Peaceful Pastures

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Mid-term Exam|

Page: | 1 2 3 |
1.| Question :| (TCO 1) The goal of managerial accounting is to provide information that managers need for|
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| Student Answer:| | planning. |
| | | control. |
| | | decision making. |
| | | All of the above answers are correct. |
| Instructor Explanation:| Chapter 1, Page 4|
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| Points Received:| 4 of 4 |
| Comments:| |
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2.| Question :| TCO 1) Which of the following statements regarding fixed costs is true?|
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| Student Answer:| | When production increases, fixed cost per unit increases. | | | | When production decreases, total fixed costs decrease. | | | | When production increases, fixed cost per unit decreases. | | | | When production decreases, total fixed costs increase. | | Instructor Explanation:| Chapter 1, Page 9|

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| Points Received:| 4 of 4 |
| Comments:| |
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3.| Question :| (TCO 1) A retailer purchased some trendy clothes that have gone out of style and must be marked down to 40% of the original selling price in order to be sold. Which of the following is a sunk cost in this situation?|

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| Student Answer:| | the current selling price |
| | | the original selling price |
| | | the original purchase price |
| | | the anticipated profit |
| Instructor Explanation:| Chapter 1, Page 9|
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| Points Received:| 4 of 4 |
| Comments:| |
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4.| Question :| (TCO 1) Shula’s 347 Grill has budgeted the following costs for a month in which 1,600 steak dinners will be produced and sold: materials, $4,080; hourly labor (variable), $5,200; rent (fixed), $1,700; depreciation, $800; and other fixed costs, $600. Each steak dinner sells for $14.00 each. How much is the budgeted variable cost per unit?|

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| Student Answer:| | $5.80 |
| | | $7.74 |
| | | $6.68 |
| | | $3.25 |
| Instructor Explanation:| Chapter 1, Page 8 ($4,080 + $5,200) / 1,600 = $5.80| |
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| Points Received:| 0 of 4 |
| Comments:| |
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5.| Question :| (TCO 1) Which of the following is an example of a manufacturing overhead cost?|
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| Student Answer:| | security at the manufacturing plant | | | | fabric used to produce shirts |
| | | cost of shipping product to customers |
| | | the salary of the president of the company |
| Instructor Explanation:| Chapter 2, Page 37|
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| Points Received:| 0 of 4 |
| Comments:| |
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6.| Question :| (TCO 1) Product costs|
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| Student Answer:| | are also called manufacturing costs. | | | | are considered an asset until the finished goods are sold. | | | | become an expense when the goods are sold. |
| | | All of the above answers are correct. |
| Instructor Explanation:| Chapter 2, Page 38|
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| Points Received:| 4 of 4 |
| Comments:| |
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7.| Question :| (TCO 1) At December 31, 2010, WDT Inc. has a balance in the Work in Process Inventory account of $62,000. At January 1, 2010, the balance was $55,000. Current manufacturing costs for the year are $292,000, and cost of goods sold is $284,000. How much is cost of goods manufactured?|

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| Student Answer:| | $292,000 |
| | | $299,000 |
| | | $277,000 |
| | | $285,000 |
| Instructor Explanation:| Chapter 2, Page 43 $55,000 + $292,000 - $62,000 = $285,000| |
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| Points Received:| 0 of 4 |
| Comments:| |
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8.| Question :| (TCO 2) BCS Company applies manufacturing overhead based on direct labor hours. Information concerning manufacturing overhead and labor for August follows: | Estimated| Actual| Overhead cost| $174,000| $171,000|

Direct labor hours| 5,800| 5,900|
Direct labor cost| $87,000| $89,975|

How much overhead should be applied in total during August?|
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| Student Answer:| | 177,000 |
| | |...
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