ACCT346 Midterm Exam (Managerial Accounting)

1. ACCT346 Midterm Exam
(Managerial Accounting)
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1. (TCO 4) Which of the following will have no effect on the break-even point in units? (Points :
4)
2. (TCO 4) Circle K Furniture has a contribution margin ratio of 16%. If fixed costs are
$176,800, how many dollars of revenue must the company generate in order to reach the break-
even point? (Points : 4)
3. (TCO 4) Paula Corporation sells a single product at a price of $275 per unit. Variable cost per
unit is $135 and fixed costs total $356,860. If sales are expected to be $825,000, what is Paula’s
margin of safety? (Points : 4)
4. (TCO 5) Which of the following is treated differently in full costing than in variable costing?
(Points : 4)
5. (TCO 5) Which of the following items on a variable costing income statement will change in
direct proportion to a change in sales? (Points : 4)
6. (TCO 5) Peak Manufacturing produces snow blowers. The selling price per snow blower is
$100. Costs involved in production are:…… (Points : 4)
7. (TCO 5) The cost objective is the (Points : 4)
8. (TCO 6) Which of the following statements about cost pools is not true? (Points : 4)
9. (TCO 6) AC Consulting Company has purchased a new $18,038 copier. This overhead cost
will be shared by the purchasing, accounting, and information technology departments since
those are the only departments which will be able to access the machine. The company has
decided to allocate the cost based on the number of copies made by each department. Each
department has estimated the number of copies which will be made over the life of the
copier……. (Points : 4)
10. (TCO 7) A company is trying to decide whether to keep or drop the sporting goods
department in its department store. If the segment is dropped, the manager will be fired. The
manager's salary, in relation to the decision to keep or drop the sporting goods department, is
(Points : 4)
11. (TCO 7) BigByte Company has 12 obsolete computers that are carried in inventory at a cost
of $13,200. If these computers are upgraded at a cost of $7,500, they could be sold for $15,300.
Alternatively, the computers could be sold "as is" for $9,000. What is the net advantage or
disadvantage of reworking the computers? (Points : 4)
12. (TCO 7) YXZ Company’s market for the Model 55 has changed significantly, and YXZ has
had to drop the price per unit from $275 to $135. There are some units in the work in process
inventory that have costs of $160 per unit associated with them. YXZ could sell these units in
their current state for $100 each. It will cost YXZ $10 per unit to complete these units so that
they can be sold for $135 each. Which of the following is the amount of sunk costs in this
problem? (Points : 4)
10. (TCO 3) Which of the following companies is most likely to use a process costing system?
(Points : 4)
11. (TCO 3) The Blending Department began the period with 45,000 units. During the period the
department received another 30,000 units from the prior department and completed 60,000 units

2. during the period. The remaining units were 75% complete. How much are equivalent units in
The Blending Department’s work in process inventory at the end of the period? (Points : 4)
13. (TCO 4) Total costs were $75,800 when 30,000 units were produced and $95,800 when
40,000 units were produced. Use the high-low method to find the estimated total costs for a
production level of 32,000 units. (Points : 4)
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