2024 – ACCT 211 MIDTERM FALL Please show all calculations to allow for partial credit

ACCT 211

MIDTERM

FALL

 

Please show all calculations to allow for partial credit.

 

 

1. Describe 3 differences between financial and managerial accounting.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1. Managerial accountants must follow a code of conduct.  Why?

 

 

 

 

 

 

 

 

 

 

 

 

1. In the Managerial Accountant’s Code of Conduct there are 4 areas:  competence, confidentiality, integrity, and credibility/objectivity.  Describe one of these areas.

 

 

 

 

 

 

 

 

1. What is Sarbanes-Oxley and what is a requirement that it places on public companies?

 

 

 

 

 

 

 

 

 

 

 

 

1. What is the difference between period costs and product costs? 

 

 

 

 

 

 

 

 

 

 

1. What is the difference between fixed and variable costs?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1. Please classify the following as either a period or product cost AND either a fixed or variable cost.

                         Period     Product       Fixed   Variable

 

1. plastic components to make a toy

 

1. administrative building rent

 

1. accountant’s salary

 

1. line workers wages

 

1. electricity for conveyor belt

 

1. property taxes (manufacturing facility)

 

 

 

1. Product costs (manufacturing costs) are made up of 3 components or types of costs.  List all 3.

 

 

 

 

 

 

 

1. All other expenses are classified as non-manufacturing expenses or period costs.  List one type of non-manufacturing expense/ period cost.

 

 

 

 

 

 

 

1. What is the difference between a direct and indirect cost?

 

 

 

 

 

 

 

 

 

 

1. A __________ cost is a cost that has already been incurred and that cannot be changed by any decision made now or in the future.

 

 

1. Depending on the product being manufactured, companies use either a process or job-order costing system.  Please determine which type of costing system that the following companies would use:

Process                        Job-Order

 

1. Coca-Cola bottling soda

 

1. A paper mill

 

1. An advertising agency

 

1. A paper clip manufacturer

 

1. Boeing making a jet

 

1. An auto repair shop

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The following data has been taken from the accounting records of Chase Corporation for the year ended 2012:

 

Sales                                                                $930,000

Raw materials inventory, beginning               $70,000                      

Raw materials inventory, ending                    $40,000

Raw materials, purchases                                $190,000

Direct labor                                                     $150,000

Manufacturing overhead                                 $210,000

Administrative expenses                                 $95,000

Selling expenses                                              $120,000

Work in process inventory, beginning            $80,000

Work in process inventory, ending                 $75,000

Finished goods inventory, beginning              $90,000

Finished goods inventory, ending                  $140,000

 

Use the data to answer the following questions (13 – 15)

 

1. What was the cost of the raw materials used in production during the year?

 

 

 

 

 

 

 

 

1. What was the cost of goods manufactured (finished) for the year?

 

 

 

 

 

 

 

 

 

1. What was the cost of goods sold for the year?

 

 

 

 

 

 

 

 

1. Please classify the following accounts where they would be found  – on the Balance Sheet (asset) or on the Income statement (expense):  

Balance sheet              Income statement

 

1. raw materials inventory

 

1. administrative expenses

 

1. work in process inventory

 

1. finished goods inventory

 

1. cost of goods sold

 

1. selling expenses  

 

 

 

 

1. During January, $49,000 in raw materials were requisitioned from the storeroom for use in production.  These raw materials included $35,000 of direct and $14,000 of indirect materials.  What is the journal entry to record this transaction?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mattie Corporation, which applies manufacturing overhead on the basis of machine-hours, has provided the following data for its year 2013 operations:

 

Estimated manufacturing overhead                $239,500

Estimated machine-hours                                      4,500

Actual manufacturing overhead                     $241,900

Actual machine hours                                           5,500

 

Use the data to answer the following questions (18-21).

 

1. The predetermined overhead rate would be:

 

 

 

 

 

 

 

 

1. The applied manufacturing overhead for the year is:

 

 

 

 

 

 

 

 

1. Was the overhead for the year over applied or under applied?  By how much?

 

 

 

 

 

 

 

 

1. When the difference in overhead is closed out to cost of goods sold (COGS), will it increase COGS or decrease COGS?    What is the effect on final net income?

 

 

 

 

 

1.  Why are predetermined overhead rates calculated and used to estimate manufacturing overhead instead of using actual overhead amounts?

 

 

 

 

 

 

 

 

 

   

1. ____________ costs increase as the total amount produced increases, but remain constant per unit.

 

 

1. ___________ costs remain constant in total, but decrease per unit as more units are produced.

 

 

 

 

 

 

 

1. What is the difference between committed fixed costs and discretionary fixed costs?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1. At Maryville hospital the total cost for 7300 patient days is $9,100.  The total fixed costs associated with this level are $3,300. 

 

1. Compute the total variable cost.

 

 

 

 

 

 

 

1. What is the variable cost per patient day?

 

 

 

 

 

 

 

 

1. Put the fixed and variable cost in the mixed cost equation format.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1. The Maui Hotel in Hawaii has accumulated records of operating costs as follows:

	occupancy	electrical
	days	costs
Jan	2736	$6,127
Feb	2904	$6,207
Mar	2356	$6,083
Apr	2560	$6,857
May	3160	$8,871
June	2544	$6,696
July	2708	$7,670
Aug	1406	$5,148
Sept	2840	$5,691
Oct	2124	$5,588
Nov	2320	$5,454
Dec	2364	$5,529

 

Using the high-low method, estimate the fixed cost of electricity per month AND the variable cost of electricity per occupancy day.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1. Sales – variable costs = _______________________.

 

 

1. Bruiser products has a single product whose selling price is $50 per unit and whose variable cost is $32 per unit.  Total monthly fixed expenses are $8,200. 

 

1. Solve for the break-even point in units.

 

 

 

 

 

 

 

 

 

1. Solve for the break-even point in sales dollars using the Contribution Margin ratio.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1. Review the following graph:

 

 

Label the break-even point, the profit area, and the loss area (or if filling out electronically, describe where these areas would be).

 

 

 

 

1. DVB Corporation has a single product whose selling price is $120 per unit and whose variable cost is $80 per unit.  Monthly fixed costs are $50,000. 

 

1. Using the equation method, solve for unit sales required to earn a target profit of $10,000.

 

 

1. Using the Contribution approach, solve for dollar sales required to earn a target profit of $30,000.

 

1. Compute the margin of safety (total sales – breakeven sales) using the following data:

selling price	$35 per unit
variable cost	$25 per unit
fixed expenses	$8,000 per month
Total unit sales	2,500 units per month

 

 

 

 

 

1. What are some ways that cost volume profit analysis (CVP analysis) can benefit managers?

 

 

1. What is a mixed cost?  Discuss why it is important to understand the components of a mixed cost and please provide an example.

 

 

 

 

 

 

 

 

 

 

 

 

 

1.  Job 827 was recently completed. The following data have been recorded on its job cost sheet:
    

Direct materials	$61,050
Direct labor hours	1,332 labor hours
Direct labor wage rate	$14 per labor-hour
Machine Hours	1,480 machine hours
Number of units completed	3,700 units

 
The company applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $13 per machine-hour.
Compute the unit product cost that would appear on the job cost sheet for this job.