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Final Exam Review Qs

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SOC 503
Tsogbadral Galaabaatar

MGAB03 Final Exam Review Questions Chapter 7 1. A firm produces and sells two products, Alpha and Zeta. The following information is available relating to setup costs (a part of factory overhead): Product Alpha Product Zeta Units produced 250 20,000 Batch size (units) 10 500 Number of setups 25 40 Direct labour hours per unit 3 3 Total direct labour hours 750 60,000 Cost per setup $ 1,000 Total setup cost 65,000 Use of activity-based costing would allocate the following amounts of setup cost to each unit (rounded to nearest cent): Product Alpha Product Zeta (A) $3.21 $3.21 (B) $100.00 $2.00 (C) $130.00 $2.00 (D) $9.63 $9.63 (E) $40.00 $2.50 2. Baker Corporation operates two departments (G and H) and an office. All office expenses are allocated to the departments. The following information is available for August: Home Office Expenses Total Allocation Basis Salaries $30,000 Number of employees Amortization 20,000 Cost of goods sold Advertising 40,000 Net sales Item Dept. G Dept. H Total Number of employees 1,000 1,500 2,500 Net sales $325,000 $475,000 $800,000 Cost of goods sold $ 75,000 $125,000 $200,000 The amount of home office expenses that should be allocated to Department H for August is: (A) $35,750, (B) $42,375, (C) $54,250, (D) $90,000, (E) $600,000 Chapter 10 The following data apply to questions 1 and 2. Zeta Company budgets on an annual basis. The following beginning and ending inventory levels (in units) are planned for the fiscal year of July 1, 2012, through June 30, 2013. July 1, 2012 June 30, 2013 Raw material 1 40,000 10,000 Work in process 8,000 8,000 Finished goods 30,000 5,000 1 Three (3) units of raw material are needed to produce each unit of finished product. 3. If Zeta Company plans to sell 500,000 units during the 2012-2013 fiscal year, the number of units it would have to manufacture (production budget) during the year would be: (A) 475,000 b. (B) 480,000 (C) 500,000 (D) 505,000 4. If 450,000 finished units were to be manufactured during the 2012-2013 fiscal year by Zeta Company, the units of raw material needed (purchase budget) would be: (A) 1,320,000 (B) 1,330,000 (C) 1,350,000 (D). 1.360,000 The following data apply to questions 5–6. Information pertaining to Omega Company’s sales revenue forecast is presented in the following table: February March April Cash sales $160,000 $150,000 $120,000 Credit sales 300,000 400,000 280,000 Total sales $460,000 $550,000 $400,000 Omega’s Management estimates that five percent of credit sales are not collectible. Of the credit sales that are collectible, 60 percent are collected in the month of sale and the remainder in the month following the sale. Cost of purchases of inventory each month are 70 percent of the next month's projected total sales. All purchases of inventory are on account; 25 percent are paid in the month of purchase, and the remainder is paid in the month following the purchase. 5. Omega's budgeted total cash receipts in April would be: (A) $328,000. (B) $431,600. (C) $437,000. (D) $448,000. 6. Omega’s budgeted total cash payments in March for inventory purchases would be: (A) $280,000. (B) $306,250. (C) $358,750. (D) $385,000. Chapter 4 Omega Industries uses ten units of Z each month in the production of scientific equipment. The unit cost to manufacturing one unit of Z is presented below. Direct materials $ 4,000 Materials handling (10% of direct materials cost) 400 Direct manufacturing labour 6,000 Indirect manufacturing (200% of direct labour) 12,000 Total manufacturing cost $22,400 Materials handling represents the direct variable costs of the Receiving Department that are applied to direct materials and purchased components on the basis of their cost. This is a separate charge in addition to indirect manufacturing cost. Omega’s annual indirect manufacturing cost budget is one-fourth variable and three-fourths fixed. Alpha Manufacturing, one of Omega’s reliable vendors, has offered to supply Zs at a unit price of $17,000. 7. If Omega purchases units o
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