Professional Documents
Culture Documents
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 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 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)
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
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)