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```					                         American University in Bulgaria
BUS 352: Managerial Accounting
Earlier Exam Materials from Chapters 2, 3 & 13 -- Spring 1998
Phase I (25 Points) -- Budgeted data for Cheatemall Corp. are:
Sales (80 units)                                          \$ 1,500
Cost of goods sold:
Direct labor                              \$ 150
Direct materials used                        140
Variable factory overhead                    100
Fixed factory overhead                         50
Cost of goods sold                                        440
Gross profit                                                1,060
Marketing expenses:
Variable                                \$ 60
Fixed                                       90
Variable                                   50
Fixed                                     110
Total marketing & admin expense                             310
Operating income                                          \$   750
The breakeven point in UNITS must be --                        UNITS
The Operating Income, assuming sales
volume INCREASES by 20%, is --              \$
The breakeven point in DOLLARS, assuming variable costs per unit INCREASE by
20% and assuming fixed factory overhead DECREASES by \$ 47.50, must be
something like --                                    \$
Phase II (5 Points) -- M Co.'s production for a certain month consisted of
1,200 units of product, with a selling price of \$21 per unit. Total costs
were \$19,800 of which \$10,800 were variable. M's monthly BREAKEVEN POINT IN
UNITS is --                                                          UNITS
Phase III (5 Points) -- S Co. is planning to sell 200,000 units of Product B.
The fixed costs are \$394,000 and the variable costs are 40% of the selling
price. In order to realize an operating income before taxes of \$320,000, the
SELLING PRICE PER UNIT would have to be --           \$
Phase IV (5 Points) -- T Co. sells two products, 200 units of A at \$5 per unit
and 300 units of Z at \$4 per unit. Variable costs are 65% of sales for A and
85% of sales for Z. If T has net income of \$410 before taxes, TOTAL FIXED
COSTS must be --                                     \$
Phase V (10 Points) -- In planning its 1991 operations W, Inc. forecast its
sales to be \$8,400, and prepared the following estimated cost data:
Variable          Fixed
Direct materials           \$2,240
Direct labor                1,960
Factory overhead              840        \$1,260
Selling costs                 336            504
Administrative costs            84            196
\$5,460        \$1,960
W Inc.'s breakeven point in sales dollars must be -- \$
Phase VI (5 Points) -- At a breakeven point of 400 units sold, the variable
costs were \$400 and the fixed costs were \$300. What will the 401st unit sold
contribute to income before income taxes?               \$
Phase VII (5 Points) -- K Co. has sales of \$752 and total costs of \$695, of
which \$225 are fixed. The breakeven point in sales dollars is -- \$
Phase VIII (15 Points) -- These data are from the log of a photocopying
machine used by S Co.
Month             Number of Copies Made            Total Costs
January                   15,200                      \$1,944
March                     22,900                       2,329
April                    10,300                     1,699

Using the high-low method, the fixed cost per month is -- \$
And the variable cost per copy is pretty near --          \$
Assuming your answers are correct, what would you expect S Co.'s total cost
would be in a month during which the firm makes a total of 17,000 copies?
\$
Phase IX (20 Points) -- W Co. has a Custodial Services Department that
services the company's Maintenance Department and its two producing
departments. Costs of the Custodial Services Department are allocated to
other departments on a basis of square footage of space occupied. The amount
of space occupied by each department is given below:
Custodial Services            700 sq. ft.
Maintenance                   600 sq. ft.
Producing Department 1       4000 sq. ft
Producing Department 2       8000 sq. ft.
Budgeted costs in the Custodial Services Department for 1992 total \$44,100.
The amount of this cost allocated to the Maintenance Department under the step
method would be:                                 \$
The amount of Custodial Services Department cost allocated to Producing
Department 2 under the direct method would be: \$
Phase I (3 Points) -- If the contribution margin ratio is 30%, net income is
\$64,000, and sales volume is \$400,000, then fixed costs are --\$
Phase II (3 Points) -- If sales volume in units is 124,600, fixed costs are
\$15,600, and contribution margin per unit is \$0.30, then the net income is --
\$
Phase III (6 Points) -- Assuming a constant mix of 3 units of X for every 1
unit of Y, a selling price of \$18 for X and \$24 for Y, variable costs per unit
of \$12 for X and \$14 for Y, and total fixed costs of \$89,600, the breakeven
point in units would be --                                  Units of X
Units of Y
Phase IV (4 Points) -- If after tax net income is \$27,000 with a 40% tax rate,
contribution margin per unit is \$0.80, and fixed costs are \$148,000, then the
number of units which must be sold is --                        Units
Phase V (6 Points) -- V Co. reported these production data:
Month              Cost                    Units
July              \$24,450                  8,200
October            44,200                 15,000

V Co. uses the high-low method to analyze mixed costs.
The variable cost per unit is --           \$
The total fixed cost is --                 \$
Phase VI (30 Points) -- C Co. has two service departments, Maintenance and
Personnel, as well as two production departments, Mixing and Finishing.
Maintenance costs are allocated based on square footage, while personnel costs
are allocated based on number of employees. This information has been
gathered for the year:         Maintenance Personnel      Mixing  Finishing
Dept. costs                    \$18,000       \$12,000       N/A      N/A
Sq. footage                        800           400      1,600    1,200
Employees                            8            12         24       32
Using the direct method, what would be allocated to the --
Mixing Department?                         \$
Finishing Department?                      \$
Using the step-down method, what would be allocated to the --
Mixing Department?                         \$
Finishing Department?                      \$
Phase VII (6 Points) -- W Co. has provided this information:
Total fixed costs                   \$100,000
Unit variable costs                       \$10
Planned unit sales                    30,000 units
Breakeven point                       25,000 units

The selling price per unit must be --     \$              per unit
The contribution-margin ratio must be --                        %
Breakeven volume in dollars must be --    \$
Phase VIII (10 Points) -- O Co. sells its product for \$320 per unit and incurs
variable costs of \$190 per unit. A sales volume of \$3,104,000 produces a net
income before taxes of \$403,000. So, total fixed costs are--\$
O Co.'s breakeven point in units must be                  units
Phase IX (10 Points) -- H Corp.'s variable costs at breakeven total \$630,000,
its income tax rate is 40%, and enjoys a contribution margin ratio of 30%.
Its fixed costs must be --                            \$
How much would H Corp.'s sales volume in dollars have to be to generate net
income of \$72,000 after taxes?                        \$
Phase X (15 Points) -- R Co. makes 3 products from a joint process. D and J
can be sold at split-off, but B must be processed further at a cost of
\$36,000. Joint costs for the year are \$1,740,000.
Product            Units Produced         Sales Price per Unit
D               68,500                        \$11.00
J               35,500                          \$ 8.40
B               16,000                          \$ 6.20
Using the relative-sales-value method of allocating joint costs, determine the
joint costs allocated to each product.
Allocated to D                                  \$
Allocated to J                                  \$
Allocated to B                                  \$
Phase XI (7 Points) -- K Co. had an after tax net income of \$150,000, a tax
rate of 25%, a contribution margin of \$900,000, and a contribution margin
ratio of 60%.
Fixed costs must be --                          \$
Total sales must be --                          \$
Breakeven in dollars must be --                 \$

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