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Final Practice Exam Questions for Managerial Accounting | ACCT 206, Exams of Management Accounting

Material Type: Exam; Professor: Ilett; Class: Introduction to Managerial Accounting; Subject: Accountancy; University: Boise State University; Term: Fall 2010;

Typology: Exams

2009/2010

Uploaded on 12/14/2010

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First Practice Examination
AC 206 – Managerial Accounting
Fall Semester 2010
Question No. 1
Attached is a sheet containing T-accounts for Susie’s Old Fashioned Rag Rugs for the year ended
December 31, 2009.
Required:
1. Using the attached T-accounts determine the following:
a) Ending balance for WIP Inventory ___________
b) Product finished during the period _________
c) Actual manufacturing overhead _________
d) Amount of MOH variance ______________
e) Selling and Administrative Expenses _____________
2. Prepare a cost of goods manufactured schedule in proper form.
3. Prepare an income statement including a detailed cost of goods sold section in proper form.
4. Why do firms prepare a cost of goods manufactured schedule?
5. What are the three inventory accounts used in a manufacturing concern?
Question No. 2
Lynette’s Puppy Supplies makes a high-end dog food. Variable manufacturing overhead is based on
machine hours. The standard costs for 20-pound bag of dog food.
Standard Quantity Standard Cost
Direct Materials…………………………………… 22 lbs $ 0.25 per lb
Direct Labor…………………………………………. .5 hours $ 10.00 per hour
Variable Manufacturing Overhead…….. $1.00 Per DLH
During August 11,000 bags of dog food were produced:
a. 250,000 pounds of raw materials were purchased for $67,500.
b. 235,000 pounds of raw materials were used during August.
c. 4,800 direct-labor hours were worked at a cost of $50,400.
d. Actual manufacturing overhead incurred was $5500.
Question No. 2 Continued
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First Practice Examination AC 206 – Managerial Accounting Fall Semester 2010 Question No. 1 Attached is a sheet containing T-accounts for Susie’s Old Fashioned Rag Rugs for the year ended December 31, 2009. Required:

  1. Using the attached T-accounts determine the following: a) Ending balance for WIP Inventory ___________ b) Product finished during the period _________ c) Actual manufacturing overhead _________ d) Amount of MOH variance ______________ e) Selling and Administrative Expenses _____________
  2. Prepare a cost of goods manufactured schedule in proper form.
  3. Prepare an income statement including a detailed cost of goods sold section in proper form.
  4. Why do firms prepare a cost of goods manufactured schedule?
  5. What are the three inventory accounts used in a manufacturing concern? Question No. 2 Lynette’s Puppy Supplies makes a high-end dog food. Variable manufacturing overhead is based on machine hours. The standard costs for 20-pound bag of dog food. Standard Quantity Standard Cost Direct Materials…………………………………… 22 lbs $ 0.25 per lb Direct Labor…………………………………………. .5 hours $ 10.00 per hour Variable Manufacturing Overhead…….. $1.00 Per DLH During August 11,000 bags of dog food were produced: a. 250,000 pounds of raw materials were purchased for $67,500. b. 235,000 pounds of raw materials were used during August. c. 4,800 direct-labor hours were worked at a cost of $50,400. d. Actual manufacturing overhead incurred was $5500. Question No. 2 Continued

Required:

  1. Calculate materials price, quantity and total variance.
  2. Calculate the labor rate, efficiency and total variance.
  3. Calculate the overhead spending, efficiency and total variance.
  4. The standard cost is a cost per _________.
  5. Name two ways standard costs are determined?
  6. Variances are closed to ___________________. Question No. 3 Stubeun Glass manufactures lead based glass vases for distribution to specialty shops. The company presently uses a single plant wide rate to apply overhead to the various models of vases. The firm projected $10,000,000 in total overhead for year ended December 31, 2009 and 500,000 machine hours. Management is considering installing an ABC costing system. Projections reflect the following cost pools and respective drivers: Cost Pool Cost Per Driver Molding $20.00 per machine hour Etching $10.00 per DLH Inspection $15.00 per inspection Company is analyzing a vase known as the Queen Marie design. The direct material is $75.00 per vase and the direct labor per vase is $50. Below is the overhead required to make a vase: Molding 2 machine hours Etching 1 DLH Inspection 10 inspections Required:
  7. Compute the total cost of making one vase using the plant wide rate.
  8. Compute the total cost of making one vase using the ABC approach.
  9. What are three environmental conditions would you find in an industry that uses ABC Costing?
  10. When might a firm choose to not use ABC costing and why?