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# DeVry ACCT 346 Midterm Exam (NEW)

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1. (TCO 1) Which of the following is NOT a difference between Financial Accounting and Managerial
Accounting? (Points : 7)
Financial Accounting is concerned with the past, while Managerial Accounting is concerned with the
future.
Managerial Accounting uses more non-monetary information than Financial Accounting.
Managerial Accounting is primarily concerned with providing information to external users, whereas
Financial Accounting is concerned with providing information to internal users.
Financial Accounting must follow GAAP, while Managerial Accounting does not need to follow GAAP.

Question 2.2. (TCO1) Josies Grill budgeted the following costs for a month in which 1,500 steak dinners
will be produced and sold: materials, \$4,080; hourly labor (variable), \$5,200; rent (fixed), \$1,700;
depreciation, \$800; and other fixed costs, \$600. Each steak dinner sells for \$14.00 each. How much is
the budgeted variable cost per unit? (Points : 7)
\$6.19
\$8.25
\$6.72
\$5.80

Question 3.3. (TCO 1) Which of the following is NOT a period cost? (Points : 7)
Direct Material
Accounting staff salaries
Depreciation on accounting office equipment

Question 4.4. (TCO 1) On December 31, 2015, GLE Inc. has a balance in the Work-in-Process Inventory
account of \$62,000. On January 1, 2015, the balance was \$55,000. Current manufacturing costs for the
year are \$292,000, and cost of goods sold is \$284,000. How much is cost of goods manufactured?
(Points : 7)
\$292,000

\$299,000
\$277,000
\$285,000

Question 5.5. (TCO 2) Paul Company applies manufacturing overhead based on direct labor cost.
Information concerning manufacturing overhead and labor for August follows.
Estimated
Actual
\$174,000
\$171,000
Direct labor hours
5,800
5,900
Direct labor cost
\$90,155
\$87,000How much is the predetermined overhead
rate? (Points : 7)
\$1.90
30.00
\$2.00
\$1.93

Question 6.6. (TCO 2) During 2015, Michael Company applied overhead using a job-order costing system
at a rate of \$15 per direct labor hours. Estimated direct labor hours for the year were 150,000, and
estimated overhead for the year was \$2,250,000. Actual direct labor hours for 201 were 140,000, and
What is the amount of under- or over-applied overhead for the year? (Points : 7)
\$300,000 under-applied
\$20,000 under-applied
\$300,000 over-applied
\$120,000 over-applied

## Question 7.7. (TCO 2) Manufacturing overhead is allocated on the basis of (Points : 7)

machine hours.
direct labor hours.
direct labor costs.
any of the listed choices.

1. (TCO 1) Which of the following topics is the focus of managerial accounting? (Points : 7)
Financial statements and other financial reports
Historical cost principles
The needs of creditors
The needs of the organizations internal parties

Question 2.2. (TCO 6) Smile Labs develops 35mm film using a four-step process that moves progressively
through four departments. The company specializes in overnight service and has the largest drug store
chain as its primary customer. Currently, direct labor, direct materials, and overhead are accumulated by
department. The cost accumulation system that best describes the system that Smile Labs is using is:
(Points : 7)
operation costing.
activity-based costing.
job order costing.
process costing.

Question 3.3. (TCO 3) Kerner Manufacturing uses a process cost system to manufacture laptop
computers. The following information summarizes operations relating to laptop computer model #KJK20
during the quarter ending March 31:
Units
Direct Labor
Work-in-process inventory, January 1
100
\$50,000
Started during the quarter
500
Completed during the quarter
400
Work-in-process inventory, March 31
200
\$720,000
Beginning work-in-process inventory was 50% complete for direct labor costs. Ending work-in-process
inventory was 75% complete for direct labor costs. What is the equivalent unit of production using the
weighted-average unit cost inventory valuation method? (Points : 7)
500
550
600
650

(TCO 2) Sweet Co. uses budgeted overhead rates to apply overhead to individual jobs. They use a system
based on direct labor hours. Last year, the company made the following estimates for this year.Direct
labor costs
\$48,000,000
\$6,400,000
Direct Labor Hours
80,000
Machine Hours
110,000(a) What is the budgeted overhead rate for the company?
(b) If Job #34567 had the following:

## Material costs were \$500,000;

Direct labor costs were \$450,000;
Direct labor hours were 25,000; and
Machine hours were 36,000,
then what is the total cost of Job #34567?(Points : 30)

(TCO 3) Adnan Company uses process costing. At the beginning of the month, there were 8,000 units in
process, 90% complete with respect to material and 80% complete with respect to conversion costs.
40,000 units were started during the month and 40,000 units were completed. The units in ending
Work-In-Process Inventory were 70% complete with respect to material and 10% complete with respect
to conversion costs. How many equivalent units will be used in calculating the cost per unit for
materials?(Points : 30)Ans) Equivalent units for materials = (40000 x 100%) + (8000 x 70%) = 45600 units

(TCO 6) Handy Display Company manufactures display cases to be sold to retail stores. The cases come
in three sizes: large, medium, and small. Currently, Handy Display Company uses a single plant-wide
overhead rate to allocate its \$3,357,800 of annual manufacturing overhead. Of this amount, \$820,000 is
associated with the Large Case line, \$1,276,800 is associated with the Medium Case line, and \$1,261,000
is associated with the Small Case line. Handy Display Company is currently running a total of 33,000
machine hours: 10,000 in the Large Case line, 13,300 in the Medium Case line, and 9,700 in the Small
Case line. Handy Display Company uses machine hours as the cost driver for manufacturing overhead
costs.

(TCO 2)
Fred Co. incurred costs of \$800,000 for direct materials (raw) purchased. Direct labor was \$5,000 and
factory overhead was \$15,000 for March.Inventories were as follows:
Raw materials beginning \$2,000; raw materials ending \$4,000;Work-in-process beginning \$210,000;
work-in-process ending \$190,000;
Finished goods beginning \$13,000; finished goods ending \$12,500;
What is the cost of goods manufactured? Please show your work. (Points : 30)

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