This Tutorial contains 6 Sets of Midterm Exam\t\u00a0\t\u00a0\t1. (TCO A) \u00a0Direct material cost is a part of (Points : 6)\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0Conversion Cost NO…. Prime Cost NO.\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0Conversion Cost YES…. Prime Cost NO.\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0Conversion Cost YES…. Prime Cost YES.\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0Conversion Cost NO…. Prime Cost YES.\t\u00a0\t\u00a0\tQuestion 2.2. (TCO A) \u00a0Total fixed costs (Points : 6)\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0will increase with increases in activity.\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0will decrease with increases in activity.\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0are not affected by activity.\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0should be ignored in making decisions because they can never change.\t\u00a0\t\u00a0\tQuestion 3.3. (TCO A) Property taxes on a company’s factory building would be classified as a(n) (Points : 6)\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0variable cost.\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0opportunity cost.\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0period cost.\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0product cost.\t\u00a0\t\u00a0\tQuestion 4.4. (TCO C) When the activity level is expected to increase within the relevant range, what effects would be anticipated with respect to each of the following? (Points : 6)\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0Fixed costs per unit decrease and variable costs per unit do not change.\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0Fixed costs per unit increase and variable costs per unit do not change.\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0Fixed costs per unit do not change and variable costs per unit do not change.\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0Fixed costs per unit do not change and variable costs per unit increase.\u00a0\t\u00a0\t\u00a0\tQuestion 5.5. (TCO B) Which of the following statements is true?\u00a0\tI. Overhead application may be made slowly as a job is worked on.\tII. Overhead application may be made in a single application at the time of completion of the job.\tIII. Overhead application should be made to any job not completed at year end in order to properly value the work in process inventory. (Points : 6)\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0Only statement I is true.\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0Only statement II is true.\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0Both statements I and II are true.\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0Statements I, II, and III are true.\t\u00a0\t\u00a0\tQuestion 6.6. (TCO B) Under a job-order costing system, the product being manufactured (Points : 6)\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0is homogeneous.\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0passes from one manufacturing department to the next before being completed.\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0can be custom manufactured.\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0has a unit cost that is easy to calculate by dividing total production costs by the units produced.\u00a0\t\u00a0\t\u00a0\tQuestion 7.7. (TCO F) \u00a0Equivalent units for a process costing system using the FIFO method would be equal to (Points : 6)\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0units completed during the period, plus equivalent units in the ending work-in-process inventory.\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0units started and completed during the period, plus equivalent units in the ending work-in-process inventory.\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0units completed during the period and transferred out.\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0units started and completed during the period, plus equivalent units in the ending work-in-process inventory, plus work needed to complete units in the beginning work-in-process inventory.\u00a0\t\u00a0\t\u00a0\tQuestion 8.8. (TCO C) The contribution margin equals (Points : 6)\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0sales – expenses.\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0sales – variable costs.\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0sales – cost of goods sold.\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0sales – fixed costs.\u00a0\t\u00a0\t\u00a0\tQuestion 9.9. (TCO C) \u00a0Which of the following would not affect the break-even point? (Points : 6)\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0Variable expense per unit\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0Number of units sold\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0Total fixed expenses\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0Selling price per unit\u00a0\t\u00a0\t\u00a0\tQuestion 10.10. (TCO D) Under variable costing, (Points : 6)\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0inventory costs will be lower than under absorption costing.\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0inventory costs will be higher than under absorption costing.\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0net operating income will always be lower than under absorption costing.\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0net operating income will always be higher than under absorption costing. \u00a0\t\u00a0\t\u00a0\t\u00a0\t1. (TCO A) The following data (in thousands of dollars) have been taken from the accounting records of Larop Corporation for the just-completed year.\tSales $950\tPurchases of raw materials $225\tDirect labor $250\tManufacturing overhead $295\tAdministrative expenses $150\tSelling expenses $140\tRaw materials inventory, beginning $30\tRaw materials inventory, ending $45\tWork-in-process inventory, beginning $20\tWork-in-process inventory, ending $55\tFinished goods inventory, beginning $100\tFinished goods inventory, ending $135\t\u00a0\tPrepare a Schedule of Cost of Goods Manufactured statement in the text box below. (Points : 15)\t\u00a0 \u00a0 \u00a0 \u00a0\u00a0\t\u00a0 \u00a0 \u00a0 \u00a0\u00a0\t\u00a0\tSchedule of cost of goods manufactured \tDirect materials: \t\u00a0\t\u00a0\t\u00a0\t\u00a0\tQuestion 2.2. (TCO B) The Nebraska Company manufactures a product that goes through three processing departments. Information relating to activity in the first department during June is given below.\t\u00a0 Percentage Completed\t\u00a0 Units Materials Conversion \tWork in process, June 1 140,000 65% 45% \tWork in process, Jun 30 120,000 75% 65% \t\u00a0\tThe department started 580,000 units into production during the month and transferred 600,000 completed units to the next department.\t\u00a0\t\u00a0\t\u00a0\tQuestion 3.3. (TCO C) A tile manufacturer has supplied the following data.\tBoxes of tile produced and sold 625,000\tSales revenue $2,975,000\tVariable manufacturing expense $1,720,000\tFixed manufacturing expense $790,000\tVariable selling and admin expense $152,000\tFixed selling and admin expense $133,000\tNet operating income $180,000\t\u00a0\t\u00a0\t\u00a0\tQuestion 4.4. (TCO D) The Hampton Company produces and sells a single product. The following data refer to the year just completed.\tSelling price $450\t\u00a0 \tUnits in beginning inventory 0\tUnits produced 25,000\tUnits sold 22,000\t\u00a0 \tVariable costs per unit: \tDirect materials $150\tDirect labor $75\tVariable manufacturing overhead $25\tVariable selling and admin $15\t\u00a0 \tFixed costs: \tFixed manufacturing overhead $275,000\tFixed selling and admin $200,000\t\u00a0\t\u00a0\tRequired:\u00a0\tCompute the cost of a single unit of product under both the absorption costing and variable costing approaches.\u00a0\tPrepare an income statement for the year using absorption costing.\u00a0\tPrepare an income statement for the year using variable costing. (Points : 30)\t\u00a0\t\u00a0\tQuestion 1. Question : (TCO A) The variable portion of advertising costs is a\t\u00a0\t\u00a0 Student Answer: Conversion YES… Period NO. \u00a0\t\u00a0 Conversion YES …. Period YES. \u00a0\t\u00a0 Conversion NO…. Period NO. \u00a0\t\u00a0 Conversion NO…. Period YES. \u00a0\t\u00a0\t\u00a0\tQuestion 2. Question : (TCO A) \u00a0A cost incurred in the past that is not relevant to any current decision is classified as a(n)\t\u00a0\t\u00a0 Student Answer: period cost. \u00a0\t\u00a0 incremental cost. \u00a0\t\u00a0 opportunity cost. \u00a0\t\u00a0 None of the above \u00a0\t\u00a0\t\u00a0\t\u00a0\tQuestion 3. Question : (TCO A) Property taxes on a company’s factory building would be classified as a(n)\t\u00a0\t\u00a0 Student Answer: variable cost. \u00a0\t\u00a0 opportunity cost. \u00a0\t\u00a0 period cost. \u00a0\t\u00a0 product cost. \u00a0\t\u00a0\t\u00a0\t\u00a0\tQuestion 4. Question : (TCO C) Within the relevant range, variable costs can be expected to\t\u00a0\t\u00a0 Student Answer: vary in total in direct proportion to changes in the activity level. \u00a0\t\u00a0 remain constant in total as the activity level changes. \u00a0\t\u00a0 increase on a per-unit basis as the activity level increases. \u00a0\t\u00a0 increase on a per-unit basis as the activity level decreases. \u00a0\t\u00a0 None of the above \u00a0\t\u00a0\t\u00a0\t\u00a0\tQuestion 5. Question : (TCO B) Which of the following statements is true?\u00a0\tI. Overhead application may be made slowly as a job is worked on.\tII. Overhead application may be made in a single application at the time of completion of the job.\tIII. Overhead application should be made to any job not completed at year end in order to properly value the work in process inventory.\t\u00a0\t\u00a0 Student Answer: Only statement I is true. \u00a0\t\u00a0 Only statement II is true. \u00a0\t\u00a0 Both statements I and II are true. \u00a0\t\u00a0 Statements I, II, and III are true. \u00a0\t\u00a0\t\u00a0\tQuestion 6. Question : (TCO B) A job-order cost system is employed in those situations when\t\u00a0\t\u00a0 Student Answer: many different products, jobs, or batches of production are being produced each period.\u00a0\t\u00a0 manufacturing involves a single, homogeneous product that flows evenly through the production process on a continuous basis.\u00a0\t\u00a0 the product moves from department to department before being completed.\u00a0\t\u00a0 the unit cost of production is computed by dividing the total production costs by the number of units produced.\u00a0\t\u00a0\t\u00a0\tQuestion 7. Question : (TCO B) The FIFO method only provides a major advantage over the weighted-average method in that\t\u00a0\t\u00a0 Student Answer: the calculation of equivalent units is less complex under the FIFO method.\u00a0\t\u00a0 the FIFO method treats units in the beginning inventory as if they were started and completed during the current period.\u00a0\t\u00a0 the FIFO method provides measurements of work done during the current period.\u00a0\t\u00a0 the weighted-average method ignores units in the beginning and ending work-in-process inventories.\u00a0\t\u00a0\t\u00a0\tQuestion 8. Question : (TCO C) \u00a0The contribution margin ratio always increases when the\t\u00a0\t\u00a0 Student Answer: fixed expenses increase. \u00a0\t\u00a0 fixed expenses decrease. \u00a0\t\u00a0 variable expenses as a percentage of net sales increase. \u00a0\t\u00a0 variable expenses as a percentage of net sales decrease. \u00a0\t\u00a0\t\u00a0\tQuestion 9. Question : (TCO C) \u00a0Which of the following would not affect the break-even point?\t\u00a0\t\u00a0 Student Answer: Variable expense per unit \u00a0\t\u00a0 Number of units sold \u00a0\t\u00a0 Total fixed expenses \u00a0\t\u00a0 Selling price per unit \u00a0\t\u00a0\u00a0\t\u00a0\tQuestion 10. Question : (TCO D) Under variable costing,\t\u00a0\t\u00a0 Student Answer: inventory costs will be lower than under absorption costing. \u00a0\t\u00a0 inventory costs will be higher than under absorption costing. \u00a0\t\u00a0 net operating income will always be lower than under absorption costing.\u00a0\t\u00a0 net operating income will always be higher than under absorption costing.\u00a0\t\u00a0\t\u00a0\t\u00a0\u00a0\tQuestion 1. Question : (TCO A) The following data (in thousands of dollars) have been taken from the accounting records of Larden Corporation for the just-completed year.\u00a0\tSales $950\u00a0\tPurchases of raw materials $170\u00a0\tDirect labor $225\u00a0\tManufacturing overhead $220\tAdministrative expenses $180\tSelling expenses $140\tRaw materials inventory, beginning $90\tRaw materials inventory, ending $80\tWork-in-process inventory, beginning $30\tWork-in-process inventory, ending $20\tFinished goods inventory, beginning $100\tFinished goods inventory, ending $70\t\u00a0\tPrepare a Schedule of Cost of Goods Manufactured statement in the text box below.\u00a0\t\u00a0\t\u00a0\t\u00a0\tQuestion 2. Question : (TCO B) The Florida Company manufactures a product that goes through three processing departments. Information relating to activity in the first department during June is given below.\u00a0\t\u00a0 Percentage Completed\t\u00a0\t\u00a0\t\u00a0\tQuestion 3. Question : (TCO C) Drake Company’s income statement for the most recent year appears below.\u00a0\tSales (45,000 units) $1,350,000\tLess: variable expenses 750,000\tContribution margin 600,000\tLess: fixed expenses 375,000\tNet operating income $225,000\t\u00a0\t\u00a0\t\u00a0\tQuestion 4. Question : (TCO D) The Hampton Company produces and sells a single product. The following data refer to the year just completed.\u00a0\tSelling price $450\t\u00a0 \tUnits in beginning inventory 0\tUnits produced 25,000\tUnits sold 22,000\t\u00a0 \tVariable costs per unit: \tDirect materials $150\tDirect labor $75\tVariable manufacturing overhead $25\tVariable selling and admin $15\t\u00a0 \tFixed costs: \tFixed manufacturing overhead $275,000\tFixed selling and admin $200,000<\/p>\n","protected":false},"excerpt":{"rendered":"
This Tutorial contains 6 Sets of Midterm Exam \u00a0 \u00a0 1. (TCO A) \u00a0Direct material cost is a part of (Points : 6) \u00a0 \u00a0 \u00a0 \u00a0 \u00a0Conversion Cost NO…. Prime Cost NO. \u00a0 \u00a0 \u00a0 \u00a0 \u00a0Conversion Cost YES…. Read More …<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-201288","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/201288","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/comments?post=201288"}],"version-history":[{"count":0,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/201288\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/media?parent=201288"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/categories?post=201288"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/tags?post=201288"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}