Managerial Accounting (ACC 212) Uses of Accounting Information II (ACC 240) Final Exam Review 1) Beginning Raw Materials Inventory $ 3,000 Ending Raw Materials Inventory 4,500 Purchases of Raw Materials 8,000 Direct Labor 5,000 Indirect Labor 2,500 Rent, office 6,000 Rent, factory 7,000 Depreciation, office 4,000 Depreciation, factory 2,000 Beginning Work In Process Inventory 5,000 Ending Work In Process Inventory 6,500 The company's cost of goods manufactured was $ 2) Sales $90,000 Beginning Finished Goods Inventory Ending Finished Goods Inventory 2,000 1,000 Cost of Goods Manufactured Selling Expenses 47,000 30,000 General & Administrative Expenses 25,000 The company had a net (income or loss)? of $ 3) Estimated manufacturing overhead $120,000 Actual manufacturing overhead 131,500 Estimated direct labor hours 10,000 Actual direct labor hours 10,500 Overhead is based on direct labor hours. The company's predetermined overhead rate was $ hour. 4) Predetermined overhead rate is $3.00 per machine hour Actual machine hours were 80,000 Actual manufacturing overhead was $235,000 Estimated machine hours were 70,000 Estimated manufacturing overhead was $210,000 Overhead was (over or under) applied? in the amount of $
5) Expense Title September October Advertising $ 60,000 $ 60,000 Utilities 70,000 100,000 Depreciation 50,000 50,000 Shipping 8,000 12,000 Cost of Goods Sold 60,000 90,000 Sales (in units) 40,000 60,000 The relevant range for these costs is between 10,000 and 60,000 units. The company's expenses can be divided as follows (supply expense titles): Fixed expense(s) Mixed expense(s) Variable expense(s) 6) 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 $ 7) Sales ($20 per unit) $700,000 Variable Expenses 20% Fixed Expenses $400,000 This company's break-even point in UNITS is
8) Sales $120,000 Contribution Margin 66,000 Fixed Expenses 27,500 This company's current margin of safety is $ 9) Variable expense $105,000 Contribution margin 45,000 Fixed expense 30,000 This company's degree of operating leverage is 10) 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: $
11) Diamondbacks 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)
12) 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? % 13) 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 $
14) Paris & Nicky 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 15) Charlie, a single man, received and paid the following amounts. Amounts received: Amounts paid: Wages $ 40,000 Interest paid - home mortgage 6,300 Bonus 5,000 car 1,200 Game show winnings Interest - bank 3,000 100 credit cards Property taxes - home 800 1,400 State of Arizona bonds 900 Gift from aunt 14,000 car Income taxes - federal 300 4,200 Illegal income 8,000 state 1,000 Income from second job 700 Inheritance 15,000 Charitable contributions Tuition paid to GCC (freshman) 2,500 3,200 a) From the amounts received column, what is his taxable income? $ b) From the amounts paid column, what are his itemized deductions? $
16) 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? $