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349 views12 pagesDeVry ACCT 505 Final Exam 2
DeVry ACCT 505 Final Exam 2
Click on the link below for the solution:
http://devryfinalexams.com/products/acct-505-final-exam-2/
Product Description
1. (TCO F) Wahr Corporation bases its predetermined overhead rate on the estimated labor hours for the upcoming year. At the beginning of the most recently completed year, the company estimated the labor hours for the upcoming year at 32,000. The estimated variable manufacturing overhead was $7.17 per labor hour and the estimated total fixed manufacturing overhead was $584,320. The actual labor hours for the year turned out to be 33,300.
Required:
Compute the company’s predetermined overhead rate for the recently completed year. (Points : 25)
2. (TCO C) Enciso Corporation is preparing its cash budget for November. The budgeted beginning cash balance is $31,000. Budgeted cash receipts total $135,000 and budgeted cash disbursements total $141,000. The desired ending cash balance is $50,000. The company can borrow up to $100,000 at any time from a local bank, with interest not due until the following month.
Required:
1. (TCO C) The following overhead data are for a department of a large company.
Actual costs Static
Incurred budget
Activity level (in units) 360 340
Variable costs:
Indirect materials $4,182 $4,148
Electricity $2,536 $2,414
Fixed costs:
Administration $6,540 $6,500
Rent $6,310 $6,400
Required: Construct a flexible budget performance report that would be useful in assessing how well costs were controlled in this department.
(Points : 30)
2. (TCO D) Mr. Earl Pearl, accountant for Margie Knall, Inc. has prepared the following product-line income data:
PRODUCT
Total A B C
Sales…………………………………………$ 100,000……..$50,000………$20,000………..$30,000
Variable expenses………………………… 60,000……….30,000…………10,000………….20,000
Contribution margin……………………….. .40,000……….20,000…………10,000………….10,000
Fixed expenses:
Rent…………………………………………. .5,000………..2,500…………..1,000……………1,500
Depreciation………………………………. 6,000………..3,000…………..1,200…………….1,800
Utilities………………………………………4,000………..2,000……………..500…………….1,500
Supervisors’ salaries………………….. 5,000………. 1,500……………..500…………….3,000
Maintenance………………………………3,000………..1,500………………600………………900
Administrative expenses……………. 10,000………..3,000……………..2,000…………..5,000
Total fixed expenses…………………… 33,000……….13,500……………5,800………….13,700
Net operating income…………………… $7,000……….$6,500………….$4,200…………($3,700)
The additional information below is available.
• The factory rent of $1,500 assigned to Product C is avoidable if the product is dropped.
• The company’s total depreciation would not be affected by dropping C.
• Eliminating Product C will reduce the monthly utility bill from $1,500 to $800.
• All supervisors’ salaries are avoidable.
• If Product C is discontinued, the maintenance department will be able to reduce monthly expenses from $3,000 to $2,000.
• Elimination of Product C will make it possible to cut two persons from the administrative staff. Currently, their combined salaries total $2,000.
Required: Prepare an analysis showing whether Product C should be eliminated. Articulate your findings.
(Points : 30)
3. (TCO E) The following absorption costing income statement and additional data are available from the accounting records of Bernon Co. for the month ended May 31, 2007. During the accounting period, 17,000 units were manufactured and sold at a price of $60 per unit. There were no beginning inventories.
Bernon Co.
Absorption Costing Income Statement
for the Month Ended May 31, 2007
Sales (17,000 @ $60) $
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349 views12 pagesDeVry ACCT 505 Final Exam 2
DeVry ACCT 505 Final Exam 2
Click on the link below for the solution:
http://devryfinalexams.com/products/acct-505-final-exam-2/
Product Description
1. (TCO F) Wahr Corporation bases its predetermined overhead rate on the estimated labor hours for the upcoming year. At the beginning of the most recently completed year, the company estimated the labor hours for the upcoming year at 32,000. The estimated variable manufacturing overhead was $7.17 per labor hour and the estimated total fixed manufacturing overhead was $584,320. The actual labor hours for the year turned out to be 33,300.
Required:
Compute the company’s predetermined overhead rate for the recently completed year. (Points : 25)
2. (TCO C) Enciso Corporation is preparing its cash budget for November. The budgeted beginning cash balance is $31,000. Budgeted cash receipts total $135,000 and budgeted cash disbursements total $141,000. The desired ending cash balance is $50,000. The company can borrow up to $100,000 at any time from a local bank, with interest not due until the following month.
Required:
1. (TCO C) The following overhead data are for a department of a large company.
Actual costs Static
Incurred budget
Activity level (in units) 360 340
Variable costs:
Indirect materials $4,182 $4,148
Electricity $2,536 $2,414
Fixed costs:
Administration $6,540 $6,500
Rent $6,310 $6,400
Required: Construct a flexible budget performance report that would be useful in assessing how well costs were controlled in this department.
(Points : 30)
2. (TCO D) Mr. Earl Pearl, accountant for Margie Knall, Inc. has prepared the following product-line income data:
PRODUCT
Total A B C
Sales…………………………………………$ 100,000……..$50,000………$20,000………..$30,000
Variable expenses………………………… 60,000……….30,000…………10,000………….20,000
Contribution margin……………………….. .40,000……….20,000…………10,000………….10,000
Fixed expenses:
Rent…………………………………………. .5,000………..2,500…………..1,000……………1,500
Depreciation………………………………. 6,000………..3,000…………..1,200…………….1,800
Utilities………………………………………4,000………..2,000……………..500…………….1,500
Supervisors’ salaries………………….. 5,000………. 1,500……………..500…………….3,000
Maintenance………………………………3,000………..1,500………………600………………900
Administrative expenses……………. 10,000………..3,000……………..2,000…………..5,000
Total fixed expenses…………………… 33,000……….13,500……………5,800………….13,700
Net operating income…………………… $7,000……….$6,500………….$4,200…………($3,700)
The additional information below is available.
• The factory rent of $1,500 assigned to Product C is avoidable if the product is dropped.
• The company’s total depreciation would not be affected by dropping C.
• Eliminating Product C will reduce the monthly utility bill from $1,500 to $800.
• All supervisors’ salaries are avoidable.
• If Product C is discontinued, the maintenance department will be able to reduce monthly expenses from $3,000 to $2,000.
• Elimination of Product C will make it possible to cut two persons from the administrative staff. Currently, their combined salaries total $2,000.
Required: Prepare an analysis showing whether Product C should be eliminated. Articulate your findings.
(Points : 30)
3. (TCO E) The following absorption costing income statement and additional data are available from the accounting records of Bernon Co. for the month ended May 31, 2007. During the accounting period, 17,000 units were manufactured and sold at a price of $60 per unit. There were no beginning inventories.
Bernon Co.
Absorption Costing Income Statement
for the Month Ended May 31, 2007
Sales (17,000 @ $60) $
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