Managerial Accounting (ACC 212) Uses of Accounting Information II (ACC 240) Final Exam Review (Blue) 1) Beginning Raw Materials Inventory $ 3 Ending Raw Materials Inventory 5 Purchases of Raw Materials 8 Direct Labor 5 Indirect Labor 2 Rent, office 6 Rent, factory 7 Depreciation, office 4 Depreciation, factory 2 Beginning Work In Process Inventory 5 Ending Work In Process Inventory 6 The company's cost of goods manufactured was $ 2) Sales $ 90 Beginning Finished Goods Inventory Ending Finished Goods Inventory 2 1 Cost of Goods Manufactured 47 Selling Expenses 30 General & Administrative Expenses 25 The company had a net (income or loss)? of $ 3) Estimated manufacturing overhead $120 Actual manufacturing overhead 138 Estimated direct labor hours 10 Actual direct labor hours 11 Overhead is applied based on direct labor hours. Overhead was (over or under) applied? in the amount of $
4) Expense Title September October Advertising $ 60 $ 60 Utilities 70 100 Depreciation 50 50 Shipping 8 12 Cost of Goods Sold 60 90 Sales (in units) 40 60 The relevant range for these costs is between 10 and 60 units. The company's expenses can be divided as follows (supply expense titles): Fixed expense(s) Mixed expense(s) Variable expense(s) 5) Utility Cost ---- Machine Hours ----- October November $ 55 40 9 6 December 85 15 Totals ----- $ 180 -- 30 ===== == Using the high-low method: the variable rate per machine hour is $ per machine hour the total fixed cost is $ 6) Sales ($20 per unit) $800 Variable Expenses 20% Fixed Expenses $240 This company's break-even point in UNITS is
7) Sales $200 Contribution Margin 140 Fixed Expenses 35 This company's current margin of safety is $ 8) Variable expense $105 Contribution margin 45 Fixed expense 30 This company's degree of operating leverage is 9) The following budget is for a merchandising company: Jun Jul Aug Sep Oct Sales (all credit) $50,000 $60,000 $50,000 $60,000 $50,000 Selling price is $20 per unit. a) Cash is collected: 20% in the month of sale 70% in the month following sale 10% in the 2nd month following sale Cash collections during September should be $ b) Any month's ending inventory is 10% of the following month's sales. The units that should be purchased during the month of August are units c) Each unit costs the company 60% of selling price. Payments are made 50% in the month of purchase and 50% in the month following purchase. During the months of June and July, 2,550 and 2,850 units were purchased, respectively. Cash payments for July should be: $
10) Cardinal Puppet Company applies overhead based on direct labor hours. Standard Cost Card Direct materials, 4 lbs @ $8 $32.00 Direct labor, 3 hrs @ $11 33.00 Overhead, 3 hrs @ $12 36.00 Standard cost per unit $101.00 ======== 6,000 puppets were budgeted & produced using the following inputs: ACTUALS Direct material - 25,000 pounds of material were purchased at an actual unit price of $7.80, for a total actual cost of $195,000 Direct labor - 17,500 hours of direct labor time was recorded at an actual hourly rate of $12.00, for a total actual cost of $210,000 Please compute the following variances: Materials price variance $ (U or F) Materials quantity variance $ (U or F) Labor rate variance $ (U or F) Labor efficiency variance $ (U or F)
11) Sales $500,000 Less: Variable Expenses 240,000 Contribution Margin $260,000 Less: Fixed Expenses 100,000 Net Operating Income $160,000 Less: Income Taxes 50,000 Net Income $110,000 ======== Assets Cash $ 600,000 Property, Plant & Equipment $1,800,000 Less: Accumulated Depreciation 400,000 1,400,000 Land Held for Future Use 400,000 -- Total Assets $2,400,000 ========== Liabilities Current Liabilities $ 400,000 Stockholders' Equity Common Stock $ 800,000 Retained Earnings 1,200,000 2,000,000 -- Total Liabilities and Stockholders' Equity $2,400,000 ========== What is this company's Return on Investment (ROI)? % If the Cash were used to pay off the Current Liabilities, what would the new ROI be? % 12) Cost of new machinery $ 600,000 Salvage value after 5 years 80,000 Annual net cash inflow 160,000 Useful life 5 years Cost of capital 14% Ignore income taxes Based on the above information, this company should (accept or reject) this investment proposal due to its net present value of $
13) Khloe & Kendall Company are purchasing a coin operated pool table for $9,000. The pool table has an estimated useful life of 4 years and no salvage value. Other relevant annual data follow: Sales $ 6,000 Variable expenses 40% Fixed expenses: Depreciation $ 2,250 Other 600 The pool table's payback period is years 14) Mom and Dad, a married couple with children, received and paid the following. Amounts received: Children: Wages $ 80,000 14 year-old twins Bonus Game show winnings 5,000 3,000 16 year-old 18 year-old GCC freshman Interest - bank 1,000 State of Arizona bonds 900 22 year-old ASU graduate student Gift from aunt 10,000 Illegal income 8,000 Amounts paid: Income - second job Inheritance 14,000 15,000 Tuition paid to GCC (freshman) Tuition paid to ASU (graduate) 4,000 7,500 a) From the amounts received column, what is their taxable income? $ b) What is the total amount of tax credits for this family? $
15) Current year payroll taxes are as follows: Tax Rate Applied to FICA Social Security 6.0% First $90,000 FICA Medicare 2.0% ALL Wages Federal Income Taxes 25.0% ALL Wages Federal Unemployment 0.8% First $7,000 State Unemployment 5.0% First $7,000 Chase works for JC and earns a salary of $9,500 per month. What is Chase s net pay for October? $ What is JC s cost to employ Chase for the year? $