ACCT 505 FINAL EXAM GUIDE
(NEW) SET 3
(TCO E) Preparing purchase orders is a(n) (Points : 5)
batch-level activity.
product-level activity.
unit-level activity.
organization sustaining activity.
2. (TCO G) Given the following data, what would ROI be?
Sales $70,000
Net operating income $10,000
Contribution margin $20,000
Average operating assets $50,000
Stockholder's equity $25,000
(Points : 5)
28.6%
20.0%
40.0%
50.0%
3. (TCO C) Heckaman Corporation produces and sells a single product. Data concerning that product
appear below.
Selling price per unit $115.00
Variable expense per unit $56.35
Fixed expense per month $299,115
Required: Determine the monthly breakeven in unit or dollar sales. Show your work! (Points : 25)
Solution:
Break-even in dollars = fixed costs/ (P - V)/P
= 299,115/(115.00 - 56.35)/56.35 = 299,115/1.04082
Break-even = $287,385
4. TCO B) Industrial Supply Corporation uses the weighted-average method in its process costing
system. Data concerning the first processing department for the most recent month are listed below.
Work in process, beginning:
Units in beginning work in process inventory 400
Materials costs $6,900
Conversion costs $2,500
Percent complete for materials 80%
Percent complete for conversion 15%
Units started into production during the month 6,000
, ACCT 505 FINAL EXAM GUIDE
(NEW) SET 3
Units transferred to the next department during the month 5,200
Materials costs added during the month $112,500
Conversion costs added during the month $210,300
Ending work in process:
Units in ending work-in-process inventory 1,200
Percentage complete for materials 75%
Percentage complete for conversion 30%
Required: Calculate the equivalent units for conversion for the month in the first processing department.
(Points : 25)
Solution:
Equivalent units using WAM = Units transfered to the next department during the month + Ending
inventory (percentage of completion)
Ending inventory completed as to conversion =30% x 1,200 = 360 units
Equivalent units as to conversion= 5,200 + 360 =5,560 units
5. (TCO D) Topple Company produces a single product. Operating data for the company and its
absorption costing income statement for the last year are presented below.
Units in beginning inventory 0
Units produced 9,000
Units sold 7,000
Sales $100,000
Less cost of goods sold:
Beginning inventory 0
Add cost of goods manufactured 54,000
Goods available for sale 54,000
Less ending inventory 12,000
Cost of goods sold 42,000
Gross margin 58,000
Less selling and admin. expenses 28,000
Net operating income $30,000
(NEW) SET 3
(TCO E) Preparing purchase orders is a(n) (Points : 5)
batch-level activity.
product-level activity.
unit-level activity.
organization sustaining activity.
2. (TCO G) Given the following data, what would ROI be?
Sales $70,000
Net operating income $10,000
Contribution margin $20,000
Average operating assets $50,000
Stockholder's equity $25,000
(Points : 5)
28.6%
20.0%
40.0%
50.0%
3. (TCO C) Heckaman Corporation produces and sells a single product. Data concerning that product
appear below.
Selling price per unit $115.00
Variable expense per unit $56.35
Fixed expense per month $299,115
Required: Determine the monthly breakeven in unit or dollar sales. Show your work! (Points : 25)
Solution:
Break-even in dollars = fixed costs/ (P - V)/P
= 299,115/(115.00 - 56.35)/56.35 = 299,115/1.04082
Break-even = $287,385
4. TCO B) Industrial Supply Corporation uses the weighted-average method in its process costing
system. Data concerning the first processing department for the most recent month are listed below.
Work in process, beginning:
Units in beginning work in process inventory 400
Materials costs $6,900
Conversion costs $2,500
Percent complete for materials 80%
Percent complete for conversion 15%
Units started into production during the month 6,000
, ACCT 505 FINAL EXAM GUIDE
(NEW) SET 3
Units transferred to the next department during the month 5,200
Materials costs added during the month $112,500
Conversion costs added during the month $210,300
Ending work in process:
Units in ending work-in-process inventory 1,200
Percentage complete for materials 75%
Percentage complete for conversion 30%
Required: Calculate the equivalent units for conversion for the month in the first processing department.
(Points : 25)
Solution:
Equivalent units using WAM = Units transfered to the next department during the month + Ending
inventory (percentage of completion)
Ending inventory completed as to conversion =30% x 1,200 = 360 units
Equivalent units as to conversion= 5,200 + 360 =5,560 units
5. (TCO D) Topple Company produces a single product. Operating data for the company and its
absorption costing income statement for the last year are presented below.
Units in beginning inventory 0
Units produced 9,000
Units sold 7,000
Sales $100,000
Less cost of goods sold:
Beginning inventory 0
Add cost of goods manufactured 54,000
Goods available for sale 54,000
Less ending inventory 12,000
Cost of goods sold 42,000
Gross margin 58,000
Less selling and admin. expenses 28,000
Net operating income $30,000
