ACCT 310 Final Exam Questions With Complete Solutions
A company (making multiple products) reported the following
costs:
Wages for making Product A: $2,000
Sales commissions: 500
Utilities for factory: 1,300
Utilities for store: 200
Direct materials: 900
Depreciation for factory machines: 800
Salaries for corporate executives: 400
Factory supplies: 100
Production supervision: 300
What is the total amount of product costs?
A. $5,800
B. $4,100
C. $4,500
D. $5,400 correct answers D. $5,400
A company has 200 machines. The company needs one
maintenance worker for every 10 machines. Each maintenance
worker is paid a flat salary of $3,000. With respect to the
number of machines, the maintenance cost is a:
A. Fixed cost
B. True variable cost
C. Mixed cost
D. Step cost correct answers D. Step cost
A company has several jobs that it can do. However, the
company has a limited supply of machine processing time.
,Therefore, it has to choose only one job to do. To maximize
profit, it has to choose the job that:
A. has the highest contribution margin per machine hour
B. uses the least machine processing time
C. generates the highest unit contribution margin
D. results in the highest contribution margin ratio correct
answers A. has the highest contribution margin per machine
hour
A company's margin of safety in sales dollars is $80,000. What
does this mean?
A. The company's profit is $80,000 above the last period's profit.
B. The company's profit is $80,000 above the target profit.
C. The company's sales are $80,000 above the operating
leverage.
D. The company's sales are $80,000 above the break-even point
sales. correct answers D. The company's sales are $80,000
above the break-even point sales.
A joint process resulted in Products M1 and M2. Both of them
can be sold immediately. For M2, a further processing option is
available. Which of the following information is relevant for
deciding whether to process further M2?
A. Sales value of M1
B. Demand for M2 after further processing
C. Portion of joint costs allocated to M2
D. Entire joint costs correct answers B. Demand for M2 after
further processing
,A manufacturing company that produces a single product has
provided the following data concerning its most recent month of
operations:
Selling price = $ 30
Units in beginning inventory = 0
Units produced = 1,000
Units sold = 900
Units in ending inventory = 100
Variable costs per unit:
Direct materials = $ 7
Direct labor = $ 4
Variable manufacturing overhead = $3
Variable selling and administrative expenses = $ 2
Fixed costs in total:
Fixed manufacturing overhead = $8,000
Fixed selling and administrative expenses =$ 3,500
What is the unit product cost under absorption costing?
A. $27.50
B. $16
C. $14
D. $22
E. $8,014 correct answers
ABC Company sells a single product at a price of $100 each.
The unit variable expense is $70. The company's fixed expenses
(step cost) are as follows:
Sales units FE
Up to 5,000 $70,000
, Over 5,000 $90,000
Currently, 4,000 units are sold and the profit is $50,000. Its
Current Operating Leverage is 2.4 and Contribution Margin
Ratio is 0.3. If the company increases its sales by 50% (by 2,000
units, or by $200,000), its income will:
A. increase by $25,000 (50%)
B. increase by $40,000 (80%)
C. increase by $60,000 (120%)
D.decrease by $20,000 (40%) correct answers B. increase by
$40,000 (80%)
As the activity level increases, which of the following will
decrease?
A. Variable cost in total
B. Variable cost per unit
C. Fixed cost in total
D. Fixed cost per unit correct answers D. Fixed cost per unit
Assume that a company has employed the high-low method and
estimated its cost function. The estimated cost function is Y =
3,000 + 5 X (X = number of units produced, Y = total cost).
Which of he following is not true?
A. If the company makes 1,000 units of the product, its
estimated total cost will be $8,000.
B. If the company makes more unts of the product, its estimated
total cost will be higher.
C. If the company makes 900 units of the product, its estimated
total variable cost will be $5.
D. If the company makes 600 units of the product, its estimated
total fixed cost will be $3,000. correct answers C. If the
A company (making multiple products) reported the following
costs:
Wages for making Product A: $2,000
Sales commissions: 500
Utilities for factory: 1,300
Utilities for store: 200
Direct materials: 900
Depreciation for factory machines: 800
Salaries for corporate executives: 400
Factory supplies: 100
Production supervision: 300
What is the total amount of product costs?
A. $5,800
B. $4,100
C. $4,500
D. $5,400 correct answers D. $5,400
A company has 200 machines. The company needs one
maintenance worker for every 10 machines. Each maintenance
worker is paid a flat salary of $3,000. With respect to the
number of machines, the maintenance cost is a:
A. Fixed cost
B. True variable cost
C. Mixed cost
D. Step cost correct answers D. Step cost
A company has several jobs that it can do. However, the
company has a limited supply of machine processing time.
,Therefore, it has to choose only one job to do. To maximize
profit, it has to choose the job that:
A. has the highest contribution margin per machine hour
B. uses the least machine processing time
C. generates the highest unit contribution margin
D. results in the highest contribution margin ratio correct
answers A. has the highest contribution margin per machine
hour
A company's margin of safety in sales dollars is $80,000. What
does this mean?
A. The company's profit is $80,000 above the last period's profit.
B. The company's profit is $80,000 above the target profit.
C. The company's sales are $80,000 above the operating
leverage.
D. The company's sales are $80,000 above the break-even point
sales. correct answers D. The company's sales are $80,000
above the break-even point sales.
A joint process resulted in Products M1 and M2. Both of them
can be sold immediately. For M2, a further processing option is
available. Which of the following information is relevant for
deciding whether to process further M2?
A. Sales value of M1
B. Demand for M2 after further processing
C. Portion of joint costs allocated to M2
D. Entire joint costs correct answers B. Demand for M2 after
further processing
,A manufacturing company that produces a single product has
provided the following data concerning its most recent month of
operations:
Selling price = $ 30
Units in beginning inventory = 0
Units produced = 1,000
Units sold = 900
Units in ending inventory = 100
Variable costs per unit:
Direct materials = $ 7
Direct labor = $ 4
Variable manufacturing overhead = $3
Variable selling and administrative expenses = $ 2
Fixed costs in total:
Fixed manufacturing overhead = $8,000
Fixed selling and administrative expenses =$ 3,500
What is the unit product cost under absorption costing?
A. $27.50
B. $16
C. $14
D. $22
E. $8,014 correct answers
ABC Company sells a single product at a price of $100 each.
The unit variable expense is $70. The company's fixed expenses
(step cost) are as follows:
Sales units FE
Up to 5,000 $70,000
, Over 5,000 $90,000
Currently, 4,000 units are sold and the profit is $50,000. Its
Current Operating Leverage is 2.4 and Contribution Margin
Ratio is 0.3. If the company increases its sales by 50% (by 2,000
units, or by $200,000), its income will:
A. increase by $25,000 (50%)
B. increase by $40,000 (80%)
C. increase by $60,000 (120%)
D.decrease by $20,000 (40%) correct answers B. increase by
$40,000 (80%)
As the activity level increases, which of the following will
decrease?
A. Variable cost in total
B. Variable cost per unit
C. Fixed cost in total
D. Fixed cost per unit correct answers D. Fixed cost per unit
Assume that a company has employed the high-low method and
estimated its cost function. The estimated cost function is Y =
3,000 + 5 X (X = number of units produced, Y = total cost).
Which of he following is not true?
A. If the company makes 1,000 units of the product, its
estimated total cost will be $8,000.
B. If the company makes more unts of the product, its estimated
total cost will be higher.
C. If the company makes 900 units of the product, its estimated
total variable cost will be $5.
D. If the company makes 600 units of the product, its estimated
total fixed cost will be $3,000. correct answers C. If the
