ACCT 346 Midterm (New Exam)

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ACCT 346 Midterm (New Exam)

1. (TCO 1) Which of the following is NOT a difference between Financial Accounting and Managerial Accounting? (Points : 7)

Financial Accounting is concerned with the past, while Managerial Accounting is concerned with the future.
Managerial Accounting uses more non-monetary information than Financial Accounting.
Managerial Accounting is primarily concerned with providing information to external users, whereas Financial Accounting is concerned with providing information to internal users.
Financial Accounting must follow GAAP, while Managerial Accounting does not need to follow GAAP.


Question 2.2. (TCO1) Josie’s Grill budgeted the following costs for a month in which 1,500 steak dinners will be produced and sold: materials, $4,080; hourly labor (variable), $5,200; rent (fixed), $1,700; depreciation, $800; and other fixed costs, $600. Each steak dinner sells for $14.00 each. How much is the budgeted variable cost per unit? (Points : 7)


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Question 3.3. (TCO 1) Which of the following is NOT a period cost? (Points : 7)

Advertising cost
Direct Material
Accounting staff salaries
Depreciation on accounting office equipment


Question 4.4. (TCO 1) On December 31, 2015, GLE Inc. has a balance in the Work-in-Process Inventory account of $62,000. On January 1, 2015, the balance was $55,000. Current manufacturing costs for the year are $292,000, and cost of goods sold is $284,000. How much is cost of goods manufactured? (Points : 7)



Question 5.5. (TCO 2) Paul Company applies manufacturing overhead based on direct labor cost. Information concerning manufacturing overhead and labor for August follows.                                                Estimated                     Actual
Overhead cost                         $174,000                        $171,000
Direct labor hours                           5,800                             5,900
Direct labor cost                        $90,155                          $87,000How much is the predetermined overhead rate? (Points : 7)



Question 6.6. (TCO 2) During 2015, Michael Company applied overhead using a job-order costing system at a rate of $15 per direct labor hours. Estimated direct labor hours for the year were 150,000, and estimated overhead for the year was $2,250,000. Actual direct labor hours for 20×1 were 140,000, and actual overhead was $2,400,000.
What is the amount of under- or over-applied overhead for the year? (Points : 7)

$300,000 under-applied
$20,000 under-applied
$300,000 over-applied
$120,000 over-applied


Question 7.7. (TCO 2) Manufacturing overhead is allocated on the basis of (Points : 7)

machine hours.
direct labor hours.
direct labor costs.
any of the listed choices.







1. (TCO 1) Which of the following topics is the focus of managerial accounting? (Points : 7)

Financial statements and other financial reports
Historical cost principles
The needs of creditors
The needs of the organization’s internal parties


Question 2.2. (TCO 6) Smile Labs develops 35mm film using a four-step process that moves progressively through four departments. The company specializes in overnight service and has the largest drug store chain as its primary customer. Currently, direct labor, direct materials, and overhead are accumulated by department. The cost accumulation system that best describes the system that Smile Labs is using is: (Points : 7)

operation costing.
activity-based costing.
job order costing.
process costing.


Question 3.3. (TCO 3) Kerner Manufacturing uses a process cost system to manufacture laptop computers. The following information summarizes operations relating to laptop computer model #KJK20 during the quarter ending March 31:
Units                   Direct Labor
Work-in-process inventory, January 1                             100                    $50,000
Started during the quarter                                              500
Completed during the quarter                                         400
Work-in-process inventory, March 31                              200
Costs added during the quarter                                                               $720,000
Beginning work-in-process inventory was 50% complete for direct labor costs. Ending work-in-process inventory was 75% complete for direct labor costs. What is the equivalent unit of production using the weighted-average unit cost inventory valuation method? (Points : 7)



  1. (TCO 2) Sweet Co. uses budgeted overhead rates to apply overhead to individual jobs. They use a system based on direct labor hours. Last year, the company made the following estimates for this year.Direct labor costs                 $48,000,000
    Factory overhead costs         $6,400,000
    Direct Labor Hours                     80,000
    Machine Hours                          110,000(a) What is the budgeted overhead rate for the company?(b) If Job #34567 had the following:Material costs were $500,000;
    Direct labor costs were $450,000;
    Direct labor hours were 25,000; and
    Machine hours were 36,000,
    then what is the total cost of Job #34567?(Points : 30)



  1. (TCO 3) Adnan Company uses process costing. At the beginning of the month, there were 8,000 units in process, 90% complete with respect to material and 80% complete with respect to conversion costs. 40,000 units were started during the month and 40,000 units were completed. The units in ending Work-In-Process Inventory were 70% complete with respect to material and 10% complete with respect to conversion costs. How many equivalent units will be used in calculating the cost per unit for materials?(Points : 30)Ans) Equivalent units for materials = (40000 x 100%) + (8000 x 70%) = 45600 units




  1. (TCO 6) Handy Display Company manufactures display cases to be sold to retail stores. The cases come in three sizes: large, medium, and small. Currently, Handy Display Company uses a single plant-wide overhead rate to allocate its $3,357,800 of annual manufacturing overhead. Of this amount, $820,000 is associated with the Large Case line, $1,276,800 is associated with the Medium Case line, and $1,261,000 is associated with the Small Case line. Handy Display Company is currently running a total of 33,000 machine hours: 10,000 in the Large Case line, 13,300 in the Medium Case line, and 9,700 in the Small Case line. Handy Display Company uses machine hours as the cost driver for manufacturing overhead costs.



  1. (TCO 2)
    Fred Co. incurred costs of $800,000 for direct materials (raw) purchased. Direct labor was $5,000 and factory overhead was $15,000 for March.Inventories were as follows:
    Raw materials beginning $2,000; raw materials ending $4,000;Work-in-process beginning $210,000; work-in-process ending $190,000;Finished goods beginning $13,000; finished goods ending $12,500;What is the cost of goods manufactured? Please show your work. (Points : 30)




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