ACC 202 ACC202 Final Exam Answers (National University)

ACC 202 Final Exam (National University)

1. In correspondence to SLOAT question number 2a. Compute pre-determined overhead rate under job order costing and determine the elements of manufacturing costs that are included in the Work in process Inventory, Finished Goods Inventory, and Cost of Goods Sold accounts.
2.  
   In correspondence to SLOAT question number 2b.
   
   Chipata Corporation applies manufacturing overhead to jobs on the basis of machine-hours. Chipata estimated 25,000 machine-hours and $10,000 of manufacturing overhead cost for the year. During the year, Chipata incurred 26,200 machine-hours and $11,300 of manufacturing overhead. What was Chipata's underapplied or overapplied overhead for the year?
3.  
   In correspondence to SLOAT question number 2c.
   
   Which of the following would usually be contained in the work-in-process inventory account balance of a manufacturing company?
4.  
   In correspondence to SLOAT question number 2d.
   
   Which of the following tasks produces an increase in work-in-process inventory?
5.  
   In correspondence to SLOAT question number 3a.
   
   Apply manufacturing overhead to each of several jobs using both a single overhead-rate approach and an activity-based-costing approach, and explain the advantages and disadvantages of the latter, as compared to the former.
   
   Use the following information to answer the following TWO questions: 
   
   Acton Company has two products: A and B. The annual production and sales of Product A is 800 units and of Product B is 500 units. The company has traditionally used direct labor-hours as the basis for applying all manufacturing overhead to products. The company is considering switching to an activity-based costing system for the purpose of computing unit product costs for external reports. The new activity-based costing system would have three overhead activity cost pools--Activity 1, Activity 2, and General Factory--with estimated overhead costs and expected activity as follows: 
   
   
   
   The predetermined overhead rate under the traditional single-rate costing system is closest to:
6. In correspondence to SLOAT question number 3b.
   Overhead rate of 53.68 * 100 DL Hrs = $5,368 / 500 units = $
   The overhead cost per unit of Product B under the traditional costing system is closest to:
7.  
   In correspondence to SLOAT question number 3c.
   $14,500 / 1,100 orders = $13.18 per order * 600 orders = $7,909.09 total Activity 1 overhead / 500 units =
   The amount of Activity 1 cost per unit of Product B under the activity based costing system is closest to:
8. In correspondence to SLOAT question number 3d.
   
   For companies that make a highly diverse set of products, Activity Based Costing provides more precise costing information for each product than does the traditional single-rate approach because it:
9. In correspondence to SLOAT question number 4a.
   
   Analyze mixed (semi-variable) costs into variable and fixed components, using both the “high-low” method, and the Excel scatter-graph approach, and explain the purpose for such an analysis. 
   
   When there is a change in the level of activity, which of the following does NOT remain constant?
10. In correspondence to SLOAT question number 4b
11. In correspondence to SLOAT question number 4c. 
    
    The analysis of mixed costs into their variable and fixed components is necessary in order to:
12. In correspondence to SLOAT question number 4d.
13. In correspondence to SLOAT question number 5a.
    
    Which of the following is correct? The break-even point occurs when:
14. In correspondence to SLOAT question number 5b.
    
    Cost-Volume-Profit analysis helps management to:
15. In correspondence to SLOAT question number 5c. 
    
    Hollis Company sells a single product for $20 per unit. The company's fixed expenses total $240,000 per year, and variable expenses are $12 per unit of product. The company's break-even point is:
16. In correspondence to SLOAT question number 5d. 
    
    Company A has a higher operating leverage then Company B. Which of the following is LEAST likely to be true?
17. In correspondence to SLOAT question number 6a.
    
    All the following are considered to be benefits of participative budgeting, EXCEPT:
18. In correspondence to SLOAT question number 6b.
    
    Primary benefits of budgeting include all of the following EXCEPT:
19. In correspondence to SLOAT question number 6c.
    
    Which of the following is NOT a true statement?
20. In correspondence to SLOAT question number 6d.
    
    Which of the following statements concerning zero-based budgeting is true?
21. Prepare a cash budget and a flexible operating budget from facts and assumptions provided. 
    
    Use the following to answer the next TWO questions: 
    
    In correspondence to SLOAT question number 7a. 
    
    
    
    The amount of cash collected during the month of June should be:
22. In correspondence to SLOAT question number 7b. 
    
    The cash disbursements during the month of June for goods purchased for resale and for selling and administrative expenses should be:
23. In correspondence to SLOAT question number 7c.
    
    The term flexible budget refers to a budget in which:
24. In correspondence to SLOAT question number 7d.
    
    Idlewild Inn is a bed and breakfast establishment in a converted 100-year-old mansion. The Inn's guests appreciate its gourmet breakfasts and individually decorated rooms. The Inn's overhead budget for the most recent month appears below:
25. In correspondence to SLOAT question number 8a
26. In correspondence to SLOAT question number 8b.
27. In correspondence to SLOAT question number 8c.
    
    Wenig Inc. has some material that originally cost $73,500. The material has a scrap value of $45,600 as is, but if reworked at a cost of $6,600, it could be sold for $58,100. What would be the incremental effect on the company's overall profit of reworking and selling the material rather than selling it as is as scrap?
28. In correspondence to SLOAT question number 8d.
29. In correspondence to SLOAT question number 9a.
    
    Apply commonly used techniques such as ROI (DuPont method) and Residual Income for measuring the performance of investment center managers.
    
    Which of the following changes would NOT change return on investment (ROI)?
30. In correspondence to SLOAT question number 9b.
    
    The residual income for the Hum Division last year was:
31. In correspondence to SLOAT question number 9c.
    
    The return on investment last year for the Hum Division was:
32. In correspondence to SLOAT question number 9d.
    
    Which of the following is NOT an advantage of ROI?
33. In correspondence to SLOAT question number 10a.
    
    Evaluate proposed capital budget expenditures on the basis of commonly used project assessment techniques. 
    
    The following information is to be used for the next TWO questions: 
    
    Waterman Publishing is considering the purchase of a used printing press costing $38,400. The printing press would generate a net cash inflow of $16,000 a year for 3 years. At the end of 3 years, the press would have no salvage value. The company's cost of capital is 10 percent. The company uses straight-line depreciation. 
    
    The project’s accounting (simple) rate of return (rounded to the nearest percent) on the initial investment is closest to:
34. In correspondence to SLOAT question number 10b.
    
    The investment’s payback period in years (rounded to two decimal points) is
35. In correspondence to SLOAT question number 10c.
    
    Project A has a predicted payback period of 2.5 and Project B has a predicted payback period of 5. Based on this information we can conclude:
36. In correspondence to SLOAT question number 10d.
    
    This is a reason to employ the net present value method in making capital expenditure decisions.
37. Corresponds to CLO 1a
    Last month, when 10,000 units of a product were manufactured, the cost per unit was $60. At this level of activity, variable costs are 50% of total unit costs. If 10,500 units are manufactured next month and cost behavior patterns remain unchanged the:
38. Corresponds to CLO 1b
    Within the relevant range, variable cost per unit will:
39. Corresponds to CLO 1c
    Given the cost formula, Y = $9,000 + $2.50X, total cost for an activity level of 3,000 units would be:
40. Corresponds to CLO 1d
    Blore Corporation reports that at an activity level of 7,300 units, its total variable cost is $511,803 and its total fixed cost is $76,650. What would be the total cost, both fixed and variable, at an activity level of 7,500 units? Assume that this level of activity is within the relevant range.