ACCOUNTING 281 TAKE-HOME FINAL EXAM: STUDY GUIDE NAME:
1) IDENTIFY IF THE FOLLOWING ITEMS ARE PRODUCT COSTS (DIRECT MATERIALS, DIRECT
LABOR, OR FACTORY OVERHEAD) OR PERIOD COSTS (ADMINISTRATIVE OR SELLING)
NOTE: USE THE LETTER OF EACH ITEM IN THE ANSWER GRID. DO NOT USE "X"s FOR EVERY
ANSWER.
PRODUCT COSTS:
D/M:
D/L:
O/H:
A
B
C
D
E
F
G
H
I
J
K
L
M
N
O
P
Q
R
S
T
U
V
W
X
Y
Z ADVERTISING IN NATIONAL PUBLICATION
SALARY OF ACCOUNTING MANAGER
FIBERGLASS USED IN MAKING CARS
SALARY OF PLANT MAINTENANCE MANAGER
SALARY OF COMPUTER GAME DESIGNER
RECEPTIONIST SALARY
MASKS USED BY PAINTING DEPT EMPLOYEES
BOLTS USED IN MANUFACTURING BICYCLES
QUALITY CONTROL INSPECTOR SALARY
COMMISSIONS PAID TO SALES PEOPLE
TIRES USED IN MANUFACTURE OF DRAG RACER
SCREWS USED IN MANUFACTURE OF GLASSES
SALARY OF ASSEMBLY LINE WORKERS
SALARY OF PLANT MANAGER
TABLES IN EMPLOYEE LUNCH ROOM
OIL USED TO LUBRICATE PRINTING PRESS
SALARY OF PRINTING PRESS OPERATOR
PAPER USED TO PRINT BOOKS
GLUE USED AS BINDING FOR BOOKS
COST OF PAVING EMPLOYEE PARKING LOT
REAL ESTATE TAXES ON MANUFACTURING PLANT
REAL ESTATE TAXES ON CORPORATE HEADQUARTERS
DECALS USED ON NASCAR CARS
COST OF CODEINE USED IN COUGH MEDICINE
COST OF LUG NUTS USED IN AUTO MANUFACTURING
COST OF PAINT USED IN AUTO MANUFACTURING PERIOD COSTS:
ADMIN: SELLING: 2)
The following information is provided for the melting department of ABC Co.,
Inc. for the month of October, 20X1:
Inventory in process, October 1, 300,000 lbs:
Direct materials cost for 300,000 lbs 600,000
400,000 Conversion costs for 300,000 lbs, 40% completed Total Inventory in Process, October 1 1,000,000
2,700,000
2,200,000 Direct materials cost for October, 1,250,000 lbs Conversion costs for October
Goods finished in October (includes units in process
on October 1)
Inventory in process, October 250,000 lbs,
70% completed as to conversion costs I. Determine Units to be assigned costs:
Beginning Inventory
Started & Completed
Transferred Out
Ending Inventory
Total
II. Determine Equivalent Units:
Whole % Material Equiv Units Units Added for DM Conversion Costs:
Beginning Inventory
Started & Completed Whole conv cost Equiv Units Units Added for Conv Cost Ending Inventory
Total:
III. Determine Cost Per Equivalent Unit:
Direct Materials / = Conversion Costs / = IV. Allocate Costs: Direct
Materials
Costs Conversion
Costs Total
Costs Inventory in process, October 1 balance
Equivalent units for completing the October 1 in-process inventory
Equivalent unit cost - Cost of October 1 in-process inventory transferred to Casting - Total Beginning Inventory
TOTAL BEG INVENTORY
Units started & completed in October
Equivalent unit cost
Cost to complete the units started & completed in October
Total Started & Completed Total Transferred Out: TOTAL TRSF OUT Equivalent units in ending inventory
Equivalent unit cost
Cost of ending inventory TOTAL TRSF OUT 3) The following information is presented for JB Enterprises:
Unit selling price:
Unit variable cost:
Total fixed costs: 50
25
150,000 Based on this information, prepare a break-even graph and identify
the breakeven point, operating loss area & operating profit area.
Also identify the breakeven point in units & dollars:
Breakeven units: ________________ Breakeven dollars: ______________ Use increments of 500 for units & increments of $25,000 in dollars 4A) Good Night manufactures comforters. The estimated inventories on January 1 for finished goods,
work in process, and materials were $51,000, $28,000, and $33,000, respectively. The desired
inventories on December 31 for finished goods, work in process, and materials were $48,000, $35,000,
and $29,000, respectively. Direct material purchases were $555,000. Direct labor was $252,000 for the
year. Factory overhead was $176,000. Prepare a cost of goods sold budget for Good Night, Inc. 4B) Mezaka PublishingExpects factory output & sales for the current year to total 3,800 units, which will be
sold at $120 per unit. The beginning & ending inventories will remain unchanged for the year. Budget
estimates of manufacturing costs and operating expense for the year are summarized below:
Prepare a budgeted income statement.
Estimated costs & expense:
fixed costs
Variable costs
for year:
(per unit sold)
Cost of goods manufactured & sold:
Direct Materials
Direct Labor
Factory Overhead:
Depreciation of plant & equipment
Other fixed factory overhead
Variable factory overhead 30.00
8.40
4,000
1,400
4.80 Selling Expenses:
Sales salaries
Advertising
Miscellaneous selling expense 64,100
13,200
10,500 Administrative expenses:
Office & officers salaries
Supplies
Miscellaneous admin expenses 34,400
5,060
9,520 Income tax for the year: 35,000 5A) Tippi Company produces lamps that require 2.25 standard hours per unit at an hourly of $15.00 per hour.
Production of 7,700 units required 17,550 hours at an hourly rate OF $15.20 per hour.
What is the direct labor (a) rate variance, (b) time variance, and (c) total cost variance?
NOTE: Show your calculations to ensure maximum points. 5B) Hsu Company produces a part with a standard of 5 yards of material per unit. The standard price of one yard
of material is $8.50. During the month, 8,800 parts were manufactured, using 45,700 yards of material at a cost of $8.30.
Determine the (a) price variance, (b) quantity variance, and (c) cost variance.
NOTE: Show your calculations to ensure maximum points. 6) String-R-Us has three divisions - Guitar, Violin & 'Cello. Information on Invested
Assets & income for each division is shown below. Management of Strings-R-Us
requires a minimum return on investment of 12%.
Required: Compute the return on investment and residual income for each
division. Show answer to three decimal places (e.g. 12.3%) Guitar: Invested
Assets:
10,000,000 Income:
2,000,000 Violin: 7,000,000 1,900,000 Cello: 5,000,000 1,800,000 Show your calculations below: Return on
Investment: Residual
Income:

 

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