ACCT 326 / ACCT326 / ACCT/326Week 4 Midterm exam (NEW 2016)

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HOMEWORK Description

1. (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 $1,150,000, and direct labor hours are budgeted at 162,000 hours. Actual overhead was $1,100,000 and actual overhead hours worked were 150,000.

(a) Calculate the predetermined overhead rate.
(b) Calculate the overhead applied.
(c) Determine the amount of overhead that is over- or underapplied

2. (TCO 2) Thibodeaux Limousine Corporation is trying to determine a predetermined manufacturing overhead. Estimated overhead for the upcoming year is $312,500. Budgeted machine hours are 97,000 hours, and budgeted labor hours are 18,000 hours at a rate of $14.00 per hour. Compute the predetermined overhead rate based on

(a) direct labor dollars;
(b) direct labor hours; and
(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 2,500
Ending balance in Work in Process 1,836
Selling expenses 123,000
General and administrative expenses 89,000
Direct material cost 54,500
Direct labor cost 66,000
Manufacturing overhead 21,400
Sales 385,000

Prepare a schedule of cost of goods manufactured.

5. (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.

_____ 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 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 Goods 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 makes 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 14,300
Beginning balance in Work in Process 24,500
Ending balance in Work in Process 23,100
Direct labor cost 89,700
Manufacturing overhead applied 66,200
Actual manufacturing overhead 66,200
Beginning balance in Finished Goods 28,900
Ending balance in Finished Goods 24,300
Sales 432,000
Selling expenses 120,000
General and administrative 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. Enterprise 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 are not worth tracing
(J) Costs that do not change in total with changes in the level of business activity
(K) Systems that prepare a master production system and all of the support across the company

8. (TCO 3) The marinade department began the period with 125,000 units. During this period, the department received another 180,000 units from the prior department, and at the end of the period, 117,000 units remained that were 13% complete. How much are equivalent units in the marinade department’s Work In Process Inventory at the end of the period?

9. (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 and 60% completed for conversion)
•Work in process, April 30: 35,000 units (45% completed for materials and 60% completed for conversion)

The department started 380,000 units into production during the month and transferred 385,000 completed units to the next department.

Compute 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.