Exam (elaborations)
Accounting 526 Midterm
- Course
- Institution
Accounting 526 Midterm
[Show more]
Seller
Follow
EXAMQA
Reviews received
Content preview
Accounting 526 MidtermWhich of the following would not require an adjustment to net income under the indirect
method? - ANS-Purchase of land
Visual Manufacturing produces two types of cameras: 35mm and digital. The cameras
are produced using one continuous process. Four activities involved in the production
have been identified as: machining, setups, receiving, and packing. Resource drivers
have been used to assign costs to each activity. The overhead activities, their costs,
and the other related data are as follows:
Product. Machine Hours Setups Receiving Orders Packing Orders
35mm 10,000 100. 200. 800
Digital 10,000 250 800 4,000
Costs $240,000 $160,000 $32,000 $96,000
Calculate an activity rate for packing based on packing orders. - ANS-$20 per packing
order
$96,,800 = $20.00 per packing order
Fame Company manufactures engines. Fame produces all the parts necessary for its
engines, except for one electronic component, which is purchased from two local
suppliers: Hydra International and Parable Company. Both suppliers are reliable and
rarely deliver late. Hydra sells the component for $12.00 per unit, while Parable sells the
same component for $10.00. Fame purchases 80% of its components from Parable
because of the lower price it offers. The total annual demand is 95,000 units.
I. Activity Data
Activity Cost
Inspecting components (sampling only) $ 210,000
Reworking products (due to failed component) $2,454,000
Warranty work (due to failed component) $1,923,000
II. Supplier Data
, Hydra. Parable
International. Company
Unit purchase price
$12.00. $10.00
Units purchased
19,000. 76,000
Sampling hours
60. 2,600
Rework hours
150. 3,800
Warranty hours
550. 7,000
Calculate the activit - ANS-$79 per hour
Activity rate for inspecting components based on sampling hours = Cost of inspecting
components / Sampling hours = $210,000 / (2,600 sampling hours + 60 sampling hours)
= $210,,660 sampling hours = $79 per sampling hour
Carlson Company uses a predetermined rate to apply overhead. At the beginning of the
year, Carlson estimated its overhead costs at $240,000, direct labor hours at 40,000,
and machine hours at 10,000. Actual overhead costs incurred were $249,280, actual
direct labor hours were 41,000, and actual machine hours were 11,000.
If the predetermined overhead rate is based on machine hours, what will be the total
amount applied to the overhead account for the year for Carlson? - ANS-$246,000
$240,,000 = $24/ machine hour
$24×11,000 machine hours= $264,000
Which of the following is included in operating activities? - ANS-An increase in accounts
receivable
If beginning work-in-process inventory is $120,000, ending work-in-process inventory is
$160,000, cost of goods manufactured is $400,000 and direct materials used are
$100,000, what are the conversion costs? - ANS-$340,000
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller EXAMQA. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $10.49. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
75759 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now