Description
This homework
assignment is worth 25 points that will be awarded based on the following:

Points 
QUESTIONS 1â€“7, 9â€“11, 14, 16â€“19 1 point 
15 
QUESTIONS 8, 12, 13, 15, 20 2 points each 
10 
TOTAL 
25 
1.
(1 point) Aesop Douglas plans
on selling autographed souvenir rugs at the Olympics. Based on similar events, he has the following
projected figures:
Selling price per rug 
$170.00 

Contribution margin per rug 
$60.00 

Total fixed costs 
$125,500 
What selling price per rug would be
needed to obtain a beforetax profit of $189,500 at a volume of 3,500 rugs?
a.
$ 90.00
b.
$110.00
c.
$150.00
d.
$170.00
e.
$200.00
f.
$230.00
g.
$260.00
h.
None of the above.
2.
(1 point) The following
information pertains to Butter, Inc. for the month of June:
Beginning workinprocess inventory
$ 110,000
Ending workinprocess inventory
$ 80,000
Cost of goods manufactured $ 350,000
Manufacturing overhead $ 170,000
If prime costs
are 75% of conversion costs, what was the direct labor cost incurred for June?
a.$112,500
b.
$200,000
c.
$90,000
d.
$30,000
e.
$20,000
f.
$127,500
g.
$150,000
h.
None of the above
3. (1 point) Abbagnale Enterprises will ship all of the USA athletesâ€™
gear to Russia for the Olympics. The
company has the following historical information based on similar trips taken
overseas:
Trip Nautical
Miles Operating
Costs
1
500,000 $356,000
2
580,000 $380,000
3
660,000 $420,000
What is the best estimate of total
operating costs using the highlow method if the expected mileage for the trip
to Russia is 590,000 miles?
a.
$236,000
b.
$375,455
c.
$386,552
d.
$386,441
e.
$392,000
f.
$391,977
g.
$420,080
h.
None of the above
4.
(1 point) Jones Manufacturing
reports that finished goods inventory was $14,000 on April 1 and $16,500 on
April 30. Beginning and ending workinprocess inventories were $12,000 and
$24,000, respectively. If cost of goods sold for the month of April was
$80,000, what was the cost of goods manufactured during April?
a.
$82,500
b.
$49,500
c.
$68,500
d.
$77,500
e.
$110,500
f.
$92,000
g.
$96,500
h.
None of the above
5.
(1 point) Cash Company has a
predetermined overhead rate of $4 per machine hour. Last year the company
incurred $112,400 of actual manufacturing overhead cost and the account was
$4,200 overapplied. How many machine hours were used during the year?
a.
16,800 machine hours
b.
20,000 machine hours
c.
28,100 machine hours
d.
30,200 machine hours
e.
27,050 machine hours
f.
29,150 machine hours
g.
28,250 machine hours
h.
None of the above.
6.
(1 point) The Adams Corporation
has the following data for 2014:
Units
sold 10,000
units
Total
fixed costs $48,000
Selling
price per unit $20
Variable
cost per unit $12
The margin of safety in units (round
to the nearest whole unit) and operating leverage are, respectively:
a.
2,000 units; 2.5.
b.
2,000 units; 1.67.
c.
4,000 units; 2.5.
d.
4,000 units; 1.67.
e.
6,000 units; 2.5.
f.
6,000 units; 1.67
g.
0 units; 1.67
h.
None of the above.
Use the following information
to answer questions the next two questions:
Nicoll, Inc., completed
the following jobs during 2014:
Job 10 
Job 20 

Direct materials 
$350 
$1,200 
Direct labor 
$345 
$1,350 
Units completed 
100 
360 
Direct labor hours 
30 
80 
Number of setups 
7 
3 
Number of orders 
7 
4 
Machine hours 
60 
32 
Kilowatt hours 
125 
150 
At the
beginning of 2014, the company identified the following overhead costs and
activity drivers:
Expected 
Expected 
Expected 
Expected 
Overhead 
Cost 
Activity Driver 
Quantity 
Setups 
$120,000 
Number of setups 
400 
Ordering 
$ 70,000 
Number of orders 
250 
Maintenance 
$180,000 
Machine hours 
3,000 
Power 
$ 30,000 
Kilowatt hours 
75,000 
The company’s
normal activity is 5,000 direct labor hours.
7.
(1 point) If Nicoll, Inc. uses
direct labor hours in a traditional costing system to assign overhead, what is
the total cost of Job 10?
a.
$2,400
b.
$8,950
c.
$2,550
d.
$6,550
e.
$3,095
f.
$8,405
g.
$5,495
h.
None of the above
8.
(2 points) If Nicoll, Inc. uses
an activitybased costing system to assign overhead, what is the total cost of
Job 20?
a.
$3,095
b.
$4,950
c.
$5,110
d.
$5,650
e.
$8,405
f.
$8,950
g.
$6,550
h.
None of the above
9.
(1 point) The workinprocess
of Parrott Corporation increased $11,500 from the beginning to the end of
November. Costs incurred during November
included $12,000 for direct materials, $63,000 for direct labor, and $21,000
for overhead. What was the cost of goods
manufactured during November?
a.
$11,500
b.
$84,500
c.
$74,500
d.
$75,000
e.
$107,500
f.
$95,500
g.
$96,000
h.
None of the above
10. (1 point) Information from the records of Place, Inc., for the month
of December is as follows:
Sales 
$962,000 
Direct materials purchases 
$188,000 
Direct labor 
$280,000 
Direct materials, December 1 
$ 25,000 
Work in process, December 1 
$ 37,000 
Finished goods, December 1 
$120,000 
Direct materials, December 31 
$ 11,000 
Work in process, December 31 
$ 85,000 
Finished goods, December 31 
$ 55,000 
Factory overhead 
$290,000 
Selling and administrative expenses 
$170,000 
The operating income (loss) for the
month of December is
a.
$(148,000)
b.
$(117,000)
c.
$3,000
d.
$20,000
e.
$34,000
f.
$68,000
g.
$173,000
h.
None of the above
Use the following information
to answer the next two questions:
Fredâ€™s Frozen Creations has been
contracted to train the USAâ€™s synchronized ice sculpting team. They have identified two different
independent variables (ice sculpting hours and number of ice blocks used in
training) in two different equations to evaluate the cost of training. The
results of the two regressions are as follows:
SUMMARY OUTPUT â€“ Sculpting hours
.gif”>
Regression Statistics
Multiple R 
0.6986 
R Square 
0.4532 
Adjusted R Square 
0.3143 
Standard Error 
$40,587 
Observations 
24 

Coefficients 
Standard Error 
t 
Pvalue 
Intercept 
$1,214.35 
$398.12 
3.05 
0.0254 
Sculpting hours 
$21.90 
$7.71 
2.84 
0.1200 
SUMMARY OUTPUT â€“ Number of ice blocks
.gif”>
Regression Statistics
Multiple R 
0.6145 
R Square 
0.3320 
Adjusted R Square 
0.2874 
Standard Error 
$43,127 
Observations 
24 

Coefficients 
Standard Error 
t 
Pvalue 
Intercept 
$6,764.58 
$2,073.09 
3.26 
0.0125 
Number of blocks 
$223.48 
$69.83 
3.20 
0.0240 
11. (1 point) Using the best cost driver,
what is the estimated total cost of training these athletes if 12,300 sculpting
hours are incurred and Fredâ€™s uses 1,190 ice blocks during training? Assume
these estimates are within the relevant range.
a.
$27,275.35
b.
$96,047.35
c.
$272,705.78
d.
$296,645.35
e.
$270,584.35
f.
$303,409.73
g.
$309,957.00
h.
None of the above
12. (2 points) Assume Fredâ€™s Frozen Creations chooses to use the number
of ice blocks to estimate the cost of training. Construct a 90% confidence
interval for the cost of training when the number of ice blocks used is
estimated at 1,300. Assume 1,300 ice blocks is within the relevant range.
(Round all calculations to the nearest dollar)
a.
($223,240, $371,338)
b.
($211,035, $383,543)
c.
($227,601, $366,977)
d.
($196,535, $344,633)
e.
($207,844, $386,734)
f.
($189,817, $404,761)
g.
($223,499, $371,079)
h.
None of the above.
13. (2 point) Eden Company manufactures two products, Brights and Dulls,
from a joint process. The cost of the joint process is $50,000 and results in
250 units of Brights and 1,000 units of
Dulls. Both products must be
processed past the splitoff point, incurring separable costs for
Brights of $60 per unit and $40 per
unit for Dulls. The market price is $250 for Brights and $200 for Dulls. What is the amount of
joint costs allocated to Brights using the net realizable value method?
a.
$10,000
b.
$11,446
c.
$25,000
d.
$27,143
e.
$27,778
f.
$30,000
g.
$50,000
h.
None of the above
Use the following information
to answer the next two questions:
Jay Manufacturing Company has two support
departments, Maintenance and Personnel, and two producing departments, A and B.
The Maintenance Department costs of $40,000 are allocated on the basis of
standard service hours used. The Personnel Department costs of $6,000 are
allocated on the basis of number of employees. The direct overhead costs of
Departments A and B are $8,000 and $20,000, respectively. The company provided the following data:
Maint. 
Person. 
Dept. 
Dept. 


Dept. 
Dept. 
A 
B 
Standard service hours used 
90 
100 
630 
270 
Number of employees 
120 
60 
200 
200 
Direct labor hours 
125 
125 
500 
250 
14. (1 point) What are the total overhead costs associated with
Department B after allocating the Maintenance and Personnel Departments using
the direct method? (Hint: You are finding
the TOTAL cost in Department B after all allocations).
a.
$31,000
b.
$32,200
c.
$35,000
d.
$36,333
e.
$38,667
f.
$39,000
g.
$41,800
h.
None of the above
15. (2 points) What are the total overhead costs associated with
Department B after allocating the Maintenance and Personnel Departments using
the step (sequential) method? Assume the
company allocates the cost of the Maintenance department first. (Hint: You are
finding the TOTAL cost in Department B after all allocations).
a.
$32,080
b.
$32,800
c.
$35,000
d.
$38,200
e.
$39,000
f.
$35,800
g.
$41,920
h.
None of the above
16. (1 point) If a companyâ€™s contribution margin ratio is 0.40, targeted
after tax net income is $28,000 (tax rate of 30%), and targeted sales volume in
dollars is $300,000, then total fixed costs are:
a.
$ 43,333
b.
$ 80,000
c.
$ 92,000
d.
$118,000
e.
$140,000
f.
$152,000
g.
$213,333
h.
None of the above
17. (1 point) Eden Company manufactures two products, Brights and Dulls,
from a joint process. The cost of the joint process is $50,000 and results in
250 units of Brights and 1,000 units of
Dulls. Both products must be
processed past the splitoff point, incurring separable costs for
Brights of $60 per unit and $40 per
unit for Dulls. The market price is $250 for Brights and $200 for Dulls. What is the gross profit for Brights assuming the physical
units method is used?
a.
$12,500
b.
$17,500
c.
$18,000
d.
$35,500
e.
$42,500
f.
$47,500
g.
$62,500
h.
None of the above
Use the following information
to answer the next two questions:
Holms Company
has a joborder costing system and uses a predetermined overhead rate based on
direct laborhours to apply manufacturing overhead to jobs. Manufacturing
overhead cost and direct labor hours were estimated at $400,000 and 80,000
hours, respectively, for the year. In May, Job #158 was completed at a cost of
$6,000 in direct materials and $4,000 in direct labor. The labor rate is $8 per
hour. By the end of the year, Holms had worked a total of 75,000 direct
laborhours and had incurred $365,500 actual manufacturing overhead cost.
18. (1 point) The total cost of Job #158 recorded on the completed job
cost sheet would be: a.$ 8,500
b.
$10,000
c.
$11,600
d.
$12,003
e.
$12,667
f.
$12,500
g.
$14,000
h.
None of the above
19. (1 point) Holms’ manufacturing overhead for the year was:
a. $1,500 underapplied
b. $1,500 overapplied
c.
$25,000 underapplied
d.
$25,000 overapplied
e.
$9,500 underapplied
f.
$9,500 overapplied
g.
$34,500 underapplied
h.
$34,500 overapplied
i.
None of the above
20. (2 points) Tier Inc. sells two products â€“ Small and Large. The
company has the following information available:
Small Large Total
Variable cost per unit $18 $28
Contribution margin ratio 40%
20%
Total fixed costs $60,000
Assuming a constant mix of 3 units of
Small for 2 units of Large, what is the breakeven point in units? (round all
ratios to 4 decimal places)
a.
1,637 units of Small and 1,091
units of Large
b.
3,600 units of Small and 2,400
units of Large
c.
2,667 units of Small and 4,000
units of Large
d.
3,375 units of Small and 2,625
units of Large
e.
3,000 units of Small and 2,000
units of Large
f.
2,400 units of Small and 3,600
units of Large
g.
1,895 units of Small and 1,263
units of Large
h.
None of the above
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