Mgmt 640 final exam answers part 1 and part 2

MGMT 640 Final Exam Answers Part 1 and Part 2 http://homeworktimes.com/downloads/mgmt-640-final-exam-answers-part-1-part-2/

MGMT 640 Final Exam Answers Part 1 and Part 2 Question Attempt 1 Written: May 10, 2015 10:18 AM – May 10, 2015 11:12 AM Submission View Released: Aug 11, 2014 12:01 AM Available until: May 17, 2015 9:51 AM Feedback after End of Due Date Question 1

1 / 1 point

A typical use of managerial accounting is to: help investors and creditors assess the financial position of the company. help management get a clean audit report help the marketing manager decide which product promotion to implement help the SEC decide whether management is in compliance of its policies.

Question 2 1 / 1 point Three costs incurred by Pitt Company are summarized below: 1,000 units 2,000 units Cost A $10,000 $15,000 Cost B $21,000 $21,000 Cost C $16,000 $32,000 Which of these costs are variable?

A, B, and C A and B A only C only Hide Feedback 3 Bubba’s Steakhouse has budgeted the following costs for a month in which 1,600 steak dinners will be produced and sold: Materials, $4,080; hourly labor (variable), $5,200; rent (fixed), $1,800; depreciation, $720; and other fixed costs, $450. Each steak dinner sells for $12.00 each.

How much would Shula’s profit increase if 10 more dinners were sold?

Question 4 0 / 1 point Bellfont Company produces door stoppers. August production costs are below: Door Stoppers produced 78,000 Direct material (variable) $20,000 Direct labor (variable) 40,000

Supplies (variable) 20,000 Supervision (fixed) 26,500 Depreciation (fixed) 22,500 Other (fixed) 6,000 In September, Bellfont expects to produce 100,000 door stoppers. Assuming no structural changes, what is Bellfont’s production cost per door stopper for September?

Question 5

1 / 1 point

Aaron’s chairs is in the process of preparing a production cost budget for August. Actual costs in July for 120 chairs were: Materials cost $4,630 Labor cost 2,880 Rent 1,500 Depreciation 2,500 Other fixed costs 3,200 Materials and labor are the only variable costs. If production and sales are budgeted to change to 100 chairs in August, how much is the expected total variable cost on the August budget?

Question 6 1 / 1 point Carry-ALL plans to sell 1,300 carriers next year and has budgeted sales of $46,000 and profits of $22,000. Variable costs are projected to be $20 per unit. Michael Co. offers to pay $20,400 to buy 660 units from Carry-ALL. Total fixed costs are $7,000 per year. This offer does not affect Carry-ALL’s other planned operations. The incremental revenues for this situation are Question 7 1 / 1 point Stellar Company has the following sales, variable cost, and fixed cost. If sales increase by $10,000 then their profit increases/decreases by how much?

Sales $50,000 Variable Costs $9,700 Fixed Costs $26,000 Question 8 1 / 1 point Susan is trying to decide whether or not to attend college during the next 12-week session. She has the following options: 1. Attend college full-time at a cost of $1,200.

2. Attend college part-time at a cost of $500 and work part-time earning $2,000.

3. Work full-time earning $4,800.

What is Susan’s incremental profit if she chooses option 3 over option 2?

Question 9 0 / 1 point

Total costs were $79,000 when 25,000 units were produced and $93,000 when 37,000 units were produced. Use the high-low method to find the estimated total costs for a production level of 32,000 units.

Question 10 1 / 1 point Professional University teaches a large range of undergraduate courses. It is interested in determining the cost equation for the facilities cost as a function of student credit hours so that it an more accurately budget its facilities costs as enrollment grows. Information for the high and low cost semesters and volumes for last 5 years appears below Semester Student Credit Hours Facilities Cost Spring 2007 250,000 $500,000 Fall 2004 300,000 $530,000 Using the high low method, with student credit hours as the activity driver, what is the equation for facilities cost (FC) as a function of student credit hours?

FC = $350,000 + $0.60 / student credit hour FC = -$585,100 + $1.67 / student credit hour FC = $1.77 / student credit hour FC = $2 / student credit hour View Feedback Question 11

1 / 1 point

Randy’s tireland makes a product that sells for $74 per unit and has $52 per unit in variable costs. Annual fixed costs are $24,000. If Rambles sells 10 units less than breakeven, how much loss would the company recognize on its income statement?

Question 12 1 / 1 point Ritz Furniture has a contribution margin ratio of 0.16. If fixed costs are $162,400, how many dollars of revenue must the company generate in order to reach the break-even point?

Question 13

1 / 1 point

U.S. Telephone Cellular sells phones for $100. The unit variable cost per phone is $50 plus a selling commission of 10% (based on the unit sales price per phone). Fixed manufacturing costs total $1,130 per month, while fixed selling and administrative costs total $2,380. How many phones must be sold to achieve the breakeven point?

Question 14

1 / 1 point

Swimkids is a swimsuit manufacturer. They sell swim suits at a selling price is $30 per unit.

Swimkids variable costs are $18 per unit. Fixed costs are $88,900. Swimkids expects sales of $278,000 next year. What is Swimkids’s margin of safety (in dollars)?

15 Lambardi Company sells 3 types of bags. Bag A sells for $19 and has variable cost of $9.00 per unit. Bag B sells for $14 and has variable cost of $12.00 per unit. Bag C sells for $9 and has variable costs of $6.00 per unit. Lambardi sells in a mix of 2 units of A, 3 units of B and 5 units of C. What is the weighted average contribution margin per unit for Lambardi?

Question 16 1 / 1 point Product A has a contribution margin per unit of $500 and required 2 hours of machine time.

Product B has a contribution margin per unit of $1,000 and requires 5 hours of machine time.

How much of each product should be produced given there are 100 hours of available machine time?

50 units of A and 25 units of B. 25 units of B. 50 units of A. None of the above Hide Feedback

Question 17

1 / 1 point

Delfi Company produces two models of seats, Toro and Prep. Information regarding these products for May follows: Number of units Sales revenue Variable costs Fixed costs Net Income Pounds of plastic to produce one bucket Contribution margin per unit

Toro 3,000 $120,000 60,000 24,000 $36,000 4.0 $20

Due to increased demand of plastic in the market, Delfi Company can obtain only 9,000 pounds of plastic per month. Delfi can sell as many seats as it can produce of either model. How many of each model should Delfi produce to maximize profit in May considering the constraint?

Toro: 0; Prep: 4,375 Toro: 2,250; Prep: 0 Toro: 1,125; Prep: 2,812 Toro: 0; Prep: 5,625 Hide Feedback

Question 18

1 / 1 point

Abagail Corp. uses activity-based costing system with three activity cost pools. The following information is provided: Costs: Wages and salaries $ 200,000 Depreciation 105,000 Utilities 114,000 Total $440,000 Activity Cost Pools Assembly Setting Up Other Wages and salaries 0.56 30% 10% Depreciation 0.30 45% 20% Utilities 0.24 40% 30% How much total cost would be allocated to the Assembly activity cost pool?

Question 19

1 / 1 point

Which of the following is not a goal of Managerial Accounting?

Provide information managers need for planning.

Provide information managers need for market wide interest rates.

Provide information managers need for control.

Provide information managers need for decision making.

Question 20 1 / 1 point Which one of the following is least likely to be a fixed cost?

Rent for buildings Rent for land Cost of commodity inputs Cost of property, plant and equipment part 2 Attempt 1 Written: May 10, 2015 11:15 AM – May 10, 2015 12:13 PM Submission View Released: Aug 11, 2014 12:01 AM Available until: May 17, 2015 10:52 AM Feedback after End of Due Date Question 1

1 / 1 point

Maxx Inc. has provided the following data from its activity-based costing system: Activity Cost Pools Total Cost Total Activity Designing products $385,300 6,580 product design hours Setting up batches $52,678 7366 batch set-ups Assembling products $25,122 4,018 assembly hours The activity rate for the “designing products” activity cost pool is: Question 2 1 / 1 point Sasha Company allocates the estimated $188,400 of its accounting department costs to its production and sales departments since the accounting department supports the other two departments particularly with regard to payroll and accounts payable functions. The costs will be allocated based on the number of employees using the direct method. Information regarding costs and employees follows: Department Employees Accounting 4 Production 35 Sales 16 How much of the accounting department costs will be allocated to the production?

Answer: Question 3 1 / 1 point Medusa Company allocates costs from the payroll department (S1) and the maintenance department (S2) to the molding (P1), finishing (P2), and packaging (P3) departments. Payroll department costs are allocated based on the number of employees in the department and maintenance department costs are allocated based on the number of square feet which the production department occupies within the factory. Information about the departments is presented below: Number of Number of Square Department Costs Employees Feet Occupied Payroll (S1) $137,000 2 2,000 Maintenance (S2) $220,000 8 64,000 Molding (P1) 69 100,000 Finishing (P2) 42 60,000 Packaging (P3) 20 40,000 Medusa uses the direct method to allocate costs. Round all answers to the nearest dollar.

What amount of the payroll department costs will be allocated to the molding department?

Question 4 1 / 1 point The Manassas Company has 55 obsolete keyboards that are carried in inventory at a cost of $9,600. If these keyboards are upgraded at a cost of $7,200, they could be sold for $18,800.

Alternatively, the keyboards could be sold “as is” for $8,800. What is the net advantage or disadvantage of re-working the keyboards?

Question 5 1 / 1 point

Ritz Company sells fine collectible statues and has implemented activity-based costing. Costs in the shipping department have been divided into three cost pools. The first cost pool contains costs that are related to packaging and shipping and Rand has determined that the number of boxes shipped is an appropriate cost driver for these costs. The second cost pool is made up of costs related to the final inspection of each item before it is shipped and the cost driver for this pool is the number of individual items that are inspected and shipped. The final cost pool is used for general operations and supervision of the department and the cost driver is the number of shipments. Information about the department is summarized below: Cost Pool Total Costs Cost Driver Packaging and shipping $161,800 Number of boxes shipped Final inspection $199,900 Number of individual items shipped General operations and supervision $82,600 Number of orders

An 21, 97, 8,6

During the period, the Far East sales office generated 661 orders for a total of 6,190 items. These orders were shipped in 1,296 boxes. What amount of shipping department costs should be allocated to these sales?

Question 6 0 / 1 point

Baller Financial is a banking services company that offers many different types of checking accounts. The bank has recently adopted an activity-based costing system to assign costs to their various types of checking accounts. The following data relate to the money market checking accounts, one of the popular checking accounts, and the ABC cost pools: Annual number of accounts = 59,000 accounts Checking account cost pools: Cost Pool Cost Cost Drivers Returned check costs $2,920,000 Number of returned checks Checking account reconciliation costs 59,000 Number of account reconciliation reques New account setup 637,000 Number of new accounts Copies of cancelled checks 393,000 Number of cancelled check copy requests Online banking web site maintenance 188,000 Per product group (type of account) Annual activity information related to cost drivers: Cost Pool All Products Returned check 200,000 returned checks Check reconciliation costs 393,000 checking account New accounts 60,000 new accounts Cancelled check copy requests 92,000 cancelled check Web site costs 8 types of accounts

Money Market Check 18,000 420 15,000 60,000 1

Calculate the overhead cost per account for the Money Market Checking.

Question 7 1 / 1 point Sosa Company has $39 per unit in variable costs and $1,900,000 per year in fixed costs. Demand is estimated to be 138,000 units annually. What is the price if a markup of 35% on total cost is used to determine the price?

Question 8

1 / 1 point

Bob’s Company sells one product with a variable cost of $5 per unit. The company is unsure what price to charge in order to maximize profits. The price charged will also affect the demand.

If fixed costs are $100,000 and the following chart represents the demand at various prices, what price should be charged in order to maximize profits?

Units Sold Price 30,000 $10 40,000 $9 50,000 $8 60,000 $7 $10 $9 $8 $7 View Feedback Question 9

1 / 1 point

A retailer purchased some trendy clothes that have gone out of style and must be marked down to 30% of the original selling price in order to be sold. Which of the following is a sunk cost in this situation? the original selling price the anticipated profit the original purchase price the current selling price Question 10 1 / 1 point Carlton Products Company has analyzed the indirect costs associated with servicing its various customers in order to assess customer profitability. Results appear below: Cost Pool Annual Cost Cost Driver Annual Driver Quantity Processing electronic orders Processing non-electronic orders Picking orders Packaging orders Returns

$1,000,000 $2,000,000 $3,000,000 $1,500,000 $2,000,000

Number of orders Number of orders Number of different products ordered Number of items ordered Number of returns

If all costs were assigned to customers based on the number of items ordered, what would be the cost per item ordered?

Question 11 1 / 1 point

Costa Company has a capacity of 40,000 units per year and is currently selling 35,000 for $400 each. Barton Company has approached Costa about buying 2,000 units for only $300 each. The units would be packaged in bulk, saving Costa $20 per unit when compared to the normal packaging cost. Normally, Costa has a variable cost of $280 per unit. The annual fixed cost of $2,000,000 would be unaffected by the special order. What would be the impact on profits if Costa were to accept this special order?

Profits would increase $40,000.

Profits would increase $60,000.

Profits would decrease $ Profits would increase $80,000 Question 12 0 / 1 point A company has $6.70 per unit in variable costs and $3.00 per unit in fixed costs at a volume of 50,000 units. If the company marks up total cost by 0.49, what price should be charged if 64,000 units are expected to be sold?

Question 13 1 / 1 point Customer profitability analysis might result in: dropping some customers that are unprofitable. lowering price or offering incentives to profitable customers. giving incentives to all customers to place orders online.

All of the above.

Question 14 1 / 1 point The Estrada Company uses cost-plus pricing with a 0.34 mark-up. The company is currently selling 100,000 units at $12 per unit. Each unit has a variable cost of $5.90. In addition, the company incurs $198,200 in fixed costs annually. If demand falls to 82,700 units and the company wants to continue to earn a 0.34 return, what price should the company charge?

Question 15 1 / 1 point A new product is being designed by an engineering team at Golem Security. Several managers and employees from the cost accounting department and the marketing department are also on the team to evaluate the product and determine the cost using a target costing methodology. An analysis of similar products on the market suggests a price of $125.00 per unit. The company requires a profit of 0.19 of selling price. How much is the target cost per unit?

Question 16 0 / 1 point A company using activity based pricing marks up the direct cost of goods by 0.20 plus charges customers for indirect costs based on the activities utilized by the customer. Indirect costs are charged as follows: $6.60 per order placed; $2.00 per separate item ordered; $29.60 per return. A customer places 10 orders with a total direct cost of $2,700, orders 295 separate items, and makes 4 returns. What will the customer be charged?

Question 17 1 / 1 point A law firm uses activity-based pricing. The company’s activity pools are as follows: Cost Pool Annual Estimated Cost Cost Driver Annual Driver Quantity

Consultation Administrative Costs Client Service

187,000 147,000 92,000

Number of consultations Admin labor hours Number of clients

100 consultat 9,900 labor h 110 clients

The firm had two consultations with this client and required 130 administrative labor hours.

What additional costs will be charged to this customer?

Answer Question 18 1 / 1 point The Break-Even point is the

Question 19

number of units sold that allow the company to neither a pro number of units sold that allow the company to pay labor th dollar revenues that allows the firm to pay the required rate investors dollar profits that allows the firm to pay the required rate of investors 1 / 1 point

Which of the following is not part of the Process of Cost Allocation Select an allocation base to relate the cost pools to the cost o Form cost pools Identify the cost objectives Allocate revenues to different products of the firm Question 20 1 / 1 point Opportunity costs are: Never incremental costs Always incremental costs Sometimes sunk costs Greater than sunk costs