Category: Accounting

“The Southern Company manufactures a single product. Assume the following data for 19×5: Variable costs per unit: Selling and administrative $14 Production $38 Fixed costs in total: Production $140,000 Selling and administrative $ 84,000 During 19×5, 7,000 units were produced and 6,800 units were sold. Page 23 Version 1 83. The inventory carrying value of finished goods at December 31, 19×5, under variable costing would be a. The same as absorption costing. b. $6,800 greater than under absorption costing. c. $6,800 less than under absorption costing. d. $4,000 less than under absorption costing.”,”4The inventory carrying value of finished goods at December 31, 19×5:Variable Costing = 200 x 38 = $7,600Absorption Costing: = 200 x (38 + (140,000/7000) = $11,60011,600 – 7,600 = 4,000Absorption costing would be $4

Managerial Accounting

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“Pardoe, Inc., manufactures a product called Product A. The company uses a standard cost system and has established the following standards for one unit of Product A: Standard Standard Price Standard Quantity or Rate Cost Direct materials 1.5 pounds $3 per pound $4.50 Direct labor 0.6 hours $6 per hour 3.60 Variable overhead 0.6 hours $1.25 per hour .75 $8.85 ÍÍÍÍÍ During March 19×3, the following activity was recorded by the company relative to the production of Product A: I. The company produced 3,000 units during the month. II. A total of 8,000 pounds of material were purchased at a cost of $23,000. III. There was no beginning inventory of materials on hand to start the month; at the end of the month, 2,000 pounds of material remained in the warehouse unused. IV. The company employs 10 people to work on the production of Product A. During March, each worked at an average of 160 hours at a rate of $6.50 per hour. In the past, the 10 persons employed in the production of Product A consisted of four senior workers and six assistants. During March, the company experimented with five senior workers and five assistants. V. Variable overhead is assigned to Product A on the basis of direct labor-hours. Variable overhead costs during March totaled $1,800.99. The labor efficiency variance for March is: a. $5,040 U. b. $1,200 U. c. $1,200 F. d. $5,040 F.”,”3Labor Efficiency Variance =Actual Hours at Standard Rate – Standard hours Allowed at Standard Rate= (10 x 160 x 6) – (300 x .6) x 6= $1

Managerial Accounting

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68. The management of a company considering an investment in automated equipment should consider: a. primarily the reduction in direct labor cost since this reduction usually is sufficient to justify the investment. b. only the quantifiable tangible aspects of the benefits of automation that can be used to calculate the net present value or the time-adjusted rate of return. c. both the tangible and intangible benefits of automation including an attempt to quantify the intangible benefits. d. the need for total automation rather than a piecemeal approach.

Managerial Accounting

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69. The evaluation of an investment having uneven cash flows using the payback method: a. cannot be done. b. can be done only by matching cash inflows and investment outflows on a year-by-year basis. c. will produce essentially the same results as those obtained through the use of discounted cash flow techniques. d. requires the use of a sophisticated calculator or computer software.

Managerial Accounting

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“38. Carlton Company sells a single product at a selling price of $40 per unit. Variable costs are $22 per unit and fixed costs are $82,800. Carlton’s break- even point is: a. $184,000 b. 3,764 units c. $150,545 d. 2,070 units”,”1Sales = Variable expenses + Fixed expenses + Profits40Q = 22Q + 82,800 + 018Q = 82,800Q = 4,600 Break-even in $ = 4,600 x 40 = $184,000ORBreak-even point = Fixed Costs = 82,800 = 4,600 units Selling – Variable Costs 18Break-even in $ = 4,600 x $40 = $184,000Answer 2:Break-even point= Fixed Costs = 82,800 = 184

Managerial Accounting

Average Rating 0 out of 5 stars. 0 votes.You must log in to submit a review.“38. Carlton Company sells a[…]

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