Midterm Exam-Spring 2014Accounting 611Professor T. LindenbergINSTRUCTIONS:1. This examination covers content covered through Session 6 . The exam ismeant to be an individual effort. Any sharing of answers (giving or receiving) willresult in immediate disciplinary action. You may use your textbook. However youare not to consult with any other individual about the problems or the processesrequired to complete this exam.2. There are 6 problems on this exam.Answer all parts of each problem.3. Show your work on all problems where appropriate. Label all amounts notgiven in the problem. Also label your answers! Make it clear what youranswers are. Please show your answers clearly and separate them fromyour calculations. Partial credit will be given only where these requirements aremet.4. Problems 2 and 4 count for 3% each problem 5 counts for 2% andProblems 1 3 and 6 counts for 4% each . Thus the exam counts for 20% of thecourse grade.5. Submit your answers (not the questions) in your Assignment Portfolio. Yourexam responses are due by Sunday March 23. I strongly suggest that youcomplete this exam and submit your responses at least 24 hours before the finalsubmission deadline.6. How to submit… Once you are ready to submit all answers please submitONLY the answers to the questions in your Web Tyco Assignment Portfolio. Post1 individual attachment to your Assignments Folder. Simply submit oneattachment that I can open and place your answers clearly labeled in order.DO NOT SUBMIT MORE THAN ONE ATTACHMENT AND DO NOT SUBMITTHE QUESTIONS.7. Please be sure to follow the directions so the grading can go smoothly. Thanksand good luck on the exam. Problem 1Using the following information find the unknown amounts. Assume each set ofinformation is an independent case.a. Merchandise InventoryPurchasesCost of goods soldBeginning balanceEnding balance$210 000223 00041 000?b. Direct MaterialsBeginning balanceEnding balancePurchasesDirect materials usedc. Work-in-process InventoryEnding balanceCost of goods manufacturedBeginning balanceCurrent manufacturing costs$ 22 00021 0008 000?d. Finished Goods InventoryCost of goods manufacturedEnding balanceCost of goods soldBeginning balance$62 00020 00061 000?$ 7 00014 00048 000?Problem 2Sprint Manufacturing Company produces two products X and Y. The followinginformation is presented for both products:XYSelling price per unit$30$20Variable cost per unit205Total fixed costs are $292 500.Required:a. Calculate the contribution margin for each product.b. Calculate breakeven point in units of both X and Y if the sales mix is 3 units of X forevery unit of Y.c. Calculate breakeven volume in total dollars if the sales mix is 2 units of X for every 3units of Y. Problem 3Rachel’s Pet Supply Corporation manufactures two models of grooming stations astandard and a deluxe model. The following activity and cost information has beencompiled:ProductStandardDeluxeOverhead costsNumber ofSetups37Number ofComponents3050$40 000Number ofDirect Labor Hours650150$120 000Assume a traditional costing system applies the $160 000 of overhead costs based ondirect labor hours.a. What is the total amount of overhead costs assigned to the standard model?b. What is the total amount of overhead costs assigned to the deluxe model?Assume an activity-based costing system is used and that the number of setups and thenumber of components are identified as the activity-cost drivers for overhead.c. What is the total amount of overhead costs assigned to the standard model?d. What is the total amount of overhead costs assigned to the deluxe model?Problem 4Clothes Inc. has an average annual demand for red medium polo shirts of 25 000 units.The cost of placing an order is $80 and the cost of carrying one unit in inventory for oneyear is $25.Required:a. Use the economic-order-quantity model to determine the optimal order size.b. Determine the reorder point assuming a lead time of 10 days and a work year of 250days.c. Determine the safety stock required to prevent stockouts assuming the maximum leadtime is 20 days and the maximum daily demand is 125 units.Problem 5The following data are available for Ruggles Company for the year ended September 30 2011.Sales:Expected and actual production:Manufacturing costs incurred:Variable:Fixed:Nonmanufacturing costs incurred:24 000 units at $50 each30 000 units$525 000$372 000 Variable:Fixed:Beginning inventories:$144 800$77 400noneRequired:a. Determine operating income using the variable-costing approach.b. Determine operating income using the absorption-costing approach.Problem 6Jerry’s TV and Appliance Store is a small company that has hired you to perform somemanagement advisory services. The following information pertains to 2011 operations.Sales (1 000 televisions)$ 900 000Cost of goods sold400 000Store manager’s salary per year70 000Operating costs per year157 000Advertising and promotion per year 15 000Commissions (4% of sales)36 000Part 1. What was the variable cost per unit sold for 2011?A) $36B) $436C) $678D) $400Part 2 What were total fixed costs for 2011?A) $678 000B) $436 000C) $242 000D) $227 000Part 3 What are the estimated total costs if Penny’s expects to sell 3 000 units next year?A) $1 550 000B) $1 332 000C) $1 671 000D) $1 453 000Part 4 Which cost estimation method is being used by Jerry’s TV and Appliance Store?A) the industrial engineering methodB) the conference methodC) the account analysis methodD) the quantitative analysis method
