finals study guide
ACCT
2110-Managerial Accounting
Review
for Final
Note: Final exam is cumulative (Chap 15-26). Please use the review
for the two midterms for Chap 15-22. This review only focuses on Chap 23-26.
Time
and location: Scheduled by University
Length
of the exam: 2 hours
Chapters
covered: Chap 15-26
Question
types: Multiple choice questions
Item
needed:
·
Pencil
·
Eraser
·
Calculator
·
Scantron (please see the next page for
example)
Study
tips:
·
Review slides
·
Practice (practices in class and on
WileyPlus)
·
Read the textbook for materials that you
have difficulty with
·
Study in groups
Exam
rules:
·
Close-book and close-notes
·
No electronic device allowed
·
Once exam starts, submit before leave the
classroom.
·
No cheating
1. Managers
function
2. Company
Types & Inventory
3. Determine
manufacturing costs, nonmanufacturing costs, product costs, period costs, and
the subcategory in each cost type.
4. Sample
questions:
1)
The sum of the direct materials costs, direct labor costs, and manufacturing
overhead incurred is the
a. cost of goods manufactured.
b. total manufacturing overhead.
c. total
manufacturing costs.
d. total cost of work in process.
2)
Sales commissions are classified as
a. overhead costs
b. period costs.
c. product costs.
d. indirect labor.
3)
Direct materials and direct labor of a company total $8,000,000. If
manufacturing overhead is $4,000,000, what is direct labor cost?
a. $4,000,000
b. $8,000,000
c. $0
d. Cannot be
determined from the information provided
4)
Which of the following is not a management function?
a. Constraining
b. Planning
c. Controlling
d. Directing
Chap 16 – Job Order Costing
1. What
kind of companies use job order costing/process costing?
2. Calculate
the direct material, direct labor, manufacturing overhead applied, and the
total costs for a particular job.
3. Journal
entries for the 8 transactions in the slides.
4. Sample
questions:
1)
The flow of costs in a job order cost system
a. involves accumulating
manufacturing costs incurred and assigning the accumulated costs to work done.
b. cannot be measured until all jobs are
complete.
c. measures product costs for a set time period.
d. generally follows a LIFO cost flow
assumption.
2)
Process costing is not used when
a. similar goods are being produced.
b. large volumes are produced.
c. jobs have
distinguishing characteristics.
d. a series of connected manufacturing processes
is necessary.
3)
Kinney Company applies overhead on the basis of 150% of direct labor cost. Job
No. 176 is charged with $150,000 of direct materials costs and $180,000 of
manufacturing overhead. The total
manufacturing costs for Job No. 176 is
a. $330,000.
b. $600,000.
c. $450,000.
d. $405,000.
180000+(180000*1.5)
= 450000
4)
Prepare journal entries to record the following transaction:
Direct
materials requisitioned during the month:
Job 101 $20,000
Job 102
16,000
Job 103 24,000
$60,000
Work in Process Inventory............................................................. 60,000
Raw
Materials Inventory................................................ 60,000
Chap 17 – Process Costing
1. Characteristics
of firms using process costing.
2. Journal
entries
3. Difference
in work in process account between job order costing and process costing
4. Calculations
(equivalent unit, unit cost, cost transferred out, etc.)
5. Sample
questions:
1)
In a process cost system,
a. a Work in Process account is maintained for
each product.
b. a materials requisition must identify the job
on which the materials will be used.
c. a Work in
Process account is maintained for each process.
d. one Work in Process account is maintained for
all the processes, similar to a job order cost system.
2)
In the month of June, a department had 20,000 units in beginning work in
process that were 70% complete. During June, 90,000 units were transferred into
production from another department. At the end of June there were 10,000 units
in ending work in process that were 40% complete. Materials are added at the
beginning of the process, while conversion costs are incurred uniformly
throughout the process. The equivalent units of production for conversion costs
for June were
a. 90,000 equivalent units.
b. 104,000
equivalent units.
c. 100,000 equivalent units.
d. 110,000 equivalent units.
(20000*0.7)+90000
3) Massey Corporation uses a process cost system and
the weighted-average cost flow assumption. Production begins in the Fabricating
Department where materials are added at the beginning of the process and
conversion costs are incurred uniformly throughout the process. On March 1, the
beginning work in process inventory consisted of 20,000 units which were 60%
complete and had a cost of $175,000, $145,000 of which were materials costs.
During March, the following occurred:
Materials added $305,000
Conversion costs incurred $120,000
Units completed and transferred out in
March 50,000
Units in ending work in process March 31
(40% complete) 25,000
Calculate
the unit cost:
Materials unit cost $6.00 ($450,000* ÷ 75,000 units) 450= (305,00+145000) /75000=(50000+25000)
Conversion
unit cost 2.50 ($150,000**
÷ 60,000 units)
Total
unit cost $8.50
*($145,000 + $305,000) **[($175,000
– $145,000) + $120,000]
Chap 18 – Activity-Based Costing
1. Benefits,
limitation, and needs of ABC system; when to use ABC system?
2. Four
activity levels and cost drivers.
3. Calculate
total/unit cost using ABC system.
4. Sample
questions:
1)
Which of the following is not an example of an activity cost pool?
a. Setting up machines
b. Machining
c. Inspecting
d. Machine hours
2)
The last step in activity-based costing is to
a. assign overhead
costs to products, using overhead rates determined for each cost pool.
b. compute the activity-based overhead rate per
cost driver.
c. identify and classify the activities involved
in the manufacture of specific products, and allocate overhead to cost pools.
d. identify the cost driver that has a strong correlation
to the activity cost pool.
3)
Which would be an appropriate cost driver for the machining activity cost pool?
a. Machine setups
b. Purchase orders
c. Machine hours
d. Inspections
4)
Which of the following is not a facility-level activity?
a. Plant management
b. Product design
c. Personnel administration
d. Training
5)
A company incurs $4,050,000 of overhead each year in three departments:
Ordering and Receiving, Mixing, and Testing. The company prepares 2,000
purchase orders, works 50,000 mixing hours, and performs 1,500 tests per year
in producing 200,000 drums of Goo and 600,000 drums of Slime. The following
data are available:
Department Expected use of Driver Cost
Ordering and Receiving 2,000 $1,200,000
Mixing 50,000 1,500,000
Testing 1,500 1,350,000
Production
information for Goo is as follows:
Department Expected use of Driver
Ordering and Receiving 400
Mixing 20,000
Testing 500
Compute the
amount of overhead assigned to Goo.
Answer:
$1,290,000
((1200000/2000)*400)+(1500000/50000)*20000)+(1350000/1500)*500))
240,000+600,000+450,000
Chap 23 – Budgetary Planning
1. Concepts:
Budget; benefit of budget; budget period; long-term planning; bottom-up budget.
2. Ten
steps of mater budget; which one is the first/last step?
3. Calculation:
production; direct materials.
4. Sample
questions:
1)
Why are budgets useful in the planning
process?
a. They provide management with information
about the company's past performance.
b. They help
communicate goals and provide a basis for evaluation.
c. They guarantee the company will be profitable
if it meets its objectives.
d. They enable the budget committee to earn
their paycheck.
2)
The direct materials budget shows:
Desired ending direct materials 48,000 pounds
Total materials required 69,000
pounds
Direct materials purchases 63,200
pounds
The
total direct materials needed for production is
a. 21,000 pounds.
b. 5,800 pounds.
c. 15,200 pounds.
d. 132,200 pounds.
69000-48000
3)
A company budgeted unit sales of 204,000 units for January, 2017 and 240,000
units for February 2017. The company has a policy of having an inventory of
units on hand at the end of each month equal to 30% of next month's budgeted
unit sales. If there were 61,200 units of inventory on hand on December 31,
2016, how many units should be produced in January, 2017 in order for the
company to meet its goals?
a. 214,800 units
b. 204,000 units
c. 193,200 units
d. 276,000 units
204000+(240000x0.3)-61200
= 214800
Chap
24 – Budgetary Control
1. What
is budgetary control? Characteristics of budget report.
2. Why
a flexible budget is needed? Deficiencies of static budget.
3. Sample
questions:
1)
What is budgetary control?
a. Another name for a flexible budget
b. The degree to which the CFO controls the
budget
c. The use of
budgets in controlling operations
d. The process of providing information on
budget differences to lower level managers
2)
Budget reports should be prepared
a. daily.
b. monthly.
c. weekly.
d. as frequently
as needed.
3)
Another name for the static budget is
a. master budget/planning
budget.
b. overhead budget.
c. permanent budget.
d. flexible budget.
4)
Which one of the following would be the same total amount on a flexible budget
and a static budget if the activity level is different for the two types of
budgets?
a. Direct materials cost
b. Direct labor cost
c. Variable manufacturing overhead
d. Fixed
manufacturing overhead
5)
Sydney, Inc. uses flexible budgets. At normal capacity of 16,000 units,
budgeted manufacturing overhead is $128,000 variable and $360,000 fixed. If
Sydney had actual overhead costs of $500,000 for 18,000 units produced, what is
the difference between actual and budgeted costs?
a. $4,000 unfavorable
b. $4,000
favorable
c. $12,000 unfavorable
d. $16,000 favorable
Chap
25 – Standard Costs
1. Concepts:
standard vs budget; advantages and disadvantages of standard cost.
2. Calculations:
price/rate variance & quantity/efficiency variance for DM, DL, and OHD.
3. Sample
questions:
1)
Marburg Co. expects direct materials cost of $6 per unit for 100,000 units (a
total of $600,000 of direct materials costs). Marburg’s standard direct
materials cost and budgeted direct materials cost is
Standard Budgeted
a. $6
per unit $600,000 per
year
b. $6 per unit $6
per unit
c. $600,000 per year $6
per unit
d. $600,000 per year $600,000
per year
2)
Using standard costs
a. makes employees less “cost-conscious.”
b. provides a
basis for evaluating cost control.
c. makes management by exception more difficult.
d. increases clerical costs
3) A company developed the
following per unit materials standards for its product: 3 pounds of direct materials at $5 per pound.
If 12,000 units of product were produced last month and 37,500 pounds of direct
materials were used, the direct materials quantity variance was
a. $4,500
favorable.
b. $7,500 unfavorable.
c. $4,500
unfavorable.
d. $7,500
favorable.
Chap
26 – Planning for Capital Investments
1. Concepts:
the authorization process of investment; cash flow is commonly used for
evaluation of investments.
2. Characteristics
of each method of capital investments evaluation.
3. Sample
questions:
1)
All of the following are involved in the capital budgeting evaluation process
except a company's
a. board of directors.
b. capital budgeting committee.
c. officers.
d. stockholders.
2)
Most of the capital budgeting methods use
a. accrual accounting numbers.
b. cash flow
numbers.
c. net income.
d. accrual accounting revenues.
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