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DeVry ACCT 346 Final Exam

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1.(TCO 4) Assumptions underlying cost-volume-profit analysis include all of the following, except:(Points : 5
all costs can be divided into fixed and variable elements.
total variable costs are directly proportional to volume over the relevant range.
selling prices are to be unchanged.
sales price is the only relevant factor affecting cost.

Question 2.2.(TCO 6) A basic assumption of activity-based costing (ABC) is that:(Points : 5)


all manufacturing costs vary directly with units of production.
inventory levels do not fluctuate.
only costs that respond to unit-level drivers are product costs.
only variable costs are included in activity-cost pools.

Question 3.3.(TCO 2) In a traditional job order cost system, the use of direct labor on jobs increases:(Points : 5
stores.
work in process.
factory overhead.
finished goods.

Question 4.4.(TCO 5) A cost driver is defined as:(Points : 5)


the largest cost in a manufacturing process.
the significant factor in the development of a new product.
an indirect cost that cannot be traced to a particular cost objective but is essential to the
business.
a causal factor that increases the total cost of a cost objective.

Question 5.5.(TCO 8) Wood Co. has considerable excess manufacturing capacity. A special job orders cost sh
includes the following applied manufacturing overhead costs:
Fixed costs: 25,000
Variable costs: 36,000
The fixed costs include a normal $4,500 allocation for in-house design costs, although no in-house design will b
Instead, the job will require the use of external designers costing $9,250. What is the total amount to be include
calculation to determine the minimum acceptable price for the job?(Points : 5)
$40,500
$45,250
$61,000
$65,750

6. (TCO 1) Who are the users of managerial accounting information? How does their
use of accounting information differ from the users of financial accounting
information?(Points : 25)

7. (TCO 2) Wolf Co.estimates


that its employees will work 400,000 direct labor hours during the coming year. Total
overhead costs are estimated to be $9,600,000 and direct labor costs are estimated
to be $12,500,000. Direct Laborhoursare actually 450,000.IfWolf Co. allocates
overhead based on direct labor HOURS, what is the predetermined overhead
rate?(Points : 25)

4. (TCO 6) At Long Co. electricity cost starts with a minimum fixed cost, and after that,
there is a perfectly variable expense. Using estimated machine hours:Machine hours
Cost
50,000 $68,000
60,000 $80,000

= $8,000

6. (TCO 9) (TCO 9) Harry Corp buys equipment for $224,888 that will last for 9 years.
The equipment will generate cash flows of $36,000 per year and will have no

salvage value at the end of its life. Ignore taxes. Use 10% required rate of return.(a)
What is the Present Value (PV) of this investment (at 10%)?.(b) What is the NET
Present Value (NPV) of this investment? If you need 10%, should you buy the
equipment?
(c) What is the Internal Rate of Return (IRR) of this investment?
(d) What is the payback period?.(Points : 25)

7. (TCO 10) Tanya Corp sells its products on both credit and cash basis.Monthly sales
are sold 20% for cash, 80% for credit.Credit sales are collected 65% in the month of
sale and35% the following month.Sales for the first quarter are BUDGETED as
follows: January $200,000; February $300,000; March $300,000.Compute cash
collections Budgeted for February.How muchcashwas collected in the
month?(Points : 25)

1. (TCO 3) The Mixing Department is the third department in the MZS Inc. factory. During
January, there were 4,000 units of beginning inventory in the Mixing Department, and
60,000 units were transferred in from the prior process. There were 8,000 units in
ending inventory. The transferred-in cost in the beginning inventory was $170,000,
and there was $600,000 in transferred-in cost during the month.

1. (TCO 4) Assume that we are manufacturing a product, and assume that the sales
price per unit is $70, the variable cost is $20 per unit, and the fixed cost is $85,000; a)
how many units would we need to sell to break even? b) How many units would we
need to sell to earn a profit of $120,000? c) How many units do we need to sell to
double that profit to $240,000? D) Why didnt the number of units double from Part B
to Part C?(Points: 25)

3. (TCO 5) Sivan Co. manufactures and sells one product. For the year, they started
with no opening inventory; produced 100,000 units but only sold 70,000 units. The
selling price per each unit is $80.The variable costs per unit were:
Direct materials.7
Direct Labor ..6
variable manufacturing overhead.5
variable selling and administrative.6
Fixed costs per year:
Fixed manufacturing Overhead .$700,000
Fixed Selling and Administrative expenses.$300,000
(a) Prepare the Income Statement using Absorption Costing.
(b) Prepare the Income Statement using Variable Costing.(Points : 25)

5. (TCO 7) North Company produces a small part that it uses in the production of its
Product H. The companys unit product cost for the part, based on a production of

100,000 parts per year, is as follows:


.Per part ..Total
Direct Materials. $7.00..$700,000
Direct Labor .6.00$600,000
Variable Manufacturing Overhead 2.00..$200,000
Plus:
Fixed manufacturing Overhead, (Traceable or avoidable) $325,000 TOTAL, equal to
$3.25 per unit
Fixed manufacturing Overhead,( Commonnot traceable to any product. Will stay
even if no product is manufactured) allocated on basis of labor-hours 5.75)
$575,000 TotalUnit Product Cost $24.00 (7+ 6+ 2, variable of
$15. Plus Fixed 3.25+ 5.75=9, total)An outside supplier has offered to supply parts
to the North Company for only $21.25 per part.(it appears to the President of the
company that he could save $2.75 per unit.
100 percent of the traceable or avoidable fixed manufacturing cost is supervisor
salaries and other costs that can be ELIMINATED if the parts are purchased. The
decision to buy the parts from the outside supplier would have no effect on the
common fixed costs of the company, and the space being used to produce the
partswould otherwise be idle. Ignore the impact of income taxes in your calculation.
How much would profits increase or decrease as a result of purchasing the parts
from the
outside supplier rather than making them inside the company?(Points : 25)

14. (TCO F) A company has the opportunity to do any, none, or all of the projects for
which the net cash flows per year are shown below. The company has a cost of

capital of 12%. Which should the company do and why? You must use at least two
capital budgeting methods. Show your work.
Year

-300

-150

-350

100

-50

100

100

100

100

100

100

100

100

100

100

100

100

100

50

100

100

-100

-200

(Points : 40)

DeVry ACCT 346 Final Exam

Click on the link below for the solution:


https://devryfinalexams.com/products/acct-346-final-exam-3/

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