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AMIS 7310

Sample Mid-term Exam

Name (Print):____________________________________________
Signature: _______________________________________
DO NOT OPEN THE EXAM UNTIL GIVEN INSTRUCTION TO DO SO!
1. You are reminded that the Code of Student Conduct upheld by The Ohio State University
and Fisher College requires you to do your own work and not give or receive assistance
on this exam.
2. The exam consists of three question types as follows:
Section

Type of
Question
Long Problem

Points Total

1

Question
#’s
1

35

Partial
Credit
yes

1

2

Long Problem

35

yes

2

1 thru 5

Short Problems

15

no

3

1 thru 6

Multiple Choice
Problems
Total

15

no

Points Earned

100

3. You will have 90 minutes to complete this exam.
Budget your time - attempt all questions!
4. When you are done, please hand back the entire question packet.
5. Please be organized and legible in your answers to receive full credit for your work.
6. Check the exam question packet for completeness.
7. The exam is closed-book and no supplemental materials are allowed;
pencil, eraser, and calculator [only the basic functions (+, -, *, /) may be
used] are the only resources which you may use. Scratch paper is not
allowed. A timepiece may be used.
8. Do not ask questions during the exam; assume that all questions are valid
and give the answer that you reason is best.

. Budgeted overhead and machine activity for the year were anticipated to be $840. The company applies manufacturing overhead on the basis of machine hours.000). d. 65.000). direct labor incurred. indirect labor ($60. 65. Fidelity Sound completed job no. Job no. and other factory costs ($139. The completion of jobs no. b.700 for the firm.000). Direct Materials used. 64 and job no. b. The application of manufacturing overhead to production. indirect materials used ($5. The manufacturing overhead incurred during the quarter. and machine hours consumed were as follows: Job No. Required: 1.000 22.800 Machine Hours 1. 65 was sold on account.000 Direct Labor $35.000 and 16. had two jobs in process at the start of 20x1: job no.500). Prepare journal entries for the first quarter to record the following: a.000 8.000 65. 65 ($53. 64 ($84. 64 and no. The sale of job no.000 hours. Manufacturing overhead during the first quarter included charges for depreciation ($34. d. respectively. which uses a job-order costing system. c. The company worked on four jobs during the first quarter.000) and job no. e. Determine the company’s predetermined overhead application rate. The issuance of direct material to production and the direct labor incurred.000 44. 2.200 700 2. During the first quarter. Also. 64 65 66 67 Direct Material $21.000 500 c.500). producing a gross profit (margin) of $34. 65 2 . The following information is available: a.000 15.AMIS 7310 Sample Mid-term Exam Long (Computational) Problem 1 (35 points) Fidelity Sound. Inc.

Was manufacturing overhead under.AMIS 7310 Sample Mid-term Exam 3.or overapplied for the first quarter of the year? By how much? 3 . 4. Did the finished-goods inventory increase or decrease during the first quarter? By how much? 5. Determine the cost of jobs still in production as of March 31.

The president of Bravo.40. variable costs and existing fixed costs for this year are expected to remain the same as last year. c and d independently) a. Assume that the company increases the quality of its ingredients. thus increasing variable costs to $0. one million bars were sold. was considering the following options to increase the bar’s profitability: (Treat requirements a. The sales manager is confident that an advertising campaign will double sales volume. The annual fixed costs are $60. Answer the following questions: i. How much must the selling price be increased to maintain the same break-even point [in units]? What will the new price be if the company wants to increase the old contribution margin ratio by 50% 4 .25. If the company’s president’s goal is to increase this year’s operating profits by 50% over last year’s.000. The variable costs for each bar total $0. b. what is the maximum amount that could be spent on this advertising campaign? b. Each bar sells for $0. not fully satisfied with the profit performance of the chocolate bar. ii. Last year. Bravo’s sales price.AMIS 7310 Sample Mid-term Exam Long (Computational) Problem 2 (35 points) Bravo Company produces a chocolate almond bar.30.

30. Compute the selling price that would be needed to achieve the goal of increasing profits by 50%. thus increasing variable cost to $.50 per bar. The sales manager is convinced that by increasing the quality of the ingredients.AMIS 7310 Sample Mid-term Exam c. Compute the sales volume (in units) that would be needed at the new price for the company to earn the same operating profit as last year. sales volume could be doubled. 5 .000. with variable costs per unit and total fixed costs remaining the same as last year. d. and by advertising the increased quality through spending an additional $100. Bravo Company has decided to increase its selling price to $0.

On the basis of this information. 600 units. the estimated direct labor-hours were 19.000 units were produced.AMIS 7310 Sample Mid-term Exam Section 2 – Short Problems (3 points each) 1. Variable costs for each model are as follows: Variable cost per unit Colonial $44 Early American $56 Total fixed costs are $39. actual direct labor-hours for the year were 17..400. Inc. Expected monthly sales are: Colonial.000 during the month of May. the direct materials cost for the month of May was: Answer: ____________ 4 Weiss Corporation produces two models of wood chairs. and manufacturing overhead for the year was underapplied by $35.700 hours. Early American. The Colonial sells for $60 per chair and the Early American sells for $80 per chair. At the end of the year. 1. Colonial and Early American. how much cost would the firm anticipate at an activity level of 97.800 units.940. the actual manufacturing overhead for the year was $392. If manufacturing overhead was $150. What was the estimated manufacturing overhead at the beginning of the year that was used in the predetermined overhead rate calculation? Answer: ____________ 2. If the sales mix is as expected. has only variable costs and fixed costs. fixed manufacturing costs amounted to $200. Extron. At the beginning of the year. A review of the company's records disclosed that when 100. Missar Company's direct labor cost is 40 percent of its prime cost and 25 percent of its conversion cost.000 units? Answer: ____________ 3.700 hours.000 and the cost per unit manufactured totaled $5.600 per month. Brabec Corporation uses direct labor-hours in its predetermined overhead rate. what would be the sales (in dollars) of Colonial and Early American at the break-even point? Answer: Colonial____________ Early American____________ 6 .

000 and the variable expenses are 45% of sales. which of the following statements is true? a.AMIS 7310 Sample Mid-term Exam 5. c. Manufacturing overhead was actually overapplied by $16. what is the net operating income? Answer: $________________ Section 3 .000 of depreciation on factory equipment was charged to administrative expense in error.000 last year.000 for the year. b. James Company has a margin of safety percentage of 20%. d. Under the circumstances posed above.000 for the year.Multiple Choice Questions (3 points each) Identify the letter of your choice that best completes the statement or answers the question. The $6. 1. The company’s operating income is understated by $6. This overapplied overhead was closed out to the Cost of Goods Sold account at the end of the year. The break-even point is $200. Sharp Company’s records show that overhead was overapplied by $10. In trying to determine why overhead was overapplied by such a large amount.000 in depreciation should have been charged to Work in Process rather than to administrative expense 7 . the company has discovered that $6. Given the above information. the error in recording depreciation would have no effect on operating income for the year. Given this information.

YY. Montgomery Company has a variable selling cost. e. c. d. None of the above changes will result in the firm reaching the breakeven point. If sales volume increases. In producing cellular phones.AMIS 7310 Sample Mid-term Exam 2. b. Fixed expenses must be decreased. Sales volume must be increased. how will the total variable cost and the variable cost per unit behave? a. Sales volume must be decreased.000 + $10X 3. Sonya Company incurs three different costs (XX. d. Per unit costs for two different activity levels are as follows: 5.000 + $26X Y = $ 45. 4. c. c. 8 .000 phones 7.500 phones Type XX $8 $8 Type YY $18 $12 Type ZZ $8 $6 Total $34 $26 The cost function that expresses the behavior of Sonya’s total costs is: a. d. b.000 + $ 8X Y = $120. Y = $ 40.000 + $18X Y = $ 90. Variable expenses must be increased. to reach the breakeven point: a. Total Variable Variable Cost Cost Per Unit Increase Increase Increase Remain constant Increase Decrease Remain constant Decrease Decrease Increase If a firm has a negative contribution margin. e. and ZZ). b.

At a $400. d.000 sales level.AMIS 7310 Sample Mid-term Exam 5. If sales increase by $40.86 5.00 9 .67 2. c. Tressel Company's variable expenses are 60% of sales. 3. the degree of operating leverage is 5.000. the new degree of operating leverage will be (rounded): a.25 5. b.

000 increase 5.50 per MH 2.AMIS 7310 Sample Mid-term Exam Exam 1 Solutions Computational Problem 1 1. 3.050 4. $7. $264. $203.500 under applied 10 . $52.

600. b 4. e 5. $105.000. $27. 99. $. d 3. a 11 .000 b. $.AMIS 7310 Sample Mid-term Exam Computational Problem 2 a. c 2.500 Multiple Choice 1.000 units d.44. $. $397.000 3.6857 c. $75.05.940 2.000 4.000 5. $491.4475 Short Problems 1.