DeVry ACCT 434 Midterm Exam

(Updated)

Click on the link below for the solution:

https://devryfinalexams.com/products/acct-434midterm-exam-updated/
1. (TCO 1) ABC systems create (Points : 5)
one large cost pool .
homogenous activity-related cost pools.
activity-cost pools with a broad focus.
activity-cost pools containing many direct costs.
Question 2.2. (TCO 1) Merriamn Company provides the following ABC costing
information:
Activities Total Costs Activity-cost drivers
Account inquiry hours $400,000 10,000 hours
Account billing lines
$280,000 4,000,000 lines
Account verification accounts $150,000 40,000 accounts
Correspondence letters $ 50,000
4,000 letters
Total costs $880,000
The above activities are used by Department A and B as follows:
Department A
Department B
Account inquiry hours 2,000 hours4,000 hours
Account billing lines
400,000 lines
200,000 lines
Account verification accounts 10,000 accounts 8,000 accounts
Correspondence letters 1,000 letters
1,600 letters
How much of account verification costs will be assigned to Department A?
(Points : 5)
$14,000
$150,000
$10,000
$37,500

Question 3.3. (TCO 2) Examples of nonfinancial budgets include all of the

following EXCEPT (Points : 5)
cash collections from customers.
units sold.
units manufactured.
number of new products introduced.
Question 4.4. (TCO 2) Dalyrymple Company produces a special spray nozzle.
The budgeted indirect total cost of inserting the spray nozzle is $80,000. The
budgeted number of nozzles to be inserted is 40,000. What is the budgeted
indirect cost allocation rate for this activity? (Points : 5)
$.50
$1.00
$1.50
$2.00
Question 5.5. (TCO 3) The conference method estimates cost functions
(Points : 5)
by mathematically analyzing the relationship between inputs and outputs in
physical terms.
using quantitative methods that can be very time consuming and costly.
based on analysis and opinions gathered from various departments.
using time-and-motion studies.
Question 6.6. (TCO 4) Relevant costs of a make-or-buy decision include all of
the following EXCEPT (Points : 5)
fixed salaries that will not be incurred if the part is outsourced.
current direct material costs of the part.
special machinery for the part that has no resale value.
material-handling costs that can be eliminated.
Question 7.7. (TCO 5) One-time-only special orders should only be accepted
if ________. (Points : 5)
incremental revenues exceed incremental costs
differential revenues exceed variable costs
incremental revenues exceed fixed costs
total revenues exceed total costs
Question 8.8. (TCO 5) Konrades Engine Company manufactures part TE456
used in several of its engine models. Monthly production costs for 1,000
units are as follows:
Direct materials
$40,000
Direct labor
10,000
Variable overhead costs
30,000
Fixed overhead costs
20,000
Total costs
$100,000

It is estimated that 10% of the fixed overhead costs assigned to TE456 will
no longer be incurred if the company purchases TE456 from the outside
supplier. Konrades Engine Company has the option of purchasing the part
from an outside supplier at $85 per unit.
If Konrades Engine Company accepts the offer from the outside supplier, the
monthly avoidable costs (costs that will no longer be incurred) total (Points :
5)
$82,000
$98,000
$50,000
$100,000
Question 9.9. (TCO 3) The cost function y = 100 + 10X (Points : 5)
has a slope coefficient of 100.
is a nonlinear.
has an intercept of 100.
represents a fixed cost.
Question 10.10. (TCO 4) Sunk costs (Points : 5)
are future costs.
are past costs.
have future implications

(TCO 1) For each of the following drivers identify an appropriate activity.

# of machines
# of setups
# of inspections
# of orders
# of runs
# of bins or aisles
# of engineers
(TCO 2) Favata Company has the following information
Month
Budgeted Sales
June
$60,000
July
51,000
August
40,000
September
70,000
October
72,000
In addition, the cost of goods sold rate is 70% and the desired inventory level
is 30% of next months cost of sales.
Prepare a purchases budget for July through September. (Points : 30)

(TCO 5) Kirkland Company manufactures a part for use in its production of

hats. When 10,000 items are produced, the costs per unit are:
Direct materials
$0.60
Direct manufacturing labor
3.00
Variable manufacturing overhead
1.20
Fixed manufacturing overhead
1.60
Total
$6.40
Mike Company has offered to sell to Kirkland Company 10,000 units of the
part for $6.00 per unit. The plant facilities could be used to manufacture
another item at a savings of $9,000 if Kirkland accepts the offer. In addition,
$1.00 per unit of fixed manufacturing overhead on the original item would be
eliminated.
What is the relevant per unit cost for the original part
Which alternative is best for Kirkland Company? By how much?

(TCO 3) The Wildcat Company has provided the following information:

Units of Output 30,000 Units
42,000 Units
Direct materials $180,000 $252,000
Workers wages 1,080,000 1,512,000
Supervisors salaries
312,000
312,000
Equipment depreciation151,200
151,200
Maintenance
81,600
110,400
Utilities
384,000
528,000
Total $2,188,800 $2,865,600
Using the high-low method and the information provided above, identify the
linear cost function equation. (Points : 30)

DeVry ACCT 324 Midterm Exam

(Updated)

Click on the link below for the solution:

https://devryfinalexams.com/products/acct-434midterm-exam-updated/