Accounting 4210: Practice Exam
Accounting 4210, Practice Exam 1 Solution Name______________ Section___
Instructions:
You have 75 minutes to complete 11 questions on this exam.
The 10 multiple choice questions are worth 4 points each.
a. Credit will only be given for clearly circling one of the four options.
The workout questions are worth a total of 60 points.
a. Credit will only be given if you clearly show your work, and clearly indicate the final answer.
Good luck!
1. SuperFine Restaurant Supply Company reported the following information for the year just ended. Estimated Actual
Units sold 1,000 1,100
Direct labor hours 2,000 2,050
Sales Revenue $140,000 $145,000
Direct materials cost 30,000 31,000
Direct labor cost 20,000 22,000
Manufacturing overhead cost 60,000 62,000
Selling and administrative costs 20,000 19,000
SuperFine uses a normal costing system with direct labor cost as the allocation basis.
By how much is manufacturing overhead misapplied?
A) $4,000 underapplied
B) $4,000 overapplied
C) $2,000 underapplied
D) $2,000 overapplied
The correct answer is $4,000 overapplied
The POHR = $60,000 / $20,000 = $3 per dollar spent on direct labor.
Applied overhead = $3 x 22,000 = $66,000
Actual overhead = $62,000
Difference = $4,000 overapplied
2. Axle and Wheel Manufacturing currently produces 1,000 axles per month. The following per unit data apply for sales to the regular 1,000 customers:
Direct materials $200 Direct manufacturing labor 30 Variable manufacturing overhead 60 Fixed manufacturing overhead 40 Total manufacturing costs $330
The plant has capacity for 2,000 axles.
What would be the total cost of producing 1,500 axles?
A) $495,000
B) $375,000
C) $330,000
D) $475,000 [($200 + $30 + $60) × 1,500 units] + ($40 x 1,000 units) = $475,000
3. Ekmark Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products:
Data for one of the company's products follow:
How much overhead cost would be
Instructions:
You have 75 minutes to complete 11 questions on this exam.
The 10 multiple choice questions are worth 4 points each.
a. Credit will only be given for clearly circling one of the four options.
The workout questions are worth a total of 60 points.
a. Credit will only be given if you clearly show your work, and clearly indicate the final answer.
Good luck!
1. SuperFine Restaurant Supply Company reported the following information for the year just ended. Estimated Actual
Units sold 1,000 1,100
Direct labor hours 2,000 2,050
Sales Revenue $140,000 $145,000
Direct materials cost 30,000 31,000
Direct labor cost 20,000 22,000
Manufacturing overhead cost 60,000 62,000
Selling and administrative costs 20,000 19,000
SuperFine uses a normal costing system with direct labor cost as the allocation basis.
By how much is manufacturing overhead misapplied?
A) $4,000 underapplied
B) $4,000 overapplied
C) $2,000 underapplied
D) $2,000 overapplied
The correct answer is $4,000 overapplied
The POHR = $60,000 / $20,000 = $3 per dollar spent on direct labor.
Applied overhead = $3 x 22,000 = $66,000
Actual overhead = $62,000
Difference = $4,000 overapplied
2. Axle and Wheel Manufacturing currently produces 1,000 axles per month. The following per unit data apply for sales to the regular 1,000 customers:
Direct materials $200 Direct manufacturing labor 30 Variable manufacturing overhead 60 Fixed manufacturing overhead 40 Total manufacturing costs $330
The plant has capacity for 2,000 axles.
What would be the total cost of producing 1,500 axles?
A) $495,000
B) $375,000
C) $330,000
D) $475,000 [($200 + $30 + $60) × 1,500 units] + ($40 x 1,000 units) = $475,000
3. Ekmark Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products:
Data for one of the company's products follow:
How much overhead cost would be