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ACC 345 Exam #2 Fall 2013

Prof. Stern Name:__________________________________________

multiple !oi e "ue#tion# an#$er on t!e S antron 1. A##ume onl% t!e #pe ifie& parameter# !an'e in a o#t()olume(profit anal%#i#. *f t!e ontri+ution mar'in in rea#e# +% ,2 per unit t!en operatin' profit# $ill a. al#o in rea#e +% ,2 per unit. . &e rea#e +% ,2 per unit. +. in rea#e +% le## t!an ,2 per unit &. not +e &etermine&. 2. a. +. . &. *f t!e fixe& o#t# in rea#e $!ile t!e )aria+le o#t# an& #ellin' pri e remain t!e #ame- $!at $ill !appen to t!e ontri+ution mar'in an& +rea.e)en point/ ontri+ution mar'in +rea.e)en point un !an'e& in rea#e un !an'e& un !an'e& in rea#e &e rea#e &e rea#e in rea#e

3. 0o reali1e an after tax profit of ,1-200-000- a ompan% $it! a 402 tax rate mu#t earn a pretax profit of a. ,1-300-000 +. ,1-340-000 . ,2-000-000 &. ,2-250-000 4. a. 5. a. +. . &. 3. a. +. . &. 5. a. At t!e +rea.e)en point of 200 unit#- )aria+le o#t# total ,400 an& fixe& o#t# total ,300. 0!e 201#t unit #ol& $ill ontri+ute ___________ to profit#. ,1 +. ,2 . ,3 &. ,5 A fa)ora+le pri e )arian e for &ire t material# in&i ate# t!at a lo$er pri e t!an planne& $a# pai& for material#. a !i'!er pri e t!an planne& $a# pai& for material#. le## material $a# u#e& &urin' pro&u tion t!an planne& for a tual output. more material $a# u#e& &urin' pro&u tion t!an planne& for a tual output. *f a ompan% pro&u e# fe$er unit# t!an expe te&- t!ere $ill +e a fa)ora+le #pen&in' )arian e. an unfa)ora+le #pen&in' )arian e. a fa)ora+le pro&u tion )olume )arian e. an unfa)ora+le pro&u tion )olume )arian e. Cra$for& Compan%6# #tan&ar& fixe& o)er!ea& o#t i# ,3 per &ire t la+or !our +a#e& on +u&'ete& fixe& o#t# of ,300-000. 0!e #tan&ar& allo$# one &ire t la+or !our per unit. 7urin' 2008- Cra$for& pro&u e& 110-000 unit# of pro&u t- in urre& ,330-000 of fixe& o)er!ea& o#t#- an& re or&e& 212-000 a tual !our# of &ire t la+or. 0!e fixe& #pen&in' o)er!ea& )arian e $a# ,30-000 9F: +. ,24-000 9F: . ,33-000 9;: &. ,30-000 9;:

0!i# information relate# to t!e follo$in' 3 "ue#tion#. 7r. C!arle# <unter- =7- perform# a ertain outpatient pro e&ure an& !ar'e# ea ! patient ,1-000. <i# fixe& o#t# are ,20-000- $!ile !i# )aria+le o#t# are ,500 per pro e&ure. 7r. <unter urrentl% plan# to perform 200 pro e&ure# t!i# mont!. 4. a. 8. a. >!at i# t!e +u&'ete& operatin' in ome for t!e mont! a##umin' t!at 7r. <unter plan# to perform t!e pro e&ure 200 time#/ ,200-000 +. ,100-000 . ,40-000 &. ,40-000 >!at i# t!e +rea.e)en point for t!e mont!/ 40 time#. +. 30 time# . 20 time# &. 10 time#

10. >!at i# t!e mar'in of #afet% a##umin' 100 pro e&ure# are +u&'ete&/ a. ,40-000 or 40 time# . ,30-000 or 30 time# +. ,50-000 or 50 time# &. ,100-000 or 100 time#

11. 0!e in ome #tatement for 0!oma# =anufa turin' Compan% for 2012 i# a# follo$#: Sale# 910-000 unit#: ,120-000 ?aria+le expen#e# 52-000 Pa'e 1 of 3 exam 'ra&e& +% point# # ore& @ total exam point#

Contri+ution mar'in 44-000 Fixe& expen#e# 33-000 Aperatin' in ome, 12-000 *f #ale# in rea#e +% 1-000 unit#- $!at $ill !appen to profit/ a. in rea#e +% ,4-400 . in rea#e +% ,5-200 +. in rea#e +% ,1-200 &. in rea#e +% ,12-000 12. Bon& Corporation- $!i ! manufa ture# pro&u t# >- C- D- an& E t!rou'! a Foint pro e## o#tin' ,14-000- !a# t!e follo$in' &ata for 2003: 0otal Sale# ?alue Pro&u t ;nit# Pro&u e& at Split(Aff > 10-000 ,5-000 C 3-000 2-500 D 13-000 3-000 E 4-000 4-500 >!at i# t!e amount of Foint o#t# a##i'ne& to pro&u t > u#in' t!e p!%#i al unit# met!o&/ a. ,3-000 . ,12-000 +. ,4-500 &. ,13-500

SHOW ALL CALCULATIONS AND CLEARLY LABEL YOUR ANSWERS


no partial credit can be awarded witho t !howin" #o r wor$ #1. points Bo Compan% u#e# metal to pro&u e pro&u t# A- B- an& C. Ea ! pro&u t an +e #ol& at #plit(off or pro e##e& furt!er. A&&itional pro e##in' o#t# are entirel% )aria+le an& are tra ea+le to t!e re#pe ti)e pro&u t#. Goint o#t# $ere ,50-000 an& allo ate& u#in' t!e #ale# at #plit(off met!o&.
sale s value afte r sale s value Product A B C at split-off ,34-000 40-000 45-000 furthe r proce ssing ,30-000 84-000 32-000 additional proce ssing costs ,20-000 20-000 14-000

Required: Bo $ant# to maximi1e profit#. >!i ! pro&u t# #!oul& Bo #u+Fe t to furt!er pro e##in' an& $!i ! #!oul& it #ell a# #oon a# t!e pro&u t# are #plit(off / #2. <ereH# t!e &ata to on#i&er: # a le # , 8 5 0 -0 0 0 )a r ia +le o# t # 93 8 3 -5 0 0 : on t r i +u t ion m a r 'i n 2 5 3 -5 0 0 fixe & o# t # 3 5 0 -0 0 0 ope r a t in ' lo# # 9, 8 3 -5 0 0 : Required: <o$ mu ! mu#t #ale# +e to +rea. e)en/ Ioun& to t!e neare#t &ollar.

#3. 0!e ompan% #pent ,400-000 to +u% Jua .- $!i ! an +e #eparate& into Fri . an& Fra .. 0!e follo$in' &ata #!oul& +e u#e& to allo ate t!e ,400-000 +et$een Fri . an& Fra .. Frick Frack unit# pro&u e& 3-000 5-000 Pa'e 2 of 3 exam 'ra&e& +% point# # ore& @ total exam point#

#ellin' pri e per unit

,120

,44

0!e ompan% an furt!er pro&u e t!e 2 pro&u t# an& 'et Fri .erette an& Fra .erette $it! t!e follo$in' re#ult#: Frickerette Frackerette unit# pro&u e& 2-500 4-000 #ellin' pri e per unit ,240 , 141.25 a&&itional o#t# ,155-000 ,220-000 Required: a. Allo ate t!e ,400-000 +et$een Fri . an& Fra . +a#e& on t!e p!%#i al unit# pro&u e&. +. Allo ate t!e ,400-000 +et$een Fri . an& Fra . +a#e& on t!e #ale# )alue at #plit off met!o&. . Allo ate t!e ,400-000 +et$een Fri .erette an& Fra .erette +a#e& on t!e net reali1a+le )alue met!o&. &. Allo ate t!e ,400-000 +et$een Fri .erette an& Fra .erette +a#e& on t!e on#tant K= met!o&. e. Prepare an in ome #tatement a##umin' 1-500 Fri .ette# are #ol& an& o#t# are allo ate& u#in' t!e NI? met!o&. #4. C!eane% =anufa turin' pro&u e# a #in'le pro&u t t!at #ell# for ,250. ?aria+le o#t# per unit e"ual ,150. 0!e ompan% expe t# total fixe& o#t# to +e ,120-000 for t!e next mont! at t!e proFe te& #ale# le)el of 2-000 unit# Required: a. >!at i# t!e urrent +rea.e)en point in term# of num+er of unit#/ +. <o$ man% unit# nee& to +e pro&u e& to 'enerate an operatin' in ome of ,44-000/ . >!at $oul& t!e operatin' in ome +e if 1-000 unit# $ere pro&u e&/ &. >!at $oul& t!e operatin' in ome +e if 1-300 unit# $ere pro&u e&/ e. Start $it! t!e 2-000 unit# proFe te& #ale#. Suppo#e t!at mana'ement +elie)e# t!at a 102 re&u tion in t!e #ellin' pri e $ill re#ult in a 152 in rea#e in #ale#. *f t!i# propo#e& re&u tion in #ellin' pri e i# implemente&- $!at $oul& t!e ne$ operatin' in ome +e/ f. *f mana'ement ma.e# t!e !an'e# in e- !o$ man% unit# mu#t +e #ol& to +rea. e)en/ # . Emil% Co. !a& t!e follo$in' #tan&ar&#: 7ire t material# 2 poun&# at ,1.30 ea ! 7ire t la+or 3 !our# at ,2.50 per !our *t manufa ture& 5-000 unit# an& !a& t!e follo$in' a tual re#ult#: pur !a#e& 15-100 poun&# at ,1.35 ea ! u#e& 8-500 poun&# $or.e& 15-400 !our# at ,2.40 per !our Required: a. Prepare t!e entr% to re or& t!e pur !a#e of material# u#in' t!e #tan&ar& o#t met!o&. +. Prepare t!e entr% to re or& t!e u#e of t!e material# u#in' t!e #tan&ar& o#t met!o&. . Prepare t!e entr% to re or& t!e &ire t la+or pa%roll- u#in' t!e #tan&ar& o#t met!o&. #!. ;#e t!e follo$in' to an#$er t!i# "ue#tion: +u&'ete& output 3-200 unit# +u&'ete& fixe& o)er!ea& ,20-000 +u&'ete& )aria+le rate , 5 per !our "udgeted hours per unit 2 hours each fixe& o)er!ea& #pent ,23-000 a tual !our# $or.e& 5-200 )aria+le o)er!ea& #pent ,35-300 a tual output 3-400 unit# Required: a. Prepare t!e entr% to re or& t!e )aria+le o)er!ea& an& t!e relate& )arian e#- u#in' C for a tual )aria+le o)er!ea&. +. Prepare t!e entr% to re or& t!e fixe& o)er!ea& an& t!e relate& )arian e#- u#in' C for a tual fixe& o)er!ea&. 0!e +u&'ete& rate #!oul& +e al ulate& to t$o &e imal point#.

Pa'e 3 of 3 exam 'ra&e& +% point# # ore& @ total exam point#

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