Accounting 102 Module Exam

Exam%4:%%Chapters%18%and%22 1. For%each%of%the%characteristics%below,%identify%whether%it%is%a%focus%of%financial% accounting%or%managerial%accounting.%Use%the%letter%F%to%identify%financial% accounting%and%M%to%identify%managerial%accounting. 1. %%%%%Users%are%generally%managers,%employees%and%decision%makers% internal%to%the%organization. %%____ 2. %%%%%Used%to%assist%managers%in%making%planning%and%control% decisions. %%____ 3. %%%%%Information%is%structured%and%controlled%by%GAAP. %%____ 4. %%%%%Information%is%available%quickly%without%the%need%to%wait%for%an% audit. %%____ 5. %%%%%Information%is%mainly%historical%with%some%predictions. %%____ 6. %%%%%Emphasis%of%the%information%is%on%the%whole%organization. %%____ 7. %%%%%Information%is%mostly%monetary,%but%includes%nonmonetary% information. %%____ 2. Explain%what%is%meant%by%the%"lean%business%model"%and%why%many%businesses% have%adopted%it. 3.%%The%following%cost%items%relate%to%the%Brock%Company.%Classify%each%cost%as%a% variable%cost,%a%fixed%cost,%or%a%mixed%cost%by%placing%an%X%in%the%appropriate%column.% Each%cost%should%be%evaluated%in%terms%of%the%volume%of%units%of%finished%products% produced.%Also%indicate%with%an%X%for%each%item%if%it%is%a%product%cost%or%a%period%cost. %% 4. For%each%item%shown%below,%classify%it%as%a%product%cost%or%a%period%cost,%by% placing%an%X%in%the%appropriate%column.%For%each%item%that%is%a%product%cost,%also% indicate%whether%it%is%a%direct%cost%or%an%indirect%cost%with%respect%to%a%unit%of% finished%product. %% 5. The%following%information%describes%a%product%expected%to%be%produced%and%sold% by%Pepin%Corporation:% Required: (a)%Calculate%the%contribution%margin%per%unit. (b)%Calculate%the%breakWeven%point%in%units. Multiple%Choice: 6. Winthrop%Manufacturing%produces%a%product%that%sells%for%$50.00.%Fixed%costs%are% $260,000%and%variable%costs%are%$24.00%per%unit.%Winthrop%can%buy%a%new% production%machine%that%will%increase%fixed%costs%by%$11,400%per%year,%but%will% decrease%variable%costs%by%$3.50%per%unit.%Compute%the%contribution%margin%per%unit% if%the%machine%is%purchased. A. $22.50. B. $26.00. C. $29.50. D. $28.50. E. $27.50. 7. Winthrop%Manufacturing%produces%a%product%that%sells%for%$50.00.%Fixed%costs%are% $260,000%and%variable%costs%are%$24.00%per%unit.%Winthrop%can%buy%a%new% production%machine%that%will%increase%fixed%costs%by%$11,400%per%year,%but%will% decrease%variable%costs%by%$3.50%per%unit.%Compute%breakWeven%point%in%units%if%the% new%machine%is%purchased. A. 10,438%units. B. 8,814%units. C. 10,000%units. D. 9,200%units. E. 9,869%units. 8. Winthrop%Manufacturing%produces%a%product%that%sells%for%$50.00.%Fixed%costs%are% $260,000%and%variable%costs%are%$24.00%per%unit.%Winthrop%can%buy%a%new% production%machine%that%will%increase%fixed%costs%by%$11,400%per%year,%but%will% decrease%variable%costs%by%$3.50%per%unit.%What%effect%would%the%purchase%of%the% new%machine%have%on%Winthrop's%breakWeven%point%in%units? A. 800%unit%increase. B. 800%unit%decrease. C. 5,714%unit%increase. D. 4,444%unit%decrease. E. No%effect%on%the%breakWeven%point%in%units.