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Following is the first exam given in the spring 2002 semester.   We are providing this sample exam to give you    
an idea of the kinds of problems you can expect.  Do not assume, however, that your exam will be just like this    
one or that these are the only topics to be covered.
1. Aurora Corporation produces one product that sells for $15 per unit.  The company expects
to manufacture and sell 100,000 units in 2001.  At this level of output they project the following 
   Direct materials  $     300,000
Direct labor        120,000
Variable manufacturing overhead        180,000
Fixed manufacturing overhead        225,000
Fixed selling and administrative expenses        135,000
Variable selling and adminstrative expense        240,000
1.1 What is the total contribution margin projected for 2001?
1.2 What is the total gross margin projected for 2001?
1.3 The company is considering whether or not to increase their projected
production and sales to 120,000 units.  If they do so, what will their
projected net income be?
2. Weiss & Company had the following beginning and ending inventories for the year 2000:
Beginning Ending
Raw Materials*  $     150,000  $     120,000
Work in process         165,000        175,000
Finished goods           80,000          95,000
(*all raw materials are used as direct materials)
During 2000, the company incurred the following costs:
Purchase of raw materials  $         600,000
Direct labor cost            720,000
Manufacturing overhead            840,000
2.1 What is the total Cost of Goods Manufactured?
3. The Rivera Company begain operating in September, 2000.  During that month they started
work on the following three jobs.  Job No. 5 and Job No. 6 were completed during the month
and Job No. 6 was sold on September 20. A predetermined overhead rate of $20 per machine
hour is used to apply overhead.
Job No. 4 Job No. 5 Job No. 6
Direct materials $50,000 $36,000 $64,000
Direct labor $80,000 $106,000 $128,000
Machine hours 2,000 1,600 2,400
3.1 What is the ending balance in work in process inventory for September?
3.2 What is the ending balance in finished goods inventory for September?
3.3 What is the Cost of Goods Sold for September?
4. The following information is provided for the year for the Cheng Company, which applies
overhead on the basis of machine hours:
Actual overhead $300,000
Actual machine hours worked 25,000
Budgeted machine hours 27,500
Applied overhead $325,000
4.1 What was the total estimated manufacturing overhead used to calculate
the company's predetermined overhead rate?
5. The Glass Company uses a job order costing system. The company has two manufacturing
departments, molding and assembly.  The molding department applies overhead based on
machine hours, while the assembly department applies overhead based on direct labor hours.
The company made the following estimates at the beginning of the current year:
Molding Assembly
Manufacturing overhead cost $1,200,000 $800,000
Machine hours 10,000 4,000
Direct labor hours 12,000 16,000
Actual results for the current year turned out to be the following:
Molding Assembly
Manufacturing overhead cost $1,000,000 $1,000,000
Machine hours 12,000 4,500
Direct labor hours 10,000 18,000
The following information was available for Job No. 7-29, which was started and completed
during July.
Molding Assembly
Direct materials $7,000 $15,000
Direct labor $18,000 $25,000
Direct labor hours 900 1,250
Machine hours 500 400
5.1 What was the total cost of Job No. 7-29?
5.2 At the end of the year, is the company's total manufacturing over-head
over- or under-applied and by how much?
6. Pratt Company uses the weighted-average method in its process costing system. 
company has only one procesing department for which the following information is given:
Ending work in process (in units): 12,000 40% complete for materials cost
Total dollar value of work in process ending inventory: $60,000
Costs per equivalent unit: $5.00 for materials
$4.00 for conversion costs
6.1 With respect to the ending work in process inventory, what is the
percent completion of conversion costs?
7. Ogle manufactures safety pins and uses the weighted-average method in its process  
costing system.  The following information is available for the month of October:
Sales 180,000 units
Work in process Oct 1: none
Work in process Oct 30: 20,000 units
Finished goods Oct 1: 60,000 units (40% complete with respect to conversion costs)
Finished goods Oct 30: 64,000 units
7.1 What were the equivalent units of production for conversion costs for
8. Simpson Company produces dolls. The following unit cost information is available:
Selling price per doll $20.00
Variable costs per doll $14.00
Required: (Each question is independent of the others.) 320,000
8.1 If total fixed costs are $435,000 how many dolls must Simpson sell in order to 360,000
break-even? -40,000
8.2  If total fixed costs are $435,000 what is the break-even point in sales dollars?
8.3 If the break-even in sales dollars is $1,446,000 what must be the total
fixed costs for the period?
8.4 If total fixed costs are $500,000 how many dolls must the company sell to earn
$40,000 in net income?
8.5 The sales manager gelieves that a 10% reduction in selling price, combined with
an increase of $10,000 in advertising spend would result in an increase of 50%
in sales.
Current annual sales are 80,000 dolls.
Current fixed costs are  $         350,000
Should the company follow her advice and by how much will net
income increase (or decrease) if they do so?
9. Minwalla Tools began operations on January 2nd.  The following activity was recorded in the
company's work in process account for the first month of the year:
Direct material  $115,000
Direct labor 37,500
Manufacturing overhead 60,000
Transferred to finished
goods 195,000
Minwalla uses a job-order costing system and applies manufacturing overhead to jobs on the
basis of direct labor costs.  There is no over- or under- applied overhead.  At the end of January
only one job, No. 100, was still in process.
The job has been charged with $3,250 in direct labor costs.
9.1 How much direct material costs were charged to Job 100?
10. Carnival Furniture uses the weighted-average method in its process costing system.  The
following information is available:
Work in process, May 1(units) 60,000
Work in process, May 31 40,000 (50% complete for conversion costs)
Units transferred to finished goods during May 140,000
All direct materials are added at the beginning of the production process.
10.1 How many cushions were started during May?
10.2 What are the equivalent units for materials costs for May?