SAMPLE EXAM 3ACCT 212 SECTION 02 SPRING 2021 These are sample questions for exam 3. Exam 3 will be a 50 point exam, so fewer questions than the sample examples. There are several different types of...

1 answer below »
Attached sample exam


SAMPLE EXAM 3ACCT 212 SECTION 02 SPRING 2021 These are sample questions for exam 3. Exam 3 will be a 50 point exam, so fewer questions than the sample examples. There are several different types of management decisions in Chapter 11 and this sample exam has an example of each type. Exam 3 will have two Chapter 11 decision problems. 1. Marty's Merchandise has budgeted sales as follows for the second quarter of the year: March$40,000 April$30,000 May$60,000 June$50,000 Cost of goods sold is equal to 70% of sales. The company wants to maintain a monthly ending inventory equal to 120% of the cost of goods sold for the following month. The inventory on March 31 was below this target and was only $22,000. The company is now preparing a Merchandise Purchases Budget for April, May, and June. Purchases are paid for 40% in the month of purchase and 60% the following month. Sales are all on credit. 60% of sales are collected in cash in the month of sale, 30% in the next month and 5% in the following month. 5% of sales are not collected (bad debts). 1. What are the required purchases (in dollars) for April and May? 2. What are the May cash disbursements for purchases? 3. What are the May cash collections for sales? 2. Milar Corporation makes a product with the following standard costs:   Standard Quantity or Hours Standard Price or Rate Direct materials   7.7 pounds $ 4.00 per pound Direct labor   0.1 hours $ 20.00 per hour Variable overhead   0.1 hours $ 4.00 per hour In January the company produced 2,000 units using 16,060 pounds of the direct material and 210 direct labor-hours. During the month, the company purchased 16,900 pounds of the direct material at a cost of $65,910. The actual direct labor cost was $4,473 and the actual variable overhead cost was $756. The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. REQUIRED: Calculate the following variances: Label each variance as Favorable or Unfavorable Materials Price Variance____________________ Materials Efficiency (Usage) Variance_____________________ Direct Labor Price (Rate) Variance_____________________ Direct Labor Efficiency Variance_____________________ Variable Overhead Price Variance_____________________ Variable Overhead Usage Variance_____________________ 3. Eady Wares is a division of a major corporation. The following data are for the latest year of operations: Sales $ 19,600,000   Net operating income $ 670,400   Average operating assets $ 5,000,000   The company's minimum required rate of return   10 % Required: a. What is the division's margin? b. What is the division's turnover? c. What is the division's return on investment (ROI)? d. What is the division's residual income? The division is considering a project that would cost $300,000 and lead to additional operating income of $36,000. Will Eady Wares want to accept the investment if it is evaluated using ROI? Would the decision be different if Eady Wares is evaluated using residual income? Explain 4. Carattini Incorporated makes a single product—an electrical motor used in many long-haul trucks. The company has a standard cost system in which it applies overhead to this product based on the standard labor-hours allowed for the actual output of the period. Data concerning the most recent year appear below: Total budgeted manufacturing overhead $ 360,000   Budgeted hours   36,000 labor-hours Standard hours allowed for the actual production   34,200 labor-hours Total actual manufacturing overhead $ 340,376   Actual hours   37,200 labor-hours Calculate the Fixed Overhead Budget Variance and the Fixed Overhead Volume Variance 5. One of the employees of Davenport Corporation recently was involved in an accident with one of the corporation's delivery vans. The corporation is either going to repair the damaged van or sell it as is and buy a comparable used van. Information related to this decision is provided below: Initial cost of the damaged van $30,000 Accumulated depreciation to date on van $18,000 Salvage value of van immediately before crash $ 9,000 Salvage value of van immediately after crash $ 1,000 Cost to repair damaged van $ 5,000 Cost of a comparable used van $10,000 Should Davenport repair or replace the damaged van? What is the financial difference? 6.Lusk Corporation produces and sells 10,000 units of Product X each month. The selling price of Product X is $40 per unit, and variable expenses are $32 per unit. A study has been made concerning whether Product X should be discontinued. The study shows that $70,000 of the $120,000 in monthly fixed expenses charged to Product X would not be avoidable even if the product was discontinued. If Product X is discontinued, the annual financial advantage (disadvantage) for the company of eliminating this product should be: 7. 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:   Per Unit Direct materials $ 6.30 Direct labor $ 5.70 Variable manufacturing overhead $ 4.80 Supervisor's salary $ 7.00 Depreciation of special equipment $ 8.60 Allocated general overhead $ 7.20 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:  8. 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:   Per Unit Selling price $ 125 Manufacturing costs:     Variable $ 25 Fixed $ 40 Selling and administrative costs:     Variable $ 10 Fixed $ 15 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:  9. 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:   Letter Openers Elvis Statues Candle Holders Selling price $ 30 $ 80 $ 42 Variable cost $ 20 $ 40 $ 20 Labor hours required   1   6   2 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? SAMPLE EXAM 3ACCT 212 SECTION 02 SPRING 2021 These are sample questions for exam 3. Exam 3 will be a 50 point exam, so fewer questions than the sample examples. There are several different types of management decisions in Chapter 11 and this sample exam has an example of each type. Exam 3 will have two Chapter 11 decision problems. 1. Marty's Merchandise has budgeted sales as follows for the second quarter of the year: March$40,000 April$30,000 May$60,000 June$50,000 Cost of goods sold is equal to 70% of sales. The company wants to maintain a monthly ending inventory equal to 120% of the cost of goods sold for the following month. The inventory on March 31 was below this target and was only $22,000. The company is now preparing a Merchandise Purchases Budget for April, May, and June. Purchases are paid for 40% in the month of purchase and 60% the following month. Sales are all on credit. 60% of sales are collected in cash in the month of sale, 30% in the next month and 5% in the following month. 5% of sales are not collected (bad debts). 1. What are the required purchases (in dollars) for April and May? 2. What are the May cash disbursements for purchases? 3. What are the May cash collections for sales? 2. Milar Corporation makes a product with the following standard costs:   Standard Quantity or Hours Standard Price or Rate Direct materials   7.7 pounds $ 4.00 per pound Direct labor   0.1 hours $ 20.00 per hour Variable overhead   0.1 hours $ 4.00 per hour In January the company produced 2,000 units using 16,060 pounds of the direct material and 210 direct labor-hours. During the month, the company purchased 16,900 pounds of the direct material at a cost of $65,910. The actual direct labor cost was $4,473 and the actual variable overhead cost was $756. The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. REQUIRED: Calculate the following variances: Label each variance as Favorable or Unfavorable Materials Price Variance____________________ Materials Efficiency (Usage) Variance_____________________ Direct Labor Price (Rate) Variance_____________________ Direct Labor Efficiency Variance_____________________ Variable Overhead Price Variance_____________________ Variable Overhead Usage Variance_____________________ 3. Eady Wares is a division of a major corporation. The following data are for the latest year of operations: Sales $ 19,600,000   Net operating income $ 670,400   Average operating assets $ 5,000,000   The company's minimum required rate of return   10 % Required: a. What is the division's margin? b. What is the division's turnover? c. What is the division's return on investment (ROI)? d. What is the division's residual income? The division is considering a project that would cost $300,000 and lead to additional operating income of $36,000. Will Eady Wares want to accept the investment if it is evaluated using ROI? Would the decision be different if Eady Wares is evaluated using residual income? Explain 4. Carattini Incorporated makes a single product—an electrical
Answered 1 days AfterMay 19, 2021

Answer To: SAMPLE EXAM 3ACCT 212 SECTION 02 SPRING 2021 These are sample questions for exam 3. Exam 3 will be...

Harshit answered on May 20 2021
135 Votes
Sheet1
    STATEMENT OF BUDGETED SALES
    PARTICULARS     APRIL    MAY    JUNE    TOTAL
    BUDGETED SALES    60000    7500
0    90000
    SELLING PRICE PER UNIT    2    2    2
    TOTAL SALES    120000    150000    180000    450000
    ANSWER TO PART 2
    STATEMENT OF EXPECTED CASH COLLECTION
    PARTICULARS     APRIL    MAY    JUNE    TOTAL
    TOTAL CREDIT...
SOLUTION.PDF

Answer To This Question Is Available To Download

Related Questions & Answers

More Questions »

Submit New Assignment

Copy and Paste Your Assignment Here