ACCT 202 Summer I 2014 Final Exam (Coursework Sample)

ACCT 202 – Summer I 2014 Final Exam
Name: _____________________________ Date: _____________
PART I: True/False
Circle the letter for the best answer for each question (1 point each).
1. Direct material costs are generally variable costs. 
A)

True

B)

False

2. Target costing involves determining what the product price must be in order to meet the target cost and still provide a profit for the company's shareholders. 
A)

True

B)

False

3.  Period costs are expensed as incurred, rather than going into the Work in Process account. 
A)

True

B)

False

4.  In process costing, costs are accumulated in processing departments, rather than by job. 
A)

True

B)

False

5. The total volume in sales dollars that would be required to attain a given target profit is determined by dividing the sum of the fixed expenses and the target profit by the contribution margin ratio. 
A)

True

B)

False



6. If fixed expenses increase by $10,000 per year, then the level of sales needed to break even will also increase by $10,000. 
A)

True

B)

False

7. A sales budget is a detailed schedule showing the expected sales for the budget period; typically, it is expressed in both dollars and units of product. 
A)

True

B)

False

8.  A favorable spending variance occurs when the actual cost exceeds the amount of that cost in the flexible budget. 
A)

True

B)

False

9. In general, the purchasing agent is responsible for the materials price variance. 
A)

True

B)

False

10. An avoidable cost is a cost that can be eliminated (in whole or in part) as a result of choosing one alternative over another. 
A)

True

B)

False

PART II: Multiple Choice
Circle the letter for the best answer for each question (1 point each).
11. Bervine, Inc. produces two different products (bompers and woobles) using two different activities: Machining, which uses machine hours as an activity driver, and Inspection, which uses number of batches as an activity driver. The activity rate for Machining is $125 per machine hour, and the activity rate for Inspection is $500 per batch. Usage of the activity drivers are as follows:  What is the amount of Machining cost assigned to bompers? A. $22,500B. $125,000C. $375,000D. $500,000
12. In describing the cost formula equation Y = a + bX, which of the following statements is correct? A. "X" is the dependent variable.B. "a" is the fixed component.C. In the high-low method, "b" equals change in activity divided by change in costs.D. As "X" increases "Y" decreases.
13. Which of the following types of firms would most likely use job order costing? A. Happy-Oh Cereal CompanyB. Huey, Lewey & Dewie, AttorneysC. SoooSweet BeverageD. C-5 Cement Company
14. Manufacturing overhead was estimated to be $250,000 for the year along with 20,000 direct labor hours. Actual manufacturing overhead was $225,000, actual direct labor hours were 19,000. The predetermined overhead rate would be A. $11.25B. $12.50C. $11.84D. $13.16
15. Ajax Company had the following information for the year:  Ajax Company used a predetermined overhead rate using estimated overhead of $320,000 and 8,000 estimated direct labor hours. Assume the only inventory balance is an ending Finished Goods balance of $9,000. How much overhead was applied during the year? A. $245,000B. $273,000C. $280,000D. $320,000
16. Carmella Inc had the following information for the preceding year:
  Additional information for the year is as follows:  What was the ending Work in Process Inventory balance on 12/31? A. $20,000B. $11,000C. $50,000D. $54,000
17. The following information pertains to Yap Company's Grinding Department for the month of April:  All materials are added at the beginning of the process. Using the weighted-average method, the cost per equivalent unit for materials is closest to: A. $0.59B. $0.55C. $0.45D. $0.43
18. In February, one of the processing departments at Whisenhunt Corporation had beginning work in process inventory of $35,000 and ending work in process inventory of $11,000. During the month, the cost of units transferred out from the department was $410,000. In the department's cost reconciliation report for February, the total cost to be accounted for would be: A. $46,000B. $807,000C. $842,000D. $421,000
19. Menlove Company had the following income statement for the most recent year:  Given this data, the unit contribution margin was: A. $2 per unitB. $15 per unitC. $6 per unitD. $4 per unit
20. Last year, Farrer Corporation had sales of $1,500,000, variable expenses of $900,000, and fixe...