KẾ TOÁN QUẢN TRỊ 1 CHAPTER 2 1 The costs of direct materials are classified as Conversion cost Manufacturing cost Prime cost (I) Yes Yes Yes (II) No No No (III) Yes Yes No (IV) No Yes Yes Choice (IV) 2 Differential costs can be either fixed or variable 3 Waldhauser Corporations relevant range of activity is 3,000 units to 7,000 units When it produces and sells 5,000 units, its average costs per unit are as follows Average Cost per Unit Direct materials 6 10 Direct labor 3 45 Variable manufa.
CHAPTER The costs of direct materials are classified as: Conversion cost Manufacturing cost Prime cost (I) Yes Yes Yes (II) No No No (III) Yes Yes No (IV) No Yes Yes Choice (IV) Differential costs can: be either fixed or variable Waldhauser Corporation's relevant range of activity is 3,000 units to 7,000 units When it produces and sells 5,000 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $ 6.10 Direct labor $ 3.45 Variable manufacturing overhead $ 1.75 Fixed manufacturing overhead $ 3.30 Fixed selling expense $ 0.75 Fixed administrative expense $ 0.60 Sales commissions $ 1.50 Variable administrative expense $ 0.45 If 6,000 units are sold, the total variable cost is closest to: $79,500 (6.1+3.45+1.75+1.5+0.45)*6,000 = 79,500 Rhome Corporation's relevant range of activity is 2,000 units to 6,000 units When it produces and sells 4,000 units, its average costs per unit are as follows: Average per Unit Cost Direct materials $ 5.40 Direct labor $ 3.55 Variable manufacturing overhead $ 1.70 Fixed manufacturing overhead $ 3.00 Fixed selling expense $ 0.60 Fixed administrative expense $ 0.40 Sales commissions $ 1.00 Variable administrative expense $ 0.40 If 5,000 units are sold, the variable cost per unit sold is closest to: $12.05 5.4+3.55+1.7+1+0.4=12.05 The cost of lubricants (dầu nhờn) used to grease a production machine in a manufacturing company is an example of a(n): indirect material cost Mullennex Corporation's relevant range of activity is 2,000 units to 6,000 units When it produces and sells 4,000 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $ 6.55 Direct labor $ 3.50 Variable manufacturing overhead $ 1.25 Fixed manufacturing overhead $ 3.00 Fixed selling expense $ 0.50 Fixed administrative expense $ 0.40 Sales commissions $ 1.50 Variable administrative expense $ 0.40 If 5,000 units are produced, the average fixed manufacturing cost per unit produced is closest to: $2.40 (3*4,000)/5,000 = 2.4 Meginnis Corporation's relevant range of activity is 3,000 units to 7,000 units When it produces and sells 5,000 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $ 5.20 Direct labor $ 3.75 Variable manufacturing overhead $ 1.65 Fixed manufacturing overhead $ 2.60 Fixed selling expense $ 0.50 Fixed administrative expense $ 0.40 Sales commissions $ 1.50 Variable administrative expense $ 0.50 If 6,000 units are produced, the total amount of direct manufacturing cost incurred is closest to: $53,700 (5.2+3.75)*6,000= 53,700 The cost of direct materials is classified as a: (I) Conversion cost Prime cost No No (II) Yes No (III) No Yes (IV) Yes Yes Choice (III) Which of the following statements concerning direct and indirect costs is NOT true? 10 Schwiesow Corporation has provided the following information: Cost Unit per Cost per Period Direct materials $ 7.05 Direct labor $ 3.50 Variable manufacturing overhead $ 1.65 Fixed manufacturing overhead Sales commissions $ 1.00 Variable administrative expense $ 0.40 Fixed selling and administrative expense $ 11,000 $ 5,500 For financial reporting purposes, the total amount of product costs incurred to make 5,000 units is closest to: $72,000 (7.05+3.5+1.65)*5,000 + 11,000 = 72,000 11 Product costs that have become expenses can be found in: COGS 12 Management of Plascencia Corporation is considering whether to purchase a new model 370 machine costing $360,000 or a new model 220 machine costing $340,000 to replace a machine that was purchased years ago for $348,000 The old machine was used to make product I43L until it broke down last week Unfortunately, the old machine cannot be repaired Management has decided to buy the new model 220 machine It has less capacity than the new model 370 machine, but its capacity is sufficient to continue making product I43L Management also considered, but rejected, the alternative of simply dropping product I43L If that were done, instead of investing $340,000 in the new machine, the money could be invested in a project that would return a total of $411,000 In making the decision to buy the model 220 machine rather than the model 370 machine: - The sunk cost was: $348,000 - The opportunity cost was: $411,000 13 The following data pertains to activity and costs for two months: June Activity level in units Direct materials July 10,000 $ 17,000 11,000 $ ? Fixed factory rent 21,000 ? Manufacturing overhead 20,000 ? Total cost $ 58,000 $ 61,300 Assuming that these activity levels are within the relevant range, the manufacturing overhead for July was: $21,600 In July, Direct materials cost = 17,000*11,000/10,000 = 18,700 Fixed factory rent = 21,000 => Manufacturing overhead = 61,300 - 18,700 - 21,000 = 21,600 14 Boersma Sales, Inc., a merchandising company, reported sales of 7,100 units in September at a selling price of $682 per unit Cost of goods sold, which is a variable cost, was $317 per unit Variable selling expenses were $44 per unit and variable administrative expenses were $22 per unit The total fixed selling expenses were $157,200 and the total administrative expenses were $338,000 The contribution margin for September was: $2,122,900 7,100*(682-317-44-22)= 2,122,900 14 A cost incurred in the past that is not relevant to any current decision is classified as a(n): sunk cost 15 The cost of electricity for running production equipment is classified as: Conversion cost Period cost (I) Yes No (II) Yes Yes (III) No tYes (IV) No No Choice (I) 16 Materials used in a factory that are not an integral part of the final product, such as cleaning supplies, should be classified as: manufacturing overhead 17 Factory overhead is typically a(n): mixed cost 18 All of the following can be differential costs except: sunk costs 19 Comparative income statements for Boggs Sports Equipment Company for the last two months are presented below: July Sales in units Sales August 11,000 $ 165,000 10,00 $ 150,0 00 Cost of goods sold 72,600 66,00 Gross margin 92,400 84,00 Selling and administrative expenses: Rent $ 12,000 $ 12,00 Sales commissions $ 13,200 $ 12,00 Maintenance expenses $ 13,500 $ 13,00 Clerical expense $ 16,000 $ 15,00 Total selling and administrative expenses $ 54,700 $ 52,00 Net operating income $ 37,700 $ 32,00 All of the company's costs are either fixed, variable, or a mixture of the two (i.e., mixed) Assume that the relevant range includes all of the activity levels mentioned in this problem Which of the selling and administrative expenses of the company is variable? 20 Mccaskell Corporation's relevant range of activity is 7,000 units to 11,000 units When it produces and sells 9,000 units, its average costs per unit are as follows: Average per Unit Cost Direct materials $ 6.30 Direct labor $ 3.65 Variable manufacturing overhead $ 1.75 Fixed manufacturing overhead $ 9.90 Fixed selling expense $ 2.25 Fixed administrative expense $ 1.80 Sales commissions (tiền hoa hồng) $ 1.00 0.50 Variable administrative expense $ If 8,000 units are produced, the total amount of indirect manufacturing cost incurred is closest to: $103,100 Fixed manufacturing overhead = 9.9*9000 = 89,100 Variable manufacturing overhead = 1.75*8000 = 14,000 Indirect manufacturing cost = 89,100 + 14,000 = 103,100 21 Kneeland Corporation has provided the following information: Cost per Unit Direct materials $ 6.80 Direct labor $ 4.15 Variable manufacturing overhead $ 1.65 Fixed manufacturing overhead Sales commissions $ 1.00 Variable administrative expense $ 0.50 Fixed selling and administrative expense Cost per Period $ 121,500 $ 40,500 If 10,000 units are produced, the total amount of manufacturing overhead cost is closest to: $138,000 = 1.65*10,000 + 121,500 22 Abburi Company's manufacturing overhead is 60% of its total conversion costs If direct labor is $52,000 and if direct materials are $28,000, the manufacturing overhead is: $42,000 total conversion costs = direct materials cost + manufacturing overhead => manufacturing overhead*100/60 = 28,000 + manufacturing overhead => manufacturing overhead = 42,000 23 Which of the following is an example of a period cost in a company that makes clothing? 24 Within the relevant range, variable costs can be expected to: 25 Lagle Corporation has provided the following information: Cost per Unit Direct materials $ 4.85 Direct labor $ 3.35 Variable manufacturing overhead $ 1.35 Fixed manufacturing overhead Sales commissions $ 1.50 Variable administrative expense $ 0.45 Fixed selling and administrative expense Cost per Period $ 8,000 $ 4,400 For financial reporting purposes, the total amount of period costs incurred to sell 4,000 units is closest to: $12,200 (1.5+0.45)*4,000 + 4,400 = 12,200 26 Rarotonga Manufacturing Company leases a vehicle to deliver its finished products to customers Which of the following terms correctly describes the monthly lease payments made on the delivery vehicle? Direct Cost Fixed Cost (I) Yes Yes (II) Yes No (III) No Yes (IV) No No Choice (III) 27 The relative proportion of variable, fixed, and mixed costs in a company is known as the company's: cost structure 28 Manufacturing overhead includes: all manufacturing costs except direct labor and direct materials 29 The following data have been collected for four different cost items Choice (II) An outside supplier has offered to make and sell the part to the company for $20.80 each If this offer is accepted, the supervisor's salary and all of the variable costs, including direct labor, can be avoided The special equipment used to make the part was purchased many years ago and has no salvage value or other use The allocated general overhead represents fixed costs of the entire company, none of which would be avoided if the part were purchased instead of produced internally If management decides to buy part E07 from the outside supplier rather than to continue making the part, what would be the annual impact on the company's overall net operating income? ($163,200) United Industries manufactures a number of products at its highly automated factory The products are very popular, with demand far exceeding the factory's capacity To maximize profit, management should rank products based on their: contribution margin per unit of the constrained resource CoolAir Corporation manufactures portable window air conditioners CoolAir has the capacity to manufacture and sell 80,000 air conditioners each year but is currently only manufacturing and selling 60,000 The following per unit numbers relate to annual operations at 60,000 units: The City of Clearwater would like to purchase 3,000 air conditioners from CoolAir but only if they can get them for $75 each Variable selling and administrative costs on this special order will drop down to $2 per unit This special order will not affect the 60,000 regular sales and it will not affect the total fixed costs The annual financial advantage (disadvantage) for the company as a result of accepting this special order from the City of Clearwater should be: $144,000 The contribution margin is the part of sales revenue that is consumed towards the variable cost incurred for selling those products The contribution margin is determined by deducting all the variable costs from the sales revenues It does not consider the fixed costs incurred over the goods Zouar Computer Corporation currently manufactures the disk drives that it uses in its computers The costs to produce 5,000 of these disk drives last year were as follows: Kidal Electronics has offered to provide Zouar with all of its disk drive needs for $27 per drive If Zouar accepts this offer, Zouar will be able to use the freed up space to generate an additional $40,000 of income each year to produce more of its computer keyboards Only $3 per drive of the fixed manufacturing overhead cost above could be avoided Direct labor is an avoidable cost in this decision Based on this information, would Zouar be financially better off making the drives or buying the drives and by how much? $15,000 better to buy In a sell or process further decision, consider the following costs: Which of the above costs is (are) not relevant in a decision regarding whether the product should be processed further? Only I The opportunity cost of making a component part in a factory with excess capacity for which there is no alternative use is: Accepting a special order will improve overall net operating income if the revenue from the special order exceeds: the incremental costs associated with the order Wood Carving Corporation manufactures three products Because of a recent lack of skilled wood carvers, the corporation has had a shortage of available labor hours The following per unit data relates to the three products of the corporation: Assume that Wood Carving only has 1,800 labor hours available next month Also assume that Wood Carving can only sell 800 units of each product in a given month What is the maximum amount of contribution margin that Wood Carving can generate next month given this labor hour shortage? $19,600 10 The Jabba Corporation manufactures the "Snack Buster" which consists of a wooden snack chip bowl with an attached porcelain dip bowl Which of the following would be relevant in Jabba's decision to make the dip bowls or buy them from an outside supplier? Choice B 11 Kinsi Corporation manufactures five different products All five of these products must pass through a stamping machine in its fabrication department This machine is Kinsi's constrained resource Kinsi would make the most profit if it produces the product that: generates the highest contribution margin per stamping machine hour 12 A joint product is: 13 Costs that can be eliminated in whole or in part if a particular business segment is discontinued are called: avoidable costs 14 Part S51 is used in one of Haberkorn Corporation's products The company makes 12,000 units of this part each year The company's Accounting Department reports the following costs of producing the part at this level of activity: An outside supplier has offered to produce this part and sell it to the company for $37.70 each If this offer is accepted, the supervisor's salary and all of the variable costs, including direct labor, can be avoided The special equipment used to make the part was purchased many years ago and has no salvage value or other use The allocated general overhead represents fixed costs of the entire company If the outside supplier's offer were accepted, only $17,000 of these allocated general overhead costs would be avoided The annual financial advantage (disadvantage) for the company as a result of buying the part from the outside supplier would be: ($149,800) Direct materials (12,000 units × $6.30 per unit) $75,600 Direct labor (12,000 units × $5.70 per unit) 68,400 Variable overhead (12,000 units × $4.80 per unit) 57,600 Supervisor's salary (12,000 units × $7.00 per unit) 84,000 Depreciation of special equipment (not relevant) Allocated general overhead (avoidable only) 17,000 Total relevant cost to make $302,600 Make Total cost to purchase (12,000 units × $37.70 per unit) $452,400 Total relevant cost to make 302,600 Higher cost to purchase$149,800 15 Landor Appliance Corporation makes and sells electric fans Each fan regularly sells for $42 The following cost data per fan is based on a full capacity of 150,000 fans produced each period A special order has been received by Landor for a sale of 25,000 fans to an overseas customer The only selling costs that would be incurred on this order would be $4 per fan for shipping Landor is now selling 120,000 fans through regular channels each period Assume that direct labor is an avoidable cost in this decision What should Landor use as a minimum selling price per fan in negotiating a price for this special order? $28 per fan Direct materials $8 Direct labor $9 Variable manufacturing overhead= $7 A special order has been received by Landor for a sale of 25,000 fans to an overseas customer The only selling costs that would be incurred on this order would be $4 per fan for shipping Because it is a special offer, and there is unused capacity, we will not take into account the fixed costs The minimum selling price is the one that equals the unitary variable cost It is not a price sustainable long term Unitary variable cost= + + + 4= $28 Lowest selling price= $28 16 Kahn Corporation (a multi-product company) produces and sells 8,000 units of Product X each year Each unit of Product X sells for $10 and has a contribution margin of $6 If Product X is discontinued, $50,000 of the $60,000 in annual fixed costs charged to Product X could be eliminated The annual financial advantage (disadvantage) for the company of eliminating this product should be: $2,000 17 Banfield Corporation makes three products that use compound W, the current constrained resource Data concerning those products appear below: Rank the products in order of their current profitability from most profitable to least profitable In other words, rank the products in the order in which they should be emphasized YI, VP, WX 18 Sardi Inc is considering whether to continue to make a component or to buy it from an outside supplier The company uses 17,000 of the components each year The unit product cost of the component according to the company's cost accounting system is given as follows: Assume that direct labor is a variable cost Of the fixed manufacturing overhead, 70% is avoidable if the component were bought from the outside supplier In addition, making the component uses minutes on the machine that is the company's current constraint If the component were bought, time would be freed up for use on another product that requires minutes on this machine and that has a contribution margin of $7.00 per unit When deciding whether to make or buy the component, what cost of making the component should be compared to the price of buying the component? $24.21 per unit 19 Part U16 is used by McVean Corporation to make one of its products A total of 13,000 units of this part are produced and used every year The company's Accounting Department reports the following costs of producing the part at this level of activity: An outside supplier has offered to make the part and sell it to the company for $29.80 each If this offer is accepted, the supervisor's salary and all of the variable costs, including the direct labor, can be avoided The special equipment used to make the part was purchased many years ago and has no salvage value or other use The allocated general overhead represents fixed costs of the entire company, none of which would be avoided if the part were purchased instead of produced internally In addition, the space used to make part U16 could be used to make more of one of the company's other products, generating an additional segment margin of $25,000 per year for that product The annual financial advantage (disadvantage) for the company as a result of buying part U16 from the outside supplier should be: ($79,000) 20 MIDTERM Normand Corporation uses the FIFO method in its process costing system Data concerning the first processing department for the most recent month are listed below: What are the equivalent units for materials for the month in the first processing department? 6,310 Crich Corporation uses direct labor-hours in its predetermined overhead rate At the beginning of the year, the estimated direct labor-hours were 21,800 hours and the total estimated manufacturing overhead was $497,040 At the end of the year, actual direct labor-hours for the year were 21,500 hours and the actual manufacturing overhead for the year was $492,040 Overhead at the end of the year was: $1,840 underapplied Weatherhead Inc has provided the following data for the month of March There were no beginning inventories; consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month Manufacturing overhead for the month was overapplied by $3,000 The Corporation allocates any underapplied or overapplied manufacturing overhead among work in process, finished goods, and cost of goods sold at the end of the month on the basis of the manufacturing overhead applied during the month in those accounts The work in process inventory at the end of March after allocation of any underapplied or overapplied manufacturing overhead for the month is closest to: $20,190 Mullins Corporation uses the FIFO method in its process costing system Data concerning the first processing department for the most recent month are listed below: The cost of a completed unit transferred out of the department is closest to: $62.36 The cost per equivalent unit for conversion costs for the first department for the month is closest to: $43.05 An income statement for Sam's Bookstore for the first quarter of the year is presented below: On average, a book sells for $50 Variable selling expenses are $5 per book with the remaining selling expenses being fixed The variable administrative expenses are 4% of sales with the remainder being fixed The cost formula for selling and administrative expenses with "X" equal to the number of books sold is: Y = $78,000 + $7X Boersma Sales, Inc., a merchandising company, reported sales of 7,100 units in September at a selling price of $682 per unit Cost of goods sold, which is a variable cost, was $317 per unit Variable selling expenses were $44 per unit and variable administrative expenses were $22 per unit The total fixed selling expenses were $157,200 and the total administrative expenses were $338,000 The contribution margin for September was: $2,122,900 In the Vasquez Corporation, any overapplied or underapplied manufacturing overhead is closed out to Cost of Goods Sold Last year, the Corporation incurred $27,000 in actual manufacturing overhead cost, and applied $29,000 of manufacturing overhead cost to jobs The beginning and ending balances of Finished Goods were equal, and the Corporation's Cost of Goods Manufactured for the year totaled $71,000 Given this information, Cost of Goods Sold, after adjustment for any overapplied or underapplied manufacturing overhead, for the year must have been: $69,000 Beshaw Inc has provided the following data for the month of January There were no beginning inventories; consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month Manufacturing overhead for the month was underapplied by $7,000 The Corporation allocates any underapplied or overapplied manufacturing overhead among work in process, finished goods, and cost of goods sold at the end of the month on the basis of the manufacturing overhead applied during the month in those accounts The cost of goods sold for January after allocation of any underapplied or overapplied manufacturing overhead for the month is: $232,340 Jerrel Corporation sells a product for $230 per unit The product's current sales are 24,000 units and its break-even sales are 17,280 units The margin of safety as a percentage of sales is closest to: 28% 10 Management of Plascencia Corporation is considering whether to purchase a new model 370 machine costing $360,000 or a new model 220 machine costing $340,000 to replace a machine that was purchased years ago for $348,000 The old machine was used to make product I43L until it broke down last week Unfortunately, the old machine cannot be repaired Management has decided to buy the new model 220 machine It has less capacity than the new model 370 machine, but its capacity is sufficient to continue making product I43L Management also considered, but rejected, the alternative of simply dropping product I43L If that were done, instead of investing $340,000 in the new machine, the money could be invested in a project that would return a total of $411,000 In making the decision to buy the model 220 machine rather than the model 370 machine, the sunk cost was: $348,000 the opportunity cost was: $411,000 11 Data concerning Strite Corporation's single product appear below: Assume the company's target profit is $8,000 The dollar sales to attain that target profit is closest to: $596,111 12 Ingrum Corporation produces and sells two products In the most recent month, Product R38T had sales of $20,000 and variable expenses of $7,400 Product X08S had sales of $39,000 and variable expenses of $6,170 The fixed expenses of the entire company were $41,160 If the sales mix were to shift toward Product R38T with total sales remaining constant, the overall break-even point for the entire company: would increase 13 Thornbrough Corporation produces and sells a single product with the following characteristics: The company is currently selling 7,000 units per month Fixed expenses are $901,000 per month The marketing manager would like to cut the selling price by $18 and increase the advertising budget by $53,000 per month The marketing manager predicts that these two changes would increase monthly sales by 1,000 units What should be the overall effect on the company's monthly net operating income of this change? decrease of $21,000 14 Ingrum Corporation produces and sells two products In the most recent month, Product R38T had sales of $20,000 and variable expenses of $7,400 Product X08S had sales of $39,000 and variable expenses of $6,170 The fixed expenses of the entire company were $41,160 The break-even point for the entire company is closest to: $53,455 15 Braam Corporation uses direct labor-hours in its predetermined overhead rate At the beginning of the year, the estimated direct labor-hours were 11,500 hours At the end of the year, actual direct labor-hours for the year were 9,700 hours, the actual manufacturing overhead for the year was $143,350, and manufacturing overhead for the year was underapplied by $18,220 The estimated manufacturing overhead at the beginning of the year used in the predetermined overhead rate must have been: $148,350 16 Gunes Corporation uses the weighted-average method in its process costing system This month, the beginning inventory in the first processing department consisted of 800 units The costs and percentage completion of these units in beginning inventory were: A total of 8,500 units were started and 7,400 units were transferred to the second processing department during the month The following costs were incurred in the first processing department during the month: The ending inventory was 50% complete with respect to materials and 35% complete with respect to conversion costs What are the equivalent units for materials for the month in the first processing department? 8,350 17 Ozdemir Corporation uses the FIFO method in its process costing system Data concerning the first processing department for the most recent month are listed below: What are the equivalent units for conversion costs for the month in the first processing department? 4,970 18 Barredo Corporation's relevant range of activity is 3,000 units to 7,000 units When it produces and sells 5,000 units, its average costs per unit are as follows: If 4,000 units are sold, the total variable cost is closest to: $51,400 ... for July was: $ 21, 600 In July, Direct materials cost = 17 ,000 *11 ,000 /10 ,000 = 18 ,700 Fixed factory rent = 21, 000 => Manufacturing overhead = 61, 300 - 18 ,700 - 21, 000 = 21, 600 14 Boersma Sales,... closest to: $10 3 ,10 0 Fixed manufacturing overhead = 9.9*9000 = 89 ,10 0 Variable manufacturing overhead = 1. 75*8000 = 14 ,000 Indirect manufacturing cost = 89 ,10 0 + 14 ,000 = 10 3 ,10 0 21 Kneeland Corporation... August 11 ,000 $ 16 5,000 10 ,00 $ 15 0,0 00 Cost of goods sold 72,600 66,00 Gross margin 92,400 84,00 Selling and administrative expenses: Rent $ 12 ,000 $ 12 ,00 Sales commissions $ 13 ,200 $ 12 ,00