[Earla Riopel (NYCARE)]

Studying on BEC right now. The following are just some calculation problems I find having difficulties already, calculating in 1-1.5min:

1) Johnson Co. is preparing its master budget for the first quarter of next year. Budgeted sales and production for one of the company’s products are as follows:
Month Sales Production
January 10,000 12,000
February 12,000 11,000
March 15,000 16,000
Each unit of this product requires four pounds of raw materials. Johnson’s policy is to have sufficient raw materials on hand at the end of each month for 40 percent of the following month’s production requirements. The January 1 raw materials inventory is expected to conform with this policy.
How many pounds of raw materials should Johnson budget to purchase for January?
a. 11,600 b. 46,400 c. 48,000 d. 65,600

2) In the past, four direct labor hours were required to produce each unit of product Y. Material costs were $200 per unit, the direct labor rate was $20 per hour, and factory overhead was three times direct labor cost. In budgeting for next year, management is planning to outsource some manufacturing activities and to further automate others. Management estimates these plans will reduce labor hours by 25%, increase the factory overhead rate to 3.6 times direct labor costs, and increase material costs by $30 per unit. Management plans to manufacture 10,000 units.
What amount should management budget for cost of goods manufactured?
a. $4,820,000 b. $5,060,000 c. $5,200,000 d. $6,500,000

3) Mighty, Inc. processes chickens for distribution to major grocery chains. The two major products resulting from the production process are white breast meat and legs. Joint costs of $600,000 are incurred during standard production runs each month, which produce a total of 100,000 pounds of white breast meat and 50,000 pounds of legs. Each pound of white breast meat sells for $2 and each pound of legs sells for $1.
If there are no further processing costs incurred after the split-off point, what amount of the joint costs would be allocated to the white breast meat on a relative sales value basis?
a. $120,000 b. $200,000 c. $400,000 d. $480,000

4) Black, Inc. employs a weighted average method in its process costing system. Black’s work in process inventory on June 30 consists of 40,000 units. These units are 100% complete with respect to materials and 60% complete with respect to conversion costs. The equivalent unit costs are $5.00 for materials and $7.00 for conversion costs. What is the total cost of the June 30 work in process inventory?
a. $200,000 b. $288,000 c. $368,000 d. $480,000

5) Virgil Corp. uses a standard cost system. In May, Virgil purchased and used 17,500 pounds of materials at a cost of $70,000. The materials usage variance was $2,500 unfavorable and the standard materials allowed for May production was 17,000 pounds. What was the materials’ price variance for May?
a. $17,500 favorable. b. $17,500 unfavorable. c. $15,000 favorable. d. $15,000 unfavorable.

6) Waldo Company, which produces only one product, provides its most current month’s data as follows:
Selling price per unit $80 Variable costs per unit: Direct materials 21 Direct labor 10 Variable manufacturing overhead 3 Variable selling and administrative 6 Fixed costs: Manufacturing overhead $76,000 Selling and administrative 58,000 Units: Beginning inventory 0 Month’s production 5,000 Number sold 4,500 Ending inventory 500
Based upon the above information, what is the total contribution margin for the month under the variable costing approach?
a. $46,000 b. $180,000 c. $207,000 d. $226,000

7) A management accountant performs a linear regression of maintenance cost vs. production using a computer spreadsheet. The regression output shows an “intercept” value of $322,897. How should the accountant interpret this information?
a. Y has a value of $322,897 when X equals zero.
b. X has a value of $322,897 when Y equals zero.
c. The residual error of the regression is $322,897.
d. Maintenance cost has an average value of $322,897.

8) At the end of a company’s first year of operations, 2,000 units of inventory are on hand. Variable costs are $100 per unit, and fixed manufacturing costs are $30 per unit. The use of absorption costing, rather than variable costing, would result in a higher net income of what amount?
a. $60,000 b. $140,000 c. $200,000 d. $260,000

9) Vested, Inc. made some changes in operations and provided the following information:
Year 2 Year 3
Operating revenues $ 900,000 $1,100,000
Operating expenses 650,000 700,000
Operating assets 1,200,000 2,000,000
What percentage represents the return on investment for year 3?
a. 28.57% b. 25% c. 20.31% d. 20%

10) Zig Corp. provides the following information:
Pretax operating profit $ 300,000,000 Tax rate 40% Capital used to generate profits 50%, 50% equity $1,200,000,000 Cost of equity 15% Cost of debt 5%
What of the following represents Zig’s year-end economic value-added amount?
a. $0 b. $60,000,000 c. $120,000,000 d. $180,000,000

11) A divisional manager receives a bonus based on 20% of the residual income from the division. The results of the division include: Divisional revenues, $1,000,000; divisional expenses, $500,000; divisional assets, $2,000,000; and the required rate of return is 15%.
What amount represents the manager’s bonus?
a. $200,000 b. $140,000 c. $100,000 d. $40,000

For some, maybe the above questions are ‘piece of cake’, but for me, I’m still wrestling on them, trying to solve them in 1-1.5min, in preparation for 2017 Q4.

AUD - 49
BEC - NINJA in Training
FAR - NINJA in Training
REG - 55

Passed: AUD (75%'08/77%'17), REG (76%'09) & BLaw(77%'99); highest on FAR (63%'11/'15) & BEC (63%'11). Credit Hours: USA(PH)-BCom'85(4yr-grandfathered); UBC-(DAP'02/'19); DC-(BBA-Acctg.'22-4th yr)=over 150 hrs credits