ACCT-346 Week 4 Midterm Exam (GRADED A) Questions and Answer elaborations

ACCT-346 Week 4 Midterm Exam 1. (TCO 4) Which of the following will have no effect on the break-even point in units? (Points : 4) The selling price increases The variable cost per unit increase s The sales volume increases Total fixed costs increase 2. (TCO 4) Circle K Furniture has a contribution margin ratio of 16%. If fixed costs are $176,800, how many dollars of revenue must the company generate in order to reach the break-even point? (Points : 4) $1,105,000 $282,880 $1,060,800 $208,476 3. (TCO 4) Paula Corporation sells a single product at a price of $275 per unit. Variable cost per unit is $135 & fixed costs total $356,860. If sales are expected to be $825,000, what is Paula’s margin of safety? (Points : 4) $468,140 $124,025 $700,975 $405,000 4. (TCO 5) Which of the following is treated differently in full costing than in variable costing? (Points : 4) Direct materials Fixed manufacturing overhead Direct labor Variable manufacturing overhead 5. (TCO 5) Which of the following items on a variable costing income statement will change in direct proportion to a change in sales? (Points : 4) Sales, contribution margin, fixed costs Sales, variable costs, contribution margin Sales, variable costs, contribution margin, fixed costs Sales, variable costs, & fixed costs 6. (TCO 5) Peak Manufacturing produces snow blowers. The selling price per snow blower is $100. Costs involved in production are: Direct Material per unit $20 Direct Labor per unit 12 Variable manufacturing overhead per unit 10 Fixed manufacturing overhead per year $148,500 In addition, the company has fixed selling & administrative costs of $150,000 per year. During the year, Peak produces 45,000 snow blowers & sells 30,000 snow blowers. How much is net income using full costing? (Points : 4) 1,641,000 $1,590,000 $1,441,500 $1,491,000 7. (TCO 5) The cost objective is the (Points : 4) reason for allocating the cost. calculation based on budgeted amounts. product, service, or department that is to receive the allocation. maximum amount to be allocated to any single department. 8. (TCO 6) Which of the following statements about cost pools is not true? (Points : 4) The costs in each of the cost pools should be homogeneous or similar. Managers must make a cost-benefit decision when determining how many cost pools are appropriate. Only four different kinds of costs may be included in a single cost pool. More cost pools usually provide more accurate information, but are more expensive. 9. (TCO 6) AC Consulting Company has purchased a new $18,038 copier. This overhead cost will be shared by the purchasing, accounting, & information technology departments since those are the only departments which will be able to access the machine. The company has decided to allocate the cost based on the number of copies made by each department. Each department has estimated the number of copies which will be made over the life of the copier. Department Copies Purchasing 250,000 Accounting 300,000 Information Tech 425,000 If cost allocations are computed to four significant digits & the purchasing department makes 58,000 copies this year, how much overhead will be allocated to purchasing? (Points : 4) $4,185 $4,624 $77,750 $1,073 10. (TCO 7) A company is trying to decide whether to keep or drop the sporting goods department in its department store. If the segment is dropped, the manager will be fired. The manager's salary, in relation to the decision to keep or drop the sporting goods department, is (Points : 4) avoidable & therefore relevant. not avoidable & therefore relevant. sunk & therefore not relevant. the same for all alternatives & therefore not relevant. 11. (TCO 7) BigByte Company has 12 obsolete computers that are carried in inventory at a cost of $13,200. If these computers are upgraded at a cost of $7,500, they could be sold for $15,300. Alternatively, the computers could be sold "as is" for $9,000. What is the net advantage or disadvantage of reworking the computers? (Points : 4) $6,300 advantage $1,200 disadvantage $5,400 disadvantage $3,000 advantage 12. (TCO 7) YXZ Company’s market for the Model 55 has changed significantly, & YXZ has had to drop the price per unit from $275 to $135. There are some units in the work in process inventory that have costs of $160 per unit associated with them. YXZ could sell these units in their current state for $100 each. It will cost YXZ $10 per unit to complete these units so that they can be sold for $135 each. Which of the following is the amount of sunk costs in this problem? (Points : 4) $160 per unit $10 per unit $125 per unit $100 per unit 13. (TCO 3) Which of the following companies is most likely to use a process costing system? (Points : 4) a law office a custom home builder a car repair business a food manufacturer 14. (TCO 3) The Blending Department began the period with 45,000 units. During the period the department received another 30,000 units from the prior department & completed 60,000 units during the period. The remaining units were 75% complete. How much are equivalent units in The Blending Department’s work in process inventory at the end of the period? (Points : 4) 30,000 22,500 15,000 11,250 15. (TCO 4) Total costs were $75,800 when 30,000 units were produced & $95,800 when 40,000 units were produced. Use the high-low method to find the estimated total costs for a production level of 32,000 units. (Points : 4) $80,115 $76,000 $79,800 $91,800 20) Goldratt’s rule of production scheduling include all but: A. An hour saved at a non-bottleneck is a marriage. B. A process batch should be fixed both along its route & in time. C. Do not balance the capacity-balance the flow. D. Utilization & activation of a resource is not the same thing 21) According to Goldratt & Fox, a useful performance measure to treat inventory is . Quick ratio. . Dollar days. . Inventory turnover. . Current ratio 22) "Slack" refers to the difference between: . finish & start times . latest & earliest times . observed & predicted times . optimistic & pessimistic times 23) Which of the following is not a typical project milestone? A. Production of a prototype B. Completion of design C. Training of project members D. Completed testing of the prototype 24) The advantages of pure project include all but: . Team pride, motivation, & commitments are high. . The project manager has full authority over the project. . Decisions are made quickly. . A team member can work on several projects 25) The idea of the Value Density calculation is: . Matching the weight of the product with an appropriate carrier . Finding a carrier that can handle the weight . Determining how a product should be shipped considering its weight & value . Finding the minimum cost carrier 26) Supply-chain response relates to the following: . How quickly a customer order can be filled . How quickly a company can react to a new competing product C. How inexpensive the product is A & B Show Less