FACULTY
OF ECONOMIC AND ADMINISTRATIVE SCIENCES
DEPARTMENT
OF MANAGEMENT
MAN 306 MANAGERIAL ACCOUNTING
FINAL
EXAM
Instructor: ALI COSKUN
Duration:
90 Minutes June
1, 2005
QUESTION 1.
Assuming a constant mix of 3 units of
Small for every 1 unit of Large, a selling price of $21.60 for Small and $28.80
for Large, variable costs per unit of $14.40 for Small and $16.80 for Large,
and total fixed costs of $53,760, How many units would be the break-even point?
QUESTION 2.
Osborne Enterprises is developing its
budgets for 2006. The 2005 income statement is as follows:
Sales (84,000 units) $504,000
Less: cost of goods sold 336,000
Gross margin $168,000
Operating expenses (includes $33,600 of
depreciation) 134,400
Net income $33,600
Selling
prices for 2006 are expected to increase by 8 percent, and sales volume in
units will decrease by 10 percent. The cost of goods sold will decline by 10
percent per unit. Other than depreciation, all other operating costs are
expected to decline by 5 percent.
a.What
is the budgeted gross margin for 2006?
b.What
is the budgeted net income for 2006?
QUESTION 3.
The
following data for the telephone company pertain to the production of 450 rolls
of telephone wire during June. Selected items are omitted because the costing
records were lost in a wind storm.
Direct
Materials (All materials purchased were used.)
Standard cost per roll: a
pounds at $4.00 per pound.
Total actual cost: b pounds
costing $9,600.
Standard cost allowed for units produced
was $9,000.
Materials price variance: c .
Materials efficiency variance was $80
unfavorable.
Direct
Manufacturing Labor
Standard cost is 3 hours per roll at $8.00
per hour.
Actual cost per hour was $8.25.
Total actual cost: d .
Labor price variance: e .
Labor efficiency variance was $400
unfavorable.
Compute
the missing elements in the report represented by the lettered items.
QUESTION
4.
Gülsüm
Yalçın, a college student, plans to operate a hot dog stand at the beach during
the summer for three months. His fixed costs for the booth, which include
utilities, will be $4,160. Variable costs per hot dog will be $0.80 for
materials and $0.16 for a franchise fee from the hot dog supplier. This year's
sales are expected to be 20,000 units, based on the operation of the same booth
the prior year. Gülsüm needs to earn $8,000 so that he can pay part of his
college expenses for the coming academic year.
Determine
the price he needs to charge to earn a profit of $8,000.
QUESTION 5.
Cortex
Company reported the following information about the production and sales of
its only product during July:
Sales ($210 per unit) $147,000
Direct materials used 80,000
Direct labor 40,000
Variable factory overhead 20,000
Fixed factory overhead 40,000
Variable selling and administrative
expenses 10,000
Fixed selling and administrative
expenses 20,000
Ending inventories Beginning inventories:
Direct materials -0- -0-
WIP
-0- -0-
Finished goods 150 units 50
units
What
would be the followings?
a.
The ending inventory under variable costing
b.
The ending inventory under absorption costing
QUESTION 6.
Taurus
Company produces a part that is used in the manufacture of one of its products.
The costs associated with the production of 10,000 units of this part are as
follows:
Direct materials $20,000
Direct labor 34,000
Variable factory overhead 60,000
Fixed factory overhead 50,000
$164,000
Of the fixed factory overhead costs,
$7,000 are avoidable.
a.
Assuming there is no alternative use for the facilities, should Taurus take
advantage of an offer from a supplier who is willing to sell Taurus 10,000
units of the same part for $12.80 per unit?
b.
Would your answer to Part A change if the facilities could be rented for
$10,000 a year?
QUESTION 7.
Different
management levels in Bags, Inc. require varying degrees of managerial
accounting information. Because of the need to comply with the managers' requests,
four different variances for manufacturing overhead are computed each month.
The information for the September overhead expenditures are as follows:
Budgeted output units
3,200 units
Budgeted fixed manufacturing overhead $20,000
Budgeted variable manufacturing overhead
$5.00 per direct labor hour
Budgeted direct manufacturing labor hours 2 hours per unit
Fixed manufacturing costs incurred $26,000
Direct manufacturing labor hours used 7,200
Variable manufacturing costs incurred $35,600
Actual units manufactured 3,400
Compute
a 4-variance analysis for the plant controller.
a.
Variable overhead spending variance
b.
Variable overhead efficiency variance
c.
Fixed overhead spending variance
d.
Fixed overhead production volume variance
BONUS
Murray
Company uses a single cost pool for fixed manufacturing overhead. The amount
for July 2005 was budgeted at $250,000; however, the actual amount was
$350,000. Actual production for July was 25,000 units, and actual machine-hours
were 20,000. Budgeted production included 35,500 units and 24,750
machine-hours.
a.
What is the budgeted fixed overhead rate per output unit (rounded to the
nearest cent)?
b. What is the budgeted fixed
overhead rate per input unit?