THE MID-TERM EXAMINATION

Date: ......................................
Duration: 90 minutes
Student ID: .................................. Name:................................................

SUBJECT: Managerial Accounting

Mark Lecturer
Signature:

Full name: Le Ngoc Anh Khoa

GENERAL INSTRUCTION(S)

Handwriting, taking pictures, pasting to Word then submit, please manage your time.
Call me if any question: 0939456447

GOOD LUCK!
MCQ QUESTION (20 points)

1. The CVP income statement classifies costs

A. as variable or fixed and computes contribution margin.

B by function and computes a contribution margin.
C as variable or fixed and computes gross margin.
D by function and computes a gross margin.

2. In a job-order cost system, indirect materials costs would be recorded as a debit to:
A. Finished Goods.
B. Manufacturing Overhead
C. Raw Materials
D. Work in Process

3. In a process costing system, the journal entry used to record the transfer of units from
Department A, a processing department, to Department B, the next processing
department, includes a debit to:
A. Work in Process – Department A and a credit to Work in Process – Department B
B. Work in Process – Department B and a credit to Work in Process – Department A
C. Work in Process – Department B and a credit to Materials
D. Finished Goods and a credit to Work in Process – Department B

4. If sales volume increases and everything else remains constant, the:

A. breakeven point will decrease
B. margin of safety will increase
C. contribution margin ratio will increase
D. net operating income will decrease

5. Rocky Company sells a single product. If both the selling price and variable cost per unit
increase by 5% and fixed costs remain steady then:
Contribution Margin Breakeven
per Unit in Units
A. Decrease Increase
B. Increase No change
C. Decrease No change
D. Increase Decrease
SHORT DISCUSSION QUESTION (20 points)

1. King BBQ incurred the following costs: $1,400 for ribs, 45 hours of labor to cook the
ribs at $10 per hour, $50 for seasoning and sauce, $300 for signs to advertise the ribs,
$150 to clean the grill after cooking the ribs, and $100 of administrative costs. How much
are total product costs?

2. Redman Company had actual sales $800,000 and its break-even sales were $600,000.
Morgan's margin of safety ratio is

3. Hinge Manufacturing’s cost of goods sold is $420,000 variable and $240,000

fixed. The company’s selling and administrative expenses are $300,000 variable
and $360,000 fixed. If the company’s sales is $1,480,000, what is its contribution
margin?

4. FIFO method:
A process with 1,600 units of beginning work in process, completed and transferred out
20,000 units during a period. There were 10,000 units in the ending work in process that
were 50% complete as to conversion costs. Materials are added 80% at the beginning of
the process and 20% when the units are 90% complete. How much is equivalent units of
production for the period for material costs?

LONG DISCUSSION QUESTION

Problem 1(20 Points)

Instructions
Calculate Direct Material cost per Equivalent unit,
Conversion Cost per Equivalent unit by Weight average
method
Problem 2 (40 points) The following inventory information is available for Ricci
Manufacturing Corporation for the year ended December 31, 2013:
Beginning Ending
Inventories:
Raw materials $17,000 $19,000
Work in process 9,000 14,000
Finished goods 11,000 8,000
Total $37,000 $41,000
In addition, the following transactions occurred in 2013:
1. Raw materials purchased on account, $70,000.
2. Incurred factory labor, $80,000, all is direct labor. (Credit Factory Wages Payable).
3. Incurred the following overhead costs during the year: Utilities $6,800, Depreciation
on manufacturing machinery $8,000, Manufacturing machinery repairs $9,200,
Factory insurance $9,000 (Credit Accounts Payable and Accumulated Depreciation).
4. Assigned $80,000 of factory labor to jobs.
5. Applied $35,000 of overhead to jobs.

Instructions
(a) Journalize the above transactions.
(b) Reproduce the manufacturing cost and inventory accounts. Use T-accounts of: Raw
material Inventory, Factory Labor, WIP Inventory, Finished Good Inventory, COGS,
Manufacturing Overhead
(c) From an analysis of the accounts, compute the following:
1. Raw materials used.
2. Completed jobs transferred to finished goods.
3. Cost of goods sold.
4. Under- or overapplied overhead.