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Mike Brown

ACC 400 Final Exam Answer

Mike Brown

ACC 400 Final Exam Answer

 

https://homeworklance.com/downloads/acc-400-final-exam-answer/

 

ACC 400 Final Exam Answer

 

ACC/400 FINAL EXAM

 

 

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1.

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Which of the following is not a characteristic of managerial accounting?

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A.

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Reports are used primarily by insiders rather than by persons outside of the business entity.

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B.

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Its purpose is to assist managers in planning and controlling business operations.

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C.

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Information must be developed in conformity with generally accepted accounting principles or with income tax regulations.

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D.

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Information may be tailored to assist in specific managerial decisions.

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2.

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In comparison with a financial statement prepared in conformity with generally accepted accounting principles, a managerial accounting report is less likely to:

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A.

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Focus upon the entire organization as the accounting entity.

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B.

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Focus upon future accounting periods.

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C.

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Make use of estimated amounts.

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D.

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Be tailored to the specific needs of an individual decision maker.

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3.

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Alton Company produces metal belts. During the current month, the company incurred the following product costs:Raw materials $100,000
Direct labor $75,000
Electricity used in the Factory $25,000
Factory foreperson salary $3,750
Maintenance of factory machinery $2,000Alton Company’s total product costs:

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A.

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$175,000.

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B.

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$30,750.

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C.

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$205,750.

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D.

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$28,750.

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4.

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Objectives of a cost accounting systemWhat are the major objectives of a cost accounting system in a manufacturing company?

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Sue’s Soup Products uses a process costing system with two processing departments: the Mixing and Cooking Department and the Canning Department. Work in process inventories are reduced to zero each month. In March, the Mixing and Cooking Department incurred manufacturing costs of $63,000 to mix 42,000 gallons of soup. The Canning Department incurred manufacturing costs of $9,000. A total of 170,000 cans of soup were transferred to the finished goods warehouse during the month.

 

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 5.

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Refer to the information above. The journal entry to record the transfer of soup out of the Mixing and Cooking Department during March would include:

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A.

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A debit to Work in Process Inventory, Mixing and Cooking Department of $63,000.

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B.

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A credit to Work in Process Inventory, Canning Department of $72,000.

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C.

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A debit to Finished Goods Inventory of $72,000.

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D.

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A credit to Work in Process Inventory, Mixing and Cooking Department of $63,000.

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 6.

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Refer to the information above. The journal entry to record the transfer of soup out of the Canning Department during March would include:

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A.

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A credit to Work in Process Inventory, Canning Department of $9,000.

</td> </tr> </tbody></table>

 

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B.

</td> <td>

A credit to Work in Process Inventory, Canning Department of $63,000.

</td> </tr> </tbody></table>

 

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C.

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A debit to Finished Goods Inventory of $72,000.

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D.

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A credit to Finished Goods Inventory, Mixing and Cooking Department of $72,000.

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7.

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Refer to the information above. The unit cost per gallon of soup transferred to the Canning Department during March was:

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A.

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$1.50.

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B.

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$1.62.

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C.

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$1.71.

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D.

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$1.83.

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Summit Products, Inc. is interested in producing and selling an improved widget. Market research indicates that customers would be willing to pay $90 for such a widget and that 50,000 units could be sold each year at this price. The current cost to produce the widget is estimated to be $65.

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40.

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8. Refer to the information above. If Summit Products requires a 25% return on sales to undertake production, what is the target cost for the new widget?

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A.

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$65.00.

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B.

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$67.50.

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C.

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$80.00.

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D.

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Some other amount.

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41.

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9.  Refer to the information above. Summit has learned that a competitor plans to introduce a similar widget at a price of $80. In response, Summit may reduce its selling price to $80. If Summit requires a 25% return on sales, what is the target cost for the new widget?

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A.

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$80.00.

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B.

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$60.00.

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C.

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$23.75.

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D.

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$20.00.

</td> </tr> </tbody></table>

 

 

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42.

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10.  Refer to the information above. At a price of $80, Summit’s market research indicates that it can sell 60,000 units per year. Assuming Summit can reach its new target cost, how will Summit’s profit at the $80 price compare to what it would have earned in the absence of the competitor’s product?

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A.

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Profit will be $75,000 higher.

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B.

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Profit will be $75,000 lower.

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C.

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Profit will be unaffected if Summit can reach the revised target cost.

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D.

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None of these.

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37.

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11. A  45% contribution margin ratio means that:

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A.

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The company should contribute 45% of its operating income to qualified charities for maximum tax benefits.

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B.

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55% of the company’s revenue is consumed by fixed and variable costs.

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C.

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The company’s revenue has increased by 45% during the current accounting period.

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D.

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45% of the company’s revenue is available to cover fixed costs and to contribute toward operating income.

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41.12.

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12. If the monthly sales volume required to break even is $190,000 and monthly fixed costs are $55,900, the contribution margin ratio is closest to:

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A.

</td> <td>

29%.

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B.

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71%.

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C.

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23%.

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D.

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340%.

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</td> <td width="21">
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</td> </tr> </tbody></table>

 

 

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Mitchell Corporation manufactures a single product. The selling price is $85 per unit, and variable costs amount to $68 per unit. The fixed costs are $16,500 per month.

 

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  13.

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Refer to the information above. What is the contribution margin ratio of Mitchell’s product?

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A.

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65%.

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