WYU BUSA 202 Exam 2 (2015)

| June 3, 2016

Question
Review Test Submission: Exam 2

Course 201505-BUSA-202-7D2

Test Exam 2

Results Displayed All Answers, Submitted Answers, Correct Answers, Feedback, Incorrectly Answered Questions

• Question 1

2 out of 2 points

Hindenburger, Inc., began operations on January 1. It made 5,000 burgers and sold 4,000 of them. Hindenburger incurred the following costs:

Raw materials $8,000

Wages of production workers 8,000

Rent for corporate headquarters 5,000

Depreciation on manufacturing equipment 3,000

Commissions paid to sales people 4,000

Calculate the Total Product Cost for the year ended December 31.

Do Not Include $ Sign In Your Response

• Question 2

2 out of 2 points

Quiche & Tell, Inc., is a catering business. Direct labor costs are $15 per hour and overhead is allocated to jobs at a rate of $10 per direct labor hour. Catering for theEggsetera, Inc. party cost $1,000 for direct materials and took 20 direct labor hours. Calculate the total cost of the Eggsetera’s party.

Do not include the dollar sign, $, or cents in your answer.

• Question 3

2 out of 2 points

Bank, Rupp, & Baroque, Inc., began operations on January 1. It made 10,000 shirts and sold 4,000 of them. Bank, Rupp, & Baroque incurred the following costs:

Raw materials $4,000

Wages of production workers 4,000

Rent for corporate headquarters 5,000

Depreciation on manufacturing equipment 2,000

Commissions paid to sales people 4,000

Calculate the Cost of Goods Sold on the income statement for the year ended December 31.

Do Not Include $ Sign In Your Response

• Question 4

2 out of 2 points

Use the following information to calculate Bead It, Inc.’s, Inventory balance on its December 31 year-end balance sheet. Note: All purchases of inventory are on account.

Cost of Goods Sold during the year $30,000

January 1 Inventory 8,000

Sales during the year 76,000

December 31 Accounts Payable 18,000

Purchases of Inventory on Account during the year 41,000

December 31 Inventory = $______

DO NOT INCLUDE $ SIGNS IN YOUR ANSWER.

• Question 5

1.33333 out of 2 points

Assume you are a retail store that sells jeans. Identify each of your costs as variable, fixed, or mixed:

Units sold 20 40 80

1. Depreciation Expense per unit $480 $240 $120

2. Total Rent $5,000 $5,000 $5,000

3. Total Cost of Shopping Bags $4 $8 $16

o

Question Correct Match Selected Match

1. Depreciation cost

2. Total rent

3. Total cost of shopping bags

o

All Answer Choices

A.

Variable Cost

B.

Fixed Cost

C.

Mixed Cost

o

• Question 6

2 out of 2 points

You plan on starting a lawn mowing business by investing $700 of your own money and purchase $500 of equipment. You plan to work 260 hours per month and charge your customers $16 per hour. Your anticipated costs include:

Depreciation $25.00 per month

Advertising $26.00 per month

Gas $1.30 per hour

Assistant’s Wages $8.00 per hour

Miscellaneous Expenses $30.00 per month

Calculate your budgeted Variable Cost per hour. Do not include $ sign in your answer.

• Question 7

2 out of 2 points

You plan on starting a lawn mowing business by investing $700 of your own money and purchasing $500 of equipment. You plan to work 230 hours per month and charge your customers $16 per hour. Your anticipated costs include:

Advertising $23 per month

Gas $1.40 per hour

Depreciation $25 per month

Assistant’s Wages $10.00 per hour

Miscellaneous Expenses $40 per month

Calculate your budgeted Total Fixed Cost. Do not include $ sign in your answer.

• Question 8

2 out of 2 points

Bayless Company produces and sells 50 units of a single product.

Selling price per unit $500

Variable cost per unit $200

Annual fixed costs $20,000

What is the company’s breakeven point in units? Round to the nearest whole unit.

DO NOT INCLUDE $ SIGNS IN YOUR ANSWER

• Question 9

2 out of 2 points

Ducts Duck, Inc., produced and sold 2,000 units of its product.

Selling price per unit $20

Variable cost per unit $10

Annual fixed cost $10,000

What is the company’s breakeven point in sales dollars?

DO NOT INCLUDE $ SIGNS, PARENTHESES, OR NEGATIVE SIGNS IN YOUR ANSWER

• Question 10

2 out of 2 points

Par for the Course produces and sells 2,000 sets of golf clubs.

Selling price per unit $3,000

Variable cost per unit $1,000

Annual fixed cost $500,000

What is the company’s contribution margin per unit? (Round to the nearest cent.)

DO NOT INCLUDE $ SIGNS IN YOUR ANSWER

• Question 11

2 out of 2 points

Bead It, Inc., produces and sells beads by the pound.

Selling price per pound $13

Variable cost per pound $10

Annual fixed costs $200,000

What will the company’s breakeven point in units equal if Bead It were to replace some of its hourly employees with a machine? The labor costs will reduce the cost per pound by $2 but the depreciation on the machine will add $100,000 to the manufacturing costs. Round to the nearest whole pound.

• Question 12

2 out of 2 points

Deja Brew, Inc., produces and sells 1,000 pallets of tea.

Selling price per pallet $500

Variable cost per pallet $100

Annual fixed costs $20,000

How many units would Deja Brew, Inc., need to sell to make $10,000? Round to the nearest whole pallet.

• Question 13

2 out of 2 points

Pasta Disasta, Inc., is preparing its master budget for its first quarter of business. It expects to sell 9,000 pizzas at $8 per pizza per month. It expects to collect 95% of the sales in the month of the sale and 5% in the following month. Calculate the amount of budgeted sales for its first quarter.

Do not include $ in your answer.

• Question 14

2 out of 2 points

Pasta Disasta, Inc., is preparing its master budget for its first quarter of business. It expects to sell 3,000 pizzas at $8 per pizza per month. It expects to collect 95% of the sales in the month of the sale and 5% in the following month. Calculate the amount of Cash Collections for its first quarter.

Do not include $ in your answer.

• Question 15

0 out of 2 points

Piece of Pizza Company is preparing its master budget for its first year of business. It expects to sell 5,000 pizzas at $9 per pizza per month. It expects to collect 95% of the sales in the month of the sale and 5% in the following month. Calculate its Accounts Receivable balance at the end of its first month.

Do not include $ in your answer.

• Question 16

2 out of 2 points

Pasta Disasta, Inc., is preparing its master budget for its first month of business. It expects to sell 1,000 pizzas per month. It will purchase enough pizzas so that 100 pizzas are in inventory at all times. The pizza is expected to cost $3 per pizza. It expects to pay 70% in the month of purchase and the remainder in the following month. Calculate the amount of budgeted purchases for its first month.

Do not include $ in your answer.

• Question 17

2 out of 2 points

Pasta Disasta, Inc., is preparing its master budget for its first quarter of business. It expects to sell 2,000 pizzas per month. It will purchase enough pizzas so that 100 pizzas are in inventory at all times by purchasing 2,100 pizzas in the first month and 2,000 pizzas in the second and third months. The pizza is expected to cost $5 per pizza. It expects to pay 70% in the month of purchase and the remainder in the following month. Calculate the amount of cash paid for purchases for its first quarter.

Do not include $ in your answer.

• Question 18

2 out of 2 points

Pasta Disasta, Inc., is preparing its master budget for its first quarter of business. It expects to sell 1,000 pizzas per month. It will purchase enough pizzas so that 100 pizzas are in inventory at all times by purchasing 1,100 pizzas in the first month and 1,000 pizzas in the second and third months. The pizza is expected to cost $6 per pizza. It expects to pay 70% in the month of purchase and the remainder in the following month. Calculate the amount of Accounts Payable on its budgeted balance at the end of the quarter.

Do not include $ in your answer.

• Question 19

2 out of 2 points

Grass Is Greener, Inc., will purchase equipment for $17,000 at the beginning of its first quarter of business. It expects to use the equipment for 10 years, after which it will be worthless. Calculate the amount of its Equipment, net of Accumulated Depreciation, on its pro-forma balance sheet at the end of its first quarter.

Do Not Include $ or negatives in your response (i.e., absolute value).

• Question 20

2 out of 2 points

Buy & Large, Inc.’s, Purchasing Department’s estimated annual costs are $400,000 and the number of purchase orders written is 800,000. The Shoe Department has requested 100,000 purchases during the year for a total of $4,000,000 in purchases. How much of the Purchasing Department’s cost should be allocated to the Shoe Department?

Do not include the dollar sign, $, or cents in your answer.

• Question 21

2 out of 2 points

Daily Kneads, Inc., is considering outsourcing one of its many products rather than making it internally. The supplier will charge $20,000 for 20,000 pounds of the product. The costs per pound to make this product include:

Cost per Pound

Direct Labor $0.50

Direct Materials $0.40

Allocated Unavoidable Corporate Overhead $0.30

Calculate the relevant incremental cost per pound of making the product. Do not include a dollar sign ($) in your answer.

• Question 22

2 out of 2 points

Wok Around the Clock, Inc., sells specialty woks. In the current year it expects to incur $840,000 in variable costs and $130,000 in fixed costs to make and sell 10,000 woks at $100 each.

If Wok Around the Clock accepts a special order from Hard Wok Cafe to purchase 1,000 woks at $75 each plus $1,200 in shipping costs, how much would it make or lose on this special order?

ENTER A LOSS WITH A “-” SIGN. DO NOT USE PARENTHESES OR DOLLAR SIGNS. EXAMPLE: -1,000

• Question 23

2 out of 2 points

Applesoft produces tablets, laptops and televisions. Applesoft typically sells 1,000 tablets a year. The tablet information is as follows:

Selling price per unit $60

Direct material cost per unit $30

Direct labor cost per unit $15

Total allocated overhead (1/4 avoidable if eliminate tablets) $80,000

One fourth of the allocated overhead would be avoidable if the tablets were eliminated.

How much would Net Income change by if Applesoft were to eliminate the tablets?

Do not include $ in your answer. Be sure to include “-” in front of your amount if net income will decrease.

• Question 24

2 out of 2 points

Vicious Cycle, Inc., produces and sells 2,000 bikes.

Selling price per unit $4,000

Variable cost per unit $800

Annual fixed cost $500,000

What is the company’s contribution margin per unit? (Round to the nearest cent.)

DO NOT INCLUDE $ SIGNS IN YOUR ANSWER

• Question 25

2 out of 2 points

Which of the following costs are irrelevant to business decisions?

Answers: direct labor

variable costs

costs that differ between alternatives

sunk costs

avoidable costs

• Question 26

2 out of 2 points

If Rich & Sweet Candy Company produces and sells 5,000 units, its projected revenues and costs would be as follows:

Total Sales Revenue $90,000

Total Variable Costs 40,000

Total Fixed Costs 20,000

If the units sold increases by 20%, what would the total contribution margin equal?

Do not include $ sign in your answer.

• Question 27

2 out of 2 points

Using the incomplete Master Budget (at 100 hours) below, calculate the total contribution margin on the Flexible Budget (at 120 hours).

Master Budget

(100 hours) Flexible Budget

(120 hours)

Sales Revenue $2,000 ?

Total Variable Costs $400 ?

Total Fixed Costs $1,000 ?

Total Contribution Margin at 120 hours =

DO NOT INCLUDE $ OR NEGATIVES IN YOUR ANSWER.

• Question 28

2 out of 2 points

If Rich & Sweet Candy Company produces and sells 5,000 units, its projected revenues and costs would be as follows:

Total Sales Revenue $100,000

Total Variable Costs 40,000

Total Fixed Costs 40,000

If the units sold increased by 20%, what would its total fixed costs equal?

• Question 29

2 out of 2 points

Grass is Greener, Inc., plans to charge its customers by the hour and to work 400 hours at $9 per hour. It expects its variable costs to be $6 per hour and fixed costs to be $600. Calculate the number of hours needed to earn $1,800 in operating income? (Round to the nearest hour)

• Question 30

2 out of 2 points

There is no final exam in this class.

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