Devry ACCt346 Midterm exam 2015

| June 6, 2016

Question

Page 2

Question 1.1.(TCO 1) Which of the following types of costs are conversion costs?(Points : 7)

Direct materials and direct labor

Direct materials and overhead

Direct labor and overhead

Direct materials, direct labor, and overhead

Question 2.2.(TCO 6) In an activity-based costing system, cost reduction is accomplished by identifying and eliminating:
All Cost Drivers Non-Value-Adding Activities(Points : 7)

No No

Yes Yes

No Yes

Yes No

Question 3.3.(TCO 3) Kerner Manufacturing uses a process cost system to manufacture laptop computers. The following information summarizes operations relating to laptop computer model #KJK20 during the quarter ending March 31:

Units Direct Labor

Work-in-process inventory, January 1 300 $50,000

Started during the quarter 800

Completed during the quarter 600

Work-in-process inventory, March 31 100

Costs added during the quarter $720,000

Beginning work-in-process inventory was 50% complete for direct labor costs. Ending work-in-process inventory was 75% complete for direct labor costs. What is the equivalent amount of units of production using the weighted-average unit cost inventory valuation method?(Points : 7)

600

650

725

675

Question 4.4.(TCO 2) Sweet Co. uses budgeted overhead rates to apply overhead to individual jobs. They use a system based on direct labor hours. Last year, the company made the following estimates for this year.

Direct labor costs $48,000,000
Factory overhead costs $6,400,000
Direct Labor Hours 80,000
Machine Hours 110,000

(a) What is the budgeted overhead rate for the company?

(b) If Job #34567 had the following:

Material costs were $500,000;
Direct labor costs were $450,000;
Direct labor hours were 25,000; and
Machine hours were 36,000,
then what is the total cost of Job #34567?(Points : 30)

Question 5.5.(TCO 3) Adnan Company uses process costing. At the beginning of the month, there were 6,000 units in process, 80% complete with respect to material and 70% complete with respect to conversion costs. 30,000 units were started during the month and 30,000 units were completed. The units in ending Work-In-Process Inventory were 80% complete with respect to material and 20% complete with respect to conversion costs. How many equivalent units will be used in calculating the cost per unit for materials?(Points : 30)

Question 6.6.(TCO 6) Handy Display Company manufactures display cases to be sold to retail stores. The cases come in three sizes: large, medium, and small. Currently, Handy Display Company uses a single plant-wide overhead rate to allocate its $3,357,800 of annual manufacturing overhead. Of this amount, $900,000 is associated with the Large Case line, $1,404,480 is associated with the Medium Case line, and $1,350,000 is associated with the Small Case line. Handy Display Company is currently running a total of 39,600 machine hours: 12,000 in the Large Case line, 15,960 in the Medium Case line, and 12,000 in the Small Case line. Handy Display Company uses machine hours as the cost driver for manufacturing overhead costs.

Requirement: Calculate the departmental overhead rate for each of the three departments listed.(Points : 30)

Question 7.7.(TCO 2)
Fred Co. incurred costs of $700,000 for direct materials (raw) purchased. Direct labor was $5,000 and factory overhead was $20,000 for March.

Inventories were as follows:
Raw materials beginning $6,000; raw materials ending $8,000;

Work-in-process beginning $230,000; work-in-process ending $210,000;

Finished goods beginning $16,000; finished goods ending $15,500;

What is the cost of goods manufactured? Please show your work.(Points : 30)

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