ScholarMatic: Explanation & Answer
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Post ACC211 Unit 1 Discussion Latest 2017 August
Unit 1 Discussion Board
Do you believe a firm must have a firm grasp of the concepts of differential cost, opportunity cost and sunk cost to be effective in making business decisions? Please be sure that your first post talks about these three different types of costs. Consider giving examples – especially if you have examples within your own employment experience. Or – you can look for some online resources that offer you some other facets of this topic to discuss so that it isn’t just a rehash of the textbook. Don’t forget to cite any resources that you use – even the textbook!
Post ACC211 Unit 2 Discussion Latest 2017 August
Unit 2 Discussion Board
What benefits and drawbacks are there for a business that uses a Standard/Traditional Costing model?
What benefits and drawback are there for a business that uses an Activity Based Costing (ABC) model?
If you owned a small manufacturing business with relatively high volume and multiple product lines, would you implement an ABC model? Why?
As you get ready to reflect on these questions, don’t forget that the best answers are attempts to apply the concept to a small business and explore how a standard/traditional costing or activity-based costing system would/could be used. What are the benefits and the risks – or how could you adapt it to get the best of both?
Don’t forget that, when you draw a blank on a question (or any part of it), take a quick look at the concept on the internet or in the Post online library. There will be some great inspiration there that will help you out AND lend some different perspective on the matter! (Don’t forget to cite anything that you use!)
Post ACC211 Unit 3 Discussion Latest 2017 August
Unit 3 Discussion Board
Companies often use leverage to augment profits. Based on what you learned this week, please explain the following in detail:
- With regards to Operating Leverage, please explain why a company with HIGH Operating Leverage faces greater financial risk in a declining sales period compared to a company with LOW Operating Leverage. (HINT: The key here is the relation between fixed costs and variable costs.)
- What does a business’s Contribution Margin represent? What does the Contribution Margin have to do with Operating Leverage?
Post ACC211 Unit 4 Discussion Latest 2017 August
Unit 4 Discussion Board
How important is it to trace costs appropriately? Explain.
As you are beginning to think about the importance of tracing costs appropriately, please consider the differences between variable costing and absorption costing. What implications does each of these have on such things as financial reporting of profit and pricing your products for the marketplace?
You may also want to think about the issues involved with traceable costs as discussed in our text or in articles that you may find online.
Post ACC211 Unit 6 Discussion Latest 2017 August
Unit 6 Discussion Board
Why is the identification of favorable and unfavorable variances so important to a company? How can the identification of the variances help management control costs? Please explain.
As you are considering the flexible budgeting topic of the week, it is important for you to look at this analysis as a significant contribution to the management of the company. Knowing what the bottom line profit or loss is important. But what is more important is to understand how your actual results varied in terms of units sold versus how the actual cost of each unit differed from the budget.
Please do watch the video available in this week’s resources – you can turn the sound off and read the script on the right side if you need to. The lecturer has an excellent example that will help you.
Do you have an example that you can share? Sometimes that’s the best way to answer the question.
Post ACC211 Unit 7 Discussion Latest 2017 August
Unit 7 Discussion Board
What insight does ROI give into investment performance? Is it acceptable to lose profit on one product, if that product is vital to the sale of an extremely profitable product? Why?
As you think about these questions, also consider what other measures beside ROI might be help in analyzing solutions to business problems – or opportunities.
Post ACC211 Unit 1 Chapter 1 Quiz
1.
The following costs were incurred in April:
|
Direct materials |
$41,400 |
|
Direct labor |
$29,800 |
|
Manufacturing overhead |
$24,300 |
|
Selling expenses |
$19,700 |
|
Administrative expenses |
$34,500 |
Conversion costs during the month totaled:
$71,200
$65,700
$54,100
$149,700
2.
The following costs were incurred in April:
|
Direct materials |
$39,700 |
|
Direct labor |
$23,200 |
|
Manufacturing overhead |
$24,000 |
|
Selling expenses |
$20,300 |
|
Administrative expenses |
$33,900 |
Prime costs during the month totaled:
$47,200
$86,900
$62,900
$141,100
3.
|
Haab Inc. is a merchandising company. Last month the company’s cost of goods sold was $67,500. The company’s beginning merchandise inventory was $11,000 and its ending merchandise inventory was $26,200. What was the total amount of the company’s merchandise purchases for the month? |
$104,700
$52,300
$82,700
$67,500
4.
|
At a sales volume of 35,500 units, Carne Company’s sales commissions (a cost that is variable with respect to sales volume) total $727,750. |
|
To the nearest whole dollar, what should be the total sales commissions at a sales volume of 34,200 units? (Assume that this sales volume is within the relevant range.) (Do not round intermediate calculations.) |
$712,620
$755,413
$701,100
$727,750
5.
|
Calip Corporation, a merchandising company, reported the following results for October: |
|
Sales |
$419,000 |
|
Cost of goods sold (all variable) |
$175,500 |
|
Total variable selling expense |
$23,600 |
|
Total fixed selling expense |
$17,200 |
|
Total variable administrative expense |
$15,400 |
|
Total fixed administrative expense |
$31,400 |
|
The contribution margin for October is: |
$204,500
$155,900
$370,400
$243,500
6.
|
Nieman Inc., a local retailer, has provided the following data for the month of March: |
|
Merchandise inventory, beginning balance |
$49,300 |
|
Merchandise inventory, ending balance |
$44,200 |
|
Sales |
$260,700 |
|
Purchases of merchandise inventory |
$142,400 |
|
Selling expense |
$20,100 |
|
Administrative expense |
$60,100 |
|
The cost of goods sold for March was: |
$222,600
$137,300
$147,500
$142,400
7.
|
Nieman Inc., a local retailer, has provided the following data for the month of March: |
|
Merchandise inventory, beginning balance |
$ 44,500 |
|
Merchandise inventory, ending balance |
$ 43,200 |
|
Sales |
$263,100 |
|
Purchases of merchandise inventory |
$137,600 |
|
Selling expense |
$ 17,000 |
|
Administrative expense |
$ 60,900 |
|
The net operating income for March was: |
$125,500
$126,500
$46,900
$46,300
8.
In April direct labor was 70% of conversion cost. If the manufacturing overhead for the month was $42,000 and the direct materials cost was $28,000, the direct labor cost was:
$98,000
$65,333
$18,000
$12,000
9.
The following cost data pertain to the operations of Rademaker Department Stores, Inc., for the month of March.
|
Corporate headquarters building lease |
$80,000 |
|
Cosmetics Department sales commissions-Northridge Store |
$7,000 |
|
Corporate legal office salaries |
$75,000 |
|
Store manager’s salary-Northridge Store |
$11,000 |
|
Heating-Northridge Store |
$11,000 |
|
Cosmetics Department cost of sales-Northridge Store |
$83,000 |
|
Central warehouse lease cost |
$17,000 |
|
Store security-Northridge Store |
$11,000 |
|
Cosmetics Department manager’s salary-Northridge Store |
$4,000 |
The Northridge Store is just one of many stores owned and operated by the company. The Cosmetics Department is one of many departments at the Northridge Store. The central warehouse serves all of the company’s stores.
What is the total amount of the costs listed above that are direct costs of the Cosmetics Department?
$83,000
$94,000
$90,000
$127,000
10.Corcetti Company manufactures and sells prewashed denim jeans. Large rolls of denim cloth are purchased and are first washed in a giant washing machine. After the cloth is dried, it is cut up into jean pattern shapes and then sewn together. The completed jeans are sold to various retail chains.
Which of the following terms could be used to correctly describe the cost of the soap used to wash the denim cloth?
|
Direct Cost |
Product Cost |
|
|
A) |
Yes |
Yes |
|
B) |
Yes |
No |
|
C) |
No |
Yes |
|
D) |
No |
No |
Option A
Option B
Option C
Option D
11.Ence Sales, Inc., a merchandising company, reported sales of 6,400 units in April at a selling price of $684 per unit. Cost of goods sold, which is a variable cost, was $455 per unit. Variable selling expenses were $30 per unit and variable administrative expenses were $40 per unit. The total fixed selling expenses were $156,800 and the total administrative expenses were $260,400.
The gross margin for April was:
$1,465,600
$3,960,400
$1,017,600
$600,400
Post ACC211 Unit 5 Chapter 7 Quiz
1.
|
The WRT Corporation makes collections on sales according to the following schedule: |
|
40% in month of sale |
|
55% in month following sale |
|
5% in second month following sale |
|
The following sales have been are expected: |
|
Expected Sales |
|
|
April |
$110,000 |
|
May |
$120,000 |
|
June |
$110,000 |
|
Budgeted cash collections in June should be budgeted to be: |
$110,550
$110,000
$115,500
$110,000
2.
|
Paradise Corporation budgets on an annual basis for its fiscal year. The following beginning and ending inventory levels (in units) are planned for next year. |
|
Beginning Inventory |
Ending Inventory |
|
|
Raw material* |
52,000 |
62,000 |
|
Finished goods |
92,000 |
62,000 |
|
*Three pounds of raw material are needed to produce each unit of finished product. |
|
If Paradise Corporation plans to sell 540,000 units during next year, the number of units it would have to manufacture during the year would be: |
488,000 units
540,000 units
570,000 units
510,000 units
3.
|
Morie Corporation is working on its direct labor budget for the next two months. Each unit of output requires 0.77 direct labor-hours. The direct labor rate is $11.10 per direct labor-hour. The production budget calls for producing 7,000 units in March and 6,800 units in April. The company guarantees its direct labor workers a 40-hour paid work week. With the number of workers currently employed, that means that the company is committed to paying its direct labor work force for at least 5,480 hours in total each month even if there is not enough work to keep them busy. What would be the total combined direct labor cost for the two months? |
$121,656.00
$117,948.60
$133,599.60
$118,947.60
4.
|
The manufacturing overhead budget at Amrein Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 2,400 direct labor-hours will be required in August. The variable overhead rate is $5 per direct labor-hour. The company’s budgeted fixed manufacturing overhead is $43,080 per month, which includes depreciation of $3,680. All other fixed manufacturing overhead costs represent current cash flows. The August cash disbursements for manufacturing overhead on the manufacturing overhead budget should be: |
$55,080
$39,400
$51,400
$12,000
5.
|
The manufacturing overhead budget at Pendley Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 6,000 direct labor-hours will be required in August. The variable overhead rate is $8.40 per direct labor-hour. The company’s budgeted fixed manufacturing overhead is $109,800 per month, which includes depreciation of $24,970. All other fixed manufacturing overhead costs represent current cash flows. The company recomputes its predetermined overhead rate every month. The predetermined overhead rate for August should be: |
$23.20
$18.30
$8.40
$26.70
6.
|
Vandel Inc. bases its selling and administrative expense budget on budgeted unit sales. The sales budget shows 2,700 units are planned to be sold in April. The variable selling and administrative expense is $3.20 per unit. The budgeted fixed selling and administrative expense is $35,770 per month, which includes depreciation of $4,200 per month. The remainder of the fixed selling and administrative expense represents current cash flows. The cash disbursements for selling and administrative expenses on the April selling and administrative expense budget should be: |
44,410
40,210
31,570
8,640
7.
|
Laurey Inc. is working on its cash budget for May. The budgeted beginning cash balance is $47,000. Budgeted cash receipts total $131,000 and budgeted cash disbursements total $126,000. The desired ending cash balance is $64,000. To attain its desired ending cash balance for May, the company needs to borrow: |
$116,000
$0
$64,000
$12,000
8.
|
Sarter Corporation is in the process of preparing its annual budget. The following beginning and ending inventory levels are planned for the year. |
|
Beginning Inventory |
Ending Inventory |
|
|
Finished goods (units) |
26,000 |
76,000 |
|
Raw material (grams) |
56,000 |
46,000 |
|
Each unit of finished goods requires 2 grams of raw material. |
|
The company plans to sell 610,000 units during the year, how much of the raw material should the company purchase during the year? |
1,336,000 grams
1,310,000 grams
1,366,000 grams
1,320,000 grams
9.
|
The Adams Corporation, a merchandising firm, has budgeted its activity for November according to the following information: |
|
• Sales at $540,000, all for cash. |
|
• Merchandise inventory on October 31 was $245,000. |
|
• The cash balance November 1 was $27,000. |
|
• Selling and administrative expenses are budgeted at $87,000 for November and are paid for in cash. |
|
• Budgeted depreciation for November is $43,000. |
|
• The planned merchandise inventory on November 30 is $275,000. |
|
• The cost of goods sold is 70% of the selling price. |
|
• All purchases are paid for in cash. |
|
• There is no interest expense or income tax expense. |
|
The budgeted cash receipts for November are: |
$405,000
$540,000
$135,000
$583,000
10.
|
LFM Corporation makes and sells a product called Product WZ. Each unit of Product WZ requires 3.0 hours of direct labor at the rate of $26.00 per direct labor-hour. Management would like you to prepare a Direct Labor Budget for June. |
The budgeted direct labor cost per unit of Product WZ would be:
$7.00 per unit
$46.00 per unit
$26.00 per unit
$78.00 per unit
11.
|
LFM Corporation makes and sells a product called Product WZ. Each unit of Product WZ requires 2.2 hours of direct labor at the rate of $18.00 per direct labor-hour. Management would like you to prepare a Direct Labor Budget for June. The company plans to sell 41,000 units of Product WZ in June. The finished goods inventories on June 1 and June 30 are budgeted to be 630 and 130 units, respectively. Budgeted direct labor costs for June would be: (Do not round intermediate calculations.) |
$1,603,800
$1,641,300
$730,500
$1,622,550
Post ACC211 Unit 6 Chapter 8 Quiz
1.
|
Hettinger Hospital bases its budgets on patient-visits. The hospital’s static budget for March appears below: |
|
Budgeted number of patient-visits |
8,900 |
|
Budgeted variable costs: |
|
|
Supplies (@ $10.00 per patient-visit) |
$ 89,000 |
|
Laundry (@ $9.70 per patient-visit) |
86,330 |
|
Total variable cost |
175,330 |
|
Budgeted fixed costs: |
|
|
Wages and salaries |
99,840 |
|
Occupancy costs |
107,840 |
|
Total fixed cost |
207,680 |
|
Total cost |
$383,010 |
The total variable cost at the activity level of 9,000 patient-visits per month should be:
$175,330
$207,680
$177,300
$210,010
2.
|
Epley Corporation makes a product with the following standard costs: |
|
Standard Quantity or Hours |
Standard Price or Rate |
|
|
Direct materials |
2.0 pounds |
$7.00 per pound |
|
Direct labor |
1.3 hours |
$11.00 per hour |
|
Variable overhead |
1.3 hours |
$3.00 per hour |
|
In July the company produced 5,000 units using 10,310 pounds of the direct material and 2,290 direct labor-hours. During the month, the company purchased 10,880 pounds of the direct material at a cost of $76,760. The actual direct labor cost was $38,241 and the actual variable overhead cost was $11,942. |
|
The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. |
|
The materials quantity variance for July is: |
$460 U
$600 F
$2,170 U
$460 F
3.
|
Epley Corporation makes a product with the following standard costs: |
|
Standard Quantity or Hours |
Standard Price or Rate |
|
|
Direct materials |
9.0 pounds |
$8.5 per pound |
|
Direct labor |
0.8 hours |
$30.00 per hour |
|
Variable overhead |
0.8 hours |
$14.00 per hour |
|
In July the company produced 3,410 units using 13,640 pounds of the direct material and 2,848 direct labor-hours. During the month, the company purchased 14,400 pounds of the direct material at a cost of $35,100. The actual direct labor cost was $85,030 and the actual variable overhead cost was $38,220. |
|
The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. |
|
The labor rate variance for July is: |
$410 F
$410 U
$3,190 U
$3,190 F
4.
|
Pardoe, Inc., manufactures a single product in which variable manufacturing overhead is assigned on the basis of standard direct labor-hours. The company uses a standard cost system and has established the following standards for one unit of product: |
|
Standard Quantity |
Standard Price or Rate |
Standard Cost |
|
|
Direct materials |
2.0 pounds |
$5.50 per pound |
$11.00 |
|
Direct labor |
0.6 hours |
$16 per hour |
$9.6 |
|
Variable manufacturing overhead |
0.6 hours |
$3.75 per hour |
$2.25 |
|
During March, the following activity was recorded by the company: |
|
• The company produced 5,000 units during the month. |
|
• A total of 13,500 pounds of material were purchased at a cost of $37,800. |
|
• There was no beginning inventory of materials on hand to start the month; at the end of the month, 2,700 pounds of material remained in the warehouse. |
|
• During March, 3,200 direct labor-hours were worked at a rate of $16.50 per hour. |
|
• Variable manufacturing overhead costs during March totaled $7,400. |
|
The direct materials purchases variance is computed when the materials are purchased. |
|
The materials price variance for March is: |
$36,450 U
$20,800 F
$20,800 U
$36,450 F
5.
|
Oddo Corporation makes a product with the following standard costs: |
|
Standard Quantity or Hours |
Standard Price or Rate |
Standard Cost Per Unit |
|
|
Direct materials |
3.0 ounces |
$8.10 per ounce |
$24.30 |
|
Direct labor |
0.8 hours |
$20.00 per hour |
$16.00 |
|
Variable overhead |
0.8 hours |
$8.00 per hour |
$6.40 |
|
The company reported the following results concerning this product in December. |
|
Originally budgeted output |
4,510 |
units |
|
Actual output |
4,310 |
units |
|
Raw materials used in production |
13,200 |
ounces |
|
Actual direct labor-hours |
3,718 |
hours |
|
Purchases of raw materials |
14,990 |
ounces |
|
Actual price of raw materials |
$7.90 |
per ounce |
|
Actual direct labor rate |
$19.40 |
per hour |
|
Actual variable overhead rate |
$8.20 |
per hour |
|
The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. |
|
The materials quantity variance for December is: |
$2,187 U
$2,133 F
$2,187 F
$2,133 U
6.
|
Oddo Corporation makes a product with the following standard costs: |
|
Standard Quantity or Hours |
Standard Price or Rate |
Standard Cost Per Unit |
|
|
Direct materials |
3.0 ounces |
$13.50 per ounce |
$40.50 |
|
Direct labor |
0.6 hours |
$19.50 per hour |
$11.70 |
|
Variable overhead |
0.6 hours |
$12.00 per hour |
$7.20 |
|
The company reported the following results concerning this product in December. |
|
Originally budgeted output |
12,400 |
units |
|
Actual output |
12,200 |
units |
|
Raw materials used in production |
35,960 |
ounces |
|
Actual direct labor-hours |
7,520 |
hours |
|
Purchases of raw materials |
37,560 |
ounces |
|
Actual price of raw materials |
13.25 |
per ounce |
|
Actual direct labor rate |
15.70 |
per hour |
|
Actual variable overhead rate |
8.70 |
per hour |
|
The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. |
|
The materials price variance for December is: |
$17,630 U
$17,630 F
$9,390 F
$9,390 U
7.
|
Oddo Corporation makes a product with the following standard costs: |
|
Standard Quantity or Hours |
Standard Price or Rate |
Standard Cost Per Unit |
|
|
Direct materials |
4.0 ounces |
$7.90 per ounce |
$31.60 |
|
Direct labor |
0.7 hours |
$30.00 per hour |
$21.00 |
|
Variable overhead |
0.7 hours |
$8.00 per hour |
$5.60 |
|
The company reported the following results concerning this product in December. |
|
Originally budgeted output |
4,490 |
units |
|
Actual output |
4,290 |
units |
|
Raw materials used in production |
17,450 |
ounces |
|
Actual direct labor-hours |
3,293 |
hours |
|
Purchases of raw materials |
19,220 |
ounces |
|
Actual price of raw materials |
$7.70 |
per ounce |
|
Actual direct labor rate |
$19.20 |
per hour |
|
Actual variable overhead rate |
$8.10 |
per hour |
ScholarMatic: Explanation & Answer
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