ACCT 505 Final Exam

This pack of ACCT 505 Final Exam consists of:

1. Nelson Company’s activity for the first six months of 2004 is as follows:

2. In the decision to replace an old machine with a new machine, which of the following would be considered a relevant cost?

3. Clarkson Industries produces an electronic calculator that sells for $75 per unit. Variable costs are $45 per unit and fixed costs are $150,000 annually. The company has been averaging an annual income of $100,000 over the past five years. The break-even point for Clarkson Industries would be:

4. Contribution margin is the amount remaining after

5. The Pohl Company uses a standard cost system in which manufacturing overhead is applied to units of product on the basis of machine hours. For June, the company’s manufacturing overhead flexible budget showed the following total budgeted costs at a denominator activity level of 20,000 machine hours:

6. Newmax Co. is a manufacturing business. When it pays the workers who assemble its products, the cash account should be decreased and what account should be increased?

7. The Talbot Company produces wheels that are used in the production of bicycles. Talbot’s costs to produce 100,000 wheels annually are:

8. The cost of goods sold in a merchandising firm typically would be classified as a

9. Questions 9 and 10 refer to the following:

10. Ignoring income taxes, what is the net present value of this project?

11. The individual generally responsible for explaining the direct-labor efficiency variance is the:

12. Allen Company collects 25% of a month’s sales in the month of sale, 70% in the month following sale, and 4% in the second month following sale. The remainder is uncollectible. Budgeted sales for the next three months are

13. Young Enterprises has budgeted sales in units for the next four months as follows

14. The Collins Company applies overhead to production orders on the basis of machine hours. At the beginning of 2002, the company made the following estimates

15. The purpose of a flexible budget is to:

16. Following is information relating to Kew Co.’s Vale Division for 2001:

17. The labor time required to assemble a product is an example of a

18. Anola Company has two products: A and B. The company uses activity- based costing to determine product costs. The estimated overhead costs and expected activity for each of the company’s three overhead activity centers are as follows:

19. A standard is

20. Which of the following would be most appropriate for evaluating a cost center?

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