Advanced Cost Accounting ACCT 610
1
Solutions of Sample Final
I. Multiple-choice Questions:
1. B:7,500+48k-52k+ X = 6,000; X = 2,500
2. A: Sales units + desired End. FG – Beg. FG = 14k + 16k x 25%-(14k x 25%) = 14,500
3. C: Q2 production units= 12k + (14k x 25%)- (12k x25%) = 12,500
Raw material purchase: 12.5k x 4 + (10% x 14.5k x 4) – (10% x 12.5 x 4) = 50,800
4. D
5. D: Irrelevant costs are costs that cannot be avoided one way or another:
30% traceable fixed cost + 100% allocated costs = 30% x 25k + 18k = 25,500
6. D
7. D X Y
CMu 5 6
/hours per unit 2 3
CM/hour 2.5 2
Produce X to demand; the left-over labor hours will be used to make (27k-2 x 6k)/3=5k
Ys.
8. B
Explanation: $187,250 − $5,000 = $182,250; $182,250 + $6,260 = $188,510
9. B
Explanation: $72,070 + $850 = $72,920
10. D
Explanation: F = 40,490; G = 70,490;
Flexible budget variance of operating income =$78,400 − $70,490 = $7,910
11. E
12. E
13. E: 60k x (560k/1,600k) = 21,000
14. A
15. C
Advanced Cost Accounting ACCT 610
II. Calculation Problems
1. Answer:
A. Material price variance: ($7.75 – $7.50) × (4,100) = $1,025 unfavorable
Material quantity variance: [3,900 – (4,000 units × 1.00)] × $7.50 = $750 favorable
Purchase of higher than standard quality material might result in unfavorable price
