ACCT 212 Exam 4 Liberty University Solution

Question 1

Cleveland Choppers manufactures two types of motorcycles, a Base and a Loaded model. The following activity and costs have been gathered:

The number of components and number of setups are chosen as activity-cost drivers for overhead. Assuming an ABC costing system is being used, what is the total overhead cost assigned to the Base model?

Question 2

Over recent decades, overhead costs have steadily decreased while direct labor costs have increased as a percentage of total manufacturing costs.

Question 3

The following information relates to the manufacturing operations of the JNR Printing Company for the year:

The raw materials used in manufacturing during the year totaled $118,000. Raw materials purchased during the year amount to:

Question 4

Which of the following items does not represent a difference between financial and managerial accounting?

Question 5

CWN Company uses a job order costing system and last period incurred $80,000 of actual overhead and $100,000 of direct labor. CWN estimates that its overhead next period will be $75,000. It also expects to incur $100,000 of direct labor. If CWN bases applied overhead on direct labor cost, its predetermined overhead rate for the next period should be:

Question 6

If actual overhead incurred during a period exceeds applied overhead, the difference will be a debit balance in the Factory Overhead account at the end of the period.

Question 7

Richards Corporation uses the FIFO method of process costing. The following information is available for October in its Fabricating Department:

Calculate the equivalent units of conversion.

Question 8

Metaline Corp. uses the weighted average method for inventory costs and had the following information available for the year. The number of units transferred to finished goods during the year is:

Question 9

Carver Packing Company reports total contribution margin of $72,000 and pretax net income of $24,000 for the current month. In the next month, the company expects sales volume to increase by 8%. The degree of operating leverage and the expected percent change in income, respectively, are:

Question 10

A company manufactures and sells a product for $120 per unit. The company's fixed costs are $68,760, and its variable costs are $90 per unit. The company's break-even point in dollars is:

Question 11

Which of the following best describes costs assigned to the product under the variable costing method?

Question 12

When setting long-term sales prices for products, the sales price must cover all costs, including fixed costs.

Question 13

Memphis Company anticipates total sales for April, May, and June of $800,000, $900,000, and $950,000 respectively. Cash sales are normally 25% of total sales. Of the credit sales, 30% are collected in the same month as the sale, 65% are collected during the first month after the sale, and the remaining 5% are collected in the second month. Compute the amount of accounts receivable reported on the company’s budgeted balance sheet for June 30.

Question 14

To develop the sales budget, companies must estimate both unit sales and the production cost per unit.