16. The Molding Department of Bidwell Company has the following production data: beginning work process 40,000 units (60% complete), started into production 680,000 units, completed and transferred out 640,000 units, and ending work in process 80,000 units (40% complete). Assuming materials are entered at the beginning of the process, equivalent units for materials are:

A) 720,000.

B) 600,000.

C) 640,000.

D) 760,000.

17. ThoAon, Inc. collected the following production data for the past month:

	Units Produced			Total Cost
		1,600	$22,000
		1,300	19,000
		1,500	22,500
		1,100	16,500

If the high-low method is used, what is the monthly total cost equation?

A) Total cost = $4,400 + $11/unit

B) Total cost = $5,500 + $10/unit

C) Total cost = $0 + $15/unit

D) Total cost = $3,300 + $12/unit

18. At the break-even point of 2,000 units, variable costs are $120,000, and fixed costs are $64,000. How much is the selling price per unit?

A) $92

B) $32

C) $28

D) Not enough information

19. The following information is taken from the production budget for the first quarter:

Beginning inventory in units	1,800
Sales budgeted for the quarter	678,000
Capacity in units of production facility	708,000

How many finished goods units should be produced during the quarter if the company desires 4,800 units available to start the next quarter?

A) 675,000

B) 681,000

C) 711,000

D) 682,800

20. Jared Manufacturing is planning to sell 1,200 boxes of ceramic tile, with production estimated at 1,120 boxes during May. Each box of tile requires 44 pounds of clay mix and a quarter hour of direct labor. Clay mix costs $0.50 per pound and employees of the company are paid $15.00 per hour. Manufacturing overhead is applied at a rate of 110% of direct labor costs. Jared has 5,200 pounds of clay mix in beginning inventory and wants to have 6,000 pounds in ending inventory.

What is the total amount to be budgeted for manufacturing overhead for the month?

A) $4,620

B) $4,950

C) $18,480

D) $19,800

21. Sales results that are evaluated by a static budget might show

1.	favorable differences that are not justified.
2.	unfavorable differences that are not justified.

A) 1

B) 2

C) both 1 and 2.

D) neither 1 nor 2.

22. If the materials price variance is $3,600 F and the materials quantity and labor variances are each $2,800 U, what is the total materials variance?

A) $3,600 F

B) $2,800 U

C) $6,300 F

D) $800 F

23. The per-unit standards for direct labor are 1.5 direct labor hours at $15 per hour. If in producing 2,300 units, the actual direct labor cost was $46,000 for 3,000 direct labor hours worked, the total direct labor variance is

A) $2,300 unfavorable.

B) $5,750 favorable.

C) $6,750 unfavorable.

D) $5,750 unfavorable.

24. It costs Maker Company $22 of variable and $15 of fixed costs to produce one Panini press which normally sells for $57. A foreign wholesaler offers to purchase 1,000 Panini presses at $40 each. Maker would incur special shipping costs of $5 per press if the order were accepted. Maker has sufficient unused capacity to produce the 1,000 Panini presses. If the special order is accepted, what will be the effect on net income?

A) $13,000 decrease

B) $13,000 increase

C) $22,000 decrease

D) $7,000 increase

25. Nelson Manufacturing Company can make 100 units of a necessary component part with the following costs:

Direct Materials	$120,000
Direct Labor	25,000
Variable Overhead	45,000
Fixed Overhead	70,000

If Nelson Manufacturing Company purchases the component externally, $30,000 of the fixed costs can be avoided. At what external price for the 100 units is the company indifferent between making or buying?

A) $190,000

B) $200,000

C) $210,000

D) $220,000

Part II. 6 Comprehensive problems worth 50 points total

26. Points = 4

Brigg Enterprises produces miniature parasols. Each parasol consists of $1.20 of variable costs and $.90 of fixed costs and sells for $4.50. A French wholesaler offers to buy 8,000 units at $1.40 each, of which Pederson has the capacity to produce. Brigg will incur extra shipping costs of $.12 per parasol.

Instructions

Determine the incremental income or loss that Brigg Enterprises would realize by accepting the special order.

27. Points = 4

R&R Inc. produces several models of clocks. An outside supplier has offered to produce the commercial clocks for R&R for $270 each. R&R needs 1,500 clocks annually. R&R has provided the following unit costs for its commercial clocks:

Direct materials	$100
Direct labor	110
Variable overhead	30
Fixed overhead (70% avoidable)	150

Instructions

Prepare an incremental analysis, which shows the effect of the make-or-buy decision.

28. Points = 12

The current sections of Donny Inc.'s balance sheets at December 31, 2013 and 2014, are presented here.

Donny's net income for 2014 was $203,000. Depreciation expense was $25,000.

		2014	2013
	Current assets
	Cash	$115,000	$99,000
	Accounts receivable	105,000	89,000
	Inventory	154,000	172,000
	Prepaid expense	27,000	21,000
	Total current assets	$401,000	$381,000
	Current liabilities
	Accrued expenses payable	$ 15,000	$ 5,000
	Accounts payable	85,000	93,000
	Total current liabilities	$100,000	$ 98,000

Instructions

Prepare the net cash provided by operating activities section of the company's statement of cash flows for the year ended December 31, 2014, using the indirect method.

29. Points = 10

Nona Manufacturing Company uses a job order cost accounting system and keeps perpetual inventory records. Prepare journal entries to record the following transactions during the month of June.

June	1		Purchased raw materials for $22,000 on account.
	8		Raw materials requisitioned by production:
				Direct materials		$8,500
				Indirect materials		1,500
	15		Paid factory utilities, $2,400 and repairs for factory equipment, $7,500.
	25		Incurred $98,000 of factory labor.
	25		Time tickets indicated the following:
				Direct Labor	(6,000 hrs. @ $13 per hr.)		=	$78,000
				Indirect Labor	(2,500 hrs. @ $8 per hr.)		=	20,000
								$98,000
	25		Applied manufacturing overhead to production based on a predetermined overhead rate of $8 per direct labor hour worked.
	28		Goods costing $20,000 were completed in the factory and were transferred to finished goods.
	30		Goods costing $16,000 were sold for $23,000 on account.

30. Points = 12

Meyer Manufacturing Company uses a process cost system. The Molding Department adds materials at the beginning of the process and conversion costs are incurred uniformly throughout the process. Work in process on May 1 was 75% complete and work in process on May 31 was 40% complete.

Instructions

Complete the Production Cost Report for the Molding Department for the month of May using the above information and the information below.

31. Points = 8

Data concerning manufacturing overhead for Analina Industries are presented below. The Mixing Department is a cost center.

An analysis of the overhead costs reveals that all variable costs are controllable by the manager of the Mixing Department and that 50% of supervisory costs are controllable at the department level.

The flexible budget formula and the cost and activity for the months of June and July are as follows:

Instructions

(a)	Prepare the responsibility reports for the Mixing Department for each month.
(b)	Comment on the manager's performance in controlling costs during the two-month period.