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ACCT 349 Full Course Latest

ACCT 349 Full Course Latest

ACCT349

ACCT 349 Week 1 DQ 1 Latest

Variable Overhead Costs (graded)

How do managers decide on what basis to determine variable overhead costs and fixed overhead costs?

ACCT 349 Week 1 DQ 2 Latest

Flexible Budgets and Activity-Based Costing (graded)

Can the flexible-budget variance approach for analyzing overhead costs be used in activity-based costing? If yes, why? If no, why not?

ACCT 349 Week 2 DQ 1 Latest

Customer Profitability (graded)

If a customer-profitability profile can highlight more profitable customers from less profitable customers, should this information be used to drop certain customers in an effort to improve profitability?

ACCT 349 Week 2 DQ 2 Latest

Sales Variances (graded)

What insights might managers gain into the causes of a sales-volume variance by subdividing it into components covered in this chapter?

ACCT 349 Week 3 DQ 1 Latest

Cost Behavior (graded)

“High correlation between two variables means that one is the cause and the other is the effect.” Do you agree? Explain.

ACCT 349 Week 3 DQ 2 Latest

Pricing Decisions (graded)

“Relevant costs for pricing decisions are full costs of the product.” Do you agree? Explain.

ACCT 349 Week 4 DQ 1 Latest

Relevant Costs (graded)

“Variable costs are always relevant, and fixed costs are always irrelevant.” Do you agree or disagree? Why?

ACCT 349 Week 4 DQ 2 Latest

Costs of Quality and Constraints (graded)

“Companies should focus on financial measures of quality because these are the only measures of quality that can be linked to bottom-line performance.” Do you agree or disagree? Explain.

ACCT 349 Week 5 DQ 1 Latest

Spoilage, Rework, and Scrap (graded)

What are spoilage, rework, and scrap, and how are they accounted for under job order versus process costing systems? Why are they treated differently?

ACCT 349 Week 5 DQ 2 Latest

EOQ—Is It Perfect? (graded)

How can companies reduce the conflict between the EOQ decision model and models used for performance evaluation?

ACCT 349 Week 6 DQ 1 Latest

Capital Budgeting (graded)

“Capital budgeting has the same focus as accrual accounting.” Do you agree or disagree? Explain.

ACCT 349 Week 6 DQ 2 Latest

Discounted Cash Flows (graded)

What is the essence of the discounted cash flow methods?

ACCT 349 Week 7 DQ 1 Latest

Divisions and Differences (graded)

“Organizations typically adopt a consistent decentralization or centralization philosophy across all their business functions.” Do you agree or disagree? Explain.

ACCT 349 Week 7 DQ 2 Latest

Evaluation Issues (graded)

“Residual Income is not identical to ROI, although both measures incorporate income and investment into their computations.” Do you agree or disagree? Explain.

ACCT 349 Week 1 Student Study Guide Latest

Assignment

Student Study Guide: Chapter 8

Answer all questions and problems for the assigned chapters. Work should be shown for all problems and the assignment should then be submitted to the Dropbox as a Word document. The Dropbox submission should be labeled using the following example format.

Homework, Week X, Chapter(s) X

ACCT 349 Week 2 Student Study Guide Latest

Assignment

Student Study Guide: Chapter 14

Answer all questions and problems for the assigned chapters. Work should be shown for all problems and the assignment should then be submitted to the Dropbox as a Word document. The Dropbox submission should be labeled using the following example format.

Homework, Week X, Chapter(s) X

ACCT 349 Week 3 Student Study Guide Latest

Assignment

Student Study Guide: Chapters 10 and 12

Important details on textbook and student study guide editions: Chapter 13: Pricing and Cost Management in the textbook aligns to Chapter 12 in the student study guide. Answer all questions and problems for the assigned chapters. Work should be shown for all problems and the assignment should then be submitted to the Dropbox as a Word document. The Dropbox submission should be labeled using the following example format. Homework, Week X, Chapter(s) X

ACCT 349 Week 4 Student Study Guide Latest

Assignment

Student Study Guide: Chapters 11, 13, and 19.

Important details on textbook and student study guide editions: Chapter 12: Strategy, Balanced Scorecard, Strategy, Balanced Scorecard and Strategic Profitability Analysisin the textbook aligns to Chapter 13 in the student study guide. Answer ALL questions and problems for the assigned chapters. Work should be shown for all problems and the assignment should then be submitted to the Dropbox as a Word document. The Dropbox submission should be labeled using the following example format. Homework, Week X, Chapter(s) X

ACCT 349 Week 5 Student Study Guide Latest

Assignment

Student Study Guide: Chapters 18 and 20

Answer all questions and problems for the assigned chapters. Work should be shown for all problems and the assignment should then be submitted to the Dropbox as a Word document. The Dropbox submission should be labeled using the following example format. Homework, Week X, Chapter(s) X

ACCT 349 Week 6 Student Study Guide Latest

Homework

Student Study Guide: Chapter 21

Answer all questions and problems for the assigned chapters. Work should be shown for all problems and the assignment should then be submitted to the Dropbox as a Word document. The Dropbox submission should be labeled using the following example format. Homework, Week X, Chapter(s) X

ACCT 349 Week 7 Student Study Guide Latest

Assignment

Student Study Guide: Chapters 22 and 23

Answer all questions and problems for the assigned chapters. Work should be shown for all problems and the assignment should then be submitted to the Dropbox as a Word document. The Dropbox submission should be labeled using the following example format. Homework, Week X, Chapter(s) X

ACCT 349 Week 1 Quiz Latest

Question :(TCO 10)

Which of the following statements is true about overhead cost variance analysis using activity-based costing?

Overhead cost variances are calculated for output-unit level costs only.

Overhead cost variances are calculated for variable manufacturing overhead costs only.

A 4-variance analysis can be conducted.

Activity-based costing uses input measures for all activities, resulting in the inability to do flexible budgets needed for variance analysis.

Question 2.(TCO 10)

Sebastian Company, which manufactures electrical switches, uses a standard cost system and carries all inventories at standard. The standard manufacturing overhead costs per switch are based on direct labor hours and are shown below:

Variable overhead (5 hours at $12 per direct manufacturing labor hour)

$ 60

Fixed overhead (5 hours at $15 per direct manufacturing labor hour, based on capacity of 200,000 direct manufacturing labor hours per month)

75

Total overhead per switch $ 135

The following information is available for the month of December:

46,000 switches were produced, although 40,000 switches were scheduled to be produced.

225,000 direct manufacturing labor hours were worked at a total cost of $5,625,000.

Variable manufacturing overhead costs were $2,750,000.

Fixed manufacturing overhead costs were $3,050,000.

The variable overhead spending variance for December was

$50,000 U

$350,000 U

$10,000 F

$60,000 F

Question 3. (TCO 10)

Sebastian Company, which manufactures electrical switches, uses a standard cost system and carries all inventories at standard. The standard manufacturing overhead costs per switch are based on direct labor hours and are shown below:

Variable overhead (5 hours at $12 per direct manufacturing labor hour)

$ 60

Fixed overhead (5 hours at $15 per direct manufacturing labor hour, based on capacity of 200,000 direct manufacturing labor hours per month)

75

Total overhead per switch

$ 135

The following information is available for the month of December:

46,000 switches were produced, although 40,000 switches were scheduled to be produced.

225,000 direct manufacturing labor hours were worked at a total cost of $5,625,000.

Variable manufacturing overhead costs were $2,750,000.

Fixed manufacturing overhead costs were $3,050,000.

The fixed overhead production volume variance for December was

$450,000 F

$400,000 F

$50,000 U

$775,000 F

Question 4. (TCO 10)

The following information is for Pappillon Corporation’s variable manufacturing overhead costs last month: favorable flexible-budget variance of $3,000, unfavorable efficiency variance of $2,500. The spending variance is

$500 favorable.

$5,500 unfavorable.

$5,500 favorable.

None of the above

Question 5. (TCO 10)

Budgeted overhead costs rates can be expressed as an amount per unit of output or per unit of input.

True

False

ACCT 349 Week 2 Quiz Latest

Question 1. (TCO 6)

Homogeneity is used to

develop cost pools in which the costs have the same or similar cost-allocation base.

develop cost pools of similar amounts for allocation purposes.

develop cost pools based on similarity of origination costs to be allocated.

develop costs pools only for activity-based costing.

Question 2. (TCO 6)

In a customer cost hierarchy, the costs of a sales visit made to a customer is

a customer output unit-level cost.

a customer batch-level cost.

a customer-sustaining cost.

a distribution-channel cost.

Question 3. (TCO 5)

Natural Nutrients Bakery of Southfield produces three flavors of cat morsels that have budgeted and actual sales data for a bag of a dozen of its cat morsels as follows for December 20XX.

Budgeted Data Actual Data

Tuna ChikBits ChezNips Tuna ChikBits ChezNips

Bags 7,200 4,800 4,000 10,800 3,600 7,200

CM per bag $2.50 $4.00 $5.00 $2.00 $3.00 $7.50

Cont. Margin $18,000 $19,200 $20,000 $21,600 $10,800 $54,000

Total Contribution Margin $57,200 $86,400

According to company forecasts, it was budgeting to earn a 25% market share in total units (bags) of specialty prepared cat treats sold in December 20XX in Southfield. Reliable industry sources indicate that the total number of bags of cat treats sold for December 200X in Southfield was 72,000.

The sales-mix variance for December 20XX for Natural Nutrients Bakery is

$8,600 F.

$8,760 F.

$160 F.

$180 F.

Question 4. (TCO 6)

The following data are for Kershaw Company for the last month.

Budgeted direct labor mix at budgeted prices for actual output produced the following.

3,825 skilled hours at $16 per hour

1,275 unskilled hours at $12 per hour

5,100 total hours

Actual results

4,000 skilled hours at $19 per hour

1,000 unskilled hours at $9 per hour

5,000 total hours

The direct labor yield variance for both types of labor together is

$1,500 favorable.

$1,000 unfavorable.

$1,000 favorable.

$500 favorable.

Question 5. (TCO 6)

The following data are for Uriah Corp. for the first quarter of the current fiscal year.

Actual Results Static Budget

Unit sales:

Product X

15,000 40,000

Product Y

65,000 60,000

Total

80,000 100,000

Contribution margin per unit:

Product X

$4 $5

Product Y

$3 $2

The sales-mix variance for both products together is

$51,000 unfavorable.

$64,000 unfavorable.

$115,000 unfavorable.

$115,000 favorable.

ACCT 349 Week 3 Quiz 1 Latest

Question 1. (TCO 1)

Troy Company derived the following costs relationship from a regression analysis of its monthly manufacturing overhead cost.

Y = $80,000 + $12X where: Y = monthly manufacturing overhead cost and X = machine hours.

The standard time required to manufacture one 6-unit case of Troy’s single product is 4 machine hours. Troy applies manufacturing overhead to production on the basis of machine-hours, and its normal annual production is 50,000 cases.

Troy’s estimated variable manufacturing overhead cost for a month in which scheduled production is 10,000 cases would be

$80,000.

$480,000.

$160,000.

$320,000.

Question 2. (TCO 1)

Which of the following is not a common problem encountered in collecting data for cost estimation?

Lack of observing extreme values

Missing data

Changes in technology

Distortions resulting from inflation

Question 3. (TCO 3)

Major influences of competitors, costs, and customers on pricing decisions are factors of

supply and demand.

activity-based costing and activity-based management.

key management themes that are important to managers attaining success in their planning and control decisions.

the value-chain concept.

Question 4. (TCO 3)

Burbank Company manufactures a product that has a variable cost of $25 per unit. Fixed costs total $1,000,000, allocated on the basis of the number of units produced. Selling price is computed by adding a 25% markup to full cost. How much should the selling price be per unit for 200,000 units?

$31.25

$42.00

$37.50

$30.00

Question 5. (TCO 3)

Price discrimination is

always illegal.

a type of peak-load pricing.

not regulated in the United States.

the practice of charging different prices to different customers for the same product or service.

ACCT 349 Week 5 Quiz Latest

Question 1. (TCO 9)

MedicalTechnical, Inc. manufactures surgical instruments to the exacting specifications of various customers. During April 2005, Job 911 for the production of 4,500 instruments was completed at the following costs per unit.

Direct materials $ 60

Direct manufacturing labor 20

Allocated manufacturing overhead 80

$160

Final inspection of Job 911 disclosed 100 defective units and 50 spoiled units. The defective instruments were reworked at a total cost of $12,000, and the spoiled instruments were sold to a jobber for $3,000.

If the costs associated with spoilage and reworked units are considered as normal to manufacturing operations, the unit cost of the good units produced on Job 911 is

$165.

$164.

$162.

$160.

Question 2. (TCO 9) Walbreck Company had the following production for the month of August.

Units

Work in process, August 1 6,000

Started during August 24,000

Completed and transferred to finished goods 18,000

Abnormal spoilage incurred 3,000

Work in process, August 31 9,000

Materials are added at the beginning of the process. As to conversion cost, work in process was 20% complete at the beginning and 70% complete at the end of the month. Spoilage is detected at the end of the process.

Using the weighted-average method, the equivalent units for August, with respect to conversion costs, were

30,000.

24,300.

23,700.

27,300.

Question 3. (TCO 9)

In manufacturing its products for the month of January 20XX, Sandusky Corporation incurred normal spoilage of $7,000 and abnormal spoilage of $3,000. How much spoilage cost should Sandusky charge as inventoriable for the month of January 20XX? (Points: 6)

$0

$3,000

$7,000

$10,000

Question 4. (TCO 6)

Libations Corporation manufactures a line of flags. The annual demand for its flag display is estimated to be 100,000 units. The annual cost of carrying one unit in inventory is $1.60, and the cost to initiate a production run is $50. There are no flag displays on hand, but Libations had scheduled 60 equal production runs of the display sets for the coming year, the first of which is to be run immediately. Libations Corporation has 250 business days per year. Assume that sales occur uniformly throughout the year and that production is instantaneous.

The estimated total setup cost for the flag displays for the coming year is (Points : 6)

$2,000.

$3,000.

$8,000.

$12,500.

Question 5. (TCO 6)

Blaster began operations in June 20XX. Blaster manufactures vehicle seat covers using a just-in-time production system supported by a backflush costing system. This system has two trigger points: (1) the purchase of raw materials, and (2) the sale of finished good units. Standard unit costs are $40 for raw materials and $25 for conversion costs. Blaster writes off any underallocated or overallocated conversion costs immediately. The following data were available for June 20XX.

Production of good units 19,800

Sales of good units 19,750

Purchases of raw materials [20,000 units at $40] $800,000

Conversion costs incurred $496,000

The June ending total for all inventory balances is (Points : 6)

$16,250.

$12,250.

$11,250.

$10,000.

ACCT 349 Week 6 Quiz 1 Latest

Question 1. (TCO 7)

The payback capital budgeting technique considers the following.

Time Value of Money Income Over Entire Life of Project

Yes Yes

Yes No

No Yes

No No

Question 2. (TCO 7)

The Valley Corporation is considering (as of 1/1/08) the replacement of an old machine that is currently being used. The old machine is fully depreciated but can be used by the corporation through 2011. If Valley decides to replace the old machine, Baker Company has offered to purchase it for $50,000 on the replacement date. The disposal value of the old machine would be zero at the end of 2011. Valley uses the straight-line method of depreciation for all classes of machinery.

If the replacement occurs, a new machine would be acquired from Busby Industries on January 2, 2008. The purchase price of $500,000 for the new machine would be paid in cash at the time of replacement. Due to increased efficiency of the new machine, estimated annual cash savings of $150,000 would be generated through 2011, the end of its expected useful life. The new machine is expected to have a zero disposal price at the end of 2011.

All operating cash receipts, operating cash expenditures, and applicable tax payments and credits are assumed to occur at the end of the year. Valley uses the calendar year for reporting purposes.

Discount tables for several different interest (discount) rates that are to be used in any discounting calculations are given below. Unless told otherwise, assume that Valley is not subject to income taxes.

Period 6% 8% 10% 12% 14%

1 .94 .93 .91 .89 .88

2 .89 .86 .83 .80 .77

3 .84 .79 .75 .71 .68

4 .79 .74 .68 .64 .59

5 .75 .68 .62 .57 .52

Present Value of an Annuity of $1.00 Received at the End of Each Period

Period 6% 8% 10% 12% 14%

1 0.94 0.93 0.91 0.89 0.88

2 1.83 1.78 1.73 1.69 1.65

3 2.67 2.58 2.49 2.40 2.32

4 3.47 .3.31 3.17 3.04 2.91

5 4.21 3.99 3.79 3.61 3.43

The payback period to replace the old machine with the new machine is

3.3 years.

3.0 years.

4.0 years.

2.5 years.

Question 3. (TCO 7)

The Valley Corporation is considering (as of 1/1/08) the replacement of an old machine that is currently being used. The old machine is fully depreciated but can be used by the corporation through 2011. If Valley decides to replace the old machine, Baker Company has offered to purchase it for $50,000 on the replacement date. The disposal value of the old machine would be zero at the end of 2011. Valley uses the straight-line method of depreciation for all classes of machinery.

If the replacement occurs, a new machine would be acquired from Busby Industries on January 2, 2008. The purchase price of $500,000 for the new machine would be paid in cash at the time of replacement. Due to increased efficiency of the new machine, estimated annual cash savings of $150,000 would be generated through 2011, the end of its expected useful life. The new machine is expected to have a zero disposal price at the end of 2011.

All operating cash receipts, operating cash expenditures, and applicable tax payments and credits are assumed to occur at the end of the year. Valley uses the calendar year for reporting purposes.

Discount tables for several different interest (discount) rates that are to be used in any discounting calculations are given below. Unless told otherwise, assume that Valley is not subject to income taxes.

Present Value of $1.00 Received at the End of the Period

Period 6% 8% 10% 12% 14%

1 .94 .93 .91 .89 .88

2 .89 .86 .83 .80 .77

3 .84 .79 .75 .71 .68

4 .79 .74 .68 .64 .59

5 .75 .68 .62 .57 .52

Present Value of an Annuity of $1.00 Received at the End of Each Period

Period 6% 8% 10% 12% 14%

1 0.94 0.93 0.91 0.89 0.88

2 1.83 1.78 1.73 1.69 1.65

3 2.67 2.58 2.49 2.40 2.32

4 3.47 .3.31 3.17 3.04 2.91

5 4.21 3.99 3.79 3.61 3.43

The accrual accounting rate of return on initial investment to the nearest percent is

0%.

11.0%.

5.6%.

30%.

Question 4. (TCO 7)

Assume that a required rate of return of 12% is used to compute the NPV of a project. If NPV is positive, IRR is greater than 12%.

True

False

Question 5. (TCO 7)

If the income tax rate for a profitable company is 30%, a depreciation deduction of $10,000 results in a tax savings of $7,000 (before considering the time value of money).

True

False

ACCT 349 Week 7 Quiz Latest

Question 1. (TCO 8)

Which of the following is not a benefit associated with decentralization? (Points : 6)

Quicker decision making

Increased motivation of subunit managers

Increased competition among managers

Greater responsiveness to local needs

Question 2. (TCO 8)

The San Jose Manufacturing Company has two divisions in Kansas—the Holton Division and the Derby Division. Currently, Derby buys a part (10,000 units) from Holton for $16 per unit. Holton has purchased new equipment and wants to increase the price to Derby to $18 per unit. The controller of Derby claims that she cannot afford to go that high, because it will decrease the division’s profit to near zero. Derby can buy the part from an outside supplier for $16 per unit. The incremental costs per unit that San Jose incurs to produce each unit are Holton’s variable cost of $12. Fixed costs per unit to Holton with the recent purchase of equipment are $5.

If Holton has no alternative uses for its facilities and the external supplier drops the price to $11 per unit, what should be done from the point of view of

Company as a whole/Derby Division only? (Points: 6)

Buy from the Holton Division/Buy from the external supplier.

Buy from the external supplier/Buy from Holton Division.

Buy from external supplier/ Buy from external supplier.

Buy from Holton Division/ Buy from Holton Division.

Question 3. (TCO 8)

Jesse James is a manager at a local bank. Jesse’s management style is best described as entrepreneurial—he is risk neutral. Wyonia Tyus is a customer service representative who reports to Jesse. Wyonia is risk averse. In designing a compensation package for Jesse and Wyonia, which type of compensation arrangement should be emphasized more? Jesse

James/Wyonia Tyus (Points : 6)

Performance-based/Performance-based

Performance-based/Straight salary

Straight salary/Performance-based

Straight salary/Straight salary

Question 4. (TCO 8)

Information pertaining to the Woodsy Creek Division of MO Corporation for 20XX follows.

Revenues $950,000

Variable costs 575,000

Traceable fixed costs 336,500

Average invested capital 350,000

Imputed interest rate 10%

The return on investment (ROI) was (Points : 6)

4%.

10%.

11%.

37%.

Question 5. (TCO 9)

The primary difference between centralization and decentralization is (Points : 6)

separate offices for all managers.

geographical separation of divisional headquarters and central headquarters.

the extent of freedom of decision making by many levels of management.

the relative size of the firm.

ACCT 349 Week 4 Midterm Exam Latest

Question 1 (TCO 5)

Flipping Tidley Works’ production budget for the year ended November 2012 was based on 200,000 units. Each unit requires 2 standard hours of labor for completion. Total O/H was budgeted at $900,000 for the year, and the fixed O/H rate was estimated to be $3.00 per unit. Both fixed and variable O/H are assigned to the product on the basis of direct labor hours. Moreover, Flipping analyzes O/H variances on a four-way basis. The actual data for the year ended November 30, 2012 are presented below.

Actual production in units 198,000

Actual direct labor hours 440,000

Actual variable O/H $352,000

Actual fixed O/H $575,000

Flipping’s variable O/H efficiency variance for the year is

$33,000 unfavorable.

$35,520 favorable.

$66,000 unfavorable.

$33,000 favorable.

Question 2. (TCO 5)

Unlike the traditional full-absorption cost system, activity-based costing (ABC) assigns

costs to individual products based only on nonfinancial variables.

costs to individual products based on various activities involved.

overhead to individual products based on some common measure of production volume.

only costs that can be directly traced to individual products.

Question 3. (TCO 1)

Daisy Bakes Order Co. applied the high-low method of cost estimation to customer order data for the first 4 months of the year. What is the estimated variable order-filling cost component per order?

Month Number of Orders Costs

January 1,200 $3,120

February 1,300 $3,185

March 1,800 $4,320

April 1,700 $3,895

$2.00

$2.42

$2.48

$2.50

Question 4. (TCO 1)

For a simple regression analysis model that is used to allocate factory overhead, an internal auditor finds that the intersection of the line of best fit for the overhead allocation with the y-axis is $5,000. The slope of the trend line is .20. The independent variable, factory wages, amounts to $900,000 for the month. What is the estimated amount of factory overhead to be allocated for the month?

$180,000

$230,000

$92,500

$185,000

Question 5. (TCO 2)

The relevance of a particular cost to a decision is determined by the

size of the cost.

riskiness of the decision.

potential effect on the decision.

accuracy and verifiability of the cost.

Question 6. (TCO 2)

When only differential manufacturing costs are taken into account for special-order pricing, an essential assumption is that

manufacturing fixed and variable costs are linear.

selling and administrative fixed and variable costs are linear.

acceptance of the order will not affect regular sales.

acceptance of the order will not cause unit selling and administrative variable costs to increase.

Question 7. (TCO 5)

The TooToo Company manufactures components for use in producing one of its finished products. When 12,000 units are produced, the full cost per unit is $35, separated as follows.

Direct materials $5

Direct labor 15

Variable overhead 10

Fixed overhead 5

The BooHoo Company has offered to sell 12,000 components to TooToo for $37 each. If TooToo accepts the offer, some of the facilities presently being used to manufacture the components can be rented out as warehouse space for $40,000. However, $3 of the fixed overhead applied to each component would have to be covered by TooToo’s other products. What is the differential cost to the TooToo Company of purchasing the components from the BooHoo Company?

$8,000

$20,000

$24,000

$44,000

Question 8. (TCO 2)

Bieber Company has excess capacity on two machines, 24 hours on Machine 105 and 16 hours on Machine 107. To use this excess capacity, the company has two products, known as Product D and Product F, that must use both machines in manufacturing. Both have excess product demand, and the company can sell as many units as it can manufacture. The company’s objective is to maximize profits.

Product D has an incremental profit of $6 per unit, and each unit utilizes 2 hours of time on Machine 105 and then 2 hours of time on Machine 107. Product F has an incremental profit of $7 per unit, and each unit utilizes 3 hours of time on Machine 105 and then 1 hour of time on machine 107. Let D be the number of units for Product D, F be the number of units for product F, and P be the company’s profit.

The equations 2D + 3F < 24, D > 0, and F > 0 are

objective functions.

inequalities.

deterministic functions.

constraints.

Question 9. (TCO 4)

Nonfinancial performance measures are important to engineering and operations managers in assessing the quality levels of their products. Which of the following indicators can be used to measure product quality?

I. Returns and allowances

II. Number and types of customer complaints

III. Production cycle time

I and II only

I and III only

II and III only

I, II, and III

Question 10. (TCO 6)

The sales quantity variance equals

actual units x (budgeted weighted-average UCM for planned mix – budgeted weighted-average UCM for actual mix).

(actual units – master budget units) x budgeted weighted-average UCM for the planned mix.

budgeted market share percentage x (actual market size in units – budgeted market size in units) x budgeted weighted-average UCM.

(actual market share percentage – budgeted market share percentage) x actual market size in units x budgeted weighted-average UCM.

Question 11. (TCO 6)

The following are relevant data for calculating sales variances for Lumber Co., which sells its sole product in two countries.

John Quincy Total

Budgeted selling price per unit $6.00 $10.00 NA

Budgeted variable cost per unit 3.00 7.50 NA

Budgeted contribution margin per unit $3.00 $ 2.50 NA

Budgeted unit sales 300 200 500

Budgeted mix percentage 60% 40% 100%

Actual units sold 260 260 520

Actual selling price per unit $6.00 $9.50 NA

The sales quantity variance for John and Quincy is

$156 U.

$30 F.

$56 F.

$100F.

Question 12. (TCO 4)

In a quality control program, which of the following is (are) categorized as internal failure costs?

I. Rework

II. Responding to customer complaints

III. Statistical quality control procedures

I only

II only

III only

I, II, and III

Question 13. (TCO 6)

For a single-product company, the sales volume variance is

the difference between actual and master budget sales volume, times actual unit contribution margin.

the difference between flexible budget and actual sales volume, times master budget unit contribution margin.

the difference between flexible budget and master budget sales volume, times actual budget unit contribution margin.

the difference between flexible budget and master budget sales volume, times master budget unit contribution margin.

Question 14. (TCO 5)

Under the three-variance method for analyzing factory O/H, which of the following is used in the computation of the spending variance?

Actual Factory Overhead Budget Allowance Based on Actual Hours

No Yes

No No

Yes No

Yes Yes

Question 15. (TCO 1)

Given demand in excess of capacity, no spoilage or waste, and full use of a constant number of assembly hours, the number of components needed for an assembly operation with an 80% learning curve should

I. increase for successive periods; or

II. decrease per unit of output.

I. only

II only

Both I and II

Neither I nor II

Question 1. (TCO 3) How do companies determine target costs?

Question 2. (TCO 2) How and why are capacity constraints relevant when trying to decide which products to produce?

Question 3. (TCO 1) Describe the different types of linear costs functions.

ACCT 349 Week 8 Final Exam Latest

Question 1.1. (TCO 9)

Harper Company’s Job 501 for the manufacture of 2,200 coats was completed during August at the unit costs presented as follows. Final inspection of Job 501 disclosed 200 spoiled coats, which were sold to a jobber for $6,000.

Direct materials $20

Direct labor 18

Factory overhead (which includes an allowance of $1 for spoiled work) 18

$56

Assume that spoilage loss is charged to all production during August. What would be the unit cost of the good coats produced on Job 501? (Points: 11)

$57.50

$55.00

56.00

$58.60

Question 2.2. (TCO 9)

Some units of output failed to pass final inspection at the end of the manufacturing process. The production and inspection supervisors determined that the estimated incremental revenue from reworking the units exceeded the cost of rework. The rework of the defective units was authorized, and the following costs were incurred in reworking the units.

Materials requisitioned from stores:

Direct materials $ 5,000

Miscellaneous supplies 300

Direct labor 14,000

The manufacturing overhead budget includes an allowance for rework. The predetermined manufacturing overhead rate is 150% as large as direct labor. The account(s) to be charged and the appropriate charges for the rework costs would be (Points: 11)

work-in-process inventory control for $19,000.

work-in-process inventory control for $5,000 and factory overhead control for $35,300.

overhead control for $19,300.

overhead control for $40,300.

Question 3.3. (TCO 6)

If annual demand decreases by 20%, what is the approximate percentage change in the economic order quantity? (Points : 11)

Decrease by approximately 20%

Decrease by approximately 10%

Increase by approximately 10%

Increase by approximately 20%

Question 4.4. (TCO 6)

Huron Corporation purchases 60,000 headbands per year. The average normal purchase lead time is 20 working days, safety stock equals 7 days normal usage, and the corporation works 240 days per year. Huron should reorder headbands when the quantity in inventory reaches (Points: 11)

5,000 units.

6,750 units.

1,750 units.

5,250 units.

Question 5.5. (TCO 6)

Which changes in costs are most conducive to switching from a traditional inventory ordering system to a just-in-time ordering system?

Cost per Purchase Order Inventory Unit Carrying Costs (Points : 11)

Increasing Increasing

Decreasing Increasing

Decreasing Decreasing

Increasing Decreasing

Question 6.6. (TCO 7)

The technique that incorporates the time value of money by determining the compound interest rate of an investment at which the present value of the after-tax cash inflows over the life of the investment is equal to the initial investment is the (Points : 11)

average rate of return method.

internal rate of return method.

capital asset pricing model.

profitability index method.

Question 7.7. (TCO 7)

Burnham Co. bought a machine that it will depreciate on the straight-line basis over an estimated useful life of 7 years. The machine will have no salvage value. Burnham expects the machine to generate after-tax net cash inflows from operations to equal $110,000 in each of the 7 years. Burnham’s minimum rate of return is 12%. Information on present value factors is as follows.

Present value of $1 at 12% at the end of 7 periods 0.452

Present value of an ordinary annuity of $1 at 125 for 7 periods 4.564

Assuming a positive net present value of $12,000, what was the original cost of the machine? (Points: 11)

$485,200

$490,040

$502,040

$514,040

Question 8.8. (TCO 7)

Paula bought a machine costing $1,000, which will produce cash inflows of $1,400 over the next 4 years. Determine the payback period given the following cash flows.

Year After-Tax Cash Flows Cumulative Cash Flows

1 $400 $400

2 300 700

3 500 1,200

4 200 1,400 (Points: 11)

2 years

2.60 years

2.86 years

3 years

Question 9.9. (TCO 9)

Which of the following does not describe the six steps in designing an accounting-based performance measure? (Points: 11)

The issues in each step are interdependent.

The decision maker will often proceed through the steps several times before deciding on one or more performance measure(s).

The answers to the questions raised at each step depend on top management’s beliefs about the organization.

The steps must be done in sequence.

Question 10.10. (TCO 8)

The proposed transfer price is based on outlay cost. Outlay cost plus opportunity cost is (Points: 11)

the retail price.

the price representing the cash outflows of the supplying division plus the contribution to the supplying division from an outside sale.

the price usually set by an absorption-costing calculation.

the price set by charging for variable costs plus a lump-sum or additional markup, but less than full markup.

Question 11.11. (TCO 8)

Abalone & Fitch has two divisions, C and D, each operated as a profit center. C charges D $35 per unit for each unit transferred to D. Other data follow.

C’s variable cost per unit $30

C’s fixed costs 10,000

C’s annual sales to D 5,000 units

C’s sales to outsiders 50,000 units

C is planning to raise its transfer price to $50 per unit. Division D can purchase units at $40 each from outsiders, but doing so would idle C’s facilities now committed to producing units for D. Division C cannot increase its sales to outsiders. From the perspective of the company as a whole, from whom should division D acquire the units, assuming D’s market is unaffected? (Points: 11)

Outside vendors

Division C, but only at the variable cost per unit

Division C, but only until fixed costs are covered, then from outside vendors

Division C, despite the increased transfer price

Question 12.12. (TCO 8)

Milton Industries is a vertically integrated firm with several divisions that operate as decentralized profit centers. Milton’s Savvy Division manufactures scientific instruments and uses the products of two of Milton’s other divisions. The Bored Division manufactures printed circuit boards (PCBs). One PCB model is made exclusively for the Savvy Division using proprietary designs, whereas less complex models are sold in outside markets. The products of the Transistor Division are sold in a well-developed competitive market; however, one transistor model is also used by the Savvy Division.

The costs per unit of the products used by the Savvy Division are presented below.

PCB Transistor

Direct materials $2.50 $ .80

Direct labor 4.50 1.00

Variable overhead 2.00 .50

Fixed cost .80 .75

Total cost $9.80 $3.05

The Bored Division sells its commercial products at full cost plus a 25% markup and believes the proprietary board made for the Savvy Division would sell for $12.25 per unit on the open market. The market price of the transistor used by the Savvy Division is $3.70 per unit.

Assume that the Savvy Division is able to purchase a large quantity of transistors from an outside source at $2.90 per unit. The Transistor Division, having excess capacity, agrees to lower its transfer price to $2.90 per unit. This action would (Points: 11)

allow evaluation of both divisions on the same basis.

subvert the profit goals of the Transistor Division while optimizing the profit goals of the Savvy Division.

cause mediocre behavior in the Transistor Division as lost opportunity costs increase.

optimize the overall profit goals of Milton Industries.

Question 13.13. (TCO 9)

Given

Segment A Segment B

Net income $ 5,000 0

Sales 60,000 $750,000

Investment 24,000 500,000

Minimum ROI –% 20% 6%

For Segment B, ROI is (Points : 11)

6%.

20.8%.

20%.

7.5%.

Question 14.14. (TCO 6)

When the level of safety stock is increased, (Points: 11)

lead time will increase.

the frequency of stock outs will decrease.

carrying costs will decrease.

ordering costs will decrease.

Question 15.15. (TCO 6)

For inventory management, ignoring safety stocks, which of the following is a valid computation of the reorder point? (Points: 11)

The economic order quantity

The economic order quantity times the anticipated demand during lead time

The anticipated demand per day during lead time times lead time in days

The square root of the anticipated demand during the lead time

Question 16. 16. (TCO 8)

What is the range over which two divisions will negotiate a transfer price when there is unused capacity? (Points: 20)

Question 17. 17. (TCO 9)

There are six categories of costs associated with inventoriable goods for sale. What are they? (Points: 35)

Question 18. 18. (TCO 9)

What special problems arise when evaluating performance in multinational companies? (Points: 35)