ACCT 505 (Devry) Flashcards
ACCT 505 Entire Course
ACCT 505 Week 1-7 All Discussion Questions
ACCT 505 Week 1 Case Study
ACCT 505 Week 2 Quiz Job Order and Process Costing Systems
ACCT 505 Week 3 Case Study II
ACCT 505 Week 4 Midterm Exam
ACCT 505 Week 5 Measuring Performance - Course Project A
ACCT 505 Week 6 Quiz Segment Reporting and Relevant Costs for Decisions
ACCT 505 Week 7 Capital Budgeting Course Project
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ACCT 505 Week 1 Case Study
Top Switch Inc. designs and manufactures switches used in telecommunications. Serious flooding throughout the state of Tennessee affected Top Switch’s facilities. Inventory was completely ruined, and the company’s computer system, including all accounting records, was destroyed.
Before the unfortunate incident, recovery specialists cleaned the buildings. The company controller is very nervous and anxious to recover whatever records he can to support the insurance claim for the destroyed inventory. After consulting with the cost accountant, they decide to retrieve the previous year’s annual report for the beginning inventory numbers. In addition, they also agreed that they need first quarter cost data.
The cost accountant was working on the first quarter results before the storm hit, and to his surprise, the report was still in his desk drawer. After reviewing the data , the information shows the following information: Material purchases were $ 325,000; Direct Labor was $ 220,000. Further discussions between the controller and the cost accountant revealed that sales were $ 1,350,000 and the gross margin was 30% of sales. The cost accountant also discovered, while sifting through the information, that cost of goods available for sale was $ 1,020,000 at cost. While assessing the damage, the controller determined that the prime costs were $ 545,000 up to the time of the damage and that manufacturing overhead is 65% of conversion cost. The cost accountant is not sure about all of this, but he decides to see what he can do with the information.
The beginning inventory numbers are as follows: Raw Materials, $ 41,000 Work in Process, $ 56,000 Finished Goods, $ 35,000 Required:
Determine the amount of cost in the Raw Materials, Work in Process, and Finished Goods Inventory as of the date of the storm. ( Hint: You may wish to reconstruct the various schedules and statements that would have been affected by the company’s accounts during the period.)
Grading Rubric for Case Study I:
Category
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ACCT 505 Week 1 to 7 All Discussion Questions
Week 1 DQ 1 Cost Terms, Classifications, and Behavior
Week 1 DQ 2 Research and Application
Week 2 DQ 1 Job Order and Process Costing Systems
Week 2 DQ 2 Research and Application
Week 3 DQ 1 Variable Costing and CVP Concepts
Week 3 DQ 2 Research and Application
Week 4 DQ 1 Budgeting Case Study
Week 4 DQ 2 Exam Review
Week 5 DQ 1 Standards, Variances, Flexible Budgets
Week 5 DQ 2 Research and Application
Week 6 DQ 1 Segment Reporting and Relevant Costs
Week 6 DQ 2 Research and Application
Week 7 DQ 1 Capital Budgeting
Week 7 DQ 2 Exam Review
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ACCT 505 Week 2 Quiz Job Order and Process Costing Systems
1.Question :(TCO F) For which situation(s) below would an organization be more likely to use a job-order costing system of accumulating product costs
rather than a process costing system?
2.Question :(TCO F) Process costing would be appropriate for each of the following except:
3.Question :(TCO F) Lucas Company uses the weighted-average method in its process costing system. The company adds materials at the beginning
of the process in the Forming Department, which is the first of two stages in its production process. Information concerning operations in the Forming Department in October follows:
Units
Material Cost
Work in process on October 1
6,000
$3,000
Units started in October
50,000
$25,560
Units completed and transferred to next Department during October
44,000
What was the materials cost of work in process at on October 31?
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ACCT 505 Week 3 Case Study II
Springfield Express is a luxury passenger carrier in Texas. All seats are first class, and the following data are available:
Number of seats per passenger train car
90
Average load factor (percentage of seats filled)
70%
Average full passenger fare
$160
Average variable cost per passenger
$70
Fixed operating cost per month
$3,150,000
What is the break-even point in passengers and revenues per month? What is the break-even point in number of passenger train cars per month? If Springfield Express raises its average passenger fare to $ 190, it is estimated that the average load factor will decrease to 60 percent. What will be the monthly break-even point in number of passenger cars? (Refer to original data.) Fuel cost is a significant variable cost to any railway. If crude oil increases by $ 20 per barrel, it is estimated that variable cost per passenger will rise to $ 90. What will be the new break-even point in passengers and in number of passenger train cars? Springfield Express has experienced an increase in variable cost per passenger to $ 85 and an increase in total fixed cost to $ 3,600,000. The company has decided to raise the average fare to $ 205. If the tax rate is 30 percent, how many passengers per month are needed to generate an after-tax profit of $ 750,000? (Use original data). Springfield Express is considering offering a discounted fare of $ 120, which the company believes would increase the load factor to 80 percent. Only the additional seats would be sold at the discounted fare. Additional monthly advertising cost would be $ 180,000. How much pre-tax income would the discounted fare provide Springfield Express if the company has 50 passenger train cars per day, 30 days per month? Springfield Express has an opportunity to obtain a new route that would be traveled 20 times per month. The company believes it can sell seats at $ 175 on the route, but the load factor would be only 60 percent. Fixed cost would increase by $ 250,000 per month for additional personnel, additional passenger train cars, maintenance, and so on. Variable cost per passenger would remain at $ 70. Should the company obtain the route? How many passenger train cars must Springfield Express operate to earn pre-tax income of $ 120,000 per month on this route? If the load factor could be increased to 75 percent, how many passenger train cars must be operated to earn pre-tax income of $ 120,000 per month on this route? What qualitative factors should be considered by Springfield Express in making its decision about acquiring this route?
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ACCT 505 Week 4 Midterm Exam
1.
Question :
(TCO A) Wages paid to an assembly line worker in a factory are a
2.
Question :
(TCO A) A cost incurred in the past that is not relevant to any current decision is classified as a(n)
3.
Question :
(TCO A) Depreciation of office buildings and office equipment is also known as
4.
Question :
(TCO A) When the activity level is expected to increase within the relevant range, what effects would be anticipated with respect to each of the following?
5.
Question :
(TCO F) Which of the following statements is true?
I. Overhead application may be made slowly as a job is worked on.
II. Overhead application may be made in a single application at the time of completion of the job.
III. Overhead application should be made to any job not completed at year end in order to properly value the work in process inventory.
6.
Question :
(TCO F) A job-order cost system is employed in those situations where
7.
Question :
(TCO F) The FIFO method only provides a major advantage over the weighted-average method in that
8.
Question :
(TCO B) The contribution margin ratio always decreases when the
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ACCT 505 Week 5 Measuring Performance - Course Project A
Prepare a master budget for the three-month period ending June 30. Include the following detailed budgets:
· 1.
a. A sales budget, by month and in total.
b. A schedule of expected cash collections from sales, by month and in total.
c. A merchandise purchases budget in units and in dollars. Show the budget by month and in total.
d. A schedule of expected cash disbursements for merchandise purchases, by month and in total.
· 2. A cash budget. Show the budget by month and in total. Determine any borrowing that would be needed to maintain the minimum cash balance of $50,000.
· 3. A budgeted income statement for the three-month period ending June 30. Use the contribution approach.
· 4. A budgeted balance sheet as of June 30.
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ACCT 505 Week 6 Quiz Segment Reporting and Relevant Costs for Decisions
Question :
(TCO D) Return on investment (ROI) is equal to the margin multiplied by
2.
Question :
(TCO D) For which of the following decisions are opportunity costs relevant?
The decision to make or buy a needed part
The desision to keep or drop a product line
(A)
Yes
Yes
(B)
Yes
No
(C)
No
Yes
(D)
No
No
3.
Question :
(TCO D) Last year, the House of Orange had sales of $826,650, net operating income of $81,000, and operating assets of $84,000 at the beginning of the year and $90,000 at the end of the year. What was the company’s turnover, rounded to the nearest tenth?
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ACCT 505 Week 7 Capital Budgeting Course Project
Here is Part B:
Clark Paints: The production department has been investigating possible ways to trim total production costs. One possibility currently being examined is to make the paint cans instead of purchasing them. The equipment needed would cost $200,000 with a disposal value of $40,000 and would be able to produce 5,500,000 cans over the life of the machinery. The production department estimates that approximately 1,100,000 cans would be needed for each of the next five years.
The company would hire three new employees. These three individuals would be full-time employees working 2,000 hours per year and earning $12.00 per hour. They would also receive the same benefits as other production employees, 18% of wages in addition to $2,500 of health benefits.
It is estimated that the raw materials will cost 25¢ per can and that other variable costs would be 5¢ per can. Since there is currently unused space in the factory, no additional fixed costs would be incurred if this proposal is accepted.
It is expected that cans would cost 45¢ per can if purchased from the current supplier. The company’s minimum rate of return (hurdle rate) has been determined to be 12% for all new projects, and the current tax rate of 35% is anticipated to remain unchanged. The pricing for a gallon of paint as well as number of units sold will not be affected by this decision. The unit-of-production depreciation method would be used if the new equipment is purchased.
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