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ACCT 505 Entire Course (New)

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ACCT 505 Week 3 Case Study II

ACCT 505 Week 4 Midterm Exam

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ACCT 505 Week 5 Measuring Performance - Course Project A

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ACCT 505 Week 6 Quiz Set 2

ACCT 505 Week 7 Capital Budgeting Course Project

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ACCT 505 Final Exam Guide (New) Set 1

ACCT 505 Final Exam Guide (New) Set 2


ACCT 505 Final Exam Guide (New) Set 3

ACCT 505 Midterm Exam (New) Set 1

ACCT 505 Midterm Exam (New) Set 2 *************************************

ACCT 505 Final Exam (New) All 3 Set

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Multiple Choice 2

Short 2

Essay 7

Question 1 : (TCO E) Designing a new product is a(n)

2. Question : (TCO G) Given the following data, what would ROI be?

Sales $70,000

Net operating income $10,000

Contribution margin $20,000

Average operating assets $50,000

Stockholder's equity $25,000


1. Question : (TCO C) Longiotti Corporation produces and sells a single product. Data

concerning that product appear below.

Selling price per unit $375.00

Variable expense per unit $144.00

Fixed expense per month $1,686,300

Required:

Determine the monthly breakeven in units or dollar sales. Show your work!

2. Question : (TCO B) Maverick Corporation uses the weightedaverage method in its

process costing system. Data concerning the first processing department for


the most recent month are listed below.

Work in process, beginning:

Units in beginning work in process inventory 400

Materials costs $6,900

Conversion costs $2,500

Percent complete for materials 80%

Percent complete for conversion 15%

Units started into production during the month 6,000

Units transferred to the next department during the month 5,600

Materials costs added during the month $112,500

Conversion costs added during the month $210,300


1. Question : (TCO D) Topple Company produces a single product. Operating data for the

company and its absorption costing income statement for the last year are

presented below.

Units in beginning inventory 2,000

Units produced 9,000

Units sold 10,000

Sales $100,000

Less cost of goods sold:

Beginning inventory 12,000


Add cost of goods manufactured 54,000

Goods available for sale 66,000

Less ending inventory 6,000

Cost of goods sold 60,000

Gross margin 40,000

Less selling and admin. expenses 28,000

Net operating income $12,000

2. Question : (TCO I) (Ignore income taxes in this problem.) Bill Anders retires in 8 years.

He has $650,000 to invest and is considering a franchise for a fastfood

outlet. He would have to purchase equipment costing $500,000 to equip the


outlet and invest an additional $150,000 for inventories and other working

capital needs. Other outlets in the fast-food chain have an annual net cash

inflow of about $160,000. Mr. Anders would close the outlet in 8 years. He

estimates that the equipment could be sold at that time for about 10% of its

original cost. Mr. Anders' required rate of return is 16%.

Required:

Part A: What is the investment's net present value when the discount rate is

16%?


Part B: Refer to your calculations. Is this an acceptable investment? Why or

why not?

3. Question : (TCO A) The following data (in thousands of dollars) have been taken from the accounting records of the Maroon Corporation for the just-completed

year.

Sales 1,300

Raw materials inventory, beginning 25

Raw materials inventory, ending 30

Purchases of raw materials 250

Direct labor 350

Manufacturing overhead 500


Administrative expenses 300

Selling expenses 250

Work in process inventory, beginning 150

Work in process inventory, ending 100

Finished goods inventory, beginning 80

Finished goods inventory, ending 110

Use the above data to prepare (in thousands of dollars) a schedule of Cost

of Goods Manufactured and a Schedule of Cost of Goods Sold for the year.

In addition, what is the impact on the financial statements if the ending


finished goods inventory is overstated or understated?

4. Question : (TCO F) Walker Corporation is preparing its cash budget for November. The

budgeted beginning cash balance is $43,000. Budgeted cash receipts total $117,000 and budgeted cash disbursements total $122,000. The desired

ending cash balance is $55,000. The company can borrow up to $100,000 at

any time from a local bank, with interest not due until the following month.

Required:

Prepare the company's cash budget for November in good form. Make sure

to indicate what borrowing, if any, would be needed to attain the desired


ending cash balance

5. Question : (TCO F) Bella Lugosi Holdings, Inc. (BLH), has collected the following

operating information for its current month's activity. Using this information,

prepare a flexible budget analysis to determine how well BLH performed in

terms of cost control.

Static Budget

Activity level (in units) 5,250 5,178

Variable costs:


Indirect materials $24,182 $23,476

Utilities $22,356 $22,674

Fixed costs:

Administration $63,450 $65,500

Rent $65,317 $63,904

6. Question : (TCO H) Lindon Company uses 7,500 units of Part Y each year as a

component in the assembly of one of its products. The company is presently

producing Part Y internally at a total cost of $119,000 as follows.

Direct


materials

$26,000

Direct labor 28,000

Variable

manufacturing

overhead

20,000

Fixed

manufacturing

overhead

45,000


Total costs $119,000

An outside supplier has offered to provide Part Y at a price of $12 per unit. If

Lindon stops producing the part internally, one third of the fixed

manufacturing overhead would be eliminated.

Required: Prepare a make-or-buy analysis showing the annual advantage or

disadvantage of accepting the outside supplier's offer. Please state clearly

whether the part should be made or bought and share your work.

7. Question : (TCO B) Sandler Corporation bases its predetermined overhead rate on the


estimated machine hours for the upcoming year. Data for the upcoming year

appear below.

Estimated machine hours 75,000

Estimated variable manufacturing

overhead $4.50 per machine hour

Estimated total fixed manufacturing

overhead $825,000

The actual machine hours for the year turned out to be 77,000.

Required:

Compute the company's predetermined overhead rate.


Set 2

1. (TCO C) Madlem, Inc., produces and sells a single product whose selling price is $120.00 per unit and whose variable expense is $46.20 per unit. The company's fixed expense is $405,900 per month.

Required: Determine the monthly breakeven in either unit or total dollar sales. Show your work! (Points : 25)

Question 2.2. (TCO B) Industrial Supply Corporation uses the weighted-average method in its process costing system. Data concerning the first processing department for the most recent month are listed below.

Work in process, beginning:

Units in beginning work in process inventory 400

Materials costs $6,900

Conversion costs $2,500


Percent complete for materials 80%

Percent complete for conversion 15%

Units started into production during the month 6,000

Units transferred to the next department during the month 5,200

Materials costs added during the month $112,500

Conversion costs added during the month $210,300

Ending work in process:

Units in ending work-in-process inventory 1,200

Percentage complete for materials 75%

Percentage complete for conversion 30%


Required: Calculate the equivalent units for conversion for the month in the first processing department. (Points : 25)

Question 1.1. (TCO D) The following absorption costing income statement and additional data are available from the accounting records of Bernon Co. for the month ended May 31, XXXX. During the accounting period, 17,000 units were manufactured and sold at a price of $60 per unit. There were no beginning inventories.

Bernon Co.

Absorption Costing Income Statement

for the Month Ended May 31, XXXX

Sales (17,000 @ $60) $1,020,000

Cost of goods sold

612,000

Gross profit $ 408,000

Selling and administrative expenses

66,000


Income from operations $ 342,000

Additional Information:

Cost Total Cost Number of Units Unit Cost

Manufacturing costs:

Variable $442,000 17,000 $26

Fixed 170,000 17,000 10

Total $612,000 $36

Selling and administrative expenses:

Variable ($2 per unit sold) $34,000

Fixed 32,000


Total $66,000

Required: Prepare a new income statement for the year using variable costing. Comment on the differences, if any, between the absorption costing and the variable costing income statements. (Points : 30)

Question 2.2. (TCO I) (Ignore income taxes in this problem.) Simpson Beauty Products Corporation is considering the production of a new conditioning shampoo that will require the purchase of new mixing machinery. The machinery will cost $700,000, is expected to have a useful life of 10 years, and is expected to have a salvage value of $70,000 at the end of 10 years. The machinery will also need a $45,000 overhaul at the end of Year 5. A $60,000 increase in working capital will be needed for this investment project. The working capital will be released at the end of the 10 years. The new shampoo is expected to generate net cash inflows of $150,000 per year for each of the 10 years. Simpson's discount rate is 18%.

Items Year(s) Amount 18% Factor Present Value

Cost of machinery Now ($700,000) 1 ($700,000)

Working capital increase Now ($60,000) 1 ($60,000)


Annual cash inflows 1–10 $150,000 4.494 674,100

Overhaul 5 ($45,000) 0.437 ($19,665)

Salvage value 10 $70,000 0.191 13,370

Working capital release 10 $60,000 0.191 11,460

Net present value

($80,735)

Required:

(a) What is the net present value of this investment opportunity?

(b) Based on your answer to (a) above, should Simpson go ahead with the new conditioning shampoo? (Points : 30)

Question 3.3. (TCO A) The following data (in thousands of dollars) have been taken from the accounting records of the Maroon Corporation for the just-completed year.


Sales 1,700

Raw materials inventory, beginning 50

Raw materials inventory, ending 25

Purchases of raw materials 210

Direct labor 360

Manufacturing overhead 330

Administrative expenses 400

Selling expenses 200

Work-in-process inventory, beginning 120

Work-in-process inventory, ending 150

Finished goods inventory, beginning 80


Finished goods inventory, ending 120

Use the above data to prepare (in thousands of dollars) a schedule of Cost of Goods Manufactured and a Schedule of Cost of Goods Sold for the year. In addition, what is the impac on the financial statements if the ending finished goods inventory is overstated or understated? (Points : 25)

Question 4.4. (TCO F) Walker Corporation is preparing its cash budget for November. The budgeted beginning cash balance is $43,000. Budgeted cash receipts total $117,000 and budgeted cash disbursements total $122,000. The desired ending cash balance is $55,000. The company can borrow up to $100,000 at any time from a local bank, with interest not due until the following month.

Required:Prepare the company's cash budget for November in good form. Make sure to indicate what borrowing, if any, would be needed to attain the desired ending cash balance(Points : 25) Question 5.5. (TCO F) The following overhead data are for a department of a large company.

Actual Costs Incurred Static Budget


Activity level (in units) 360 340

Variable costs:

Indirect materials $4,182 $4,148

Electricity $2,536 $2,414

Fixed costs:

Administration $6,540 $6,500

Rent $6,310 $6,400

Required: Construct a flexible budget performance report that would be useful in assessing how well costs were controlled in this department. (Points : 25)

Question 6.6. (TCO H) McMullen Co. uses 10,000 units of Part X each year as a component in the assembly of one of its products. The company is presently producing Part X internally at a total cost of $125,000 as follows.


Direct materials $40,000

Direct labor 30,000

Variable manufacturing overhead 25,000

Fixed manufacturing overhead 30,000

Total costs $125,000

An outside supplier has offered to provide Part X at a price of $10 per unit. If McMullen stops producing the part internally, one third of the fixed manufacturing overhead would be eliminated.

Required: Prepare a make-or-buy analysis showing the annual advantage or disadvantage of accepting the outside supplier's offer. Please state clearly whether the part should be made or bought and share your work. (Points : 30)

Question 7.7. (TCO B) Buckhorn Corporation bases its predetermined overhead rate on the estimated machine hours for the upcoming year. Data for the upcoming year appear below.


Estimated machine hours 37,000

Estimated variable manufacturing overhead $7.77 per machine hour

Estimated total fixed manufacturing overhead $888,000

The actual machine hours for the year turned out to be 35,000.

Required: Compute the company's predetermined overhead rate. (Points : 25)

Set 3

(TCO E) Preparing purchase orders is a(n) (Points : 5)

batch-level activity.


product-level activity.

unit-level activity.

organization sustaining activity.

2. (TCO G) Given the following data, what would ROI be?

Sales $70,000

Net operating income $10,000

Contribution margin $20,000

Average operating assets $50,000

Stockholder's equity $25,000

(Points : 5)


28.6%

20.0%

40.0%

50.0%

3. (TCO C) Heckaman Corporation produces and sells a single product. Data concerning that product appear below.

Selling price per unit $115.00

Variable expense per unit $56.35

Fixed expense per month $299,115

4. TCO B) Industrial Supply Corporation uses the weightedaverage method in its process costing system. Data concerning the first processing department for the most recent month are listed below.


Work in process, beginning:

Units in beginning work in process inventory 400

Materials costs $6,900

Conversion costs $2,500

Percent complete for materials 80%

Percent complete for conversion 15%

5. (TCO D) Topple Company produces a single product. Operating data for the company and its absorption costing income statement for the last year are presented below.

Units in beginning inventory 0

Units produced 9,000

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ACCT 505 Inspiring Innovation--tutorialrank.com  

For more course tutorials visit www.tutorialrank.com ACCT 505 Week 1-7 All Discussion Questions ACCT 505 Week 1 Case Study

ACCT 505 Inspiring Innovation--tutorialrank.com  

For more course tutorials visit www.tutorialrank.com ACCT 505 Week 1-7 All Discussion Questions ACCT 505 Week 1 Case Study

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