UNIVERSITY OF TORONTO
RSM 222 H1S
MIDTERM EXAM, Winter 2011
Section I: 9 Multiple Choice Questions (3 marks each, 27 marks in aggregate) :
Please dissipation the individual best tally control the multiple-choice questions.
1. Which of the aftercited individuals would be comprised as sbeneath of contenty aloft in a microcomputer creator?
a. the consume of recollection chips
b. wage of computer assemblers
c. diminution of computer assemblers
d. stipend of communicateing straightforwardor
e. completion of the pit
2. Inventorioperative consumes
a. enclose simply the consummate consumes of manufacturing a performance.
b. enclose simply the alteration consumes of manufacturing a performance.
c. are expensed when performances beseem sbeneath of refined consequence list.
d. are cherished as consequence anteriorly the performances are sold.
e. Nsingle of the pit.
3. Once the break-even top is reached
a. The aggregate oblation brink changes from privative to unequivocal.
b. Net proceeds gain growth by the individual oblation brink control each individual sold.
c. Ininvarioperative consumes gain sojourn uniform in aggregate
d. The oblation brink connection begins to decrease
e. Nsingle of the pit
4. Miller constructions desks. During the most performanceive month of the year, 3,500 desks are pretended at a aggregate consume of $84,400. In its slowest month, Miller gains 1,100 desks at a consume of $46,000. February is a recurrent month. Miller schemes to gain 2,000 individuals. What is the aggregate ininvarioperative consumes control Fabruary?
e. Nsingle of the pit.
5. Winsor Inc. has schemened to growth contenty straightforwardor stipend by 10%. If regulate-ofing absorbs and completion other consume are held uniform, the break-even top
a. decreases at rebuke improve than 10%
b. decreases at a rebuke inferior than 10%.
c. growths at rebuke improve than 10%
d. growths at a rebuke inferior than 10%.
e. Nsingle of the pit.
6. The aftercited advice relates to Glow Ltd.
Consume of consequence sold 56,000
Operating expenses 25,500
Refined consequence, source list 15,000
Refined consequence, extent list 15,000
Straightforward playative 10,500
Straightforward labour 19,000
What is Glow’s consume of consequence pretended?
e. Nsingle of the pit
7. Ghost invetetrounce consumeing may be portraitured in which of the aftercited scenarios?
a. Control regulate-ofing and functional expenses.
b. Control portraiture connected calling.
c. Twain a and b.
d. Nether a nor b.
8. The arrangement of choosing incompact competing alternatives is called
b. Resolution making
d. Execution evaluation
e. Nsingle of the pit.
9. Which of the aftercited announcement is gentleman?
I. A consume driver is a content that causally affects consumes.
II. A consume hierarchy is a categorization of consumes into unanalogous consume pools on the caportraiture of
the unanalogous types of consume drivers or unanalogous degrees of awkwardness in determining
a. Simply I
b. Simply II
c. Twain I and II
d. Neither I nor II
Section II. Short Tally Questions (18 marks)
1. Ruth Reed, resistanceal controller and aware address statementant, was capsize by a novel memo she ordinary from the resistanceal straightforwardor, Paul Chesser. Ruth was scheduled to give the resistance’s financial execution at headquarters in single week. In the memo, Paul had ardent Ruth some instructions control this upfuture reverberation. In sundericular, she has been told to emphasize the weighty advancement in the resistance’s income pit developed year. Ruth, thus-far, didn’t consider that there was any developed beneathlying advancement in the resistance’s execution and was loth to utter inadequately. She kstrange that the growth in income was accordingly of Paul’s aware resolution to result control list.
Paul had undenioperative his place straightforwardors to result further than they kstrange they could regulate-of. Paul argued that by doing so reverberationed income would bound. He toped quenched couple weighty benefits. First, by increasing income, the resistance could excel the stint roll needed so that completion the straightforwardors would enoperative control the annual premium. Second, by meeting the budgeted avail roll, the resistance would be improve operative to contend control abundant needed cardinal. Ruth had objected beside had been pitruled. The most unassuming counterargument was that the growth in list could be liquidated in the future year as the arrangement improved. Thus-far, Ruth considered this circumstance incredible. Invetetrounce on elapsed trial, she consider that it would capture at meanest couple years of improved communicate ask-ce anteriorly the performanceive accommodation of the resistance was exceled.
Tally the aftercited questions:
a. (4 marks) Why does the avail growth when the resistance results control further list?
b. (4 marks) In stipulation 1, holy standards control address statementant were listed. Identify any standards that engage in this plight. Invetetrounce on this, argue what should Ruth do?
Should she accede with the moral to emphasize the growth in income? If not attributable attributable, what options does she accept?
2. DEF union has the aftercited consume facts control 2010. The facts is cool anteriorly the air of beneath- or pit-applied aloft.
Performance in Arrangement List $60,000
Refined Consequence List $80,000
Consume of Consequence Sold $200,000
Actual aloft $150,000
Applied aloft $130,000
a. (2 marks) How abundant is the beneath-applied or pitapplied aloft control 2010?
b. (4 marks) Assume that the sum is significant, lay the narrative initiation to regulate of the sum.
3. (4 marks) Provide couple reasons why aloft strength be beneath-applied/over-applied control DEF union in 2010.
Section III. 4 Problems (55 Marks)
1. Work Consumeing (13 marks)
Orange Inc. is a manufacturing decided that portraitures natural work-order consumeing. On January 1, the
source of its fiscal year, the union had the aftercited list pits: Raw playative
$ 20,000; Performance in arrangement $25,000; Refined consequence $30,000.
The union applies aloft consume to works on the caportraiture of machine-hours performanceed. Control the
current year, the union estimated that it would performance 75,000 machine-hours and incur
$450,000 in manufacturing aloft consume. The aftercited transactions were chronicled control the year:
1. Raw playatives were purchased on statement, $410,000.
2. Raw playatives were requisitioned control portraiture in performanceion, $380,000 ($360,000 straightforward
materials and $20,000 unconnected playatives).
3. The aftercited consumes were incurred control employee portraitures: straightforward strive, $75,000; unconnected
labor, $110,000; sales commissions, $90,000; and functional salaries, $200,000.
4. Sales rustication consumes were $17,000.
5. Utility consumes in the contenty were $43,000.
6. Advertising consumes were $180,000
7. Diminution was chronicled control the year, $350,000 (80% relates to contenty operations, and
20% relates to regulate-ofing and functional activities).
8. Insurance expired during the year, 10,000 (70% connected to contenty operations, and the
remaining 30% relates to regulate-ofing and functional activities).
9. Manufacturing aloft was applied to performanceions. Due to inferior than expected
ask-ce control its performances, the union performanceed 70,000 machine-hours during the year.
10. Consequence consumeing $880,000 to construction according to their work consume sheets were
completed during the year
Required ( A – C): (Show your estimation using T-Account)
A) (6 marks) Determine the sum of pit or beneath applied aloft control the year
B) (4 marks) Determine the extent list pit of performance-in-process.
C) (3 marks) Determine the sum of Regulate-ofing, General & Functional Consumes control the year.
2. Arrangement Consumeing (12 Marks)
Halifax Salt union arrangement salt and statements control performanceion using weighted medium arrangement
costing process. Straightforward playative is pretended at the set-quenched of performanceion beside strive and aloft consumes
are incurred evenly throughout. The aftercited facts pertain to operations control February:
Source WIP (75% total) 8,000 kg
Started in February 200,000 kg
Extent WIP (25% total) 20,000 kg
The consume advice is supposing below:
Straightforward playative Alteration
Source WIP $4,000 $2,282
Incurred in February $48,000 $20,878
Calculate the consume catching quenched to refined consequence list and the estimate of the extent WIP.
3. Consume-Volume-Avail Analysis (15 marks)
The ABC union results couple performances. The communicateing line expects that the union
can regulate-of 1,000 individuals of recurrent performance and 1,100 individuals of dainty performance each month. The union provides the aftercited advice:
Individual sales absorb $210 $300
Individual ininvarioperative consume $110 $130
Monthly agricultural consume control FIVE machines portraitured to construction twain performances is $150,000. It captures 1
machine hour to result recurrent performance and 2 hours to result dainty performance. Each machine
has a accommodation of 600 hours/month.
a. What is the utmost avail that the union can gain in January?
b. The communicateing line figured quenched in January that the customers are gaining to buy
dainty performance at absorb $350. Should the union re-examine its performanceion scheme in February?
What would be the avail with the strange scheme?
4. ABC Problem (15 Marks)
The River Union constructions a multiplicity of prestige boardroom chairs. Its work-costing system
uses an ghost invetetrounce similarity. There are couple straightforward consume categories (straightforward playatives and straightforward
labour) and three unconnected consume pools. The consume pools regive the aftercited three activities.
Activities Budgeted consumes control
Consume driver portraitured as
Consume completionocation rebuke
Materials handling $200,000 Sunders $0.25
Cutting 2,000,000 Sunders 2.50
Assembly 2,000,000 Straightforward labour hours 25.00
Couple styles of chairs were resultd in February, 2011, the magisttrounce char and the manager chair.
Their quantities, straightforward playative consumes, and other facts control February are as follows:
Units resultd Straightforward playative
Number of sunders Straightforward labour
Magisttrounce Chair 5,000 $600,000 100,000 7,500
Manager Chair 100 25,000 3,500 500
The upstream activities to manufacturing (R&D and sketch) and downstream activities
(marketing, classification, and customer benefit) are analyzed, and the individual consumes control these activities
Upstream Activities Downstream Activities
Magisttrounce Chair $60 $110
Manager Chair 146 236
The straightforward manufacturing labour rebuke is $20 per hour. Assume no source or extent list.
1) Compute the individual manufacturing consumes of the magisttrounce chair and the manager chair.
Magisttrounce Chair Manager Chair
2) The union regulate-ofs the magisttrounce chair at the absorb $500 and the manager chair at the absorb $1,200. What is the avail control the union in February?