ACT321 Exam 1 Ver A Name All work must be shown legible and understandable to get full credit on all problems Caution do not assume I understand work done on your calculator Work carefully there will be little if any partial credit allowed Put your name on ALL pages Wilson Corporation Wilson Corporation has the following data for use of its machinery Month Jun Jul Aug Sept Oct Usage 600 650 420 500 450 Cost 750 775 550 650 570 1 10pts Refer to Wilson Corporation Using the high low method determine the variable and fixed cost The records of Denver Corporation revealed the following data for the current year 775 650 98 775 637 138 Denver Corporation Work in Process Finished Goods Cost of Goods Sold Direct Labor Direct Material 73 150 115 000 133 650 111 600 84 200 2 10pts Refer to Denver Corporation Assume that Denver has under applied overhead of 37 200 and that this amount is material What journal entry is needed to close the overhead account Round decimals to nearest whole percent WIP 73 000 321 000 37 200 8 556 FG 115 000 321 000 37 200 13 392 CGS 133 000 321 000 37 200 15 252 3 10pts Refer to Denver Corporation Assume that Denver has under applied overhead of 10 000 and that this amount is immaterial What is the balance in Cost of Goods Sold after the under applied overhead is closed COGS Under applied Overhead Adjusted COGS ACT321 Exam 1 Ver A Name 133 650 10 000 143 650 Awesome Athletics Inc Awesome Athletics Inc has developed a new design to produce hurdles that are used in track and field competition Management estimates expected annual capacity to be 90 000 units overhead is applied using expected annual capacity The company s cost accountant predicts the following current year activities and related costs Standard unit variable manufacturing costs Variable unit selling expense Fixed manufacturing overhead actual budgeted Fixed selling and administrative expenses Selling price per unit Units of sales Units of production Units in beginning inventory 12 5 495 000 136 000 35 80 000 85 000 10 000 Costs incurred are as expected Under or over applied fixed overhead is to be written off to Cost of Goods Sold Required 4 10pts Determine the amount of under or over applied fixed overhead using a variable costing b absorption costing 5 20pts Prepare projected income statements using a variable costing b absorption costing ACT321 Exam 1 Ver A Name ANS 1 a 0 2 b a b 90 000 85 000 5 50 27 500 U Sales 80 000 35 VC 80 000 17 CM FC Income before income taxes Sales 80 000 35 COGS 17 50 80 000 GM S A Income before income tax before volume var under applied Income before income taxes 2 800 000 1 360 000 1 440 000 631 000 809 000 2 800 000 1 400 000 1 400 000 536 000 864 000 27 500 836 500 ACT321 Exam 1 Ver A Name Anderson Enterprises Inventories Raw material Work in process Finished goods Additional information for March Raw material purchased Direct labor payroll Direct labor rate per hour Overhead rate per direct labor hour March 31 15 000 6 000 36 000 March 1 18 000 9 000 27 000 42 000 30 000 7 50 10 00 6 10Pts Refer to Anderson Enterprises For March prime cost incurred was ANS A Direct Labor a 30 000 b 40 000 c 70 000 d 72 000 ANS C Direct Labor Overhead Raw Materials 18 000 15 000 45 000 Begin Inv Purch Ending Inv 42 000 Rate 7 50 Hours 4 000 30 000 7 50 30 000 75 000 7 10Pts Refer to Anderson Enterprises For March conversion cost incurred was Begin Inv Purch 7 50 Ending Inv 4 000 30 000 Rate Hours 10 00 4 000 30 000 7 50 40 000 70 000 8 10 pts Refer to Anderson Enterprises For March Cost of Goods Manufactured was Beginning WIP Inventory Ending WIP Inventory Raw Materials Direct Labor Factory Overhead 45 000 30 000 40 000 9 000 115 000 6 000 118 000 ACT321 Exam 1 Ver A Name Parrish Company Parrish Company uses activity based costing The company produces two products IPods and MP3 players The annual production and sales volume of IPods is 8 000 units and of MP3 players is 6 000 units There are three activity cost pools with the following expected activities and estimated total costs Activity Cost Pool Estimated Cost Expected Activity IPods Expected Activity MP3 players Activity 1 Activity 2 Activity 3 20 000 37 000 91 200 100 800 800 400 200 3 000 Total 500 1 000 3 800 9 20 Pts Refer to Parrish Company Using ABC the cost per unit of IPods is approximately Activity 1 2 3 Cost Allocation 20 000 100 500 4 000 8 000 37 000 800 1 000 29 600 8 000 91 200 800 3 800 19 200 8 000 Total Cost per Unit Cost per Unit 0 50 3 70 2 40 6 60