Acct 505 Final Exam 100% Correct Answers

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ACCT 505 Final Exam 100% Correct Answers 1. (TCO C) Silver City, Inc., has collected the following operating information below for its current month’s activity. Using this information, prepare a flexible budget analysis to determine how well Silver City performed in terms of cost control.
Actual Costs Incurred
Static Budget
Activity level (in units)
5,250
5,178
Variable Costs:
Indirect materials
$24,182
$23,476
Utilities
$22,356
$22,674
Fixed Costs:
Administration
$63,450
$65,500
Rent
$65,317
$63,904
2.
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In addition, what is the impact on the financial statements if the ending finished goods inventory is overstated or understated?
1. (TCO F) Farmington Corporation uses the weighted-average method in its process costing system. Data concerning the first processing department for the most recent month are listed below.
Work in process, beginning:
Units in beginning work-in-process inventory
400
Materials costs
$6,900
Conversion costs
$2,500
Percentage complete for materials
80%
Percentage complete for conversion
15%
Units started into production during the month
6,000
Units transferred to the next department during the month
5,000
Materials costs added during the month
$112,500
Conversion costs added during the month
$210,300
Ending work in process:
Units in ending work-in-process inventory
1,200
Percentage complete for materials
60%
Percentage complete for conversion
30%
Required: Calculate the equivalent units for materials (using the weighted-average method) for the month in the first processing department.
2.
(TCO G) – (Ignore income taxes in this problem.) Tennessee Co. is considering the production of an exterior paint that will require the purchase of new mixing machinery. The machinery will cost $700,000, is expected to have a useful life of 12 years, and is expected to have a salvage value of $100,000 at the end of 12 years. The machinery will also need a $40,000 overhaul at the

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