Financial Accounting and Cost Accounting Online Exam Solution

This document presents a comprehensive solution to an online finance exam, focusing on cost accounting and financial accounting principles. The solution addresses various aspects, including variance analysis (material price and quantity, labor rate and efficiency, and variable overhead variances), make-or-buy decisions, and flexible budget performance reports. It also includes answers to multiple-choice questions covering topics such as relevant costs, spoilage, practical capacity, flexible budgeting, management by exception, and product costing. The document provides detailed calculations and explanations for each problem, offering a complete understanding of the concepts and methodologies involved. This solution is designed to help students prepare for similar exams and understand key financial accounting and cost accounting principles.

Online Exam

TABLE OF CONTENTS
INTRODUCTION......................................................................................................................3
MAIN BODY.............................................................................................................................3
CONCLUSION..........................................................................................................................3
REFERENCES...........................................................................................................................4

Q1.
Bemino Pool
1.
a.
Material price variance = 22050 Favorable
Material quantity variance = 900 Favorable
b. labor rate variance = 35700 U
Labor efficiency variance = 8900 U
c.
variable overhead spending = $2364 U
variable overhead efficiency variance = $340 F
Q 2.
Trainor Machines LLC
Particulars
Keeping the existing
machine
Replacin
g the
existing
machine
Operating cost 553000 276500
Additional maintenance
expenses 378000
Total cost 931000 276500
Total savings 654500
Sales value 124500 0
Loss on sale 124500 0
Based upon the above, it is better for controller to undertake alternative 2 of replacing the
machine as it will help in saving the total operating cost of 654500 in 7 years through which
it can again purchase the new machine.
Q3 Mittal and Singh Ltd
Net benefit of making the game boards = $14416.67 per month
Make
4. Midland Manufacturing Inc.
Matoika Marine
Flexible budge performance report
For the month ended August 31
Cost formula (per
unit)
Actua
l
Spending or budget
variance
Flexible
budget
Static
budget

Activity level (units)
750 600 750 600
Variable cost
Medical supplies 9500 7560 1940 U 9375 7560
Emmission tests 6630 6300 330 U 7875 6300
Other variable
expenses 1490 1200 290 U 1500 1200
Administrative
expenses 430 300 130 U 375 300
Total variable cost
1805
0 15360 2690 U 19125 15360
Fixed costs
Staff salaries
1300
0 13000 - 13000 13000
Equipment
depreciation 3100 2650 450 U 2650 2650
rent 1300 1300 - 1300 1300
Utilities 600 515 85 U 515 515
Total fixed cost
1800
0 17465 535 U 17465 17465
Total cost
3605
0 32825 3225 U 68875 32825
5.
b. $38
6.
b. $26,800
7.
d. 11,000 minutes
8.
a. Re-machine and $5000
9.
d. Future costs that differ between alternatives are relevant costs
10.
b. Spoilage
11.
a. Practical
12.
c. flexible
13.

c. When material is purchased
14.
d. management by exception
15.
a. Labor rate
16.
d. $250 U
17.
a. Product B
18.