Managerial Accounting Exam

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CONCORDIA UNIVERSITY

Course:Managerial Accounting,

No.: COMM 305 & ACCO. 240 Sections: All

Examination:Alternate Final

Date:June, 2006

No. of Pages: 9 including the cover page

Material Allowed:Non-programmable calculators and dictionaries

Special Instructions:Answer all multiple choice questions in the Answer Sheet form no. 4521

Return the exam questions with your answers.

Student Name:

Student ID No.:

Section:

Instructor:
QUESTION I. 22.5 POINTS

SELECT THE BEST ANSWER: 1.5 POINTS EACH QUESTION.

1.A responsibility centre that incurs costs (and expenses) and generates revenues is classified as a(n) a.cost centre.
b.revenue centre.
c.profit centre.
d.investment centre.
e.none of the above

2.The most useful measure for evaluating a manager's performance in controlling revenues and costs in a profit centre is a.contribution margin.
b.contribution net income.
c.contribution gross profit.
d.controllable margin.
e.none of the above

3.Pentecost Corporation desires to earn target net income of $40,000. If the selling price per unit is $30, unit variable cost is $24, and total fixed costs are $160,000, the number of units that the company must sell to earn its target net income is a.13,333.

b.33,333.
c.20,000.
d.26,667.
e.none of the above

4. Juniper, Inc. sells a single product with a contribution margin of $12 per unit and fixed costs of $74,400 and sales for the current year of $100,000. How much is Juniper’s break-even point? a. 4,600 units b. 5,600 units

c. 6,200 unitsd. 2,133 units
e.none of the above

5.Guerry Company applies overhead on the basis of machine hours. Given the following data, calculate overhead applied and the under- or over-application of overhead for the period:

Estimated annual overhead cost$600,000
Actual annual overhead cost$575,000
Estimated machine hours150,000
Actual machine hours140,000

a.$560,000 applied and $15,000 under-applied
b.$600,000 applied and $15,000 over-applied
c.$560,000 applied and $15,000 over-applied
d.$575,000 applied and neither under- nor over-applied e.none of the above

6.Given the following information for Satoko Company: Sales $1,000,000; Controllable Margin $150,000; Average Operating Assets $500,000. The company's ROI is:

a.60%b.50%
c.15%d.30%
e.none of the above

7.The starting point of a master budget is the preparation of the:

a.cash budget.b.sales budget.
c.production budget.d.budgeted balance sheet. e.none of the above

Use the following information for questions 8 and 9.

Thorton Company estimates its sales at 80,000 units in the first quarter and that sales will increase by 8,000 units each quarter over the year. The company wants an ending inventory of finished goods equal to 25% of the sales of the following quarter. Each unit sells for $25. 40% of the sales are for cash. 70% of the credit customers pay within the quarter. The remainder is received in the quarter following sale.

8.Cash collections for the second quarter are budgeted at

a.$1,356,000.b.$1,968,000.
c.$2,364,000.d.$2,164,000.
e.none of the above

9.Production in units for the third quarter should be budgeted at

a.98,000.b.92,000.
c.122,000.d.96,000.
e.none of the above

10.Rebel Company incurs the following costs in producing 50,000 units...
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