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ACCT 505 WEEK 8: FINAL EXAM GUIDE
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ACCT 505 WEEK 8: FINAL EXAM GUIDE1. (TCO E) Complying with regulations is a(n) (Points : 5)
batch-level activity.
product-level activity.
unit-level activity.
organization sustaining activity.
2. (TCO G) Given the following data, what would ROI be?
Sales $90,000
Net operating income $18,000
Contribution margin $40,000
Average operating assets $100,000
Stockholder's equity $250,000
(Points : 5)
7.2%
20.0%
18.0%
44.4%
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1. (TCO C) Madlem, Inc., produces and sells a single product whose selling price is $120.00 per unit and whose variable
expense is $46.20 per unit. The company's fixed expense is $405,900 per month.
Required: Determine the monthly breakeven in either unit or total dollar sales. Show your work! (Points : 25)
Monthly Break Even Unit = Fixed Cost/(Sale Price - Variable Cost per unit)
Monthly Break Even Unit = 405,900/(120-46.20)
Monthly Break Even Unit = 5,500 Units
Monthly Break Even in total dollar sales = Fixed Cost/contribution margin ratio
Contribution margin ratio = (Sale Price - Variable Cost per unit)/Sale
Contribution margin ratio = (120-46.20)/120
, Contribution margin ratio =61.5%
Monthly Break Even in total dollar sales = 405900/61.5%
Monthly Break Even in total dollar sales = 660,000
2. (TCO B) Loxham Corporation uses the weighted-average method in its process costing system. Data concerning the first
processing department for the most recent month are listed below.
Work in process, beginning:
Units in beginning work in process inventory 400
Materials costs $6,900
Conversion costs $2,500
Percent complete for materials 80%
Percent complete for conversion 15%
Units started into production during the month 6,000
Units transferred to the next department during the month 5,400
Materials costs added during the month $112,500
Conversion costs added during the month $210,300
Ending work in process:
Units in ending work-in-process inventory 1,000
Percentage complete for materials 80%
Percentage complete for conversion 30%
Required: Calculate the equivalent units for conversion for the month in the first processing department. (Points : 25)
Units in beginning work in process inventory = 400 x 20% = 80
Units completed & transferred to the next department = 5,400
Units in ending work in process inventory = 1,000 x 80% = 800
Total Equivalent units for materials for the month = 6,280 units
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