Exam: Costs
LAST NAME: _________________________ FIRST NAME___________________________
PUID________________________________Section________
Purdue University
Krannert School of Management
MGMT 201 – Managerial Accounting I
Summer 2014
Practice Final Exam--SOLUTION
This exam consists of 30 multiple choice questions on 10 pages (including this cover page) for a total of
120 points.
Answer all questions.
No partial credit is available for multiple choice questions. Be sure to put your answers to the multiple choice questions on your Scantron form.
The exam is closed book. A calculator is permitted.
GOOD LUCK.
Please circle the best answer and fill-in the corresponding circle on your Scantron sheet.
Only answers on the Scantron will be scored.
PART I: Multiple Choice. Please circle the best answer and fill-in the corresponding circle on your Scantron sheet. Only answers on the Scantron will be scored.
Please use the following information to answer questions 1 and 2:
Forrester, Inc., currently uses traditional costing procedures, applying $815,000 of overhead to products Alpha and Gamma on the basis of direct labor hours. The company is considering a shift to activity-based costing and the creation of individual cost pools that will use direct labor hours (DLH), material handling (MH), and number of shipments (NS) as cost drivers. Data on the cost pools and respective driver volumes follow.
Product
Alpha
Gamma
Pool Cost
Pool No. 1
(Driver: DLH)
200
1800
$420,000
Pool No. 2
(Driver: MH)
15
10
$375,000
Pool No. 3
(Driver: NS)
2,000
18,000
$20,000
1. The overhead cost allocated to Alpha by using traditional costing procedures would be:
a. $84,000
b. $356,000
c. $81,500
d. $420,000
2. The overhead cost allocated to Gamma by using activity-based costing procedures would be:
a. $378,000
b. $546,000
c. $444,000
d. $269,000
3. Manny Co. sells only one product at a regular price of $16 per unit, resulting in a contribution
PUID________________________________Section________
Purdue University
Krannert School of Management
MGMT 201 – Managerial Accounting I
Summer 2014
Practice Final Exam--SOLUTION
This exam consists of 30 multiple choice questions on 10 pages (including this cover page) for a total of
120 points.
Answer all questions.
No partial credit is available for multiple choice questions. Be sure to put your answers to the multiple choice questions on your Scantron form.
The exam is closed book. A calculator is permitted.
GOOD LUCK.
Please circle the best answer and fill-in the corresponding circle on your Scantron sheet.
Only answers on the Scantron will be scored.
PART I: Multiple Choice. Please circle the best answer and fill-in the corresponding circle on your Scantron sheet. Only answers on the Scantron will be scored.
Please use the following information to answer questions 1 and 2:
Forrester, Inc., currently uses traditional costing procedures, applying $815,000 of overhead to products Alpha and Gamma on the basis of direct labor hours. The company is considering a shift to activity-based costing and the creation of individual cost pools that will use direct labor hours (DLH), material handling (MH), and number of shipments (NS) as cost drivers. Data on the cost pools and respective driver volumes follow.
Product
Alpha
Gamma
Pool Cost
Pool No. 1
(Driver: DLH)
200
1800
$420,000
Pool No. 2
(Driver: MH)
15
10
$375,000
Pool No. 3
(Driver: NS)
2,000
18,000
$20,000
1. The overhead cost allocated to Alpha by using traditional costing procedures would be:
a. $84,000
b. $356,000
c. $81,500
d. $420,000
2. The overhead cost allocated to Gamma by using activity-based costing procedures would be:
a. $378,000
b. $546,000
c. $444,000
d. $269,000
3. Manny Co. sells only one product at a regular price of $16 per unit, resulting in a contribution