.............10,000 Fixed expenses: Rent................................................. .5,000...........2,500..............1,000...............1,500 Depreciation..................................... 6,000...........3,000..............1,200................1,800 Utilities.............................................4,000...........2,000.................500................1,500 Supervisors' salaries....................... 5,000.......... 1,500.................500................3,000 Maintenance....................................3,000...........1,500..................600..................900 Administrative expenses................ 10,000...........3,000.................2,000..............5,000 Total fixed expenses........................ 33,000..........13,500...............5,800.............13,700 Net operating income........................ $7,000..........$6,500.............$4,200............($3,700) The additional information below is available.  The factory rent of $1,500 assigned to Product C is avoidable if the product is dropped.  The company's total depreciation would not be affected by dropping C.  Eliminating Product C will reduce the monthly utility bill from $1,500 to $800.  All supervisors' salaries are avoidable.  If Product C is discontinued, the maintenance department will be able to reduce monthly expenses from $3,000 to $2,000.  Elimination of Product C will make it possible to cut two persons from the administrative staff. Currently, their combined salaries total $2,000. Required: Prepare an analysis showing whether Product C should be eliminated. Articulate your findings. Answer CM 10000