Week 2 Quiz

. (TCO 2) Bubba’s Crawfish Processing Company uses a traditional overhead allocation based on direct labor hours. For the current year overhead is estimated at $2,250,000 and direct labor hours are budgeted at 415,000 hours. Actual overhead was $2,200,000 and actual direct labor hours worked were 422,000. (a) Calculate the predetermined overhead rate. Rate, based on budgeted factory overhead cost and budgeted activity, that is established before a period begins. 2,250,000/415,000Budgeted activity units used in the denominator of the formula, more often called the denominator level, are measured in direct labor-hours, machine-hours, direct labor costs, or production units. Read more: http://www. answers. com/topic/predetermined-overhead-rate#ixzz2NxCv9pKK (b) Calculate the overhead applied. Applied overhead = predetermined overhead rate x actual direct labor (c) Determin Prorate the overhead variance to the appropriate accounts 765 – 750 = variance of 15K Rate This Answe r e the amount of overhead that is over/under applied. 2. TCO 2) Thibodeaux Limousine Corporation is trying to determine a predetermined manufacturing overhead. Estimated overhead for the upcoming year is $776,000. Budgeted machine hours are 105,000 hours, and budgeted labor hours are 17,500 hours at a rate of $10. 00 per hour. Compute the predetermined overhead rate based on: (a) Direct labor dollars Labor rate variance = (Actual hours worked ? Actual rate) ? (Actual hours worked ? Standard rate) Read more at http://accounting4management. com/direct_labor_rate_variance. htm#pqUTOT7ClOOtMr4F. 99 (b) Direct labor hours (c) Machine hours 3. TCO 1) List and briefly describe four of the five differences between managerial accounting and financial accounting 4. (TCO 2)The following information is available for Sappy’s Surgical Shears for the fiscal year ending December 31, 20XX. Beginning balance in Finished Goods $ 17,000 Ending balance in Finished Goods 15,200 Beginning balance in Work in Process 2,500Ending balance in Work in Process 1,836 Selling expenses 123,000 General and administrative expenses 89,000Direct material cost 54,500 Direct labor cost 66,000 Manufacturing overhead 21,400 Sales 385,000 Prepare a schedule of cost of goods manufactured. . (TCO 2) Match each of the following six terms with the phrase that most closely describes it. Each answer below may be used only once. Read also Quiz Week 42. ______ 1. activity-based costing ______ 2. cost of goods available for sale ______ 3. period costs ______ 4. process costing system ______ 5. just-in-time system ______ 6. work in process A) Costs assigned to the goods produced; also known as manufacturing costs (B) Materials costs that are not traced directly to products produced (C) System that seeks to minimize Raw Materials Inventory and Work in Process Inventory (D) Cost of items that are completed and transferred from Work in Process Inventory to Finished Goods Inventory (E) Costs that are identified with accounting periods rather than with goods produced (F) Actual overhead is greater than overhead that has been applied to products (G) Method of assigning overhead costs that uses multiple allocation bases (H) System that uses job-order sheets to collect costs for each individual job (I) Cost of all materials and parts that are directly traced to the items produced (J) Beginning balance in the Finished G oods Inventory plus cost of goods manufactured (K) Overhead applied to products is greater than the actual overhead costs incurred (L) Used by companies that produce large quantities of identical items (M) Cost of all manufacturing activities other than direct material and direct labor (N) Inventory account that contains the cost of goods that are only partially completed 6. (TCO 2) Far Out Ceramics akes custom macaroni tile and applies job-order costing. The following information relates to the fiscal year ending December 31,20XX. Beginning balance in Raw Materials Inventory $ 12,500 Purchases of raw material 189,000 Ending balance in Raw Materials Inventory 14,300Beginning balance in Work in Process 24,500 Ending balance in Work in Process 23,100Direct labor cost 89,700 Manufacturing overhead applied 66,200 Actual manufacturing overhead 64,100Beginning balance in Finished Goods 28,900 Ending balance in Finished Goods 24,300Sales 432,000Selling expenses 120,000 General and administ rative expenses 86,000 How much is cost of goods sold? 7. TCO 2) Match each of the six following terms with the phrase that most closely describes it. Each answer may be used only once. _____ 1. Direct costs _____ 2. Fixed costs _____ 3. Incremental costs _____ 4. Economic Resource Planning system _____ 5. Noncontrollable costs _____ 6. Opportunity costs (A) Costs that increase or decrease in total in response to increases or decreases in the level of business activity (B) Costs that are directly traceable to a product, activity, or department (C) Costs that a manager can influence (D) The difference in costs between decision alternatives (E) Costs incurred in the past that are not relevant to present decisions (F) Costs that cannot be influenced by a manager G) Financial plans prepared by management accountants (H) Value of the benefits foregone when one decision alternative is selected over another (I) Costs that cannot be directly traced to a product, activity, or department or a re not worth tracing (J) Costs that do not change in total with changes in the level of business activity (K) These systems prepare a master production systems and all the support across the company. (L) Allows companies and suppliers to share information to improve efficiency in getting inputs. (M) Allows customer data analysis and support, often in online format for customers. 8. (TCO 3) The Marinade Department began the period with 150,000 units.During the period the department received another 180,000 units from the prior department and at the end of the period 112,000 units remained which were 17%complete. How much are equivalent units in The Marinade Department’s work in process inventory at the end of the period? (TCO 3) The Franc Zeppo Venture manufactures a product that goes through two processing departments. Information relating to the activity in the first department during April is given below: Work in process, April 1: 50,000 units (80% completed for materials a nd 60%completed for conversion. Work in process, April 30: 45,000 units (70% completed for materials and 60%completed for conversion. 4. The department started 380,000 units into production during the month and transferred 385,000 completed units to the next department.Compute and calculate the equivalent units of production for the first department for April, assuming the company uses the weighted-average method of accounting for units and costs. 1. Question : (TCO D) A company that has a profit can increase its return on investment by Student Answer: increasing sales revenue and operating expenses by the same dollar amount. increasing average operating assets and operating expenses by the same dollar amount. increasing sales revenue and operating expenses by the same percentage. decreasing average operating assets and sales by the same percentage. Instructor Explanation: Chapter 12 2. Question : (TCO D) Given the following data, what would ROI be?Sales $50,000 Net operating income $5,000 Contribution margin $20,000 Average operating assets $25,000 Stockholder's equity $15,000 Student Answer: 10% 20% 16. 7% 80% Instructor Explanation: See Chapter 12. ROI = Net operating income / Average operating assets = $5,000 / $25,000 = 20. 0% 3. Question : (TCO D) Given the following data: What is the return on the investment (ROI)? Sales $50. 000 Net operating income $5,000 Contribution margin $20,000 Average operating assets $25,000 Stockholder's equity $15,000 Student Answer: 10% 20% 16. 7% 80% Instructor Explanation: ROI = Net operating income / Average operating assets = $5,000 / $25,000 = 20. 0%