preview

Exam Practice

Satisfactory Essays
Open Document
ACCA 310 EXAM 1 PRACTICE QUESTIONS
1.First Bank had the following activities, traceable costs, and physical flow of driver units:

TraceablePhysical Flow of
Activities CostsDriver Units
Open new accounts$40,0001,000 accounts
Process deposits72,000360,000 deposits
Process withdrawals100,000200,000 withdrawals

The above activities are used by Downtown branch and Uptown branch: DowntownSuburb
New accounts200400
Deposits 40,00020,000
Withdrawals 15,00018,000

a.Compute the new account cost assigned to Downtown branch.
b.Compute deposit processing cost assigned to Suburb branch.
c.Compute the withdrawal processing cost…show more content…
Answer:
Additional sales: (2,000 x $120) $240,000
Relevant costs: Variable costs:
Direct materials (2,000 x $15) $30,000
Direct mfg. labor (2,000 x $45) 90,000
Variable mfg. overhead (2,000 x $25) 50,000 Total 170,000
Additional operating income$70.000
4.Strangle Company manufactures ties. When 28,000 items are produced, the costs per unit are:
Direct materials $0.60 Direct manufacturing labor 3.00
Variable manufacturing overhead 1.20
Fixed manufacturing overhead 1.60
Variable selling0.80
Fixed selling1.13 Total $8.30

The ties normally sell for $22 each. Strangle Company has received a special order for 2,000 ties at $10.00 per tie. Strangle Company has excess capacity.
Required:
Compute the amount by which the operating income would change if the order were accepted.

Answer:

Additional sales (2,000 x $10.00)$20,000
Relevant costs:
Direct materials (2,000 x $0.60)$1,200
Direct labor 2,000 x $3.00) 6,000
Variable manufacturing overhead 2,400
(2,000 x $1.20)
Variable selling (2,000 x $0.80) 1,60011,200
Additional operating income$8,800
CHAPTER 35.Colbert Company gathered the following information regarding its only product:
Direct materials used$9,000
Direct labor17,000
Variable factory overhead13,000
Fixed factory
Get Access
Related
Get Access