Acct 505 Final Exam.

ACCT 505 FINAL EXAM. Question 1.1. (TCO E) Installing a custom logo on a boat is a(n) (Points : 10) batch-level activity. product-level activity. unit-level activity. organization sustaining activity. Question 2.2. (TCO G) Given the following data, what would ROI be? Sales $70,000 Net operating income $10,000 Contribution margin $20,000 Average operating assets $50,000 Stockholder's equity $25,000 (Points : 10) 28.6% 20.0% 40.0% 50.0% Page 2 Question 1.1. (TCO C) Aziz Corporation produces and sells a single product. Data concerning that product appear below. Selling price per unit $110.00 Variable expense per unit $38.50 Fixed expense per month $85,800 Required: Determine the monthly breakeven in either unit or total dollar sales. Show your work! (Points : 25) BEP (units) = fixed cost / contribution per unit = 85,800 / (110 - 38.50) = 1200 units (dollars) = 85,800 *110/71.5 Question 2.2. (TCO B) Carter Corporation uses the weighted-average method in its process costing system. Data concerning the first processing department for the most recent month are listed below. Work in process, beginning: Units in beginning work-in-process inventory 600 Materials costs $6,900 Conversion costs $2,500 Percentage complete for materials 80% Percentage complete for conversion 15% Units started into production during the month 6,300 Units transferred to the next department during the month 5,800 Materials costs added during the month $112,500 Conversion costs added during the month $210,300 Ending work in process: Units in ending work-in-process inventory 1,100 Percentage complete for materials 70% Percentage complete for conversion 40% Required: Calculate the equivalent units for materials (using the weighted-average method) for the month in the first processing department. (Points : 25) SOLUTION: To solve for units transferred: +WIP,beginning +Units started into production during the month -WIP,ending =Units completed and transferred out during the month Equivalent units of production Transferred to next department 5,800 WIP,ending (1,100 units*40%complete) 440 Equivalent units of production 6,240 Cost per equivalent unit Cost of beginning WIP $2,500 Cost added during the period $112,500 Total cost(a) $115,000 Equivalent units of production(b) 6,240 Cost per equivalent unit=(a)/(b) $18.43 Page 3 Question 1.1. (TCO D) Topple Company produces a single product. Operating data for the company and its absorption costing income statement for the last year are presented below. Units in beginning inventory 0 Units produced 9,000 Units sold 7,000 Sales $100,000 Less cost of goods sold: Beginning inventory 0 Add cost of goods manufactured 54,000 Goods available for sale 54,000 Less ending inventory 12,000 Cost of goods sold 42,000 Gross margin 58,000 Less selling and admin. expenses 28,000 Net operating income $30,000