Exam (elaborations) University of Louisiana, Lafayette ACCT 526 / ACCT526 Final Exam

University of Louisiana, Lafayette ACCT 526 / ACCT526 Final Exam 1 Question 1 Correct Mark 3.00 out of 3.00 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: Select one: a. overhead is an indirect cost which cannot be traced easily and directly to specific units of product b. independent of both the number and the type of products manufactured and also independent of the amount of overhead costs incurred c. traceable directly to the products manufactured but independent of the amount of overhead costs incurred d. independent of the type and number of units manufactured but a casual factor in the amount of overhead cost incurred Your answer is correct. The correct answer is: overhead is an indirect cost which cannot be traced easily and directly to specific units of product Question 2 Correct Mark 3.00 out of 3.00 Question 3 Correct Mark 3.00 out of 3.00 An advantage of using regression analysis over the high-low and scattergraph methods is that Select one: a. neither: regression analysis is less costly to implement than high-low or scattergraph methods or is a more precise approach than the high-low or scattergraph methods b. regression analysis is less costly to implement than high-low or scattergraph methods c. regression analysis is a more precise approach than the high-low or scattergraph methods d. both: regression analysis is less costly to implement than high-low or scattergraph methods and is a more precise approach than the high-low or scattergraph methods Your answer is correct. The correct answer is: regression analysis is a more precise approach than the high-low or scattergraph methods An example of a discretionary fixed cost is: Select one: a. depreciation of buildings and equipment b. insurance c. management training d. taxes on real estate Your answer is correct. The correct answer is: management training Question 4 Correct Mark 3.00 out of 3.00 Tucker, Inc collected the following production data for the past month: Units Produced Total Cost 1,600 $22,000 1,300 19,000 1,500 22,500 1,100 16,500 If the high-low method is used, what is the monthly total cost equation? Select one: a. Total cost = $5,500 + $10/unit b. Total cost = $0 + $15/unit c. Total cost = $4,400 + $11/unit d. Total cost = $3,300 + $12/unit Your answer is correct. The correct answer is: Total cost = $4,400 + $11/unit Question 5 Correct Mark 3.00 out of 3.00 Roddy Company has the following cost formulas for overhead: Cost Cost Formula Indirect materials $2,000 + $0.40/machine hour Maintenance $1,500 + $0.60/machine hour Machine setup $0.30/machine hour Utilities $200 + $0.10/machine hour Depreciation $800 Based on these cost formulas, the total overhead cost at 600 machine hours is expected to be: Select one: a. $5,200 b. $4,500 c. $5,620 d. $5,340 Your answer is correct. The correct answer is: $5,340 Question 6 Correct Mark 3.00 out of 3.00 When comparing a traditional income statement to a contribution margin income statement: Select one: a. net income will be greater or less depending on the sales volume b. net income will always be identical on both c. net income will always be less on the traditional income statement d. net income will always be greater on the traditional statement Your answer is correct. The correct answer is: net income will always be identical on both Question 7 Correct Mark 3.00 out of 3.00 Question 8 Correct Mark 3.00 out of 3.00 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? Select one: a. $900,000 b. $1,000,000 c. $700,000 d. $500,000 Your answer is correct. The correct answer is: $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? Select one: a. contribution margin will increase and the break-even point will increase b. contribution margin will decrease and the break-even point will increase c. contribution margin will be unchanged and the break-even point will increase d. contribution margin will be unchanged and the break-even point will decrease Your answer is correct. The correct answer is: contribution margin will be unch