BUSI 1002 C PASS MOCK EXAM 2015

PASS MOCK EXAM – FOR PRACTICE ONLYCourse: BUSI 1002 C Facilitator: Richard CoffinDates and locations of mock exam take-up: TBAIMPORTANT:It is most beneficial to you to write this mock midterm UNDER EXAM CONDITIONS. Thismeans:• Complete the midterm in 1.5 hour(s).• Work on your own.• Keep your notes and textbook closed.• Attempt every question.After the time limit, go back over your work with a different colour or on a separate piece ofpaper and try to do the questions you are unsure of. Record your ideas in the margins to remindyourself of what you were thinking when you take it up at PASS.The purpose of this mock exam is to give you practice answering questions in a timed settingand to help you to gauge which aspects of the course content you know well and which are inneed of further development and review. Use this mock exam as a learning tool in preparing forthe actual exam.Please note:? Come to the PASS session with your mock exam complete. There, you can work withother students to review your work.? Often, there is not enough time to review the entire exam in the PASS session. Decidewhich questions you most want to review – the facilitator may ask students to vote onwhich questions they want to discuss.? Facilitators do not bring copies of the mock exam to the session. Please print out andcomplete the exam before you attend.? Facilitators do not produce or distribute an answer key for mock exams. Facilitators helpstudents to work together to compare and assess the answers they have. If you are notable to attend the PASS session, you can work alone or with others in the class.DISCLAIMER: PASS handouts are designed as a study aid only foruse in PASS workshops. Handouts may contain errors, intentional orotherwise. It is up to the student to verify the information containedwithin. PLEASE NOTE: THIS HANDOUT IS NOT TO BE POSTED ONTHE INTERNET1. A company’s budgeted overhead (applied using direct labour hours) totalled $235,000 and itsactual overhead totalled $230,300. If its budgeted direct labour hours totalled 5,000, and itsactual direct labour hours totalled 4,700, what is the company’s predetermined overhead rate?a) $49.00/hourb) $50.00/hourc) $46.06/hourd) $47.00/hour2. A restauraunt calls a waiter in for work for every 10 customers that enters the business. Whattype of cost best represents this practice?a) Variable Costb) Direct Labour Variable Costc) Step Fixed Costd) Step Variable Cost3. If a company released $50,000 worth of indirect material, what would the corresponding journalentry be?a) Dr. Raw Materials $50,000 Cr. WIP $50,000b) Dr. Manufacturing Overhead $50,000 Cr. Raw Materials $50,000c) Dr. WIP $50,000 Cr. Raw Materials $50,000d) Dr. WIP $50,000 Cr. Manufacturing Overhead $50,000Use the following information for questions 4-6:- Knicks’N’Knacks produced 15,000 units in June at a cost of $39,250- In July, they produced 14,000 units at a cost of $37,500- In August, they produced 14,200 units at a cost of $36,5004. Using the High-Low Method, what is Knicks’N’Knacks variable cost (per unit)?a) $0.20b) $5.00c) $1.75d) $3.445. Using you answer from question 4, what is the company’s fixed cost?a) $13,000b) $12,350c) $12,348d) $11,6506. What is Knicks’N’Knacks average cost per unit at 15,000 units?a) $0.87b) $2.68c) $2.62d) $2.577. Which of the following is not a cost estimation method?a) Activity-Driver Methodb) Visual-Fit Methodc) High-Low Methodd) Least-Squares Regression Method8. Which of the following is not an example of a manufacturing overhead cost?a) Glue used to combine the pieces of an action figureb) Fabric used to make high-quality T-shirtsc) Supervisors of factory activityd) Employee’s hired to handle product materials9. If a company’s Cost of Goods Manufactured totaled 36,500, their Work in Process inventorystarted with a balance of 12,000, and their total manufacturing costs were 30,000, what was thecompany’s ending Work in Process?a) $18,000b) $5,500c) $24,500d) $6,50010. In what order do direct material costs move through a company’s accounts, from purchase tosale?a) Raw Materials > Manufacturing Overhead > Work in Process > Finished Goods > Cost ofGoods Soldb) Manufacturing Overhead > Work in Process > Finished Goods > Cost of Goods Soldc) Manufacturing Overhead > Raw Materials > Work in Process > Finished Goodsd) Raw Materials > Work in Process > Finished Goods > Cost of Goods SoldPart B: Short AnswerShow all of you work for the following questions in the space providedQuestion 1The following costs of Coffin Co. were recorded for the year 2012 ending.Month Machine Hours Cost ($)January 2,100 205,000February 3,250 224,050March 1,980 190,010April 2,100 173,100May 1,700 174,050June 3,100 265,200July 3,500 218,150August 2,900 199,000September 2,400 189,000October 1,900 170,000November 2,100 180,500December 1,800 178,000a) Using the High-Low method, calculate the variable cost of Coffin Co.’s activity.b) Using your calculated variable cost, what would the company’s fixed costs total?c) Using your calculated answers, form an equation Coffin Co. could use to estimate activity costs.Use this equation to estimate the cost when machine hours total 2,100.Question 2Reid’s Dairy, a small town ice cream manufacturer, is trying to calculate their production costs for theyear 2012 and would like your help. The company would like you to use the t-table below to show yourwork. They have provided you with the following information:- Raw Materials were purchased for $1,250,000- Machine hours totalled 60,000- The company began work 35,000 tubs of ice cream in 2012:? Each unit absorbed $25 of direct materials? Each unit required 4 hours of direct labour, at a rate of $12/hour- Indirect materials used, such as napkins and plastic spoons, totalled $300,000- Indirect labour, such as janitors and factory administrators, totalled 80,000 hours at thesame rate as direct labour.- The cost of running and maintaining the ice cream machines totalled $100,000- Overhead is applied traditionally at a rate of $25/machine hour.- Beginning Work in Process inventory for the year 2012 totalled $425,000. The endingbalance was $25,000.- Finished Goods Inventory had a balance of $0 in January, and $80,000 in December.a) What is the remainder in Raw Materials Inventory at year end if the beginning balance was $0?b) What is the total amount paid for labour in 2012?c) What was the value difference between the applied and actual overhead? Is this amount over orunder applied?d) What amount of good were completed in 2012 (dollar value)?e) What is the Cost of Goods Sold?Question 3The accountants at Johnny’s Jackets are considering switching from traditional costing to activity basedcosting and need to calculate and compare the unit costs of their top two products: leather jackets andwool sweaters. The store budgeted their overhead to be $4,500,000, which was traditionally allocatedusing machine hours, which were budgeted at 55,000.Below is the information the accountants collected regarding their two products:Product Leather Jacket Wool SweaterDirect Materials $30.00 $10.00Direct Labour $10.00 $15.00Total Direct Labour Hours 20,000 15,000Total Machine Hours 30,000 25,000Batch Inspections 700 1300Units Produced 35,000 28,000a) What is the unit cost of both products under the Traditional method? (Round all calculations totwo decimal places)The Following information was found upon further research:Activity Cost Driver Dollar ValueMachine-Related Costs Machine Hours $1,800,000Labour-Related Costs Direct Labour Hours $1,500,000Batch-Related Costs Number of Inspections $1,000,000Total $4,300,000b) What is the unit cost of both products under Activity Based Costing? Why might this be an issueto the company? (Round all calculations to two decimal places)

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