Final Examination

Study Guide
Comprehensive
There are approximately 17 multiple-choice questions on your final exam and seven problems. I feel
the problems will be better for you so you can earn partial credit. Please, PLEASE show your work so
I will be able to give you the partial credit you deserve. Please let me know if you have questions, I
am always available for assistance.
Problems:
 Make v. Buy Problem (e12-3 & e12-11)
 Special Order Problem (E12-4 & E12-9)
 DM or DL Variance Problem (see problem in review, E10-1 and E10-2)
 Chapter 3 T-Acct problem with over/under applied OH, inc stmt (see HW & notes along with
problem attached)
 High/Low Problem (see chapter 2 notes, E2-5, E2-11)
 Breakeven point problems (2) & changes to variables (chapter 5 notes, E5-1, 5-5, 5-16 & E5-7:
also see problem attached)
If you would like to work similar problems in the text and would like solutions, please email me and
I will work the problems and send you the answers.
Please let me know if you need me!
Good luck!!
Nichole 

Review Sheet Final Examination--Revised

1

050 U D) $13.............................786 and 13.....000 Actual output.. 2.... 2.........150 F C) $10.The direct labor standards for a particular product are: 4 hours of direct labor @ $12.... The direct labor variances for the month were: A) B) C) D) Labor Rate (LEFT) Variance $1..420 U B) $3...................................080 U C) $11........614 U $1..........600 U B) $11..........600 hours Actual total variable overhead cost.080 F D) $10......10 per hour The following data pertain to operations concerning the product for the last month: Actual hours worked............. 8.00 per direct labor-hour = $48.The following labor standards have been established for a particular product: Standard labor-hours per unit of output. 4...0 hours Standard labor rate............ $127... 7.. $53... 3........30 per hour The following data pertain to operations for the last month: Actual hours. $13...300 Actual output.614 F Labor Efficiency (RIGHT) Variance $600 U $600 F $600 U $600 F 3...... which was 150 units less than budgeted.......350 units of this product were made...........450 direct labor-hours were worked............200 U 2 Review Sheet Final Examination--Revised ... The labor cost incurred was $159....... 400 units What is the labor efficiency (RIGHT) variance for the month?  A) $10..... $16..........000 hours Actual total labor cost.. The following standards for variable manufacturing overhead have been established for a company that makes only one product: Standard hours per unit of output...00 During October................Final Examination Practice Questions 1..614 F $1.........614 U $1......480 U 2..8 hours Standard variable overhead rate....500 units What is the variable overhead spending (LEFT) variance for the month?  A) $3.

....... In order to maximize total contribution margin....000 $42......400 MHs 7...000 units of X.... 2 DLHs @ $5 per DLH = $10 The following data pertain to operations in April: Actual output...... 0 units of Y.................... Budgeted fixed overhead cost.........000 unfavorable Use the following to answer questions 5-6: Standard Company has developed standard manufacturing overhead costs based on a capacity of 180........000 unfavorable C) $38..........000 machine hours.000 DLHs $518.... 2 DLHs @ $3 per DLH = $6 Fixed portion...........................000 $860.................000 What was the variable overhead spending (LEFT) variance for the month? A) $1......000 unfavorable 6....000 165.000 5.................... Marley Company makes three products (X................... 500 units of Y..000 units $644..................... and 200 units of Z B) 0 units of X............. Suski Corporation has a standard cost system in which it applies manufacturing overhead to products on the basis of standard machine-hours (MHs)............500 MHs $5................................. Fixed overhead cost incurred... 80.....90 per MH $60......000 unfavorable B) $23.. & Z) with the following characteristics: Selling price per unit...... The company has provided the following data for the most recent month: Budgeted level of activity....000 unfavorable B) $23.... The variable overhead efficiency (RIGHT) variance for April was: A) $15............. X $10 $6 2 Product Y Z $15 $20 $10 $10 4 10 The company has a capacity of 2.. Actual direct labor-hours worked....000 direct labor-hours (DLHs) as follows: Standard overhead costs per unit: Variable portion.......................000 unfavorable C) $38..............000 units of X............... Variable cost per unit........750 $61.... and 0 units of Z Review Sheet Final Examination--Revised 3 ........... 500 units of Y.......... how many units of each product should the company produce? A) 2....... Cost formula for variable overhead cost............ Actual total fixed overhead.. and 0 units of Z D) 1. and 200 units of Z C) 0 units of X...... 0 units of Y..000 unfavorable 7....000 favorable D) $38.. but there is virtually unlimited demand for each product................ Y.... Actual direct labor cost.......... Actual total variable overhead..... Machine hours per unit................. Variable overhead cost incurred.............. The variable overhead spending (LEFT) variance for April was: A) $15.... Actual level of activity... 7.....4....500 favorable B) $590 unfavorable C) $910 favorable D) $1.000 favorable D) $38.............

.. Variable overhead.......... $15.000 $50..... then the change in annual net operating income due to accepting the offer is a: A) $35... Direct labor..25 per wheel...................................Use the following to answer questions 8: The Talbot Company makes wheels that it uses in the production of bicycles.................... Fixed overhead....... If the wheels are purchased from the outside supplier..50 $0.............. An order has been received from a customer in a foreign market for 100 units....... Jensen's total fixed costs..........000 wheels annually are: Direct materials..............000 An outside supplier has offered to sell Talbot similar wheels for $1.....000 units per month (which represents the company's capacity): Manufacturing: Direct materials... $1.............. 8................000 $70............................................... $30........................ If Talbot chooses to buy the wheel from the outside supplier.000 increase B) $10..... The variable selling and administrative expenses would have to be incurred on this special order as well as for all other sales..... Variable overhead.........................000 $20....... Selling and Administrative: Variable.......40 $2.....000 per year.............................00 $2..............80 Present sales amount to 700 units per month............ Talbot's costs to produce 100... are constant within the relevant range between 700 units and 1.......000 increase D) $70..... 9.........000 decrease C) $45.......000 increase Use the following to answer questions 9: The following are the Jensen Company's unit costs of making and selling an item at a volume of 1.00 $0. Direct labor............... The order would not affect current sales......................00 $0........ How much will the company's profits be increased or (decreased) if it prices the 100 units at $7 each? A) $(30) B) $150 C) $0 D) $310 4 Review Sheet Final Examination--Revised .... Fixed.000 units.............. Fixed overhead............... both manufacturing and selling and administrative..................000 of annual fixed overhead could be avoided and the facilities now being used could be rented to another company for $45.......................

.... rather than being sold at the split-off point. C....000 increase D) $39. 10. C. B D) C. Direct labor hours per unit...Use the following to answer questions 10-11: The Wester Company produces three products with the following costs and selling prices: Selling price per unit. Monthly joint production costs are $290.... At the split-off point. B 11........75 per unit or it can be further processed and sold for $7. B Use the following to answer questions 12: Paulsen Company makes two products......1 0.. additional processing costs of $3....20 per unit. then the three products should be produced in the order: A) A.... Product P either can be sold at the split-off point for $4...60 per unit...... If P is processed further...000 decrease Review Sheet Final Examination--Revised 5 .. If machine hours are the constraint. C B) B.5 0... If P is processed further and then sold. 50. If direct labor hours are the constraint.. Product W can be sold at the split-off point for $5. in a joint process............ Fixed cost per unit. Variable cost per unit.000 units of W and 60. Product A B C $21 $12 $32 $11 $7 $18 $5 $3 $9 0. Machine hours per unit.. A.... A C) A..2 The company has insufficient capacity to fulfill all of the demand for these three products..2 0... C B) B....10 per unit will be incurred. B...000 increase C) $39. B D) A..000.000 decrease B) $147. A.... the change in monthly net operating income would be a: A) $147.. 12........ B...... C... A. then the three products should be produced in the order: A) A.... W and P....4 0...7 0.000 units of P are available each month. C C) C.

... What is the net monetary advantage (disadvantage) of processing Product X beyond the split-off point? A) $23..) A) $6..361 C) $6..000 $24.200 Product Y $19.500 D) $7.000 units in the ending work in process inventory of the Welding Department that were 80% complete with respect to conversion costs.. Sales value after further processing.000 $26..900 B) $29..000 $50..001 D) $8...900 D) $9.Use the following to answer questions 13-14: Dockham Company makes two products from a common input........ the conversion cost in beginning work in process inventory was $77....062 were incurred in the department during the month..322 B) $7.000 units in its beginning work in process inventory that were 50% complete with respect to conversion costs.. Costs of further processing....000 units were started into production during the month... Data concerning these products appear below: Allocated joint processing costs.........500 $48....600 a year...310 16.000 Ending work in process inventory.....900 C) $3..000 Started into production during June.416 6 Review Sheet Final Examination--Revised .. Each product may be sold at the split-off point or processed further. What would be the cost per equivalent unit for conversion costs for the month? (Round off to three decimal places... 75. An additional 98... Product X $14... the Welding Department.. The conversion cost in this beginning work in process inventory was $37....610 B) $7.... There were 17....000 $20.....419 C) $7. What is the net monetary advantage (disadvantage) of processing Product Y beyond the split-off point? A) $(3.. Operating data for the first processing department for the month of June appear below: Units Beginning work in process inventory..900) B) $24...500 15..800 $98. The company allocates these costs to the joint products on the basis of their total sales values at the split-off point..490 at the beginning of June..100 C) $32.....900 14.. Joint processing costs up to the split-off point total $33. Additional conversion costs of $552.000 Percentage complete 90% 40% According to the company's records. What was the cost per equivalent unit for conversion costs for the month? (Round off to three decimal places..... A total of $727.080 in conversion costs were incurred in the department during the month..600 $28.300 $50..) A) $8.. Sales value at split-off point....... The first processing department.600 $48.....500.. started the month with 10.800 13....600 Total $33.....500 D) $4.... 10...... Dedra Company uses the weighted-average method in its process costing system.... 17.Lumdal Company uses the weighted-average method in its process costing system...

Review Sheet Final Examination--Revised 7 .

4..000 units. The Assembly Department started the month with 5.800 B) 22... Based on these data..780 D) 55. Which of the following might be included as a disbursement on a cash budget? Depreciatio n A) B) C) D) on factory equipment Yes Yes No No Income taxes to be paid Yes No Yes No 20... Sales of Product A during June were 25... Past experience has shown that end-of-month inventory should equal 3..200 B) 60.700 Transferred in from the prior department during April.......800 8 Review Sheet Final Examination--Revised ..000 units in the ending work in process inventory of the Assembly Department that were 80% complete with respect to conversion costs..000 19.....000 units during August...... 6..17..000 units were transferred in from the prior department during the month to begin processing in the Assembly Department... What were the equivalent units for conversion costs in the Assembly Department for the month? A) 79.300 Percentage complete 40% 60% What were the equivalent units for conversion costs in the Painting Department for April? A) 58.... An additional 81..000 D) 25.. Bricker Company uses the weighted-average method in its process costing system... 56.600 Ending work in process inventory.000 units in its beginning work in process inventory that were 60% complete with respect to conversion costs... There were 18. On June 30 this requirement was met.000 units of Product A during July and 30... Jumil Company uses the weighted-average method in its process costing system..200 C) 24.....000 units plus 30% of the next month's sales.400 B) 82.......000 D) 68. how many units of Product A must be produced during the month of July? A) 28.. Operating data for the Painting Department for the month of April appear below: Units Beginning work in process inventory.000 18... Douglas Company plans to sell 24........380 C) 58...400 C) 94...

000.000 Villi wants to maintain a finished goods inventory of 20% of the next month's expected sales. If the company has budgeted to produce 20.000 B) $8..000 August 275. The direct labor workforce is fully adjusted each month to the required workload.000 units 22. Young Company has budgeted its cash receipts at $125.000 B) $180.Villi Manufacturing Corporation's most recent sales budget indicates the following expected sales (in units): July Expected unit sales.000 September 310.For May.1 hours of direct labor time.000 units B) 282... 23.000 units 25. then the budgeted production of Clops for February is: A) 23.000 units C) 19.000 Use the following to answer questions 23-25: The Gerald Company makes and sells a single product called a Clop.360.The budgeted direct labor cost per Clop is: A) $7.000 Clops in January.200 units B) 21.20 C) $9.45 B) $8.600 24. Each Clop requires the use of 1.400 C) $172..000 and its cash disbursements at $138. How many units should Villi plan on producing for the month of August? A) 268. The planned cost of direct labor time is $8.02 D) $9.76 Review Sheet Final Examination--Revised 9 .000 D) $16.000 units C) 291.. 230. then how much cash must the company borrow during the month (before considering any interest payments)? A) $4.000.000 units D) 337...200 D) $195.000. The company's cash balance on May 1 is $17.. The company wishes to prepare a Direct Labor Budget for the first quarter of the year.. If the desired May 31 cash balance is $20.21.000 C) $12.800 units D) 18. If the budgeted direct labor cost for February is $162... then the budgeted direct labor cost for January is: A) $164..20 per hour.

.. $14.........70 per hour The following data pertain to last month’s operations: Actual output of product S57S..The following direct labor standards have been established for product S57S: 1........000 Actual direct labor wages paid. S57S Standard direct labor wage rate..5 hours per unit of Standard direct labor-hours.....................800 Required: a... $14...... 720 units Actual direct labor-hours worked.......... What was the labor efficiency variance for the month?  10 Review Sheet Final Examination--Revised .............. 1................26......... What was the labor rate variance for the month? b...

.......... Advertising Depreciation: Selling & Admin Selling & Admin Wages Utilities: Selling & Admin $16........ The rate last year was $5.............................500 $3....... The company closes any under/overapplied overhead to COGS........000 $60.................... a total of 5................ d....... 5.......27....000 Inventories: Raw materials... Work in process.......... Prepare an income statement................. The following cost data relate to the manufacturing activities of the Kanaba Company last year: Manufacturing overhead costs: Property taxes.....000 40...............000 Other costs incurred: Purchases of direct materials.000 machine-hours were recorded for the year.......... Finished Goods. January 1............................................................... January 1. Calculate Cost of Goods Manufactured for the year. c....... December 31................ December 31........000 Depreciation........ 2.... 12.... factory...............500 Utilities...... Raw materials......... $4............500 Indirect labor......... $24....or overapplied overhead cost for the year..... $ 1............. Calculate COGS..000 5......... December 31........... Compute the amount of under.............. Required: a. b................................................ 3..000 Insurance......000 The company uses a predetermined overhead rate to apply manufacturing overhead cost to production............750 $68................ factory.....00 per machine-hour............... Direct labor cost...................................... Finished Goods...000 $3.................... factory.000 $3.............000 Sales for the year 130.....000 Total..000 $20................................................. Review Sheet Final Examination--Revised 11 ....000 16.... Work in process...............000 10....... January 1........

..... factory................................000 13........000 machine-hours were recorded for the year...................... Work in process................ January 1...... Calculate Cost of Goods Manufactured for the year... 6.000 Total............000 $14............. Direct labor cost........... $8. January 1..........000 9..000 Inventories: Raw materials......00 per machine-hour........................... 3........000 Depreciation....... Advertising Depreciation: Selling & Admin Selling & Admin Wages Utilities: Selling & Admin $19.....100 Other costs incurred: Purchases of direct materials............... Finished Goods......... factory.......000 $4..... Raw materials.......000 Sales for the year 142..900 Utilities........ 27b. $ 1................................. factory.. 12 Compute the amount of under.................. a total of 6..... December 31............250 $12... Finished Goods.......... 10..................................000 $9.. c....................................................... December 31. Required: a...000 20... The following cost data relate to the manufacturing activities of the Kanaba Company last year: Manufacturing overhead costs: Property taxes..... The company closes any under/overapplied overhead to COGS. The rate last year was $4............. December 31........................................000 Insurance..................000 28...................500 $6......... d................... January 1......000 The company uses a predetermined overhead rate to apply manufacturing overhead cost to production..... Calculate COGS.. Review Sheet Final Examination--Revised ...................200 Indirect labor............or overapplied overhead cost for the year.... 4............... $25..000 $26................ Work in process....... Prepare an income statement.............. b..................

.00 $24....00 $160... Zoran will sell the cordless phones for $125 per phone.......000 $5...00 $12................. Zoran Corporation manufactures and sells a single product...... $20..000 Upgrade d $20...............00 $10........... Required: a...28....00 Variable overhead cost per unit. $5...00 Fixed expense in total. Relevant cost data under the current facility and the upgraded facility is provided below: Current Manufacturing costs: Direct materials cost per unit............. What is the break-even point (in number of phones) of each option? Review Sheet Final Examination--Revised 13 ........ $18. $43...... Zoran is considering upgrading its current manufacturing facilities with more modern equipment...00 Direct labor cost per unit....000 Selling and administrative expenses: Variable expense per unit...000 Under either system..... cordless telephones.........00 Fixed overhead cost in total....... $34..... $12.....

Answer: C Level: Easy LO: 5 26. adapted 6. Answer: C Level: Medium LO: 3 Source: CIMA.3 19. Answer: A Level: Easy LO: 4 4. Answer: A Level: Medium LO: 4 Source: CMA.800 – (1.3 18.000) ÷ ($125 – $20 – $10 – $24 – $5) = 2. Answer: C Level: Medium LO: 6 14. Answer: D Level: Medium LO: 5 12. Answer: a. Answer: A Level: Medium LO: 3 5.000 + $12.3. Answer: B Level: Medium LO: 2. Answer: D Level: Easy LO: 8 23. Answer: C Level: Medium LO: 2. Answer: D Level: Easy LO: 5 25. Answer: D Level: Medium LO: 6 13.Answers: 1.000) ÷ ($125 – $20 – $18 – $34 – $5) = 1.3. Answer: C Level: Medium LO: 8 20. adapted 7. Answer: D Level: Easy LO: 3 2.606 phones (rounded) 14 Review Sheet Final Examination--Revised . adapted 3. Answer: B Level: Medium LO: 3 Source: CMA. Answer: A Level: Medium LO: 6 15.080 28. Answer: B Level: Hard LO: 5 11.70 (1.146 phones (rounded) Upgraded: ($160.4 17. Current: ($43.5 × 720 = 1. Answer: B Level: Medium LO: 4 10.70) = $100 U b.176 F *SH = Standard hours per unit × Actual output = 1. Answer: D Level: Medium LO: 2.080) = $1.000 – 1.000 + $12. Answer: D Level: Medium LO: 3 21. Answer: D Level: Medium LO: 2. Answer: A Level: Medium LO: 3 9. Labor rate variance = (AH × AR) – (AH × SR) = $14.000 × $14.4 16. Answer: B Level: Easy LO: 5 24. Answer: D Level: Medium LO: 5 8. Answer: B Level: Medium LO: 3 22. Labor efficiency variance = SR(AH – SH*) = $14.

COGS Gross Margin a) 1000 overapplied b) 6075 0 c) 6775 0 Review Sheet Final Examination--Revised 15 .Depr Exp 1300 00 6775 0 6225 0 1000 0 .Advertising Exp .Wages Exp 1600 0 .Utilities Exp Net Income 4000 0 5000 -8750 Sales 0 . (storage room) Raw Materials 4000 16000 16500 3500 (factory floor) WIP 3000 (warehouse) FG 68000 1650 0 2000 0 2500 0 3750 60750 60750 68750 60000 COGS 68750 1000 67750 OH Actua l Applied 2400 0 25000 1000 1000 d) Inc Stmt: .27.

27b (storage room) Raw Materials (factory floor) WIP 8000 19000 6000 22500 4500 22500 26000 24000 69250 (warehouse) FG 1200 0 6925 0 1400 0 9250 67250 COGS 67250 1100 68350 (temporary account) OH 25100 24000 1100 sales -cogs gm .selling/admin net income 1100 142000 -68350 73650 -70000 3650 A 1100 underapplied B 69250 C68350 16 Review Sheet Final Examination--Revised .