ACCT 526 FINAL EXAM QUESTIONS ANSWERED CORRECTLY LATEST UPDATE 2026

ACCT 526 FINAL EXAM QUESTIONS ANSWERED CORRECTLY LATEST UPDATE 2026 Overhead costs are assigned to production using an overhead application rate, whereas no such application rate is used to assign the costs of direct materials and direct labor to production. The reason for this difference in procedures is that: - Answers overhead is an indirect cost which cannot be traced easily and directly to specific units of product An advantage of using regression analysis over the high-low and scattergraph methods is that - Answers regression analysis is a more precise approach than the high-low or scattergraph methods An example of a discretionary fixed cost is: - Answers management training Tucker, Inc collected the following production data for the past month: Units Produced Total Cost 1,600 1,300 1,500 1,100 $22,000 19,000 22,500 16,500 If the high-low method is used, what is the monthly total cost equation? - Answers Total cost = $4,400 + $11/unit Roddy Company has the following cost formulas for overhead: Cost Indirect materials Maintenance Machine setup Utilities Depreciation Cost Formula $2,000 + $0.40/machine hour $1,500 + $0.60/machine hour $0.30/machine hour$200 + $0.10/machine hour $800 Based on these cost formulas, the total overhead cost at 600 machine hours is expected to be: - Answers $5,340 When comparing a traditional income statement to a contribution margin income statement: - Answers net income will always be identical on both Kendra Corporation sells 100,000 wrenches for $12 a unit. Fixed costs are $300,000, and net income is $200,000. What should be reported as variable expenses in the CVP income statement? - Answers $700,000 Snyder Corporation, which produces and sells a single product, recently experienced an increase in fixed costs relating to depreciation on new equipment. If variable costs and sales price remain unchanged, what will happen to contribution margin and the break-even point? - Answers contribution margin will be unchanged and the break-even point will increase The following is last month's contribution format (CVP) income statement: Sales (10,000 units) Less: variable expenses Contribution margin Less: fixed expenses Net income $1,200,000 800,000 400,000 240,000 $160,000 What is the company's break-even sales in units? - Answers 6,000 units A 45% contribution margin ratio means that: - Answers 45% of the company's revenue is available to cover fixed costs and to contribute toward operating income. Suppose Motel 6 has annual fixed costs applicable to its rooms of $1.2 million for its 300-room motel, average daily room rents of $50, and average variable costs of $10 for each room rented. It operates 365 days per year. How much net income on rooms will be generated if the motel is completely full throughout the entire year? - Answers $3,180,000 Brant Company manufactures a part for its production cycle. The costs per unit for 5,000 units of this part are as follows: Direct materials $3 Direct labor 5 Variable factory overhead 4 Fixed factory overhead 2 Total costs $14 The fixed factory overhead costs are unavoidable. Assuming no other use of their facilities, the highest price that Brant Company should be willing to pay for the part is - Answers $12 In a decision to retain or replace equipment, the book value of the old equipment is a: - Answers sunk cost A segment of Duke Inc has the following data: Sales $200,000 Variable expenses $140,000 Fixed expenses $100,000 If this segment is eliminated, what will be the effect on the remaining company? Assume that 50% of the fixed expenses will be eliminated and the rest will be allocated to the segments of the remaining company. - Answers $10,000 decrease Which of the following are risks of outsourcing the production of a part? a. unscheduled price increases b. unreliable delivery c. all of these are risks of outsourcing d. unpredictable quality - Answers c. all of these are risks of outsourcing If a plant is operating at full capacity and receives a one-time opportunity to accept an order at a special price below its usual price, then - Answers the order will likely be rejected A job order cost system traces direct materials cost to a particular job by means of: - Answers materials requisitions In a manufacturing company, the Cost of Goods Manufactured (COGM) is equal to: - Answers the beginning inventory of work in process, plus total manufacturing costs, less the ending inventory of work in process Harrell Company uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. At the beginning of the year the company estimated its total manufacturing overhead would be $150,000 and direct labor hours would be 10,000. The actual figures for the year were $186,000 for manufacturing overhead and 12,000 direct labor hours. The cost records for the year will show: - Answers under applied overhead of $6,000 The following information is available for completed Job No. 402: Direct materials - $80,000; direct labor - $120,000; manufacturing overhead applied - $60,000; units produced - 5,000 units; units sold, 4,000 units. The cost of the finished goods on hand from this job is - Answers $52,000 The flow of costs in job order costing: - Answers parallels the physical flow of materials as they are converted into finished goods In a job order cost system, the amount of overhead cost that has been applied to a job that remains incomplete at the end of a period: - Answers is part of the ending balance of the Work in Process inventory account Archer Company uses a job order cost system. During the month of September, the company worked on Job B. The information contained on the cost sheet is as follows: Job B Beg Balance $1,500 Direct Material $800 Direct Labor $2,300 The company applied overhead at 120% of direct labor cost. During September Job B was completed and sold in October. If Job B sold for $8,000, what was the amount of gross profit for this job? (Ignore any consideration of over/under applied overhead) - Answers $640 At the end of the accounting period, applied overhead was larger than actual overhead by a material amount. The over applied overhead should be: - Answers apportioned among Work in Process Inventory, Finished Goods Inventory and Cost of Goods Sold At December 31, 2017, Stand Still Industries had $2,500 of raw material inventory. At the beginning of 2017, there was $2,000 of materials on hand. During the year, the company purchased $305,000 of materials; however, it paid for only $292,500. How much inventory was used of jobs during 2017? - Answers $304,500 In the year-end financial statements, the Manufacturing Overhead account should have: - Answers a zero balance, since all overhead costs incurred during the year should be assigned to the production of the year ABC Company budgeted the following transactions for April: Sales (75% collected in month of sale) $200,000