Lincoln University Oakland, California

BA$240$: Management Accounting Mid$-$term Exam Spring $2024$

nstructions:

There are $13$ questions consisting of $10$ multiple$-$choice, $2$ problem$-$solving, and $1$ identification questions. Do not forget the bonus question.

Read each question carefully because it may consist of several parts.

You have $120$ minutes to complete the exam. The points awarded are shown.

Even if your answer may not be correct, you will still receive partial credits when you show the steps in calculating or determining the answers.

The space provided is sufficient to answer the question.

hapter $2$: CVP Analysis

: Choose from the following graphs A$-$H the one that matches the numbered items. Indicate by letter ich graph best fits each of the situations described $(10$ points$)$:

vertical axes of the graphs represent total dollars of costs incurred, and the horizontal axes represent s of cost driver activity during a particular time period. The graphs may be used more than once.

Cost of machining labor that tends to decrease as workers gain experience

Price of a scarce raw material keeps increasing as the quantity used increase:

Guaranteed annual wage plan, whereby workers get paid for $40$ hours of work per week even at zero or low levels of production that require working only a few hours weekly

Water bill, which entails a flat fee for the first $10,000$ gallons used and then an increasing unit cost for every additional $10,000$ gallons used

Availability of quantity discounts, where the cost per unit falls as each price break is reached

Yearly depreciation of office equipment

Constant cost of sheet steel for a manufacturer of farm implements

Salaries of supervisors, where one supervisor is added for every $12$ phone solicitors

Natural gas bill consisting of a fixed component, plus a constant variable cost per thousand cubic feet after a specified number of cubic feet are used

The more time you spent studying, the value of scholarship increases

:Wehr Corporation produces one product. Total fixed costs are $$600,000.$ The unit selling price $60\mathrm{.}00$ and the unit variable cost is $$45\mathrm{.}00(20$ points$)$

A$)$ Compute the contribution margin per unit.

selling price perunit $=$$$60,$ Variable cost perunit $=$ Contribution margin per unit $=$$$60-$$$45$

$=$$$15$

Compute the contribution$-$margin ratio.

Contribution Margin Ratio $=$ Contromargin perunit

selling pirce pervnit

$\frac{15}{60}$

Compute the break$-$even point in units.

Fixed lost $=600000,$ contribution