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Acc 406 Exam with Answers

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ACC 2301
INTRODUCTORY MANAGEMENT ACCOUNTING
Question 1 (12 marks)
Templar Company, a manufacturing firm, has supplied the following information from
its accounting records for the month of November:
|Factory supplies used |$18,000 |
|Depreciation on factory building |17,000 |
|Salary of company controller |6,000 |
|Factory janitorial costs |5,000 |
|Marketing and promotion |4,500 |
|Direct labor cost |22,000 |
|Purchases of raw materials |10,000 |
|Finished Goods Inventory, Nov. 1 |2,250 |
|Finished Goods Inventory, Nov. 30 |3,750 |
|Work in Process Inventory, Nov. 1 |4,200 |
|Work in Process Inventory, Nov. 30 |2,750 |
|Materials Inventory, Nov. 1 |3,500 |
|Materials Inventory, Nov. 30 |5,100 |
| |Required: Prepare a Statement of Cost of Goods Manufactured for November |
| | |
ANS:
|Templar Company |
|Statement of Cost of Goods Manufactured |
|For the month of November |
|Beginning Materials Inventory |$ 3,500 | |
|Add: Purchases of materials |10,000 | |

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| Materials Available for Use |13,500 | |
|Less: Ending Materials Inventory |5,100 | |
| Materials Used | |$ 8,400 |
| Direct Labor | |22,000 |
| Overhead (18,000 + 17,000 + 5,000) | | 40,000 |
| Total Manufacturing Costs Added | |70,400 |
| Add: Beginning Work in Process Inventory | |4,200 |
| Total Manufacturing Costs In Process | |74,600 |
|Less: Ending Work in Process Inventory | |2,750 |
| Cost of Goods Manufactured | |$71,850 |
Question 2 (10 marks)
The following six months of data were collected on electricity cost and the number of
machine hours in a factory.
| | | |
|Month |Electricity cost |Machine hours |
|June |$25,160 |4,500 |
|July |26,170 |4,810 |
|August |27,250 |5,120 |
|September |26,680 |5,010 |
|October |27,950 |5,430 |
|November |27,500 |5,190 |
Required:
|A. |Using the high-low method, compute the variable electricity cost per machine
hour. |
|B. |Using the high-low method, compute the total fixed cost of electricity. |
|C. |Estimate the total electricity cost to be incurred in December if 5,300 machine

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