Final Exam: Chapters 1-14
Final Exam: Chapters 1-14 Name ___________________________ Name ___________________________ ISV Managerial Accounting, 4e
ISV Managerial Accounting, 4e Instructor Instructor ___________________________________ _____________ Secti
Section # __on # ________________ Date ___Date ______________ ___
P
Paarrtt II IIII IIIIII IIVV VV TToottaall
P
Pooiinnttss 6600 1188 1199 1144 1144 112255 Score
Score
PAT I ! "$TIP$% &'(I&% )60 *oints+ PAT I ! "$TIP$% &'(I&% )60 *oints+ Instructions:
Instructions: Desi,nate t-e .est Desi,nate t-e .est ans/er or eac- ans/er or eac- o t-e ollo/o t-e ollo/in, uestionsin, uestions ____
____ 11 A A res*onsi.ilit3 res*onsi.ilit3 center center t-at t-at incurs incurs costs costs )an )an e*enses+ e*enses+ an an ,enerates ,enerates reenues reenues isis classiie as a)n+
classiie as a)n+ a
a cocosst ct cenentteerr .
. rereeenunue ce cenenteterr cc *r*rooit cit cenenteterr
inineeststmement nt cecentnterer ____
____ 22 T-e T-e most most useul useul measure measure or or ealuatin, ealuatin, a a mana,er7s mana,er7s *erormance *erormance in in controllin,controllin, reenues an costs in a
reenues an costs in a *roit center is*roit center is a
a cocontntriri.u.utition on mamar,r,inin .
. cocontntriri.u.utition neon net int incocomeme c
c cocontntriri.u.utition ,ron ,rososs *ros *roiitt
cocontntrorolllla.a.le le mamar,r,inin ____
____ amse3 &or*oration amse3 &or*oration esires to esires to earn tar,et earn tar,et net income net income o 90:000 o 90:000 I t-e I t-e sellin, *ricesellin, *rice *er unit is 0: unit aria.le cost is 24: an total ie costs are 60:000: t-e *er unit is 0: unit aria.le cost is 24: an total ie costs are 60:000: t-e num.er o units t-at t-e com*an3
num.er o units t-at t-e com*an3 must sell to earn its tar,et net must sell to earn its tar,et net income isincome is a a 00::000000 . . ;;55::000000 cc 4455::000000 6600::000000 ____
____ 44 S-ane &or*oration S-ane &or*oration uses a uses a *rocess cost *rocess cost accountin, s3stem <ien accountin, s3stem <ien t-e ollo/in, t-e ollo/in, ata:ata: com*ute t-e num.er o units transerre out urin, t-e current *erio
com*ute t-e num.er o units transerre out urin, t-e current *erio =
=ee,,iinnnniinn, , >>oorr? ? iin n PPrroocceessss 2020::00000 0 uunniitts s ))11@@2 2 ccoomm**lleettee++ %
%nniinn, , >>oorr? ? iin n PPrroocceessss 2255::00000 0 uunniitts s ))11@@ ccoomm**lleettee++ S
Sttaarrttee iinntto o PPrroouuccttiioonn 115500::00000 0 uunniittss a a 112255::000000 . . 114411::6666;; cc 114455::000000 115500::000000
Test Bank for ISV Manaerial !ccountin" Fourth E#ition
____ 5 >itten &om*an3 a**lies oer-ea on t-e .asis o mac-ine -ours <ien t-e ollo/in, ata: com*ute oer-ea a**lie an t-e uner or oera**lication o oer-ea or t-e *erioB
%stimate annual oer-ea cost 1:200:000 Actual annual oer-ea cost 1:150:000
%stimate mac-ine -ours 00:000
Actual mac-ine -ours 280:000
a 1:120:000 a**lie an 0:000 unera**lie . 1:200:000 a**lie an 0:000 oera**lie c 1:120:000 a**lie an 0:000 oera**lie
1:150:000 a**lie an neit-er uner nor oera**lie
____ 6 T-e ollo/in, ata -as .een collecte or use in anal3Cin, t-e .e-aior o main tenance costs o iell &or*orationB
"ont- "aintenance &osts "ac-ine 'ours
anuar3 121:000 20:000 Ee.ruar3 125:000 2:000 "arc- 128:000 24:000 A*ril 159:000 4:000 "a3 168:000 6:000 une 1;8:000 8:000 ul3 181:000 40:000
sin, t-e -i,-lo/ met-o to se*arate t-e maintenance costs into t-eir aria.le an ie cost com*onents: t-ese com*onents are
a 5 *er -our *lus 20:000 . 5 *er -our *lus 0:000 c 4 *er -our *lus 41:000 *er -our *lus 61:000
____ ; <ien t-e ollo/in, inormation or 'ett &om*an3: com*ute t-e com*an37s (IB Sales ! 1:000:000F &ontrolla.le "ar,in ! 120:000F Aera,e (*eratin, Assets ! 500:000
a 40G . 50G c 12G 24G
____ 8 <ien t-e ollo/in, ata or <lennon &om*an3: com*ute )A+ total manuacturin, costs an )=+ costs o ,oos manuactureB
Direct materials use 120:000 =e,innin, /or? in *rocess 20:000
Direct la.or 50:000 %nin, /or? in *rocess 10:000
"anuacturin, oer-ea 150:000 =e,innin, inis-e ,oos 25:000 (*eratin, e*enses 1;5:000 %nin, inis-e ,oos 15:000
)A+ )=+ a 10:000 0:000 . 20:000 10:000 c 20:000 0:000 0:000 40:000 FE- $
Einal %am
____ 9 T-e *rouction cost re*ort s-o/s .ot- uantities an costs &osts are re*orte in t-ree sectionsB )1+ costs accounte or: )2+ unit costs: an )+ costs c-ar,e to e*artment T-e sections are liste in t-e ollo/in, orerB
a )1+: )2+: )+ . )1+: )+: )2+ c )2+: )1+: )+ )2+: )+: )1+
____ 10 T-e startin, *oint o a master .u,et is t-e *re*aration o t-e a cas- .u,et
. sales .u,et c *rouction .u,et
.u,ete .alance s-eet
____ 11 T-e most useul measure or ealuatin, t-e *erormance o t-e mana,er o an inestment center is
a contri.ution mar,in . controlla.le mar,in c return on inestment income rom o*erations
____ 12 >-ic- o t-e ollo/in, ca*ital .u,etin, tec-niues e*licitl3 ta?es t-e time alue o mone3 into consierationH
a Annual rate o return . Internal rate o return c Net *resent alue =ot- ).+ an )c+ a.oe
____ 1 T-e cost classiication sc-eme most releant to res*onsi.ilit3 accountin, is a controlla.le s uncontrolla.le
. ie s aria.le
c semiaria.le s mie irect s inirect
se t-e ollo/in, inormation or uestions 14 an 15
<rant &om*an3 estimates its sales at 60:000 units in t-e irst uarter an t-at sales /ill increase .3 6:000 units eac- uarter oer t-e 3ear It -as: an esires: a 25G enin, inentor3 o inis-e ,oos %ac- unit sells or 25 40G o t-e sales are or cas- ;0G o t-e creit customers *a3 /it-in t-e uarter T-e remainer is receie in t-e uarter ollo/in, sale
____ 14 &as- collections or t-e t-ir uarter are .u,ete at a 1:01;:000
. 1:4;6:000 c 1:;;:000 2:052:000
____ 15 Prouction in units or t-e t-ir uarter s-oul .e .u,ete at a ;:500
. 69:000 c 91:500 ;2:000
Test Bank for ISV Manaerial !ccountin" Fourth E#ition
____ 16 Stine &om*an3 incurs t-e ollo/in, costs in *roucin, 50:000 units o *rouctB
Direct materials 100:000
Direct la.or 50:000
Varia.le manuacturin, oer-ea 100:000 Eie manuacturin, oer-ea 00:000
An outsie su**lier -as oere to su**l3 t-e 50:000 units at ;00 eac- All o Stine7s relate aria.le costs: .ut onl3 200:000 o t-e ie costs /oul .e eliminate i t-e oer is acce*te Acce*tance /ill result in a
a sain,s o 200:000 . loss o 100:000 c sain,s o 100:000 loss o 200:000
____ 1; Einne3 &om*an3 -as a *rouction *rocess /-ere t/o *roucts result rom a oint *rocessin, *roceureF .ot- can .e sol immeiatel3 or *rocesse urt-er <ien t-e ollo/in, aitional *er unit inormation: etermine /-ic- o t-e *roucts s-oul .e *rocesse urt-er
Allocate Aitional Ne/
Prouct oint &ost Sellin, Price Processin, &ost Sellin, Price
A 100 200 180 400 = 60 100 50 160 a A . = c =ot- Neit-er ____ 18 A lei.le .u,et
a is also calle a static .u,et
. can .e consiere a series o relate static .u,ets
c can .e *re*are or sales or *rouction .u,ets: .ut not or an o*eratin, e*ense .u,et
t3*icall3 uses an actiit3 ine ierent rom t-at use in eelo*in, t-e *reetermine oer-ea rate
____ 19 &are3 &om*an37s eui*ment account increase 800:000 urin, t-e *erioF t-e relate accumulate e*reciation increase 60:000 Ne/ eui*ment /as *urc-ase at a cost o 1:400:000 an use eui*ment /as sol at a loss o 40:000 De*reciation e*ense /as 200:000 Procees rom t-e sale o t-e use eui*ment /ere
a 420:000 . 500:000 c 560:000 640:000
____ 20 >-ic- o t-e ollo/in, com.inations *resents correct eam*les o liuiit3: *roita.ilit3: an solenc3 ratios: res*ectiel3H
$iuiit3 Proita.ilit3 Solenc3
a Inentor3 turnoer Inentor3 turnoer Times interest earne . &urrent ratio Inentor3 turnoer De.t to total assets c eceia.les turnoer eturn on assets Times interest earne
Juic? ratio Pa3out ratio eturn on assets
Einal %am
____ 21 A com*an3Ks *lanne actiit3 leel or net 3ear is e*ecte to .e 100:000 mac-ine -ours At t-is leel o actiit3: t-e com*an3 .u,ete t-e ollo/in, manuacturin, oer-ea costsB
Varia.le Eie
Inirect materials 60:000 De*reciation 25:000
Inirect la.or 80:000 Taes 5:000
Eactor3 su**lies 10:000 Su*erision 20:000
A lei.le .u,et *re*are at t-e 90:000 mac-ine -ours leel o actiit3 /oul allo/ total manuacturin, oer-ea costs o
a 15:000 . 180:000 c 185:000 150:000
____ 22 A com*an3 eelo*e t-e ollo/in, *er unit materials stanars or its *rouctB ,allons o irect materials at 5 *er ,allon I 4:000 units o *rouct /ere *rouce last mont- an 12:500 ,allons o irect materials /ere use: t-e irect materials uantit3 ariance /as
a 1:500 aora.le . 2:500 unaora.le c 1:500 unaora.le 2:500 aora.le
____ 2 T-e stanar irect la.or cost or *roucin, one unit o *rouct is 5 irect la.or -ours at a stanar rate o *a3 o 8 $ast mont-: 5:000 units /ere *rouce an 24:500 irect la.or -ours /ere actuall3 /or?e at a total cost o 180:000 T-e irect la.or uantit3 ariance /as
a 4:000 unaora.le . 6:000 unaora.le c 6:000 aora.le 4:000 aora.le
____ L24 Sm3t-e &om*an3 a**lies oer-ea to *roucts .ase on irect la.or -ours "anuacturin, oer-ea at t-e e*ecte normal leel o actiit3 is 50:000 *er mont-*lus 5 *er irect la.or -our Durin, une: actual manuacturin, oer-ea costs amounte to 85:000 /-en 6:100 actual irect la.or -ours /ere /or?e T-e stanar num.er o irect la.or -ours t-at s-oul -ae .een /or?e or t-e out*ut ac-iee /as 6:000 irect la.or -ours T-e oer-ea controlla.le ariance or une /as
a 4:500 unaora.le . :400 aora.le c 5:000 unaora.le 5:000 aora.le
____ 25 ner t-e timeanmaterial*ricin, a**roac-: t-e c-ar,es or an3 *articular o. inclue eac- o t-e ollo/in,except t-e
a la.or c-ar,e
. c-ar,e or materials c material loain, c-ar,e oer-ea c-ar,e
Test Bank for ISV Manaerial !ccountin" Fourth E#ition
____ 26 T-e transer *ricin, a**roac- t-at oes not relect t-e sellin, iisionKs true *roit a.ilit3 is t-e
a cost.ase a**roac- . mar?et.ase a**roac- c ne,otiate *rice a**roac-
timeanmaterial*ricin, a**roac- se t-e ollo/in, inormation or uestions 2; an 28
o.ot To3 &om*an3 manuactures t/o *rouctsB M(Tron an "ec-oman o.otKs oer-ea costs consist o settin, u* mac-ines: 200:000F mac-inin,: 450:000F an ins*ectin,: 150:000 Aitional inormation on t-e t/o *roucts isB
M(Tron "ec-oman
Direct la.or -ours 15:000 25:000
"ac-ine setu*s 600 400
"ac-ine -ours 24:000 26:000
Ins*ections 800 ;00
____ 2; (er-ea a**lie to "ec-oman usin, traitional costin, is a 20:000
. 84:000 c 416:000 500:000
____ 28 (er-ea a**lie to M(Tron usin, actiit3.ase costin, is a 00:000
. 84:000 c 416:000 480:000
____ 29 An a**ro*riate cost rier or an assem.lin, cost *ool is t-e num.er o a *urc-ase orers
. setu*s c *arts
irect la.or -ours
____ 0 >-ic- o t-e ollo/in, is inclue in t-e cost o ,oos manuacture uner a.sor*tion costin, .utnot uner aria.le costin,H
a Direct materials
. Varia.le actor3 oer-ea c Eie actor3 oer-ea Direct la.or
Einal %am PAT II ! "AT&'IN< )18 *oints+
Instructions: Desi,nate t-e terminolo,3 t-at .est re*resents t-e einition or statement ,ien .elo/ .3 *lacin, t-e ienti3in, letter)s+ in t-e s*ace *roie No term s-oul .e use more t-an once
A Actiit3.ase costin, N o. cost s-eet
= Annual rate o return ( Noncontrolla.le costs & =u,etar3 control P Nonalueae actiit3 D &ontri.ution mar,in J (*eratin, .u,ets
% &ontri.ution mar,in ratio L (er-ea controlla.le ariance E &ontrolla.le costs LS (er-ea olume ariance < A.sor*tion costin, T P-3sical units
' &ost accountin, Process cost s3stems
I &ost centers V Prouct costs
&ost o ca*ital > Proit center
%uialent units o *rouction M Valueae actiit3
$ Eie costs O Varia.le costs
" Eree cas- lo/ Variances
____ 1 &osts t-at a mana,er -as t-e aut-orit3 to incur /it-in a ,ien *erio o time ____ 2 A orm use to recor t-e costs c-ar,ea.le to a o.
____ A res*onsi.ilit3 center t-at incurs costs an also ,enerates reenues
____ 4 T-e ierence .et/een oer-ea .u,ete or stanar -ours allo/e an oer-ea incurre
____ 5 T-e amount o reenue remainin, ater euctin, aria.le costs
____ 6 se to a**l3 costs to similar *roucts t-at are mass *rouce in a continuous as-ion
____ ; &osts t-at ar3 in total irectl3 an *ro*ortionatel3 /it- c-an,es in t-e actiit3 leel ____ 8 T-e ierences .et/een actual costs an stanar costs
____ 9 Determines *roita.ilit3 o a ca*ital e*eniture .3 iiin, e*ecte net income .3 t-e aera,e inestment
____ 10 T-e rate a com*an3 must *a3 to o.tain uns rom creitors an stoc?-olers ____ 11 &osts t-at are an inte,ral *art o *roucin, t-e inis-e *rouct
____ 12 Allocates oer-ea to multi*le cost *ools an assi,ns t-e cost *ools to *roucts .3 means o cost riers
____ 1 Inoles t-e measurin,: recorin,: an re*ortin, o *rouct costs
____ 14 A measure o t-e /or? one urin, t-e *erio: e*resse in ull3 com*lete units ____ 15 A costin, a**roac- in /-ic- all manuacturin, costs are c-ar,e to t-e *rouct ____ 16 Increase t-e /ort- o a *rouct or serice to customers
____ 1; T-e amount o rom o*erations ater euctin, ca*ital e*enitures an cas-iiens *ai
____ 18 Iniiual .u,ets t-at culminate in a .u,ete income statement
Test Bank for ISV Manaerial !ccountin" Fourth E#ition PAT III ! VAIAN&% ANA$OSIS )19 *oints+
T-e (lson &om*an3 eelo*e t-e ollo/in, stanar costs or its *rouct in 2008B
Stanar &ost &ar nit Stanar &ost Direct materials )5 *ouns Q 4 *er *oun+ 20
Direct la.or )4 -ours Q 8 *er -our+ 2 "anuacturin, oer-ea
Varia.le )4 -ours Q 4 *er -our+ 16
Eie )4 -ours Q *er -our+ 12
80
T-e com*an3 *lanne to /or? 100:000 irect la.or -ours an *rouce 25:000 units o *rouct in 2008 Actual results or 2008 are as ollo/sB
• 24:000 units o *rouct /ere *rouce
• Actual irect materials *urc-ase an use urin, t-e 3ear amounte to 122:000
*ouns at a cost o 4;5:800
• Actual irect la.or costs /ere ;;9:000 or 95:000 irect la.or -ours /or?e • Total actual manuacturin, oer-ea incurre amounte to 685:500
Instructions
&alculate t-e ollo/in, ariances s-o/in, all com*utations su**ortin, 3our ans/ers Inicate i t-e ariances are aora.le )E+ or unaora.le )+
)a+ Direct materials *rice an irect materials uantit3 ariances ).+ Direct la.or *rice an irect la.or uantit3 ariances
L)c+ (er-ea controlla.le an oer-ea olume ariances FE- )
Einal %am PAT IV ! ATI( ANA$OSIS )14 *oints+
T-e conense inancial statements o enner &or*oration or 2008 are *resente .elo/ enner &or*oration enner &or*oration
=alance S-eet Income Statement
Decem.er 1: 2008 Eor t-e Oear %ne Decem.er 1: 2008
Assets eenues 2:000:000
&urrent assets %*enses
&as- an s-ortterm &ost o ,oos sol 960:000 inestments 0:000 Sellin, an aministratie
Accounts receia.le ;0:000 e*enses ;40:000
Inentories 140:000 Interest e*ense 50:000
Total current assets 240:000 Total e*enses 1:;50:000
Pro*ert3: *lant: an Income .eore income taes 250:000
eui*ment )net+ ;60:000 Income ta e*ense 100:000
Total assets 1:000:000 Net income 150:000
$ia.ilities an Stoc?-olers7 %uit3
&urrent lia.ilities 100:000 $on,term lia.ilities 50:000 Stoc?-olers7 euit3 550:000
Total lia.ilities an
stoc?-olers7 euit3 1:000:000
Aitional ata as o Decem.er 1: 200;B Inentor3 R 100:000F Total assets R 800:000F Stoc?-olers7 euit3 R 450:000
Instructions: &om*ute t-e ollo/in, ratios or 2008 s-o/in, su**ortin, calculations
)a+ &urrent ratio R ___________________________________________________________ ).+ De.t to total assets ratio R _________________________________________________ )c+ Times interest earne R ___________________________________________________ )+ Inentor3 turnoer R ______________________________________________________ )e+ Proit mar,in R __________________________________________________________ )+ eturn on stoc?-olers7 euit3 R ____________________________________________ ),+ eturn on assets R _______________________________________________________
Test Bank for ISV Manaerial !ccountin" Fourth E#ition PAT V ! "IS&%$$AN%(S "ANA<%IA$ "INIP(=$%"S )14 *oints+
&arson &or*oration manuactures *a*er s-rein, eui*ment Oou are reueste to auit a sam*lin, o com*utations mae .3 &arson7s internal accountants ia 3our ine*enent recalculation o t-e inormation
Instructions: &om*ute t-e reueste inormation or eac- o t-e ollo/in, ine*enent situations )*resent su**ortin, calculations+
)a+ &arson uses a *rocess costin, s3stem 2:000 units /ere in *rocess at t-e .e,innin, o t-e *erio: 60G com*lete 20:000 units /ere starte into *rouction urin, t-e *erioF 1:000 /ere in *rocess at t-e en o t-e *erio: 60G com*lete &om*ute euialent units or conersion costs
).+ &arson sells eac- unit or 500 Varia.le costs *er unit eual 00 Total ie costs eual 800:000 &arson is currentl3 sellin, 5:000 units *er *erio an /oul li?e to earn net income o 400:000 &om*uteB )1+ .rea?een *oint in ollarsF )2+ sales units necessar3 to attain esire incomeF an )+ mar,in o saet3 ratio or current o*erations
)1+ =rea?een *oint R ________________________________________________ )2+ Desire sales R ___________________________________________ units
)+ "ar,in o saet3 R _____________________________________________G FE- 1+
Einal %am
Solutions , Final Exam: &-a*ters 114 PAT I ! "$TIP$% &'(I&% )60 *oints+
1 c ; 1 a 19 a 25 2 8 c 14 c 20 c 26 a . 9 15 a 21 c 2; 4 c 10 . 16 c 22 . 28 c 5 a 11 c 1; c 2 29 c 6 12 18 . L24 c 0 c
PAT II ! "AT&'IN< )18 *oints+
1 E 6 11 V 16 M
2 N ; O 12 A 1; "
> 8 1 ' 18 J
L4 9 = 14
5 D 10 15 <
PAT III ! VAIAN&% ANA$OSIS )19 *oints+
)a+ Direct materials *rice an irect materials uantit3 ariances Direct materials *rice ariance
)122:000 90+ U )122:000 400+ R "PV 4;5:800 U 488:000 R 12:200 E
Direct materials uantit3 ariance
)122:000 400+ U )120:000 400+ R "JV 488:000 U 480:000 R 8:000
).+ Direct la.or *rice an irect la.or uantit3 ariances Direct la.or *rice ariance
)Actual 'ours Actual ate+ U )Actual 'ours Stanar ate+ R $PV )95:000 820+ U )95:000 8+ R $PV
;;9:000 U ;60:000 R 19:000 Direct la.or uantit3 ariance
)Actual 'ours Stanar ate+ U )Stanar 'ours Stanar ate+ R $JV )95:000 8+ U )96:000 8+ R $JV
;60:000 U ;68:000 R 8:000 E L)c+ (er-ea controlla.le ariance
Actual oer-ea 685:000 =u,ete oer-ea ! 24:000 4 R 96:000 Varia.le 4 84:000 Eie ! 100:000 R 00:000 684:000 1:500 (er-ea olume ariance
=u,ete oer-ea )see a.oe+ 684:000
(er-ea a**lie )96:000 ;+ 6;2:000
12:000 FE- 11
Test Bank for ISV Manaerial !ccountin" Fourth E#ition PAT IV ! ATI( ANA$OSIS )14 *oints+
)a+ 240:000
&urrent ratio R !!!! R 24 0B1 100:000
).+ 450:000
De.t to total assets ratio R !!!!! R 45G 1:000:000
)c+ 00:000
Times interest earne R !!!! R 6 times 50:000
)+ 960:000
Inentor3 turnoer R !!!!! R 8 times 120:000
)e+ 150:000
Proit mar,in R !!!!! R ;5G 2:000:000
)+ 150:000
eturn on stoc?-olers7 euit3 R !!!! R 0G 500:000
),+ 150:000
eturn on assets R !!!! R 16;G 900:000
PAT V ! "IS&%$$AN%(S "ANA<%IA$ "INIP(=$%"S )14 *oints+
)a+ nits transerre out )20:000 2:000 U 1:000+ 21:000 %nin, /or? in *rocess )1:000 60G+ 600 %uialent units or conersion costs 21:600
).+ 800:000
)1+ =rea?een *oint R !!!! R 2:000:000 4
800:000 400:000
)2+ Desire sales R !!!!!!!!!! R 6:000 units 200
500:000
)+ "ar,in o saet3 R !!!!!! R 20G 2:500:000
