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ACC. 5250: Managerial Accounting Dr. S. Arends, Professor/Dean Mid-Term Exam Directions: Although this is basically a multiple choice exam please show your work. 1. Briefly differentiate between financial and managerial accounting. Why is financial accounting subject to GAAP rules and managerial is not? How does managerial accounting \"fit\" into financial accounting documents? 2. Last month when 10,000 units of a product were manufactured the cost per unit was $60. At this level of activity variable costs are 50% of total unit costs. If 10,500 units are manufactured next month and cost behavior patterns remain unchanged the: a. b. c. d. Total variable costs will remain the same Variable costs per unit will increase Total costs per unit will decrease None of the above 3. Net income reported under absorption costing will exceed net income reported under variable costing for a given period if: a. b. c. d. Production equals sales for that period Production exceeds sales for that period Sales exceed production for that period The variable manufacturing overhead exceeds the fixed manufacturing overhead 4.The variable costing method ordinarily includes in product costs the following: a. Direct material, direct labor, but no manufacturing overhead cost. e. Direct material, direct labor cost, and variable manufacturing overhead cost f. Prime cost but no conversion cost g. Prime cost and all conversion cost 5.. The variable costing method ordinarily includes in product costs the following: A) Direct materials cost, direct labor cost, but no manufacturing overhead cost B) Direct materials cost, direct labor cost, and variable manufacturing overhead cost. C) Prime cost but not conversion cost. D) Prime cost and all conversion cost. 6. Net income reported under absorption costing will exceed net income reported under variable costing for given period if: A) production equals sales for that period. B) production exceeds sales for that period. C) sales exceed production for that period. D) the variable manufacturing overhead exceeds the fixed manufacturing overhead. 7. Indiana Corporation produces a single product that it sells for $9 per unit. During the first year of operations 100,000 units were produced and 90,000 units were sold. Manufacturing costs and selling and administrative expenses for the year were as follows: Raw materials Direct labor Factory overhead Selling and administrative Fixed Costs ----$100,000 70,000 Variable Costs $1.75 per unit produced 1.25 per unit produced .50 per unit produced 0.60 per unit sold What was Indiana Corporation's net income for the year using variable costing? A) $181,000 B) $271,000 C) $281,000 D) $371,000 Use the following to answer question 8: Jarvix Company, which has only one product, has provided the following data concerning its most recent moth of operations: Selling price $111 Units in beginning inventory 400 Units produced 8,800 Units sold Units in ending inventory 8,900 300 Variable costs per unit: Direct materials $34 Direct labor 37 Variable manufacturing overhead 3 Variable selling and administrative 9 Fixed costs: Fixed manufacturing overhead Fixed selling and administrative $ 61,600 169,100 The company produces the same number of units every month, although the sales in units vary from month to month. The company's variable costs per unit and total fixed costs have been constant from month to month 8. What is the unit product cost for the month under variable costing? A) $83 B) $74 C) $90 D) $81 9. Variable cost: A) increases on a per unit basis as the number of units produced increases. B) remains constant on a per unit basis as the number of units produced increases. C) remains the same in total as production increases. D) decreases on a per unit basis as the number of units produced increases. 10, Within the relevant range, the difference between variable costs and fixed costs is: A) variable costs per unit fluctuate and fixed costs per unit remain constant. B) variable costs per unit are constant and fixed costs per unit fluctuate C) both total variable costs and total fixed costs are constant. C) both total variable costs and total fixed costs fluctuate ACC. 5250: Managerial Accounting Dr. S. Arends, Professor/Dean Mid-Term Exam Directions: Although this is basically a multiple choice exam please show your work. 1. Briefly differentiate between financial and managerial accounting. Why is financial accounting subject to GAAP rules and managerial is not? How does managerial accounting \"fit\" into financial accounting documents? 2. Last month when 10,000 units of a product were manufactured the cost per unit was $60. At this level of activity variable costs are 50% of total unit costs. If 10,500 units are manufactured next month and cost behavior patterns remain unchanged the: a. b. c. d. Total variable costs will remain the same Variable costs per unit will increase Total costs per unit will decrease None of the above 3. Net income reported under absorption costing will exceed net income reported under variable costing for a given period if: a. b. c. d. Production equals sales for that period Production exceeds sales for that period Sales exceed production for that period The variable manufacturing overhead exceeds the fixed manufacturing overhead 4.The variable costing method ordinarily includes in product costs the following: a. Direct material, direct labor, but no manufacturing overhead cost. e. Direct material, direct labor cost, and variable manufacturing overhead cost f. Prime cost but no conversion cost g. Prime cost and all conversion cost 5.. The variable costing method ordinarily includes in product costs the following: A) Direct materials cost, direct labor cost, but no manufacturing overhead cost B) Direct materials cost, direct labor cost, and variable manufacturing overhead cost. C) Prime cost but not conversion cost. D) Prime cost and all conversion cost. 6. Net income reported under absorption costing will exceed net income reported under variable costing for given period if: A) production equals sales for that period. B) production exceeds sales for that period. C) sales exceed production for that period. D) the variable manufacturing overhead exceeds the fixed manufacturing overhead. 7. Indiana Corporation produces a single product that it sells for $9 per unit. During the first year of operations 100,000 units were produced and 90,000 units were sold. Manufacturing costs and selling and administrative expenses for the year were as follows: Raw materials Direct labor Factory overhead Selling and administrative Fixed Costs ----$100,000 70,000 Variable Costs $1.75 per unit produced 1.25 per unit produced .50 per unit produced 0.60 per unit sold What was Indiana Corporation's net income for the year using variable costing? A) $181,000 B) $271,000 C) $281,000 D) $371,000 Use the following to answer question 8: Jarvix Company, which has only one product, has provided the following data concerning its most recent moth of operations: Selling price $111 Units in beginning inventory 400 Units produced 8,800 Units sold Units in ending inventory 8,900 300 Variable costs per unit: Direct materials $34 Direct labor 37 Variable manufacturing overhead 3 Variable selling and administrative 9 Fixed costs: Fixed manufacturing overhead Fixed selling and administrative $ 61,600 169,100 The company produces the same number of units every month, although the sales in units vary from month to month. The company's variable costs per unit and total fixed costs have been constant from month to month 8. What is the unit product cost for the month under variable costing? A) $83 B) $74 C) $90 D) $81 9. Variable cost: A) increases on a per unit basis as the number of units produced increases. B) remains constant on a per unit basis as the number of units produced increases. C) remains the same in total as production increases. D) decreases on a per unit basis as the number of units produced increases. 10, Within the relevant range, the difference between variable costs and fixed costs is: A) variable costs per unit fluctuate and fixed costs per unit remain constant. B) variable costs per unit are constant and fixed costs per unit fluctuate C) both total variable costs and total fixed costs are constant. C) both total variable costs and total fixed costs fluctuate ACC. 5250: Managerial Accounting Dr. S. Arends, Professor/Dean Mid-Term Exam Directions: Although this is basically a multiple choice exam please show your work. 1. Briefly differentiate between financial and managerial accounting. Why is financial accounting subject to GAAP rules and managerial is not? How does managerial accounting \"fit\" into financial accounting documents? 2. Last month when 10,000 units of a product were manufactured the cost per unit was $60. At this level of activity variable costs are 50% of total unit costs. If 10,500 units are manufactured next month and cost behavior patterns remain unchanged the: a. b. c. d. Total variable costs will remain the same Variable costs per unit will increase Total costs per unit will decrease None of the above 3. Net income reported under absorption costing will exceed net income reported under variable costing for a given period if: a. b. c. d. Production equals sales for that period Production exceeds sales for that period Sales exceed production for that period The variable manufacturing overhead exceeds the fixed manufacturing overhead 4.The variable costing method ordinarily includes in product costs the following: a. Direct material, direct labor, but no manufacturing overhead cost. e. Direct material, direct labor cost, and variable manufacturing overhead cost f. Prime cost but no conversion cost g. Prime cost and all conversion cost 5.. The variable costing method ordinarily includes in product costs the following: A) Direct materials cost, direct labor cost, but no manufacturing overhead cost B) Direct materials cost, direct labor cost, and variable manufacturing overhead cost. C) Prime cost but not conversion cost. D) Prime cost and all conversion cost. 6. Net income reported under absorption costing will exceed net income reported under variable costing for given period if: A) production equals sales for that period. B) production exceeds sales for that period. C) sales exceed production for that period. D) the variable manufacturing overhead exceeds the fixed manufacturing overhead. 7. Indiana Corporation produces a single product that it sells for $9 per unit. During the first year of operations 100,000 units were produced and 90,000 units were sold. Manufacturing costs and selling and administrative expenses for the year were as follows: Raw materials Direct labor Factory overhead Selling and administrative Fixed Costs ----$100,000 70,000 Variable Costs $1.75 per unit produced 1.25 per unit produced .50 per unit produced 0.60 per unit sold What was Indiana Corporation's net income for the year using variable costing? A) $181,000 B) $271,000 C) $281,000 D) $371,000 Use the following to answer question 8: Jarvix Company, which has only one product, has provided the following data concerning its most recent moth of operations: Selling price $111 Units in beginning inventory 400 Units produced 8,800 Units sold Units in ending inventory 8,900 300 Variable costs per unit: Direct materials $34 Direct labor 37 Variable manufacturing overhead 3 Variable selling and administrative 9 Fixed costs: Fixed manufacturing overhead Fixed selling and administrative $ 61,600 169,100 The company produces the same number of units every month, although the sales in units vary from month to month. The company's variable costs per unit and total fixed costs have been constant from month to month 8. What is the unit product cost for the month under variable costing? A) $83 B) $74 C) $90 D) $81 9. Variable cost: A) increases on a per unit basis as the number of units produced increases. B) remains constant on a per unit basis as the number of units produced increases. C) remains the same in total as production increases. D) decreases on a per unit basis as the number of units produced increases. 10, Within the relevant range, the difference between variable costs and fixed costs is: A) variable costs per unit fluctuate and fixed costs per unit remain constant. B) variable costs per unit are constant and fixed costs per unit fluctuate C) both total variable costs and total fixed costs are constant. C) both total variable costs and total fixed costs fluctuate