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HRM 590 Human Resource Management Final Exam Both sets Complete Answer

HRM 590 Human Resource Management Final Exam Set 1 and set 2 Complete Answer

Set 1

1. (TCO A) Many people still believe that companies care little about human resource management compared to other revenue-generating departments. Explain why companies have this perception. Describe how you would convince the company’s leadership of the value of HRM. (Points: 30)

2. (TCO B) If an employer asked you to review an employment decision to determine whether discrimination had occurred, identify the factors you would consider in that decision and describe how you would evaluate them. (Points: 30)

3. (TCO C) Many believe that good pay and good management result in union avoidance. Describe the policies and practices companies should develop to avoid unionizing. Explain how these practices might be less costly than unionized labor. (Points: 30)

4. (TCO D) In developing human resource strategies, businesses face several important challenges. Identify and describe four of these challenges. Link these challenges back to the HRM department’s strategy plan. (Points: 30)

5. (TCO G) From a general human resource standpoint, describe what you would include in a benefits strategy. Describe the value of a benefits strategy for employees and the business. (Points : 30)

6. (TCO H) Explain how human resource technology can improve efficiency and effectiveness of HRM functions. How, specifically, can technology support the business? Provide an example. (Points: 40)

Question 7. (TCO F) Evaluate the importance of measuring training effectiveness on performance and in terms of return on investment (ROI). Share an example of how you would measure training effectiveness. (Points : 30)

Question 8. (TCO G) Employee recognition programs can enhance employee performance by showing that the business is willing to reward them for their efforts. Describe how team-based recognition programs have driven improved individual results. Explain the value it has brought to the business and the employees. (Points : 30)
Question 9. (TCO H) Discuss two major trends in human resource technology and the ways in which they are transforming the HRM function. Be sure to provide examples of each. (Points : 40)

Set 2

1. (TCO A) HRM has never been a revenue-generating department. However, many companies are seeing the value in collaborating with HRM based on a strategic focus. Explain how HRM is now considered a strategic partner in most companies and provide an example of this strategic alliance.

Question 2. 2. (TCO B) Describe the difference between human resources as a back-office support function and strategic human resource management. Discuss two strategic HR methods for recruitment.

Question 3. 3. (TCO C) Describe four potential HRM risks related to employment laws.

Question 4. 4. (TCO D) As the new human resource manager at Hardwick’s Fabric Store, which is a retail chain, you have been tasked to develop an HRM plan. What external factors are important for you to consider and why? (Points : 30)

Question 5. 5. (TCO E) Part of strategic staffing is ensuring that HRM hires the right person/skills the first time. This is completed through strategic planning as well as an efficient selection process. Describe three selection methods used to assess knowledge, skills, and abilities (KSAs) for candidates. Explain how those selection methods will maximize finding the right candidate.

Question 6. 6. (TCO F) Evaluate the importance of measuring training effectiveness on performance and in terms of return on investment (ROI). Share an example of how you would measure training effectiveness.

Question 7. 7. (TCO G) Employee recognition programs can enhance employee performance by showing that the business is willing to reward them for their efforts. Describe how team-based recognition programs have driven improved individual results. Explain the value it has brought to the business and the employees.

Question 8. 8. (TCO H) Discuss two major trends in human resource technology and the ways in which they are transforming the HRM function. Be sure to provide examples of each. (Points : 40)

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HRM 590 final exam

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ACCT 567 Week 8 Final Exam All Complete A+ Answer

ACCT 567 Week 8 Final Exam All Complete A+ Answer

ACCT 567 Week 8 Final Exam All Complete A+ Answer

1. (TCO A) On what should the government-wide financial statements report? (Points : 5)
Net position and results of the financial operations of the government as a whole.
Budgetary Compliance
The cost of government services
Fiscal accountability

2. (TCO B) According to GASB standards, when should transfers be recognized? (Points : 5)
When earned.
When collected in cash.
When authorized by the budget ordinance.
In the period the interfund receivable and payable arise.

3. (TCO C) Comparisons of budgeted versus actual revenues and expenditures are a requirement of which of the following situations? (Points : 5)
Required by GAAP for the general fund and major special revenue funds for which an annual budget has been legally adopted.
Required by GAAP for all government fund types.
Required by GAAP for internal management reports only, they are not permitted for external financial reporting.
It is optional under GASB standards for all funds.

4. (TCO D) The revenues account of a government entity is debited when (Points : 5)
the budget is recorded at the beginning of the year.
property taxes are recorded.
the account is closed to fund balance-unassigned at the end of the year.
property taxes are collected.

5. (TCO E) During the year, a wealthy local businessman donated a building to city of Perris. The original cost of the building was $340,000. Accumulated depreciation at the date of the gift amounted to $220,000. The appraised fair market value of the donation at the date of the gift was $525,000 of which $35,000 was the value of the land on which the building was situated. At what amount should the city record this donated property in the governmental activities accounts at the government-wide level? (Points : 5)
$220,000.
$120,000.
$340,000.
$525,000.

6. (TCO E) Which of the following resource inflows would be recorded as a revenue of a debt service fund? (Points : 5)
Receipt of the premium on a new bond issue.
Property taxes levied by the debt service fund for debt service purposes.
Taxes collected by the General Fund and transferred to the debt service fund.
Transfer of the residual equity of a capital projects fund to the debt service fund.

7. (TCO G) Which of the statements concerning agency funds is a true statement? (Points : 5)
Agency funds use the same basis of accounting as permanent funds.
Agency funds are reported only on the statement of fiduciary net position.
Agency funds use the temporary accounts—Additions and Deductions.
Agency funds never receive cash.

8. (TCO J) Which of the following items are typically reported differently between the governmental fund statements and the governmental activities column of the government-wide statements? (Points : 5)
Inventories
Cash collected on property taxes receivable
Capital outlays
Accounts Payable and other accrued expenses

9. (TCO H) A condition whereby the design or operation of a control does not allow management or employees in the normal course of performing their assigned functions, to prevent or detect and correct misstatements on a timely basis is called a(an) (Points : 5)
system design weakness.
deficiency.
unacceptable reportable condition.
audit alert item.

10. (TCO H) Under FASB Standards, how would a not-for-profit organization recognize a conditional pledge? (Points : 5)
It would disclose the amount of the conditional pledge in the notes to the financial statements.
It would debit Pledges Receivable and credit Deferred Contributions.
It would debit Pledges Receivable and credit Contributions—Temporarily Restricted.
It would not recognize the conditional pledge until pledge conditions are substantially met.

11. (TCO I) Which of the following items would not affect the amounts reported in the Revenues and Gains section of the statement of activities for a private college or university? (Points : 5)
Student tuition and fees
Net assets released from restriction
Tuition and fees discounts and allowances
Deferred revenues

12. (TCO I) The primary source of revenues for most hospitals are (Points : 5)
investment income.
capitation fees from health maintenance organizations.
exchange transactions, such as fees for services.
nonexchange transactions, such as contributions.

Page 2

1. (TCOs D, E, F, and G) Please list the name of the fund(s) in which each of the following transactions or events would be recorded.

(1) Bonds of $1,000,000 from which the proceeds are to be used for the construction of a new City Hall building.
(2) Salaries of $170,000 were paid to personnel in the office of the mayor.
(3) Installment payments of $75,000 were received from the property owners that were assessed for the street improvement project.
(4) Over $65,000 of funds were received by employees by payroll deductions that are to be used for the purchase of United States Government Bonds for those employees on an individual basis.
(5) Materials of $140,000 were to be used for the general repair of the streets that were purchased by the city.
(6) Excess funds of $60,000 were transferred from the water utility to the General Fund. (Points : 30)

2. (TCO F) The garbage collection of the city of Rockwell could be accounted for through the General Fund, a Special Revenue Fund, or an Enterprise Fund. Please identify the circumstances in which each of these fund types might be appropriate. (Points : 40)

3. (TCO I) During the fiscal year of June 2012, Jefferson General Hospital, a not-for-profit healthcare organization, had the following revenue-related transactions. (The amounts are summarized for the entire year.)

(1) Healthcare services that are provided to inpatients and outpatients amounted to $9,640,000, of which $420,000 were for charity cases, $865,000 was paid by uninsured patients, and $8,355,000 was billed to Medicare, Medicaid, and other insurance companies.
(2) Pharmaceutical drugs and medicines sold by the hospital pharmacy amounted to $830,000, all of which was paid by the customer or the insurance companies.
(3) Medicare, Medicaid, and third-party payors (insurance companies) approved and paid $5,640,000 of the $8,355,000 billed by the hospital during the year (please review transaction #1).
(4) A contribution of $4,000,000 (of which is unconditional) was received in cash from a donor to construct a new facility for cancer patients. The full amount is expendable for that purpose. No activity has taken place during the current year.
(5) A total of $810,000 was received from the following activities/sources: cafeteria and gift shop sales, $630,000, unrestricted transfers from the Claremont Hospital Foundation, $110,000, and fees for medical transcripts, $70,000.
(6) The allowance for uncollectible receivables was increased by $1,350.

Enter the templates provided in the answer space and complete the following requirements:
Requirements:
a. Record the preceding transactions in general journal form.
b. Prepare the unrestricted revenues, gains, and other support section of Jefferson General Hospital’s statement of operations for the current year.

Templates:
Part A
……………………………………………………………………………..Debit…………………….. Credit
a. Cash
Accounts and Notes Receivable
Patient Service Revenue

b. Cash
Other revenues

c. Cash
Contractual adjustments
Accounts and Notes Receivable

d. Cash
Contributions-Temporarily Restricted

e. Cash
Other revenues

f. Provision for Bad Debts
Allowance for Uncollectible Receivables

Part B
Unrestricted Revenues, Gains, and Other Support:

Net Patient Service Revenue $ xxx
……………………..Other revenues xxx (Points : 40)

4. (TCO E) Enter the template provided in the answer space and record the following transactions in the Capital Projects Fund in the general journal for the following transactions.

a. McDowell County issued $4,000,000, 5% bonds with interest payable on a semiannual basis on July 1 and January 1. The bonds sold for 102 on July 30, 2012. Proceeds from the bond issue were to be used for construction of the new sheriff station with all interest and premiums received to be used to service the debt issue.
b. A state grant of $250,000 was received to help finance the construction of the sheriff station.
c. The General Fund transferred $300,000 for use in the construction of the new sheriff station.
d. A federal grant of $500,000 was received to help finance the construction of the new sheriff station.
e. A construction contract was awarded to the Young Construction Company in the amount of $4,750,000.
f. The new sheriff station was completed on May 1, 2013, three months ahead of schedule. The construction expenditures amounted to $4,870,000. When the project was completed, the cost of the sheriff station was allocated to the following, $310,000 for land, $4,180,000 for the building, and the remainder to equipment.
g. The temporary accounts of the capital projects were closed to Fund Balance-Restricted. The amounts are restricted due to the bond issue that is related to the construction of the sheriff station. The capital projects fund will be closed by transferring remaining funds to the debt service fund for repayment.

Template:

Capital Project Fund (only) ……………………………………….debit………………………. credit

a. Cash
Other Financing Sources-Bond Proceeds

b. Cash
Revenues

c. Cash
Other Financing Sources-Transfer In

d. Cash
Revenues

e. Encumbrances
Reserve for Encumbrances

f. Construction Expenditures
Cash
Reserve for Encumbrances
Encumbrances

g. To close the temporary accounts:
Other Financing Sources-Bond Proceeds
Other Financing Sources-Transfers In
Revenues
Construction Expenditures
Fund Balance-Restricted

To close the Capital Projects Fund:
Other Financing Uses-Transfers Out
Cash
Fund Balance-Restricted
Other Financing Uses-Transfers Out

(Points : 40)

5. (TCO F) The following Statement of Cash Receipts and Disbursements was prepared by the bookkeeper of the City of Glass City Museum of Science. The museum is a component unit of the City of Glass City and must be included in the city’s financial statements. It began operations on January 1, 2012 with no liabilities or commitments and only two assets.

(1) $6,000 in cash and (2) Land that was acquired for $11,000.

Cash Basis
12 months
Cash Receipts:
Admission Fees $295,000
Loan from the Bank $50,000
Total deposits $345,000

Cash Disbursements:
Supplies $62,000
Wages 104,000
Utilities 48,000
Purchase of Equipment 70,000
Purchase of Fixtures 45,000
Interest on the Bank Loan 1,250
Total checks $330,250

Excess of Receipts Over Disbursements $14,750

Additional Information:

• The loan from the bank is dated April 1 and is for a five-year period. Interest (5% annual rate) is paid on Oct. 1 and April 1 of each year, beginning Oct. 1, 2012.
• The equipment was purchased on April 1, 2012 with the proceeds provided by the bank loan and has an estimated useful life of 10 years (please use the straight-line method of depreciation) for computing depreciation on the equipment. The fixtures were purchased on July 1, 2012 and has an estimated useful life of five years (please use the straight-line method of depreciation) for computing depreciation on the fixtures.
• Supplies on-hand amounted to $5,900 at December 31, 2012.
• All other bills and salaries related to 2012 had been paid by the close of business on December 31.

Required:
Enter the template provided in the answer space and complete the following requirements:
Please prepare a Statement of Revenues, Expenses, and Changes in Net Assets for the year ended December 31, 2012 assuming the city plans to account for its activities on the accrual basis.

Template:

Operating Revenues:
Charges for Services $

Operating Expenses:
Wages $
Supplies ($62,000-5,900)
Utilities
Depreciation ($70,000/10*9/12)
+ ($45,000/5*6/12)
Total Operating Expenses

Operating Income (Loss) $

Nonoperating Expenses:
Interest $1,250 + ($50,000*5%*3/12)

Change in Net Assets
Net Assets, Jan. 1, 2012
Net Assets, Dec. 31, 2012

(Points : 40)

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ACCT 567 Week 8 Final Exam All Complete A+ Answer

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GSCM 588 Managing Quality Week 8 Final Exam Complete Detailed A+ Answer

GSCM 588 Managing Quality Week 8 Final Exam Complete Detailed A+ Answer

GSCM 588 Managing Quality Week 8 Final Exam Answer

1. Question : (TCO E) Suggested reasons why many customer satisfaction efforts fail include all of the following EXCEPT:

Student Answer: using poor satisfaction measurement schemes

failing to weight quality dimensions equally

confusing loyalty with satisfaction

failing to identify appropriate quality dimensions

2. Question : (TCO D) Factors that should be considered when selecting Six Sigma projects include the following EXCEPT:

Student Answer: financial return.

impacts on customers and organizational effectiveness.

fit to existing government legislation(s) on quality.

probability of success.

3. Question : (TCO C) In a service context, lean production
is referred to as:

Student Answer: lean operation.

lean enterprise.

lean process.

lean service.

4. Question : (TCO C) Poka-yoke is:

Student Answer: an approach for mistake-proofing processes.

a Japanese organizational hierarchy.

an error-detection machine used in engineering industries.

a computer program used in streamlining processes.

5. Question : (TCO B) Marketplace performance indicators could include all of the following EXCEPT:

Student Answer: measures of business growth.

new product and geographic markets entered.

percentage of new product sales as appropriate.

customer surveys on product and service performance.

6. Question : (TCO I) A machined part is returned to the drilling department for rework. The additional labor that is used to correct the quality problem with the part is:

Student Answer: a prevention cost.

an appraisal cost.

an internal failure cost.

an external failure cost.

7. Question : (TCO A) _____ focuses on the elimination of waste in all forms, including defects requiring rework, unnecessary processing steps, unnecessary movement of materials or people, waiting time, excess inventory, and overproduction.

Student Answer: Lean approach

Six Sigma

Deming Quality Circles

Kaizen

8. Question : (TCO B) Robert Kaplan and David Norton developed a balanced scorecard which had four perspectives. Which one of the following is NOT one of them?

Student Answer: Financial

Industry

Customer

Innovation and Learning

9. Question : (TCO D) The Baldrige Award criteria, as a tool for self-assessment:

Student Answer: can be useful for firms never intending to apply for the award.

is most useful to firms intending to apply for the award.

is of little value if the firm has already applied for the award.

is of little value if the firm has already won the award.

10. Question : (TCO H) Focusing on how to maintain improvements occurs in which DMAIC phase?

Student Answer: Measure

Analyze

Improve

Control

Page: 1 2

1. Question : (TCO B) Explain why it is difficult to obtain a single, universal definition of quality. Be specific in your response.

2. Question : (TCO I) Define benchmarking. Identify the three major types of benchmarking, discuss their purposes and provide examples. Be specific in your response.

3. Question : (TCO G) Discuss the three major reasons why companies adopt total quality. Also, discuss the initial key steps are involved in the adoption process.

4. Question : (TCO F) Explain in detail why change is necessary in organizations. Describe the effects that change can have on quality management with respect to employee commitment and quality levels.

5. Question : (TCO H) Describe the six basic steps required to build the House of Quality. Describe, in general, where in the House are customer and technical requirements located. Also explain why it is important that each area of the House is “linked” with the others.

6. Question : (TCO C) Explain the concepts of lean production. Describe its relation to Six Sigma. Please provide examples of the pros and cons for linking them.

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PROJ 595_Project Risk Management_Week 8 Final Exam Complete A+ Answer

PROJ 595_Project Risk Management_Week 8 Final Exam Complete A+ Answer

PROJ 595_Project Risk Management_Week 8 Final Exam Complete A+ Answer

Question 1. (TCOs A and B) An EVM analysis employs which factors to evaluate risks? (Points : 5)
Risk and impact
Probability and urgency
Impact and probability
Decision trees and reliability of data

Question 2. (TCO G) You have completed all design drawings and have a complete scope for your project. You need to hire a contractor to build the product to your designs. Which type of contract would be best in this situation? (Points : 5)
FPEPA
T&M
CPIF
FP
Question 3. (TCO D) In which risk response strategy is the responsibility for the risk moved to a third party? (Points : 5)
Transference and sharing
Exploitation and avoidance
Acceptance and enhancement
Mitigation and active acceptance

4. (TCOs A and B) You have been appointed as a project manager for a high-dollar project for a government agency, and you have been asked by your boss to identify the stakeholder groups and the individuals who make up those groups in order to start the stakeholder analysis. Identify at least six groups of stakeholders and the individuals who comprise those groups, and explain when the stakeholder identification process should take place during the planning of the project. (Points: 20)

5. (TCO B) Due to globalization within your industry, you have been appointed as the project manager for an R & D project. Your task is to create a new technologically advanced solar cell. You want to employ the PMBOK® Guide risk management process. Senior management would like you to briefly describe the process and all its steps. Please create a short briefing for senior management below. (Points : 40)

6. (TCO I) You are the project manager on a critical project for your corporation. You have decided to employ fault-tree analysis on your project. What is fault-tree analysis, and how can it be applied to your project? (Points : 25)

7. (TCO H) Senior management is concerned about risk owners on your project. What is the role of a risk owner in the risk management process? (Points: 20)

8. (TCO F) You are a project manager for a large healthcare R & D project. Senior management has asked you to utilize a sensitivity analysis and a tornado diagram to quantify risks on your project. Senior management’s major concern is the price of raw materials in the development of the new drug. Describe how to perform a sensitivity analysis and use a tornado diagram to quantify risks to your project. (Points : 25)

9. TCO G) Describe and discuss when one should use an FPEPA contract. Compare and contrast this to a typical FP contract. (Points: 20)

10. (TCO E) Senior management has just returned from a risk management workshop. One of the topics was reserve analysis. Management does not completely understand the concept and asks you what the purpose is of performing reserve analysis during the risk management process. (Points : 20)

11. (TCO D) You are the project manager for an important healthcare project. You are performing qualitative risk analysis. Below are the values of probability and impact for the top six risks that were given to you by project team. Assuming a neutral stakeholder tolerance, which risks must be addressed proactively if possible?(Points : 25)

12. TCO C) You are the project manager for a large health information technology project. You are confronted with an important decision on your project: How much scenario testing is appropriate for this project? Employ decision tree analysis to provide senior management with the best course of action for this decision.
For this decision, you have three possible choices: no scenario testing of the design, moderate scenario testing of the design, or full scenario testing of the design. No scenario testing will incur no additional costs due to testing and has a 10% chance of a successful implementation. If it is unsuccessful, rework costs are likely to be $30 million. Moderate scenario testing will cost $5 million and has a 50% chance of success. If it is unsuccessful, rework costs are likely to be $30 million. Full scenario testing will cost $10 million and has a 90% chance of success. If it is unsuccessful, rework costs are likely to be $30 million. Which solution is appropriate for this project?

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PROJ 595_Project Risk Management_Week 8 Final Exam Complete A+ Answer

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PROJ 592 Proj Cost and Schedule Control Week 8 Final Exam Set 1_set 2 and set 3 A+ Answer

PROJ 592 Proj Cost and Schedule Control Week 8 Final Exam Complete A+ Set 1_set 2 and set 3 Answer

PROJ 592 Proj Cost and Schedule Control Week 8 Final Exam Complete A+ Set 1_set 2 and set 3 Answer

PROJ 592 Proj Cost and Schedule Control Week 8 Final Exam Complete A+ Set 1_set 2 and set 3 Answer

PROJ 592 Proj Cost and Schedule Control Week 8 Final Exam Complete A+ Set 1_set 2 and set 3 Answer

Proj 592 Week 8 Final Exam Answer

SET 1

Page: | 1 2 3 |
Question 1. | Question : | (TCO B) Estimating Procedures
(a) You are the project manager for a new high-rise office building. You are working on estimating the exterior landscaping for the new development. The landscaping requires the use of a special landscape stone. Based on recent experience, the most likely price for the material is $120.00/ton. However, the price for this stone is volatile, and the price fluctuates over time based on market conditions and material availability. The most optimistic price estimate is $100.00/ton, and the most pessimistic estimate is $200.00/ton. What is the expected price of the material?
(b) In addition to price fluctuations, you are also uncertain of how much of the material will be required for the project. Scope changes and site conditions will affect the amount of material actually needed. The most likely amount required is 36 tons. However, as little as 32 tons or as much as 44 tons might be required.What is the expected amount of the material needed for the project? Round to two decimal places.
(c) Using the estimates from (a) & (b) what is the expected cost for the material over the life of the project using the COMPLEX method?

Question 2. | Question : | (TCO B) Contingency Allowance:
You are a project manager for the development of Motorola’s new 4G, HD, Touch Screen Cell Phone which is supposed to take the cell phone industry by storm. Listed below are the initial cost estimates for the materials and labor for one of the phones:
ITEM | COST ESTIMATE | TYPE OF ESTIMATE |
Case | $15.00 | Order of Magnitude |
Handset | $12.00 | Definitive |
Labor | $2.00 | Definitive |
Speaker | $2.50 | Budget |
Mouthpiece | $5.50 | Budget |
Antenna | $1.70 | Definitive |
Keypad | $3.00 | Order of Magnitude |
Circuit boards (handset) | $6.50 | Budget |
Circuit boards (base unit) | $8.50 | Definitive |
Battery | $1.20 | Order of Magnitude |
Charger | $16.00 | Order of Magnitude |
Total cost | $73.90 | NA |
The estimating department currently defines estimate accuracy as follows:
Order of Magnitude | -25%, +75% |
Budget | -10%, +25% |
Definitive | -5%, +10% |

(a) What contingency cost budget do you recommend for the product?
(b) The target retail price for the new telephone is $165.00 per unit. The markup demanded by retailers is 50%. Based on cost factors, write a brief rationale for acceptance or rejection of the project, including any recommendations you have regarding the cost estimates.

Page: | 1 2 3 |

Question 3. | Question : | (TCO C) Work Breakdown Structure WBS
Eurocash has decided to develop a mutual fund comprised almost entirely of East European companies with a high growth potential. The process of developing a new mutual fund begins with concept development, which includes establishing a clear definition of the project’s objectives that is agreed upon by senior management and developing a marketing strategy.
* A business analysis is then performed that includes assessments of market feasibility, internal feasibility (budgetary resource requirements), and regulatory feasibility. * If the proposed fund passes the business analysis, the fund design is developed. * The design process consists of product design, service design, internal review and authorization, and SEC registration (assuming a U.S. market). * As the design process nears completion, generally recognized as a positive preliminary review by the SEC, employee training is performed. * After completion of the employee training and final regulatory approval, the product is launched, and post-launch reviews are conducted at predetermined intervals.

Prepare a work breakdown structure (WBS) for this project with activities corresponding to a two level task and sub-task hierarchy. Provide columns showing the WBS code and activities. Number and indent the WBS codes so that the level of each activity is clearly identified.

Question 4. | Question : | (TCO A) Budgeting processes and techniques
A company builds custom yachts for the high-end boating market. They develop and build these custom designs as a single individualized unit. The orders are generated by the marketing and sales department with help from the owners, who participate in the management of the company. Each new order is assigned to a project team which starts by making an estimate to the customer before a contract is signed. The project teams have a great deal of experience in these projects. As would be expected, the owners are hands-on and have opinions on the estimates. The marketing folks also provide suggestions on what the customer is willing to pay.
What are some processes and techniques that you would suggest to make the budgeting process work well? Start with general but also provide some specifics as relate to creating detailed project budgets. Be sure to justify why you think your recommendations will work.

Page: | 1 2 3 |
Question 1. | Question : | (TCO C) Schedule Crashing
Using the network below and the additional information provided, find:
(a) The crash cost per day per activity.
(b) Which activities should be crashed to meet a project deadline of 13 days at minimum cost? State the number of days you will crash each activity.
(c) What is the additional cost to crash the project?
Critical path = B-C-D = 14
Activity | Normal time | Normal total cost | Crash time | Crash total cost |
A | 5 | 300 | 3 | 380 |
B | 3 | 250 | 1 | 330 |
C | 6 | 400 | 4 | 700 |
D | 5 | 150 | 3 | 250 |

Question 2. | Question : | (TCO E) Responsibility Assignment Matrix
Projects often cross many functional boundaries with team members reporting to different functional managers. This cross functional aspect can create problems with roles and responsibilities. You decide to use a Responsibility Assignment Matrix (RAM) to help with this situation. Your manager is wondering why you are spending your time on this tool when you already have resources assigned to tasks in your schedule.
(a) Why is the RAM such an effective tool for Project Managers?
(b) What are some of the typical responsibilities assigned on a RAM? |

Question 3. | Question : | (TCO E) Resource Allocation/Leveling
The following data were obtained from a project to expand a school: Activity | Duration | Predecessors | Resources / cost |
A | 2 Weeks | — | 2 Excavators/$800 day each |
B | 3 Weeks | — | 2 Dump Trucks/$600 day each |
C | 2 Weeks | B | 2 Concrete Mixers/$250 day each |
D | 3 Weeks | A, C | 2 Cranes/$2,000 day each |
E | 2 Weeks | B | 1 High-lift/$500 day each |
F | 1 Weeks | B | 2 Excavators/$800 day each |
G | 3 Weeks | F | 2 Cranes/$2,000 day each |
The contractor has access to the listed quantity of machines of each type available at the listed cost ‘each’. The operations cannot be split. Additional equipment can be rented at a 50% cost premium if needed.
(a) Identify any resource conflicts in the above project. State the activities involved, the time frame of the conflict(s), the resources in conflict and the quantity of resource involved.
(b) What is the least cost method of resolving the conflict(s), assuming the project duration must not be extended? What additional cost, if any, will be incurred?

Page: | 1 2 3 |
Question 1. | Question : | (TCO G) Estimate At Completion forecast (EAC)
A project has been estimated to take eight weeks and cost $65,000. The critical path is A – D. Cost and earned value data are provided below:
| | EV | PV | | | AC | | | | Budget | BCWP | – BCWS | SV | SPI | – ACWP | CV | CPI |
A | $8,500 | $8,500 | $8,500 | $ – | 1.00 | $7,500 | $1,000 | 1.13 |
B | $15,000 | $15,000 | $15,000 | $ – | 1.00 | $13,000 | $2,000 | 1.15 |
C | $6,800 | $2,530 | $2,700 | ($170) | 0.94 | $4,000 | ($1,470) | 0.63 |
D | $18,000 | $900 | $3,000 | ($2,100) | 0.30 | $1,200 | ($300) | 0.75 |
E | $16,000 | $0 | $0 | $ – | | $0 | $ – | |
Project: | $64,300 | 26,930 | 29,200 | ($2,270) | 0.92 | $25,700 | $730 | 1.05 |
(i) Calculate the Estimate At Completion (EAC) considering future performance will be back on schedule and budget.
(ii) Calculate EAC considering that the project will continue to perform as it has to date.
(iii) Using either of these two numbers discuss the status of the project and if the project manager needs to take corrective actions. Justify your comments. |

Question 2. | Question : | (TCO F) Earned Value
The following data were obtained from a project to design a new software package: Activity | Duration | Predecessors | Budgeted Cost |
A | 3 Days | — | $8,320 |
B | 6 Days | — | $11,740 |
C | 4 Days | A | $11,550 |

D | 2 Days | C, B | $7,850 |
E | 3 Days | A | $10,750 |
F | 2 Days | D, E | $8,600 |
At the end of day 4, the status of the project is as follows: Activity | % Complete | Actual Cost |
A | 100% | $7,200 |
B | 80% | $10,370 |
C | 25% | $8,250 |
D | 0% | $0 |
E | 80% | $8,560 |
F | 0% | $0 |
(a) Calculate the Cost and Schedule Variances and Indexes (CV, SV, CPI, SPI) for tasks A, B, C, D, and E.
(b) Write a brief analysis of the status of the project at this time, including task level, project level, and critical path. |

SET 2

Final Exam Page 1
1. (TCO B) Estimating Procedures
(a) You are the project manager for a new high rise office building. You are working on estimating the exterior landscaping for the new development. The landscaping requires the use of a special landscape stone. Based on recent experience the most likely price for the material is $120.00/ton. However, the price for this stone is volatile, and the price fluctuates over time based on market conditions and material availability. The most optimistic price estimate is $80.00/ton, and the most pessimistic estimate is $180.00/ton. (Note there are 3 data points in for this estimate.)What is the expected price of the material?
(b) In addition to price fluctuations, you are also uncertain of how much of the material will be required for the project. Scope changes and site conditions will affect the amount of material actually needed. The most likely amount required is 36 tons. However, as little as 28 tons, and as much as 56 tons might be required.What is the expected amount of the material needed for the project?
(c) Using the estimates from (a) & (b), what is the expected cost for the material over the life of the project using the COMPLEX method?(Points : 30)

2. (TCO B) Contingency Allowance:
You are a project manager for the development of Motorola’s new 4G, HD, Touch Screen Cell Phone which is supposed to take the cell phone industry by storm. Listed below are the initial cost estimates for the materials and labor for one of the phones:
ITEM | COST
ESTIMATE | TYPE OF ESTIMATE |
Case | $10.00 | Order of Magnitude |
Handset | $12.00 | Definitive |
Labor | $2.00 | Definitive |
Speaker | $2.50 | Budget |
Mouthpiece | $5.50 | Budget |
Antenna | $1.70 | Definitive |
Keypad | $3.00 | Order of Magnitude |
Circuit boards (handset) | $6.50 | Budget |
Circuit boards (base unit) | $8.50 | Definitive |
Battery | $1.20 | Order of Magnitude |
Charger | $16.00 | Order of Magnitude |
Total | $68.90 | NA |
The estimating department currently defines estimate accuracy as follows:
Order of Magnitude | -25%, +75% |
Budget | -10%, +25% |
Definitive | -5%, +10% |
(a) What contingency cost budget do you recommend for the product?
(b) The target retail price for the new telephone is $165.00 per unit. The markup demanded by retailers is 75%. Based on cost factors, write a brief rationale for acceptance or rejection of the project, including any recommendations you have regarding the cost estimates. (Points : 30)

3. (TCO C) Work Breakdown Structure WBS
Eurocash has decided to develop a mutual fund comprised almost entirely of East European companies with a high growth potential. The process of developing a new mutual fund begins with concept development, which includes establishing a clear definition of the project’s objectives that is agreed upon by senior management and developing a marketing strategy.
* A business analysis is then performed that includes assessments of market feasibility, internal feasibility (budgetary resource requirements), and regulatory feasibility. * If the proposed fund passes the business analysis, the fund design is developed. * The design process consists of product design, service design, internal review and authorization, and SEC registration (assuming a U.S. market). * As the design process nears completion, generally recognized as a positive preliminary review by the SEC, employee training is performed. * After completion of the employee training and final regulatory approval, the product is launched, and post-launch reviews are conducted at predetermined intervals.
Prepare a work breakdown structure (WBS) for this project with activities corresponding to a two level task and sub-task hierarchy. Provide columns showing the WBS code and activities. Number and indent the WBS codes so that the level of each activity is clearly identified. (Points : 30)

4. (TCO A) Budgeting processes and techniques
A company builds custom yachts for the high-end boating market. They develop and build these custom designs as a single individualized unit. The orders are generated by the marketing and sales department with help from the owners, who participate in the management of the company. Each new order is assigned to a project team which starts by making an estimate to the customer before a contract is signed. The project teams have a great deal of experience in these projects.
As would be expected, the owners are hands-on and have opinions on the estimates. The marketing folks also provide suggestions on what the customer is willing to pay.
What are some processes and techniques that you would suggest to make the budgeting process work well? Start with general but also provide some specifics as relate to creating detailed project budgets. Be sure to justify why you think your recommendations will work. (Points : 30)

Page: 1 2 3 |
1. (TCO C) Schedule Crashing
Using the network below and the additional information provided, find:
(a) The crash cost per day per activity.
(b) Which activities should be crashed to meet a project deadline of 13 days at minimum cost? State the number of days you will crash each activity.
(c) What is the additional cost to crash the project?
Critical path = B-C-D = 14
Activity | Normal time | Normal total cost | Crash time | Crash total cost |
A | 5 | 300 | 3 | 380 |
B | 3 | 250 | 1 | 330 |
C | 6 | 400 | 4 | 700 |
D | 5 | 150 | 3 | 250 |
(Points : 30)

2. (TCO E) Responsibility Allocation Matrix
Projects often cross many functional boundaries with team members reporting to different functional managers. This cross functional aspect can create problems with roles and responsibilities. You decide to use a Responsibility Assignment Matrix (RAM) to help with this situation. Your manager is wondering why you are spending your time on this tool when you already have resources assigned to tasks in your schedule.
(a) Why is the RAM such an effective tool for Project Managers?
(b) What are some of the typical responsibilities assigned on a RAM? (Points : 30)

3. (TCO E) Resource Allocation/Leveling
The following data were obtained from a project to design a new software package: Activity | Duration | Predecessors | Personnel / Cost |
A | 3 days | — | 1 Systems Analyst/$260 day |
B | 6 days | — | 3 Programmers/$200 day each |
C | 4 days | A | 3 Programmers/$200 day each |
D | 2 days | C | 2 Hardware specialists/$230 day each |
E | 3 days | A | 1 Systems Analyst/$260 day |
F | 2 days | D, E | 1 Test Engineer/$300 day |
Personnel Available | Quantity |
Systems Analysts | 1 |
Programmers | 3 |
Hardware Specialists | 2 |
Test Engineers | 2 |
The software manufacturer has only the above personnel available for the project. Additional personnel can be hired from an agency at an 80% cost premium if needed.
(a) Identify any resource conflicts in the above project. State the activities involved, the time frame of the conflict(s), the personnel in conflict, and the number of people involved.
(b) Note that operations can be split if required: what is the least cost method of resolving the conflict(s), assuming the project duration must not be extended? What additional cost, if any, will be incurred? (Points : 30)

Page: 1 2 3
Page 3
1. (TCO G) Estimate At Completion forecast (EAC)
A project has been estimated to take eight weeks and cost $65,000. The critical path is A – D. Cost and earned value data are provided below: | | EV | PV | | | AC | | |
| Budget | BCWP | – BCWS | SV | SPI | – ACWP | CV | CPI |
A | $8,500 | $8,500 | $8,500 | $ – | 1.00 | $7,000 | $1,500 | 1.21 |
B | $15,000 | $15,000 | $15,000 | $ – | 1.00 | $13,000 | $2,000 | 1.15 |
C | $6,800 | $2,530 | $2,700 | ($170) | 0.94 | $4,000 | ($1,470) | 0.63 |
D | $18,000 | $900 | $3,000 | ($2,100) | 0.30 | $1,200 | ($300) | 0.75 |
E | $16,000 | $0 | $0 | $ – | | $0 | $ – | |
Project: | $65,000 | 26,930 | 29,200 | ($2,270) | 0.92 | $25,200 | $ 730 | 1.07 |
(i) Calculate the Estimate At Completion (EAC) considering future performance will be back on schedule and budget.
(ii) Calculate EAC considering that the project will continue to perform as it has to date.
(iii) Using either of these two numbers discuss the status of the project and if the project manager needs to take corrective actions. Justify your comments.(Points : 30)

2. (TCO D) PMIS and cost accounting
An Earned Value system can be a very effective way to monitor projects. However, Earned Value Analysis requires a Project Cost Accounting System (PCAS).
(a) What are some of the benefits of PCAS?
(b) What are some of the software solutions for establishing a PCAS? (Points : 30)

3. (TCO F) Earned Value
The following data were obtained from a project to design a new software package: Activity | Duration | Predecessors | Budgeted Cost |
A | 3 Days | — | $8,320 |
B | 6 Days | — | $11,740 |
C | 4 Days | A | $11,550 |
D | 2 Days | C, B | $7,850 |
E | 3 Days | A | $10,750 |
F | 2 Days | D, E | $8,600 |
At the end of day 5, the status of the project is as follows: Activity | % Complete | Actual Cost |
A | 100% | $7,200 |
B | 50% | $6,370 |
C | 25% | $8,250 |
D | 0% | $0 |
E | 80% | $8,560 |
F | 0% | $0 |
(a) Calculate the Cost and Schedule Variances and Indexes (CV, SV, CPI, SPI) for tasks A, B, C, D, and E.
(b) Write a brief analysis of the status of the project at this time, including task level, project level, and critical path.(Points : 30)

Set 3

Week 8 : Final Exam – Final Exam

Page 1

Question 1. 1. (TCO A) Work Breakdown Structure (WBS)

A consumer electronics firm is planning an expansion into Milwaukee. Generally, the firm prefers to remodel large existing tenant spaces to suit its needs. After a site is selected from several alternatives, the corporate architect develops plans by reviewing the suitability of the existing structure and utilities. A modification and demolition plan is then developed. Interior finish plans are then developed from corporate standards and adjusted to each site.

• Building permits are handled by the general contractor (GC). The firm uses the GC for all of its construction in a region. The GC hires local subcontractors and provides on-site construction supervision.
• As construction begins, the firm also begins to assemble a new management team from existing management staff, making an attempt to use only staff that has an interest in relocating. Sales staff is hired locally.
• When construction is approximately 6 weeks from completion, inventory is ordered.

Prepare a WBS for this project with activities corresponding to a two-level task and subtask hierarchy. Provide columns showing the WBS code and activities. Number and indent the WBS codes so that the level of each activity is clearly identified. (Points : 25)

Question 2. 2. (TCO E) Using the network below and the additional information provided, find answers to the following questions.

(a) What is the crash cost per day per activity?
(b) Which activities should be crashed to meet a project deadline of 13 days at minimum cost? State the number of days you will crash each activity.
(c) What is the additional cost to crash the project?

Critical path = B-C-D = 15

Activity Normal time Normal total cost Crash time Crash total cost
A 4 $300 3 $360
B 3 $250 1 $330
C 7 $400 4 $550
D 5 $150 3 $250
(Points : 25)

Question 3. 3. (TCO E) There are many stakeholders and participants in projects, and they often get confused as to who is doing what. You decide to use an RACI to help with this situation. Your manager is wondering why you are spending your time on this tool when you already have resources assigned to tasks in your schedule.

(a) What do you tell management to justify your time creating the RACI?
(b) What are the best ways to create the RACI? (Points : 25)

Page 2

Question 1. 1. (TCO F) Earned Value

The following data were obtained from a project to design a new software package.
Activity Duration Predecessors Budgeted Cost
A 3 days — $8,320
B 6 days — $11,740
C 4 days A $11,550
D 2 days C and B $7,850
E 3 days A $10,750
F 2 days D and E $8,600

At the end of Day 5, the status of the project is as follows.
Activity % Complete Actual Cost
A 100% $7,200
B 50% $5,370
C 25% $8,250
D 0% $0
E 70% $8,560
F 0% $0

(a) Calculate the cost and schedule variances and indexes (CV, SV, CPI, SPI) for Tasks A, B, C, D, and E.

(b) Write a brief analysis of the status of the project at this time, including task level, project level, and critical path. (Points : 25)

Question 2. 2. (TCO C)
(a) You are the project manager for a new high-rise office building. You are working on estimating the exterior landscaping for the new development. The landscaping requires the use of a special landscape stone. Based on recent experience, the most likely price for the material is $120.00/ton. However, the price for this stone is volatile, and the price fluctuates over time based on market conditions and material availability. The most optimistic price estimate is $80.00/ton, and the most pessimistic estimate is $180.00/ton.
What is the expected price of the material? Round to two decimal places.

(b) In addition to price fluctuations, you are also uncertain of how much of the material will be required for the project. Scope changes and site conditions will affect the amount of material actually needed. The most likely amount required is 36 tons. However, as little as 28 tons or as much as 56 tons might be required.
What is the expected amount of the material needed for the project?

(c) Using the estimates from (a) and (b), what is the expected cost for the material over the life of the project? (Points : 25)

Question 3. 3. (TCO E) Resource Allocation and Leveling

The following data were obtained from an in-house MIS project.
Activity Duration Predecessors Personnel/Cost
A 3 days — One systems snalyst/$260 day
B 6 days — Two programmers/$200 day each
C 3 days A Two programmers/$200 day each
D 3 days B Two hardware specialists/$280 day each
E 3 days B One hardware specialist/$280 day
F 2 days C and D One test engineer/$300 day

Personnel Available Quantity
Systems analysts 1
Programmers 4
Hardware specialists 2
Test engineers 1

The software manufacturer has only the above personnel available for the project. Additional personnel can be hired from an agency at a 90% cost premium if needed.

(a) Identify any resource conflicts in the above project. State the activities involved, the time frame of the conflict(s), the personnel in conflict, and the number of people involved.

(b) Note that operations cannot be split. What is the least-cost method of resolving the conflict(s), assuming the project duration must not be extended? What additional cost, if any, will be incurred? (Points : 25)

Page 3

Question 1. 1. (TCO D) Change control is critical to a successful project. Describe the roles and responsibilities of two key components of a good change control process: the change control board and the project manager. (Points : 25)

Question 2. 2. (TCO G) Your project is progressing well in your estimation. Your team has collected the following data. From these data, calculate the project’s ETC. Assume spending will continue at the same rate.
Activity A is 60% complete at a cost so far of $100,000. It was estimated to cost $200,000 when finished. It is at the end of Week 3 of 5. Activity B is 85% complete at a cost so far of $50,000. It was estimated to cost $80,000 when finished. It is at the end of Week 4 of 5. Activity C is complete at a cost so far of $110,000. It was estimated to cost $100,000 when finished. (Points : 25)

Question 3. 3. (TCO B) You are the project manager for three different projects.

Project A: This project is behind schedule by 12 weeks. It was to have been completed in 3 months. The sponsor has additional funds to help complete the project on time if needed but does not want to increase risk to the project.
Project B: This project is scheduled to take 27 weeks to complete. You are in the planning stage of the project. You need to reduce the schedule for this project by 8 weeks. This project has a number of predecessors that were created by the project team’s preference. The sponsor insists on having all the work done on time without unduly increasing risk or costs to the project.
Project C: This project is in the execution stage of the project. It is behind schedule by 6 weeks; it was scheduled to be completed in 10 weeks. The sponsor is desperate to accomplish something on this project. The budget is limited to the original amount, and all soft predecessors have already been removed.

For each of the projects above, choose an appropriate schedule compression technique. Explain your choice. (Points : 25)

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BUSN 278 Budgeting and Forecasting Final Exam A+ Answer

Busn 278 Budgeting and Forecasting Final Exam_Answer

Busn 278 Budgeting and Forecasting Final Exam_Answer

Busn 278 Budgeting and Forecasting Final Exam.

1. (TCO 1) Which one of the following is not a benefit of budgeting? (Points : 5)

It facilitates the coordination of activities.
It provides definite objectives for evaluating performance.
It provides assurance that the company will achieve its objectives.
It provides early warning signs of potential threats.

2. (TCO 2) Which of the following is not a qualitative forecasting method? (Points : 5)

Executive opinions
Sales force polling
Delphi method
Classical decomposition

3. (TCO 3) Which of the following statements regarding the t-statistic is true? (Points : 5)

The t-statistic cannot be negative.
The t-statistic measures how many standard errors the coefficient is away from the independent variable.
The higher the t-value, the more confidence we have in the coefficient.
Low t-values indicate high reliability.

4. (TCO 4) Which of the following statements regarding the risk associated with R&D activities is incorrect? (Points : 5)

The amount of time between the R&D activity and the cash flows from the project does not affect risk.
Greater risk is associated with creating new products than improving existing products.
Risk increases as the time between the R&D activity and the cash flows from the project increases.
Assessing risk is a vital part of research and development.

5. (TCO 5) Program budgeting does not include: (Points : 5)

Controlling
Programming
Budgeting
Planning

6. (TCO 6) The payback period technique ___________ (Points : 5)

should be used as a final screening tool.
can be the only basis for the capital budgeting decision.
is relatively easy to compute and understand.
considers the expected profitability of a project.

7. (TCO 6) The profitability index is computed by dividing the ___________ (Points : 5)

total cash flows by the initial investment.
present value of cash inflows by the present value of each outflow.
initial investment by the total cash flows.
initial investment by the present value of cash flows.

8. (TCO 6) A company projects annual cash inflows of $85,000 each year for the next five years if it invests $300,000 in new equipment. The equipment has a five-year life and an estimated salvage value of

$75,000. What is the accounting rate of return on this investment? (Points : 5)

28.3%
13.3%
15%
43.3%

9. (TCO 6) If an asset costs $210,000 and is expected to have a $30,000 salvage value at the end of its ten-year life, and generates annual net cash inflows of $30,000 each year, the payback period is _____.

(Points : 5)

5 years
6 years
7 years
8 years

10. (TCO 6) Hyde Inc. is comparing several alternative capital budgeting projects as shown below:

Projects A B C

Initial Investment $110,000 $90,000 $50,000

Present value of cash inflows $100,000 $100,000 $60,000

Using the profitability index, rank the projects, starting with the most attractive. (Points : 5)

A, C, B.
A, B, C.
C, A, B.
C, B, A.

11. (TCO 6) Cleaners, Inc. is considering purchasing equipment costing $30,000 with a six-year useful life. The equipment will provide cost savings of $7,300 and will be depreciated straight-line over its

useful life with no salvage value. Cleaners requires a 10% rate of return. What is the approximate net present value of this investment? (Points : 5)

$13,800
$1,794
$886
$2,748

12. (TCO 7) Which of the following would not appear as a fixed expense on a selling and administrative expense budget? (Points : 5)

Freight-out
Office salaries
Property taxes
Depreciation

13. (TCO 7) A company budgeted unit sales of 102,000 units for January, 2008 and 120,000 units for February, 2008. The company has a policy of having an inventory of units on hand at the end of each

month equal to 30% of next month’s budgeted unit sales. If there were 30,600 units of inventory on hand on December 31, 2007, how many units should be produced in January, 2008 in order for the company

to meet its goals? (Points : 5)

107,400 units
102,000 units
96,600 units
138,000 units

14. (TCO 8) Standards that are based on efficient activity with allowances for unavoidable losses are called _______ (Points : 5)

basic standards.
maximum efficiency standards.
currently attainable standards.
expected standards.

15. (TCO 9) A static budget is appropriate for __________ (Points : 5)

variable overhead costs.
direct materials costs.
fixed overhead costs.
none of these.

16. (TCO 9) If the activity level increases 10%, total variable costs will ___________. (Points : 5)

remain the same
increase by more than 10%
decrease by less than 10%
increase 10%

17. (TCO 9) At the high level of activity in November, 7,000 machine hours were run and power costs were $12,000. In April, a month of low activity, 2,000 machine hours were run and power costs amounted

to $6,000. Using the high-low method, what is the estimated fixed cost element of power costs? (Points : 5)

$12,000
$6,000
$3,600
$8,400

18. (TCO 10) Which of the following statements regarding budget reports is incorrect? (Points : 5)

The cost of budget reports should not outweigh the benefits.
Budget reports are used for planning, control, and information.
Reports prepared for upper management typically have fewer details than reports prepared for lower-level managers.
Reports are prepared more frequently for upper management than for lower-level managers.

Page 2

1. (TCO 7) The first step in creating the master budget is the sales budget. Describe this budget and the information it includes. Why is the accuracy of the sales budget important? (Points : 20)

2. (TCO 9) Understanding how costs behave can help managers plan operations and choose between various courses of action.

Part (a) Identify and describe the three types of cost behavior, including examples of each Part.

Part (b) As a manager, which cost behavior would you prefer and why? (Points : 20)

3. (TCO 6) Yappy Company is considering a capital investment of $320,000 in additional equipment. The new equipment is expected to have a useful life of 8 years with no salvage value. Depreciation is computed by the straight-line method. During the life of the investment, annual net income and cash inflows are expected to be $25,000 and $65,000, respectively. Yappy requires a 10% return on all new investments.

Part (a) Compute each of the following:
1: Payback period.
2: Net present value.
3: Profitability index.
4: Internal rate of return.
5: Accounting rate of return.

(b) Indicate whether the investment should be accepted or rejected. (Points : 30)

4. (TCO 7) Roswell Company has budgeted sales revenue as follows for the next 4 months as follows:

February

$150,000

March

$120,000

April

$105,000

May

$165,000

Past experience indicates that 80% of sales each month are on credit and that collection of credit sales occurs as follows: 60% in the month of sale, 35% in the month following the sale, and 3% in the second month following the sale. The other 2% is uncollectible.

Prepare a schedule which shows expected cash receipts from sales for the month of May.

5. (TCO 8) Eastern Company’s budgeted and actual sales for 2009 were:

Product

Budgeted Sales

Actual Sales

A

35,300 units at $2.00 per unit

32,700 units at $2.60 per unit

B

27,900 units at $5.00 per unit

29,200 units at $4.70 per unit

Part (a) Calculate the sales volume variance.
Part (b) Calculate the sales price variance.
Part (c) Calculate the total sales variance.

6. (TCO 9) The Mays Clinic has the following monthly telephone records and costs:
Calls

Costs

2,000

$2,400

1,500

2,000

2,200

2,600

2,500

2,900

2,300

2,700

1,700

2,200

Identify the fixed and variable cost elements using the high-low method.

2. (TCO 9) Understanding how costs behave can help managers plan operations and choose between various courses of action.

Part (a) Identify and describe the three types of cost behavior, including examples of each.
Part (b) As a manager, which cost behavior would you prefer and why? (Points : 20)

3. (TCO 6) Yappy Company is considering a capital investment of $320,000 in additional equipment. The new equipment is expected to have a useful life of 8 years with no salvage value. Depreciation is

computed by the straight-line method. During the life of the investment, annual net income and cash inflows are expected to be $25,000 and $65,000, respectively. Yappy requires a 10% return on all new

investments.

Part (a) Compute each of the following:
1: Payback period.
2: Net present value.
3: Profitability index.
4: Internal rate of return.
5: Accounting rate of return.
(b) Indicate whether the investment should be accepted or rejected. (Points : 30)

4. (TCO 7) Roswell Company has budgeted sales revenue as follows for the next 4 months as follows:

February

$150,000

March

$120,000

April

$105,000

May

$165,000

Past experience indicates that 80% of sales each month are on credit and that collection of credit sales occurs as follows: 60% in the month of sale, 35% in the month following the sale, and 3% in the second

month following the sale. The other 2% is uncollectible.

Prepare a schedule which shows expected cash receipts from sales for the month of May.

5. (TCO 8) Eastern Company’s budgeted and actual sales for 2009 were:

Product

Budgeted Sales

Actual Sales

A 35,300 units at $2.00 per unit

32,700 units at $2.60 per unit

B 27,900 units at $5.00 per unit

29,200 units at $4.70 per unit

Part (a) Calculate the sales volume variance.
Part (b) Calculate the sales price variance.
Part (c) Calculate the total sales variance.

6. (TCO 9) The Mays Clinic has the following monthly telephone records and costs:

Calls Costs

2,000 $2,400

1,500 2,000

2,200 2,600

2,500 2,900

2,300 2,700

1,700 2,200

Identify the fixed and variable cost elements using the high-low method.

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ECO 365 Principles Of Microeconomics Final exam Correct Answers

ECO 365 Principles Of Microeconomics Final exam Correct Answers

ECO 365 Principles Of Microeconomics Final exam Correct Answers

ECO 365 Principles Of Microeconomics Final exam Correct Answers

ECO 365 Principles Of Microeconomics Final exam Correct Answers


ECO/365 Final Exam

1) An economist who is studying the relationship between the money supply, interest rates, and the rate of inflation is engaged in
A. microeconomic research
B. macroeconomic research
C. theoretical research, because there is no data on these variables
D. empirical research, because there is no economic theory related to these variables

2) A basic difference between microeconomics and macroeconomics is that microeconomics
A. focuses on the choices of individual consumers, while macroeconomics considers the behavior of large businesses
B. focuses on financial reporting by individuals, while macroeconomics focuses on financial reporting by large firms
C. examines the choices made by individual participants in an economy, while macroeconomics considers the economy’s overall performance
D. focuses on national markets, while macroeconomics concentrates on international markets

3) The distinction between supply and the quantity supplied is best made by saying that
A. the quantity supplied is represented graphically by a curve and supply as a point on that curve associated with a particular price
B. supply is represented graphically by a curve and the quantity supplied as a point on that curve associated with a particular price
C. the quantity supplied is in direct relation with prices, whereas supply is in inverse relation
D. the quantity supplied is in inverse relation with prices, whereas supply is in direct relation

4) After several years of slow economic growth, world demand for petroleum began to rise rapidly in the 1990s. Much of the increase in demand was met by additional supplies from sources outside the Organization of Petroleum Exporting Countries (OPEC). OPEC, during this time, was unable to restrain output among members in its effort to lift oil prices. What best describes these events?
A. The rise in demand shifted the demand for oil to the right. OPEC actions shifted the demand for oil back to the left.
B. The rise in demand shifted the demand for oil to the right. As price rose, the supply of oil also rose.
C. The rise in demand shifted the demand for oil to the right. As price rose, the quantity of oil supplied rose.
D. The rise in demand reflects a movement down along the demand curve as supply shifted to the right when suppliers produced more oil.

5) Price elasticity of demand is the:
A. change in the quantity of a good demanded divided by the change in the price of that good
B. change in the price of a good divided by the change in the quantity of that good demanded
C. percentage change in price of that good divided by the percentage change in the quantity of that good demanded
D. percentage change in quantity demanded of a good divided by the percentage change in the price of that good

6) If average movie ticket prices rise by about 5 percent and attendance falls by about 2 percent, other things being equal, the elasticity of demand for movie tickets is about:
A. 0.0
B. 0.4
C. 0.6
D. 2.5

7) When labor is the variable input, the average product equals the
A. marginal product divided by the number of workers
B. marginal product multiplied by the number of workers
C. number of workers divided by the quantity of output
D. quantity of output divided by the number of workers

8) The increase in output obtained by hiring an additional worker is known as
A. the average product
B. the marginal product
C. the total product
D. value added

9) Which of the following is the best example of a long-run decision?
A. An automobile manufacturing company is considering whether or not to invest in robotic equipment to develop a more cost-effective production technique.
B. An automobile manufacturing company is considering whether or not to expand its existing workforce, while keeping the same factory and equipment.
C. A business consulting firm is considering whether or not to hire interns to assist with research and data processing.
D. A business consulting firm is considering whether or not to add new computers while maintaining the same number of employees.

10) Other things being equal, when average productivity falls,
A. average fixed cost must rise
B. marginal cost must rise
C. average total cost must rise
D. average variable cost must rise

11) According to economist Colin Camerer of the California Institute of Technology, many New York taxi drivers decide when to finish work by setting an income goal for themselves. If this is true, then on busy days when the effective hourly wage is higher, taxi drivers will
A. work the same number of hours as they will on slower days
B. work fewer hours than they will on slower days
C. work more hours than they will on slower days
D. not work any hours

12) A firm’s demand for labor is derived from the
A. opportunity costs associated with labor and leisure
B. desires and needs of the entrepreneur
C. cost of labor inputs
D. demand for its output

13) Owen runs a delivery business and currently employs three drivers. He owns three vans that employees use to make deliveries, but he is considering hiring a fourth driver. If he hires a fourth driver, he can schedule breaks and lunch hours so all three vans are in constant use, allowing him to increase deliveries per day from 60 to 75. This will cost an additional $75 per day to hire the fourth driver. The marginal cost per delivery of increasing output beyond 60 deliveries per day
A. is $0 because Owen does not have to purchase another van
B. is $5
C. is $75
D. cannot be calculated without knowing Owen’s total fixed costs

14) Expected economic profit per unit is equal to
A. expected price
B. expected average total cost
C. the difference between expected average price and expected average total cost
D. the difference between expected total revenue and expected total cost

15) If a firm in a perfectly competitive market experiences a technological breakthrough,
A. other firms would find out about it eventually
B. other firms would find out about it immediately
C. other firms would not find out about it
D. some firms would find out about it, but others would not

16) A significant difference between monopoly and perfect competition is that
A. free entry and exit is possible in a monopolized industry, but impossible in a competitive industry
B. competitive firms control market supply, but monopolies do not
C. the monopolist’s demand curve is the industry demand curve, while the competitive firm’s demand curve is perfectly elastic
D. profits are driven to zero in a monopolized industry, but may be positive in a competitive industry.

17) A monopoly firm is different from a competitive firm in that
A. there are many substitutes for a monopolist’s product while there are no substitutes for a competitive firm’s product
B. a monopolist’s demand curve is perfectly inelastic while a competitive firm’s demand curve is perfectly elastic
C. a monopolist can influence market price while a competitive firm cannot
D. a competitive firm has a U-shaped average cost curve while a monopolist does not

18) The difference between a perfectly competitive firm and a monopolistically competitive firm is that a monopolistically competitive firm faces a
A. horizontal demand curve and price equals marginal cost in equilibrium
B. horizontal demand curve and price exceeds marginal cost in equilibrium
C. downward-sloping demand curve and price equals marginal cost in equilibrium
D. downward-sloping demand curve and price exceeds marginal cost in equilibrium

19) As long as marginal cost is below marginal revenue, a perfectly competitive firm should
A. increase production
B. hold production constant
C. decrease production
D. reconsider past production decisions

20) Because a monopolistic competitor has some monopoly power, advertising to increase that monopoly power makes sense as long as the marginal
A. benefit of advertising is positive
B. cost of advertising is positive
C. benefit of advertising exceeds the marginal cost of advertising
D. cost of advertising exceeds the marginal benefit of advertising

21) In the Flint Hills area of Kansas, proposals to build wind turbines to generate electricity have pitted environmentalist against environmentalist. Members of the Kansas Sierra Club support the turbines as a way to reduce fossil fuel usage, while local chapters of the Nature Conservancy say they will befoul the landscape. The Sierra Club argues that wind turbines
A. are a source of negative externalities
B. reduce negative externalities elsewhere in the economy
C. create a free-rider problem
D. are a way of solving a free-rider problem

22) When negative externalities are present, market failure often occurs because
A the marginal external cost resulting from the activity is not reflected in the market price
B. the marginal external cost resulting from the activity is reflected in the market price
C. the existence of imports from foreign countries takes jobs and income away from U.S. citizen
D. consumers will consume the good at a level where their individual marginal benefits exceed the marginal costs borne by the firm producing the good

23) A merger between a textile mill and a clothing manufacturing company would be considered a
A. horizontal merger
B. vertical merger
C. conglomerate merger
D. diagonal merger

24) A merger between a baby food company and a life insurance company would be considered a
A. horizontal merger
B. vertical merger
C. conglomerate merger
D. diagonal merger

25) From the point of view of consumer and producer surplus, what problem may be created when a country subsidizes the cost of energy to consumers to help alleviate the burden of higher energy costs?
A. It hurts the poor and benefits the rich.
B. It leads to less fuel being used than the amount that maximizes consumer surplus.
C. It encourages the consumption of too much fuel at the expense of other goods.
D. It has no effect; consumers gain a surplus, but taxpayers lose the same amount because they must finance the subsidy.

26) Suppose people freely choose to spend 40 percent of their income on health care, but the government decides to tax 40 percent of a person’s income to provide the same level of coverage as before. What can be said about deadweight loss in each case?
A. Taxing income results in deadweight loss, while purchasing health care on one’s own does not result in deadweight loss.
B. Taxing income results in less deadweight loss, because government knows better what health care coverage is good for society.
C. There is no difference because the goods are purchased in the market in either case.
D. There is no difference because the total spending remains the same and the health care purchased remains the same.

27) The U.S. textile industry is relatively small because the US imports most of its clothing. A clear result of the importation of clothing is
A. there is less variety available than there would be without imports
B. the quality of clothing is lower than it would be without imports
C. the price of clothing is higher than it would be without imports
D. the price of clothing is lower than it would be without imports

28) Countries can expect to gain from international trade as long as they
A. keep production diversified
B. specialize according to their comparative advantage
C. produce only those goods for which they have a relatively high opportunity cost
D. use trade restrictions to reduce competition for domestic producers

29) Which of the following is an example of the law of one price?
A. Exchange rates tend to have equivalent values. For example, one Italian lire equals one U.S. dollar.
B. Because people have essentially the same basic needs wherever they live, they tend to buy the same bundle of goods.
C. Because wages are so much lower in China, eventually all U.S. jobs will be outsourced to China, leaving the US to import all goods at one price.
D. Because their countries have similar institutions, the price paid for a computer in Germany and the United States are about the same when converted into the same currency.

30) The fact that U.S. managers’ salaries are substantially greater than those of comparable managers in Japan may be related to
A. an increase in the demand for CEOs
B. an increase in the supply of CEOs
C. the comparatively greater competitive markets in Japan
D. the greater number of public goods provided in the United States

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ECO 365 Principles Of Microeconomics Final exam Correct

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ACC 349 Final Exam Complete A+ Answer

ACC 349 Final Exam Complete Answer

ACC 349 Final Exam Complete Answer

ACC 349 Final Exam Complete Answer


ACC 349 Final Exam Complete Answer

1) What is the best way to handle manufacturing overhead costs in order to get the most timely job cost information?

A. The company should add actual manufacturing overhead costs to jobs as soon as the overhead costs are incurred.
B. The company should determine an allocation rate as soon as the actual costs are known, and then apply manufacturing overhead to jobs.
C. The company should apply overhead using an estimated rate throughout the year. D. The company should account for only the direct production costs.

2) At the end of the year, manufacturing overhead has been overapplied. What occurred to create this situation?

A. The company incurred more manufacturing overhead costs than the manufacturing overhead assigned to jobs
B. The actual manufacturing overhead costs were less than the manufacturing overhead assigned to jobs
C. The company incurred more total job costs than the amount budgeted for the job
D. Estimated manufacturing overhead was less than actual manufacturing overhead costs

3) Luca Company overapplied manufacturing overhead during 2006. Which one of the following is part of the year end entry to dispose of the overapplied amount assuming the amount is material

A. A decrease to work in process inventory
B. A decrease to applied overhead
C. An increase to finished goods
D. An increase to cost of goods sold

4) Which of the following would be accounted for using a job order cost system?

A. The production of textbooks
B. The production of town homes
C. The pasteurization of milk
D. The production of cans of spinach

5) Which one of the following is NEVER part of recording the issuance of raw materials in a job order cost system?

A. Debit Manufacturing Overhead
B. Debit Finished Goods Inventory
C. Debit Work in Process Inventory
D. Credit Raw Materials Inventory

Finished Goods Inventory is debited when goods are transferred from work in process to finished goods, not when raw materials are issued for a job.

6. What is unique about the flow of costs in a job order cost system?

A. It involves accumulating material, labor, and manufacturing overhead costs as they are incurred in order to determine the job cost
B. Each job is costed separately in a Work in Process subsidiary ledger
C. Job costs cannot be measured until all overhead costs are determined
D. There are no costs remaining in Work in Process at year end

7) Which one of the following costs would be included in manufacturing overhead of a lawn mower manufacturer?

A. The cost of the fuel lines that run from the motor to the gas tank
B. The cost of the wheels
C. Depreciation on the testing equipment
D. The wages earned by motor assemblers

Depreciation on testing equipment would be included in manufacturing overhead because it is indirectly associated with the finished product.

8) What broad functions do the management of an organization perform?

A. Planning, directing, and controlling
B. Directing, manufacturing, and controlling
C. Planning, directing, and selling
D. Planning, manufacturing, and controlling

9) Which of the following represents the correct order in which inventories are reported on a manufacturer’s balance sheet?

A. Work in process, finished goods raw materials
B. Raw materials, work in process, finished goods
C. Finished goods, work in process, raw materials
D. Work in process, raw materials, finished goods

10) In traditional costing systems, overhead is generally applied based on

A. machine hours
B. direct labor
C. direct material dollars
D. units of production

11) An activity that has a direct cause-effect relationship with the resources consumed is a(n)

A. overhead rate
B. product activity
C. cost driver
D. cost pool

12) A well-designed activity-based costing system starts with

A. computing the activity-based overhead rate
B. analyzing the activities performed to manufacture a product
C. identifying the activity-cost pools
D. assigning manufacturing overhead costs for each activity cost pool to products

13) Which of the following factors would suggest a switch to activity-based costing?

A. Overhead costs constitute a significant portion of total costs
B. Production managers use data provided by the existing system.
C. Product lines similar in volume and manufacturing complexity
D. The manufacturing process has been stable

14) All of the following statements are correct EXCEPT that

A. the objective of installing ABC in service firms is different than it is in a manufacturing firm
B. the general approach to identifying activities and activity cost pools is the same in a service company as in a manufacturing company
C. activity-based costing has been widely adopted in service industries
D. a larger proportion of overhead costs are company-wide costs in service industries

15) What sometimes makes implementation of activity-based costing difficult in service industries is

A. identifying activities, activity cost plus, and cost drivers
B. attempting to reduce or eliminate nonvalue-added activities
C. the labeling of activities as value-added
D. that a larger proportion of overhead costs are company-wide costs

16) One of Astro Company’s activity cost pools is machine setups, with estimated overhead of $150,000. Astro produces sparklers (400 setups) and lighters (600 setups). How much of the machine setup cost pool should be assigned to sparklers?

A. $60,000
B. $90,000
C. $150,000
D. $75,000

17) Poodle Company manufactures two products, Mini A and Maxi B. Poodle’s overhead costs consist of setting up machines, $800,000; machining, $1,800,000; and inspecting, $600,000. Information on the two products is:
Mini A Maxi B
Direct labor hours 15,000 25,000
Machine setups 600 400
Machine hours 24,000 26,000
Inspections 800 700

Overhead applied to Mini A using activity-based costing is

A. $1,536,000
B. $1,664,000
C. $1,920,000
D. $1,200,000

18) Poodle Company manufactures two products, Mini A and Maxi B. Poodle’s overhead costs consist of setting up machines, $800,000; machining, $1,800,000; and inspecting, $600,000. Information on the two products is:
Mini A Maxi B
Direct labor hours 15,000 25,000
Machine setups 600 400
Machine hours 24,000 26,000
Inspections 800 700

Overhead applied to Maxi B using activity-based costing is

A. $1,536,000
B. $1,664,000
C. $2,000,000
D. $1,280,000

19) Seran Company has contacted Truckel Inc. with an offer to sell it 5,000 of the wickets for $18 each. If Truckel makes the wickets, variable costs are $11 per unit. Fixed costs are $12 per unit; however, $5 per unit is avoidable. Should Truckel make or buy the wickets?

A. Buy; savings = $10,000
B. Make; savings = $20,000
C. Make; savings = $10,000
D. Buy; savings = $25,000

20) Rosen, Inc. has 10,000 obsolete calculators, which are carried in inventory at a cost of $20,000. If the calculators are scrapped, they can be sold for $1.10 each (for parts). If they are repackaged, at a cost of $15,000, they could be sold to toy stores for $2.50 per unit. What alternative should be chosen, and why?

A. Repackage; revenue is $5,000 greater than cost
B. Scrap; incremental loss is $9,000
C. Repackage; receive profit of $10,000
D. Scrap; profit is $1,000 greater

21) The cost to produce Part A was $10 per unit in 2005. During 2006, it has increased to $11 per unit. In 2006, Supplier Company has offered to supply Part A for $9 per unit. For the make-or-buy decision

A. incremental costs are $1 per unit
B. net relevant costs are $1 per unit
C. differential costs are $2 per unit
D. incremental revenues are $2 per unit

22) Hartley, Inc. has one product with a selling price per unit of $200, the unit variable cost is $75, and the total monthly fixed costs are $300,000. How much is Hartley’s contribution margin ratio?

A. 37.5%
B. 150%
C. 266.6%
D. 62.5%.

23. Which statement describes a fixed cost?

A. The amount per unit varies depending on the activity level
B. It varies in total at every level of activity
C. It remains the same per unit regardless of activity level
D. Its total varies proportionally to the level of activity

24) Disney’s variable costs are 30% of sales. The company is contemplating an advertising campaign that will cost $22,000. If sales are expected to increase $40,000, by how much will the company’s net income increase?

A. $28,000
B. $18,000
C. $6,000
D. $12,000

25) Variable costing

A. is required under GAAP
B. is used for external reporting purposes
C. is also known as full costing
D. treats fixed manufacturing overhead as a period cost

26) Which cost is NOT charged to the product under variable costing?

A. Direct labor
B. Direct materials
C. Fixed manufacturing overhead
D. Variable manufacturing overhead

27) Orbach Company sells its product for $40 per unit. During 2005, it produced 60,000 units and sold 50,000 units (there was no beginning inventory). Costs per unit are: direct materials $10, direct labor $6, and variable overhead $2. Fixed costs are: $480,000 manufacturing overhead, and $60,000 selling and administrative expenses. The per unit manufacturing cost under absorption costing is

A. $18
B. $16
C. $27
D. $26

28) Which of the following is NOT considered an advantage of using standard costs?

A. Standard costs can be useful in setting prices for finished goods
B. Standard costs can reduce clerical costs
C. Standard costs can make employees “cost-conscious.”
D. Standard costs can be used as a means of finding fault with performance

29) The difference between a budget and a standard is that

A. a budget expresses management’s plans, while a standard reflects what actually happened
B. standards are excluded from the cost accounting system, whereas budgets are generally incorporated into the cost accounting system
C. a budget expresses a total amount while a standard expresses a unit amount
D. a budget expresses what costs were, while a standard expresses what costs should be

30) If a company is concerned with the potential negative effects of establishing standards, they should

A. offer wage incentives to those meeting standards
B. set tight standards in order to motivate people
C. not employ any standards
D. set loose standards that are easy to fulfill

31) The per-unit standards for direct materials are 2 gallons at $4 per gallon. Last month, 11,200 gallons of direct materials that actually cost $42,400 were used to produce 6,000 units of product. The direct materials quantity variance for last month was

A. $2,400 favorable
B. $5,600 unfavorable
C. $3,200 unfavorable
D. $3,200 favorable

32) The standard number of hours that should have been worked for the output attained is 8,000 direct labor hours and the actual number of direct labor hours worked was 8,400. If the direct labor price variance was $8,400 unfavorable, and the standard rate of pay was $18 per direct labor hour, what was the actual rate of pay for direct labor?

A. $15 per direct labor hour
B. $18 per direct labor hour
C. $19 per direct labor hour
D. $17 per direct labor hour

33) The total variance is $10,000. The total materials variance is $4,000. The total labor variance is twice the total overhead variance. What is the total overhead variance?

A. $2,000
B. $4,000
C. $3,000
D. $1,000

34) Manufacturing overhead costs are applied to work in process on the basis of

A. standard hours allowed
B. actual overhead costs incurred
C. ratio of actual variable to fixed costs
D. actual hours worked

35) The overhead volume variance relates only to

A. variable overhead costs
B. both variable and fixed overhead costs
C. all manufacturing costs
D. fixed overhead costs

36) If the standard hours allowed are less than the standard hours at normal capacity

A. the overhead volume variance will be unfavorable
B. the overhead controllable variance will be favorable
C. variable overhead costs will be overapplied
D. variable overhead costs will be underapplied

37) Gottberg Mugs is planning to sell 2,000 mugs and produce 2,200 mugs during April. Each mug requires 2 pounds of resin and a half hour of direct labor. Resin costs $1 per pound and employees of the company are paid $12.50 per hour. Manufacturing overhead is applied at a rate of 120% of direct labor costs. Gottberg has 2,000 pounds of resin in beginning inventory and wants to have 2,400 pounds in ending inventory. How much is the total amount of budgeted direct labor for April?

A. $12,500
B. $25,000
C. $27,500
D. $13,750

38) Lewis Hats is planning to sell 600 straw hats. Each hat requires a half pound of straw and a quarter hour of direct labor. Straw costs $0.20 per pound and employees of the company are paid $22 per hour. Lewis has 80 pounds of straw and 40 hats in beginning inventory and wants to have 50 pounds of straw and 60 hats in ending inventory. How many units should Lewis Hats produce in April?

A. 600
B. 580
C. 630
D. 620

39) At January 1, 2004, Barry, Inc. has beginning inventory of 4,000 widgets. Barry estimates it will sell 35,000 units during the first quarter of 2004 with a 10% increase in sales each quarter. Barry’s policy is to maintain an ending inventory equal to 25% of the next quarter’s sales. Each widget costs $1 and is sold for $1.50. How much is budgeted sales revenue for the third quarter of 2004?

A. $57,525
B. $63,525
C. $42,350
D. $63,000

40) In most cases, prices are set by the

A. customers
B. largest competitor
C. selling company
D. competitive market

41) A company must price its product to cover its costs and earn a reasonable profit in

A. all cases
B. its early years
C. the long run
D. the short run

42) The cost-plus pricing approach’s major advantage is

A. it considers customer demand
B. that sales volume has no effect on per unit costs
C. it is simple to compute
D. it can be used to determine a product’s target cost

43) What does cost accounting measure, record, and report

A. Future costs
B. Product costs
C. Managerial accounting decisions
D. Manufacturing processes

44) Why is factory overhead applied to products and jobs by manufacturing companies?

A. Because indirect costs are easy to trace to products and jobs
B. It provides a more accurate cost of the job or products being processed
C. Total actual overhead costs can never be accurately determined for production
D. It allows managers more timely determination of product costs during the manufacturing process

45) In a job order cost accounting system, the Work in Process account is

A. a period cost
B. a control account
C. closed at year end
D. an expense

46) Managerial accounting

A. is governed by generally accepted accounting principles
B. places emphasis on special-purpose information

C. is concerned with costing products
D. pertains to the entity as a whole and is highly aggregated

47) A well-designed activity-based costing system starts with

A. computing the activity-based overhead rate
B. assigning manufacturing overhead costs for each activity cost pool to products
C. identifying the activity-cost pools
D. analyzing the activities performed to manufacture a product

48) Which of the following is a value-added activity?

A. Machinery repair
B. Inventory storage
C. Engineering design
D. Inspections

49) Which of the following is a nonvalue-added activity?

A. Machining
B. Inspection
C. Engineering design
D. Packaging

50) Each of the following is a limitation of activity-based costing EXCEPT

A. It is more complex than traditional costing
B. More cost pools are used
C. It can be expensive to use
D. Some arbitrary allocations continue

51) Ace Company sells office chairs with a selling price of $25 and a contribution margin per unit of $15. It takes 3 machine hours to produce one chair. How much is the contribution margin per unit of limited resource?

A. $3.33
B. $45
C. $10
D. $5

52) Walton, Inc. is unsure of whether to sell its product assembled or unassembled. The unit cost of the unassembled product is $16, while the cost of assembling each unit is estimated at $17. Unassembled units can be sold for $55, while assembled units could be sold for $71 per unit. What decision should Walton make?

A. Sell before assembly; the company will save $15 per unit
B. Process further; the company will save $1 per unit
C. Process further; the company will save $16 per unit
D. Sell before assembly; the company will save $1 per unit

53) Which cost is charged to the product under variable costing?

A. Fixed manufacturing overhead
B. Variable manufacturing overhead
C. Fixed administrative expenses
D. Variable administrative expenses

54) Which of the following statements is FALSE?

A. A standard is a unit amount
B. A standard cost is more accurate than a budgeted cost
C. The standard cost of a product is equivalent to the budgeted cost per unit of product
D. In concept, standards and budgets are essentially the same

55) If standard costs are incorporated into the accounting system

A. it can eliminate the need for the budgeting process
B. it may simplify the costing of inventories and reduce clerical costs
C. approval of the stockholders is required
D. the accounting system will produce information which is less relevant than the historical cost accounting system

56) A standard cost is

A. the average cost in an industry
B. a cost which is paid for a group of similar products
C. the historical cost of producing a product last year
D. a predetermined cost

57) The per-unit standards for direct labor are 2 direct labor hours at $12 per hour. If in producing 2,400 units, the actual direct labor cost was $51,200 for 4,000 direct labor hours worked, the total direct labor variance is

A. $6,400 favorable
B. $6,400 unfavorable
C. $1,920 unfavorable
D. $4,000 unfavorable

58) If the standard hours allowed are less than the standard hours at normal capacity, the volume variance

A. will be favorable
B. will be greater than the controllable variance
C. cannot be calculated
D. will be unfavorable

59) Which of the following statements is FALSE?

A. The costs that cause the overhead volume variance are usually controllable costs
B. The overhead volume variance is favorable if standard hours allowed for output is greater than the standard hours at normal capacity
C. The overhead volume variance indicates whether plant facilities were used efficiently during the period
D. The overhead volume variance relates solely to fixed costs

60) Looker Hats is planning to sell 600 felt hats, and 700 will be produced during June. Each hat requires a half yard of felt and a quarter hour of direct labor. Felt costs $3.00 per yard and employees of the company are paid $20 per hour. How much is the total amount of budgeted direct labor for June?

A. $48,000
B. $3,500
C. $3,000
D. $2,400

61) In cost-plus pricing, the markup percentage is computed by dividing the desired ROI per unit by the

A. total cost per unit
B. total manufacturing cost per unit
C. fixed cost per unit
D. variable cost per unit

62) Which would be an appropriate cost driver for the ordering and receiving activity cost pool?

A. Purchase orders
B. Inspections
C. Machine setups
D. Machine hours

63) The first step in activity-based costing is to

A. identify the cost driver that has a strong correlation to the activity cost pool
B. compute the activity-based overhead rate per cost driver
C. assign manufacturing overhead costs for each activity cost pool to product
D. identify and classify the major activities involved in the manufacture of specific products

64) Which one of the following is required in order for an activity base to be useful in cost behavior analysis?

A. The activity should always be based on the number of units produced
B. There should be a correlation between changes in the level of activity and changes in costs.
C. The activity should always be a fixed amount
D. The activity level should be an approved GAAP activity base

65) Which cost is NOT charged to the product under absorption costing?

A. Fixed administrative expenses
B. Variable manufacturing overhead
C. Direct labor
D. Direct materials

66) A company developed the following per-unit standards for its product: 2 pounds of direct materials at $6 per pound. Last month, 2,000 pounds of direct materials were purchased for $11,400. The direct materials price variance for last month was

A. $600 unfavorable
B. $11,400 favorable
C. $300 favorable
D. $600 favorable

67) The standard rate of pay is $5 per direct labor hour. If the actual direct labor payroll was $19,600 for 4,000 direct labor hours worked, the direct labor price (rate) variance is

A. $500 favorable
B. $400 unfavorable
C. $500 unfavorable
D. $400 favorable

68) Waco’s Widgets plans to sell 22,000 widgets during May, 19,000 units in June, and 20,000 during July. Waco keeps 10% of the next month’s sales as ending inventory. How many units should Waco produce during June?

A. 19,000
B. 18,900
C. 19,100
D. 21,000

69) In cost-plus pricing, the target selling price is computed as

A. variable cost per unit + fixed manufacturing cost per unit + desired ROI per unit
B. variable cost per unit + desired ROI per unit
C. total unit cost + desired ROI per unit
D. fixed cost per unit + desired ROI per unit

70) Which one of the following is an important feature of a job order cost system?

A. Each must be completed before a new product order is accepted
B. Each job uses similar processes to produce
C. Each consists of features which distinguish it from the next
D. Each job has characteristics similar to the next

71) Which of the following represents the two basic types of cost accounting systems?

A. Job order and process cost systems
B. Job order and batch systems
C. Job order and job accumulation systems
D. Process cost and batch systems

72) Which one of the following is indirect labor considered?

A. Product cost
B. Period cost
C. Nonmanufacturing cost
D. Raw material cost

73) Which of the following is an element of manufacturing overhead?

A. Factory workers wages
B. Plant manager’s salary
C. Components used in calculators during production
D. Flour used in manufactured cake mixes

74) Which of the following is NOT typical of traditional costing systems?

A. Use of a single predetermined overhead rate
B. Assumption of correlation between direct labor and incurrence of overhead cost
C. Use of direct labor hours or direct labor cost to assign overhead
D. Use of multiple cost drivers to allocate overhead

75) Max Company uses 10,000 units of Part A in producing its products. A supplier offers to make Part A for $7. Max Company has relevant costs of $8 a unit to manufacture Part A. If there is excess capacity, the opportunity cost of buying Part A from the supplier is

A. $80,000
B. $70,000
C. $0
D. $10,000

76) H55 Company sells two products, beer and wine. Beer has a 10 percent profit margin and wine has a 12 percent profit margin. Beer has a 27 percent contribution margin and wine has a 25 percent contribution margin. If other factors are equal, which product should H55 push to customers?

A. It should sell an equal quantity of both
B. Selling either results in the same additional income for the COMPANY
C. Beer
D. Wine

77) During December, the capital budget indicates a $280,000 purchase of equipment. The ending November cash balance is budgeted to be $40,000. Cash receipts are $840,000, and cash disbursements are $610,000 during December. The company wants to maintain a minimum cash balance of $20,000. What is the minimum cash loan that must be planned to be borrowed from the bank during December?

A. $0
B. $50,000
C. $10,000
D. $30,000

78) Prices are set by the competitive market when

A. a product is not easily distinguished from competing products
B. a company can effectively differentiate its product from others
C. there are no other producers capable of manufacturing a similar item
D. the product is specially made for a customer

79) The standards and rules that are recognized as a general guide for financial reporting are called __________.

A. standards of financial reporting
B. generally accepted accounting principles
C. generally accepted accounting standards
D. operating guidelines

80) Hess, Inc. sells a single product with a contribution margin of $12 per unit and fixed costs of $74,400 and sales for the current year of $100,000. How much is Hess’s break even point?
A. 2,133 units
B. 6,200 units
C. $25,600
D. 4,600 units

81) In what situations will a static budget be most effective in evaluating a manager’s effectiveness?

A. The company has no fixed costs.
B. The planned activity levels match actual activity levels.
C. The company has substantial variable costs.
D. The company has substantial fixed costs.

82) The primary purpose of the statement of cash flows is to __________.

A. facilitate banking relationships
B. provide information about the cash receipts and cash payments during a period
C. prove that revenues exceed expenses if there is a net income
D. provide information about the investing and financing activities during a period

83) The category that is generally considered to be the best measure of a company’s ability to
continue as a going concern is
A. cash flows from operating activities.
B. cash flows from investing activities.
C. cash flows from financing activities.
D. usually different from year to year.

84) Of the items below, the one that appears first on the statement of cash flows is
A. noncash investing and financing activities.
B. net increase (decrease) in cash.
C. cash at the end of the period.
D. cash at the beginning of the period.

85) Which of the following transactions does not affect cash during a period?
A. Write-off of an uncollectible account
B. Collection of an accounts receivable
C. Sale of treasury stock
D. Exercise of the call option on bonds payable

86) One of Lara Dole Company’s activity cost pools is machine setups, with estimated overhead of $300,000. Dole produces flares (400 setups) and health packs (600 setups). How much of the machine setup cost pool should be assigned to flares?
A. $0.
B. $120,000.
C. $150,000.
D. $180,000

87) As compared to a high-volume product, a low-volume product
A. usually requires less special handling.
B. is usually responsible for more overhead costs per unit.
C. requires relatively fewer machine setups.
D. requires use of direct labor hours as the primary cost driver to ensure proper allocation
of overhead

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ACCT 505 Week 8 Final Exam Set 1 set 2 and set 3 Complete Answer

ACCT 505 Week 8 Final Exam Set 1 set 2 and set 3 Complete Answer

ACCT 505 Week 8 Final Exam Set 1 set 2 and set 3 Complete Answer

ACCT 505 Week 8 Final Exam Set 1 set 2 and set 3 Complete Answer

ACCT 505 Week 8 Final Exam Set 1 set 2 and set 3 Complete Answer

ACCT 505 Week 8 Final Exam Set 1 set 2 and set 3 Complete Answer

Set 1

1. (TCO A) Wages paid to the factory maintenance supervisor are considered an example of: (Points : 5) Direct Labor – yes, Period Cost – yes Direct Labor – yes, Period Cost – No Direct Labor – no , Period Cost – yes Direct Labor – no , Period Cost – no

2. (TCO A) Rent on a manufacturing plant is an element of: (Points : 5) Conversion cost – yes, period cost – no Conversion cost – yes, period cost – yes Conversion cost – no, period cost – yes Conversion cost – no, period cost – no
3. (TCO B) Evergreen Corp. has provided the following data: Sales per period 1,000 units Selling price $40 per unit Variable manufacturing cost $12 per unit Selling expenses $5,100 plus 5% of selling price Administrative expenses $3,000 plus 20% of selling price The number of units needed to achieve a target net operating income of $63,900 would be:
(Points : 5) 4,000 units 3,950 units 4,150 units 4,050 units

4. (TCO B) Garth Company sells a single product. If the selling price per unit and the variable expense per unit both increase by 10% and fixed expenses do not change, then: (Points : 5) Contribution Margin Per Unit – Increases, Contribution Margin Ratio – Increases, Break-Even in Units – Decreases Contribution Margin Per Unit – No Change, Contribution Margin Ratio – No Change, Break-Even in Units – No Change Contribution Margin Per Unit – No Change, Contribution Margin Ratio – Increases, Break-Even in Units – No Change Contribution Margin Per Unit – Increases, Contribution Margin Ratio – No Change, Break-Even in Units – Decreases

5. (TCO E) Rebel Company manufactures a single product and has the following cost structure: Variable costs per unit: Production…………………………………………. $5 Selling and administrative……………………… $3 Fixed costs in total: Production…………………………………………. $32,000 Selling and administrative……………………… $16,000 Last year there were no beginning inventories, 8,000 units were produced, and 7,800 units were sold.
Under variable costing, the unit product cost would be:
(Points : 5) $5 $8 $9 $11

6. (TCO F) Vagon Corporation has provided data concerning the company’s Manufacturing Overhead account for the month of September. Prior to the closing of the overapplied or underapplied balance to Cost of Goods Sold, the total of the debits to the Manufacturing Overhead account was $76,000 and the total of the credits to the account was $86,000. Which of the following statements is true? (Points : 5) Manufacturing overhead transferred from Finished Goods to Cost of Goods Sold during the month was $76,000 Actual manufacturing overhead incurred during the month was $66,000 Manufacturing overhead applied to Work in Process for the month was $76,000 Manufacturing overhead for the month was overapplied by $10,000

7. (TCO G) The net present value (NPV) method of investment project analysis assumes that the project’s cash flows are reinvested at the: (Points : 5) internal rate of return. discount rate used in the NPV calculation. firm’s simple rate of return. firm’s average ROI.

8. (TCO G) Logan Company is considering two projects, A and B. The following information has been gathered on these projects: Project A Project B Initial investment needed………………………………….$40,000 $60,000 Present value of future cash flows………………………………………60,000 85,000 Useful life………………………………………….4 years 4 years Based on this information, which of the following statements is (are) true?
I. Project A has the highest ranking according to the profitability index criterion. II. Project B has the highest ranking according to the net present value criterion.
(Points : 5) Only I Only II Both I and II Neither I and II

9. (TCO B) Variable expenses for Alpha Company are 40% of sales. What are sales at the break-even point, assuming that fixed expenses total $150,000 per year: (Points : 5) $250,000 $375,000 $600,000 $150,000

10. (TCO F) Elliott Company uses a predetermined overhead rate based on machine-hours to apply manufacturing overhead to jobs. The company manufactures tools to customer specifications. The following data pertain to Job 1501:
Direct materials used: $4,200
Direct labor hours worked: 300
Direct labor rate per hour: $8.00
Machine hours used: 200
Predetermined overhead rate per machine hour: $15.00
What is the total manufacturing cost recorded on Job 1501?
(Points : 5) $8,800 $9,600 $10,300 $11,100

1. (TCO C) The following overhead data are for a department of a large company.
Actual costs Static Incurred budget
Activity level (in units) 360 340
Variable costs: Indirect materials $4,182 $4,148 Electricity $2,536 $2,414 Fixed costs: Administration $6,540 $6,500 Rent $6,310 $6,400
Required: Construct a flexible budget performance report that would be useful in assessing how well costs were controlled in this department.

2. (TCO D) Mr. Earl Pearl, Accountant for Margie Knall, Inc. has prepared the following product-line income data:
PRODUCT
Total A B C
Sales…………………………………………$ 100,000……..$50,000………$20,000………..$30,000
Variable Expenses………………………… 60,000……….30,000…………10,000………….20,000
Contribution Margin……………………….. .40,000……….20,000…………10,000………….10,000
Fixed Expenses:
Rent…………………………………………. .5,000………..2,500…………..1,000……………1,500
Depreciation………………………………. 6,000………..3,000…………..1,200…………….1,800
Utilities………………………………………4,000………..2,000……………..500…………….1,500
Supervisors’ salaries………………….. 5,000………. 1,500……………..500…………….3,000
Maintenance………………………………3,000………..1,500………………600………………900
Administrative Expenses……………. 10,000………..3,000……………..2,000…………..5,000
Total Fixed Expenses…………………… 33,000……….13,500……………5,800………….13,700
Net Operating Income…………………… $7,000……….$6,500………….$4,200…………($3,700)
The following additional information is available:
The factory rent of $1,500 assigned to product C is avoidable if the product were dropped.
The company’s total depreciation would not be affected by dropping C.
Eliminating product C will reduce the monthly utility bill from $1,500 to $800.
All supervisors’ salaries are avoidable.
If product C is discontinued, the maintenance department will be able to reduce monthly expenses from $3,000 to $2,000.
Elimination of product C will make it possible to cut two persons from the administrative staff. Currently, their combined salaries total $2,000.
Required: Prepare an analysis showing whether product C should be eliminated. Articulate your findings.

Set 2

1. (TCO A) Wages paid to the factory maintenance supervisor are considered an example of: (Points : 5) Direct Labor – yes, Period Cost – yes Direct Labor – yes, Period Cost – No Direct Labor – no , Period Cost – yes Direct Labor – no , Period Cost – no

2. (TCO A) Rent on a manufacturing plant is an element of: (Points : 5) Conversion cost – yes, period cost – no Conversion cost – yes, period cost – yes Conversion cost – no, period cost – yes Conversion cost – no, period cost – no

3. (TCO B) Evergreen Corp. has provided the following data: Sales per period 1,000 units Selling price $40 per unit Variable manufacturing cost $12 per unit Selling expenses $5,100 plus 5% of selling price Administrative expenses $3,000 plus 20% of selling price The number of units needed to achieve a target net operating income of $63,900 would be:
(Points : 5) 4,000 units 3,950 units 4,150 units 4,050 units

4. (TCO B) Garth Company sells a single product. If the selling price per unit and the variable expense per unit both increase by 10% and fixed expenses do not change, then: (Points : 5) Contribution Margin Per Unit – Increases, Contribution Margin Ratio – Increases, Break-Even in Units – Decreases Contribution Margin Per Unit – No Change, Contribution Margin Ratio – No Change, Break-Even in Units – No Change Contribution Margin Per Unit – No Change, Contribution Margin Ratio – Increases, Break-Even in Units – No Change Contribution Margin Per Unit – Increases, Contribution Margin Ratio – No Change, Break-Even in Units – Decreases

5. (TCO E) Rebel Company manufactures a single product and has the following cost structure: Variable costs per unit: Production…………………………………………. $5 Selling and administrative……………………… $3 Fixed costs in total: Production…………………………………………. $32,000 Selling and administrative……………………… $16,000 Last year there were no beginning inventories, 8,000 units were produced, and 7,800 units were sold.
Under variable costing, the unit product cost would be:
(Points : 5) $5 $8 $9 $11

6. (TCO F) Vagon Corporation has provided data concerning the company’s Manufacturing Overhead account for the month of September. Prior to the closing of the overapplied or underapplied balance to Cost of Goods Sold, the total of the debits to the Manufacturing Overhead account was $76,000 and the total of the credits to the account was $86,000. Which of the following statements is true? (Points : 5) Manufacturing overhead transferred from Finished Goods to Cost of Goods Sold during the month was $76,000 Actual manufacturing overhead incurred during the month was $66,000 Manufacturing overhead applied to Work in Process for the month was $76,000 Manufacturing overhead for the month was overapplied by $10,000

7. (TCO G) The net present value (NPV) method of investment project analysis assumes that the project’s cash flows are reinvested at the: (Points : 5) internal rate of return. discount rate used in the NPV calculation. firm’s simple rate of return. firm’s average ROI.

8. (TCO G) Logan Company is considering two projects, A and B. The following information has been gathered on these projects: Project A Project B Initial investment needed………………………………….$40,000 $60,000 Present value of future cash flows………………………………………60,000 85,000 Useful life………………………………………….4 years 4 years Based on this information, which of the following statements is (are) true?
I. Project A has the highest ranking according to the profitability index criterion. II. Project B has the highest ranking according to the net present value criterion.
(Points : 5) Only I Only II Both I and II Neither I and II

9. (TCO B) Variable expenses for Alpha Company are 40% of sales. What are sales at the break-even point, assuming that fixed expenses total $150,000 per year: (Points : 5) $250,000 $375,000 $600,000 $150,000

10. (TCO F) Elliott Company uses a predetermined overhead rate based on machine-hours to apply manufacturing overhead to jobs. The company manufactures tools to customer specifications. The following data pertain to Job 1501:
Direct materials used: $4,200
Direct labor hours worked: 300
Direct labor rate per hour: $8.00
Machine hours used: 200
Predetermined overhead rate per machine hour: $15.00
What is the total manufacturing cost recorded on Job 1501?
(Points : 5) $8,800 $9,600 $10,300 $11,100

1. (TCO C) The following overhead data are for a department of a large company.
Actual costs Static Incurred budget
Activity level (in units) 360 340
Variable costs: Indirect materials $4,182 $4,148 Electricity $2,536 $2,414 Fixed costs: Administration $6,540 $6,500 Rent $6,310 $6,400
Required: Construct a flexible budget performance report that would be useful in assessing how well costs were controlled in this department.

2. (TCO D) Mr. Earl Pearl, Accountant for Margie Knall, Inc. has prepared the following product-line income data:
PRODUCT
Total A B C
Sales…………………………………………$ 100,000……..$50,000………$20,000………..$30,000
Variable Expenses………………………… 60,000……….30,000…………10,000………….20,000
Contribution Margin……………………….. .40,000……….20,000…………10,000………….10,000
Fixed Expenses:
Rent…………………………………………. .5,000………..2,500…………..1,000……………1,500
Depreciation………………………………. 6,000………..3,000…………..1,200…………….1,800
Utilities………………………………………4,000………..2,000……………..500…………….1,500
Supervisors’ salaries………………….. 5,000………. 1,500……………..500…………….3,000
Maintenance………………………………3,000………..1,500………………600………………900
Administrative Expenses……………. 10,000………..3,000……………..2,000…………..5,000
Total Fixed Expenses…………………… 33,000……….13,500……………5,800………….13,700
Net Operating Income…………………… $7,000……….$6,500………….$4,200…………($3,700)
The following additional information is available:
The factory rent of $1,500 assigned to product C is avoidable if the product were dropped.
The company’s total depreciation would not be affected by dropping C.
Eliminating product C will reduce the monthly utility bill from $1,500 to $800.
All supervisors’ salaries are avoidable.
If product C is discontinued, the maintenance department will be able to reduce monthly expenses from $3,000 to $2,000.
Elimination of product C will make it possible to cut two persons from the administrative staff. Currently, their combined salaries total $2,000.
Required: Prepare an analysis showing whether product C should be eliminated. Articulate your findings.

Set 3

1. (TCO A) Wages paid to the factory maintenance supervisor are considered an example of: (Points : 5) Direct Labor – yes, Period Cost – yes Direct Labor – yes, Period Cost – No Direct Labor – no , Period Cost – yes Direct Labor – no , Period Cost – no

2. (TCO A) Rent on a manufacturing plant is an element of: (Points : 5) Conversion cost – yes, period cost – no Conversion cost – yes, period cost – yes Conversion cost – no, period cost – yes Conversion cost – no, period cost – no

3. (TCO B) Evergreen Corp. has provided the following data: Sales per period 1,000 units Selling price $40 per unit Variable manufacturing cost $12 per unit Selling expenses $5,100 plus 5% of selling price Administrative expenses $3,000 plus 20% of selling price The number of units needed to achieve a target net operating income of $63,900 would be:
(Points : 5) 4,000 units 3,950 units 4,150 units 4,050 units

4. (TCO B) Garth Company sells a single product. If the selling price per unit and the variable expense per unit both increase by 10% and fixed expenses do not change, then: (Points : 5) Contribution Margin Per Unit – Increases, Contribution Margin Ratio – Increases, Break-Even in Units – Decreases Contribution Margin Per Unit – No Change, Contribution Margin Ratio – No Change, Break-Even in Units – No Change Contribution Margin Per Unit – No Change, Contribution Margin Ratio – Increases, Break-Even in Units – No Change Contribution Margin Per Unit – Increases, Contribution Margin Ratio – No Change, Break-Even in Units – Decreases

5. (TCO E) Rebel Company manufactures a single product and has the following cost structure: Variable costs per unit: Production…………………………………………. $5 Selling and administrative……………………… $3 Fixed costs in total: Production…………………………………………. $32,000 Selling and administrative……………………… $16,000 Last year there were no beginning inventories, 8,000 units were produced, and 7,800 units were sold.
Under variable costing, the unit product cost would be:
(Points : 5) $5 $8 $9 $11

6. (TCO F) Vagon Corporation has provided data concerning the company’s Manufacturing Overhead account for the month of September. Prior to the closing of the overapplied or underapplied balance to Cost of Goods Sold, the total of the debits to the Manufacturing Overhead account was $76,000 and the total of the credits to the account was $86,000. Which of the following statements is true? (Points : 5) Manufacturing overhead transferred from Finished Goods to Cost of Goods Sold during the month was $76,000 Actual manufacturing overhead incurred during the month was $66,000 Manufacturing overhead applied to Work in Process for the month was $76,000 Manufacturing overhead for the month was overapplied by $10,000

7. (TCO G) The net present value (NPV) method of investment project analysis assumes that the project’s cash flows are reinvested at the: (Points : 5) internal rate of return. discount rate used in the NPV calculation. firm’s simple rate of return. firm’s average ROI.

8. (TCO G) Logan Company is considering two projects, A and B. The following information has been gathered on these projects: Project A Project B Initial investment needed………………………………….$40,000 $60,000 Present value of future cash flows………………………………………60,000 85,000 Useful life………………………………………….4 years 4 years Based on this information, which of the following statements is (are) true?
I. Project A has the highest ranking according to the profitability index criterion. II. Project B has the highest ranking according to the net present value criterion.
(Points : 5) Only I Only II Both I and II Neither I and II

9. (TCO B) Variable expenses for Alpha Company are 40% of sales. What are sales at the break-even point, assuming that fixed expenses total $150,000 per year: (Points : 5) $250,000 $375,000 $600,000 $150,000

10. (TCO F) Elliott Company uses a predetermined overhead rate based on machine-hours to apply manufacturing overhead to jobs. The company manufactures tools to customer specifications. The following data pertain to Job 1501:
Direct materials used: $4,200
Direct labor hours worked: 300
Direct labor rate per hour: $8.00
Machine hours used: 200
Predetermined overhead rate per machine hour: $15.00
What is the total manufacturing cost recorded on Job 1501?
(Points : 5) $8,800 $9,600 $10,300 $11,100

1. (TCO C) The following overhead data are for a department of a large company.
Actual costs Static Incurred budget
Activity level (in units) 360 340
Variable costs: Indirect materials $4,182 $4,148 Electricity $2,536 $2,414 Fixed costs: Administration $6,540 $6,500 Rent $6,310 $6,400
Required: Construct a flexible budget performance report that would be useful in assessing how well costs were controlled in this department.

2. (TCO D) Mr. Earl Pearl, Accountant for Margie Knall, Inc. has prepared the following product-line income data:
PRODUCT
Total A B C
Sales…………………………………………$ 100,000……..$50,000………$20,000………..$30,000
Variable Expenses………………………… 60,000……….30,000…………10,000………….20,000
Contribution Margin……………………….. .40,000……….20,000…………10,000………….10,000
Fixed Expenses:
Rent…………………………………………. .5,000………..2,500…………..1,000……………1,500
Depreciation………………………………. 6,000………..3,000…………..1,200…………….1,800
Utilities………………………………………4,000………..2,000……………..500…………….1,500
Supervisors’ salaries………………….. 5,000………. 1,500……………..500…………….3,000
Maintenance………………………………3,000………..1,500………………600………………900
Administrative Expenses……………. 10,000………..3,000……………..2,000…………..5,000
Total Fixed Expenses…………………… 33,000……….13,500……………5,800………….13,700
Net Operating Income…………………… $7,000……….$6,500………….$4,200…………($3,700)
The following additional information is available:
The factory rent of $1,500 assigned to product C is avoidable if the product were dropped.
The company’s total depreciation would not be affected by dropping C.
Eliminating product C will reduce the monthly utility bill from $1,500 to $800.
All supervisors’ salaries are avoidable.
If product C is discontinued, the maintenance department will be able to reduce monthly expenses from $3,000 to $2,000.
Elimination of product C will make it possible to cut two persons from the administrative staff. Currently, their combined salaries total $2,000.
Required: Prepare an analysis showing whether product C should be eliminated. Articulate your findings.

3. (TCO E) Duif Company’s absorption costing income statement for the last year of operations is presented below: Sales…………………………………………………$70,000 Less cost of goods sold: Beginning inventory………………………………………. 0 Add cost of goods manufactured………………48,000 Goods available for sale………………………….48,000 Less ending inventory………………………………6,000 Cost of goods sold………………………………..42,000 Gross margin……………………………………….28,000 Less selling & admin. expenses………………..25,000 Net operating income…………………………..$ 3,000
Data on units produced and sold for the year are given below:
Units in beginning inventory……………………………..0 Units produced……………………………………….8,000 Units sold………………………………………………7,000 Fixed factory overhead totaled $16,000 for the year. This overhead was applied to products at a rate of $2 per unit. Variable selling and administrative expenses were $3 per unit sold.
Required: Prepare a new income statement for the year using variable costing. Comment on the differences between the absorption costing and the variable costing income statements.

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ACCT-505-final-Exam[1]

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PROJ 592 Proj Cost and Schedule Control Week 8 Final Exam Complete A+ Set 1_set 2 and set 3 Answer

PROJ 592 Proj Cost and Schedule Control Week 8 Final Exam Complete A+ Set 1_set 2 and set 3 Answer

PROJ 592 Proj Cost and Schedule Control Week 8 Final Exam Complete A+ Set 1_set 2 and set 3 Answer

PROJ 592 Proj Cost and Schedule Control Week 8 Final Exam Complete A+ Set 1_set 2 and set 3 Answer

PROJ 592 Proj Cost and Schedule Control Week 8 Final Exam Complete A+ Set 1_set 2 and set 3 Answer

Proj 592 Week 8 Final Exam Answer

SET 1

Page: | 1 2 3 |
Question 1. | Question : | (TCO B) Estimating Procedures
(a) You are the project manager for a new high-rise office building. You are working on estimating the exterior landscaping for the new development. The landscaping requires the use of a special landscape stone. Based on recent experience, the most likely price for the material is $120.00/ton. However, the price for this stone is volatile, and the price fluctuates over time based on market conditions and material availability. The most optimistic price estimate is $100.00/ton, and the most pessimistic estimate is $200.00/ton. What is the expected price of the material?
(b) In addition to price fluctuations, you are also uncertain of how much of the material will be required for the project. Scope changes and site conditions will affect the amount of material actually needed. The most likely amount required is 36 tons. However, as little as 32 tons or as much as 44 tons might be required.What is the expected amount of the material needed for the project? Round to two decimal places.
(c) Using the estimates from (a) & (b) what is the expected cost for the material over the life of the project using the COMPLEX method?

Question 2. | Question : | (TCO B) Contingency Allowance:
You are a project manager for the development of Motorola’s new 4G, HD, Touch Screen Cell Phone which is supposed to take the cell phone industry by storm. Listed below are the initial cost estimates for the materials and labor for one of the phones:
ITEM | COST ESTIMATE | TYPE OF ESTIMATE |
Case | $15.00 | Order of Magnitude |
Handset | $12.00 | Definitive |
Labor | $2.00 | Definitive |
Speaker | $2.50 | Budget |
Mouthpiece | $5.50 | Budget |
Antenna | $1.70 | Definitive |
Keypad | $3.00 | Order of Magnitude |
Circuit boards (handset) | $6.50 | Budget |
Circuit boards (base unit) | $8.50 | Definitive |
Battery | $1.20 | Order of Magnitude |
Charger | $16.00 | Order of Magnitude |
Total cost | $73.90 | NA |
The estimating department currently defines estimate accuracy as follows:
Order of Magnitude | -25%, +75% |
Budget | -10%, +25% |
Definitive | -5%, +10% |

(a) What contingency cost budget do you recommend for the product?
(b) The target retail price for the new telephone is $165.00 per unit. The markup demanded by retailers is 50%. Based on cost factors, write a brief rationale for acceptance or rejection of the project, including any recommendations you have regarding the cost estimates.

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Question 3. | Question : | (TCO C) Work Breakdown Structure WBS
Eurocash has decided to develop a mutual fund comprised almost entirely of East European companies with a high growth potential. The process of developing a new mutual fund begins with concept development, which includes establishing a clear definition of the project’s objectives that is agreed upon by senior management and developing a marketing strategy.
* A business analysis is then performed that includes assessments of market feasibility, internal feasibility (budgetary resource requirements), and regulatory feasibility. * If the proposed fund passes the business analysis, the fund design is developed. * The design process consists of product design, service design, internal review and authorization, and SEC registration (assuming a U.S. market). * As the design process nears completion, generally recognized as a positive preliminary review by the SEC, employee training is performed. * After completion of the employee training and final regulatory approval, the product is launched, and post-launch reviews are conducted at predetermined intervals.

Prepare a work breakdown structure (WBS) for this project with activities corresponding to a two level task and sub-task hierarchy. Provide columns showing the WBS code and activities. Number and indent the WBS codes so that the level of each activity is clearly identified.

Question 4. | Question : | (TCO A) Budgeting processes and techniques
A company builds custom yachts for the high-end boating market. They develop and build these custom designs as a single individualized unit. The orders are generated by the marketing and sales department with help from the owners, who participate in the management of the company. Each new order is assigned to a project team which starts by making an estimate to the customer before a contract is signed. The project teams have a great deal of experience in these projects. As would be expected, the owners are hands-on and have opinions on the estimates. The marketing folks also provide suggestions on what the customer is willing to pay.
What are some processes and techniques that you would suggest to make the budgeting process work well? Start with general but also provide some specifics as relate to creating detailed project budgets. Be sure to justify why you think your recommendations will work.

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Question 1. | Question : | (TCO C) Schedule Crashing
Using the network below and the additional information provided, find:
(a) The crash cost per day per activity.
(b) Which activities should be crashed to meet a project deadline of 13 days at minimum cost? State the number of days you will crash each activity.
(c) What is the additional cost to crash the project?
Critical path = B-C-D = 14
Activity | Normal time | Normal total cost | Crash time | Crash total cost |
A | 5 | 300 | 3 | 380 |
B | 3 | 250 | 1 | 330 |
C | 6 | 400 | 4 | 700 |
D | 5 | 150 | 3 | 250 |

Question 2. | Question : | (TCO E) Responsibility Assignment Matrix
Projects often cross many functional boundaries with team members reporting to different functional managers. This cross functional aspect can create problems with roles and responsibilities. You decide to use a Responsibility Assignment Matrix (RAM) to help with this situation. Your manager is wondering why you are spending your time on this tool when you already have resources assigned to tasks in your schedule.
(a) Why is the RAM such an effective tool for Project Managers?
(b) What are some of the typical responsibilities assigned on a RAM? |

Question 3. | Question : | (TCO E) Resource Allocation/Leveling
The following data were obtained from a project to expand a school: Activity | Duration | Predecessors | Resources / cost |
A | 2 Weeks | — | 2 Excavators/$800 day each |
B | 3 Weeks | — | 2 Dump Trucks/$600 day each |
C | 2 Weeks | B | 2 Concrete Mixers/$250 day each |
D | 3 Weeks | A, C | 2 Cranes/$2,000 day each |
E | 2 Weeks | B | 1 High-lift/$500 day each |
F | 1 Weeks | B | 2 Excavators/$800 day each |
G | 3 Weeks | F | 2 Cranes/$2,000 day each |
The contractor has access to the listed quantity of machines of each type available at the listed cost ‘each’. The operations cannot be split. Additional equipment can be rented at a 50% cost premium if needed.
(a) Identify any resource conflicts in the above project. State the activities involved, the time frame of the conflict(s), the resources in conflict and the quantity of resource involved.
(b) What is the least cost method of resolving the conflict(s), assuming the project duration must not be extended? What additional cost, if any, will be incurred?

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Question 1. | Question : | (TCO G) Estimate At Completion forecast (EAC)
A project has been estimated to take eight weeks and cost $65,000. The critical path is A – D. Cost and earned value data are provided below:
| | EV | PV | | | AC | | | | Budget | BCWP | – BCWS | SV | SPI | – ACWP | CV | CPI |
A | $8,500 | $8,500 | $8,500 | $ – | 1.00 | $7,500 | $1,000 | 1.13 |
B | $15,000 | $15,000 | $15,000 | $ – | 1.00 | $13,000 | $2,000 | 1.15 |
C | $6,800 | $2,530 | $2,700 | ($170) | 0.94 | $4,000 | ($1,470) | 0.63 |
D | $18,000 | $900 | $3,000 | ($2,100) | 0.30 | $1,200 | ($300) | 0.75 |
E | $16,000 | $0 | $0 | $ – | | $0 | $ – | |
Project: | $64,300 | 26,930 | 29,200 | ($2,270) | 0.92 | $25,700 | $730 | 1.05 |
(i) Calculate the Estimate At Completion (EAC) considering future performance will be back on schedule and budget.
(ii) Calculate EAC considering that the project will continue to perform as it has to date.
(iii) Using either of these two numbers discuss the status of the project and if the project manager needs to take corrective actions. Justify your comments. |

Question 2. | Question : | (TCO F) Earned Value
The following data were obtained from a project to design a new software package: Activity | Duration | Predecessors | Budgeted Cost |
A | 3 Days | — | $8,320 |
B | 6 Days | — | $11,740 |
C | 4 Days | A | $11,550 |

D | 2 Days | C, B | $7,850 |
E | 3 Days | A | $10,750 |
F | 2 Days | D, E | $8,600 |
At the end of day 4, the status of the project is as follows: Activity | % Complete | Actual Cost |
A | 100% | $7,200 |
B | 80% | $10,370 |
C | 25% | $8,250 |
D | 0% | $0 |
E | 80% | $8,560 |
F | 0% | $0 |
(a) Calculate the Cost and Schedule Variances and Indexes (CV, SV, CPI, SPI) for tasks A, B, C, D, and E.
(b) Write a brief analysis of the status of the project at this time, including task level, project level, and critical path. |

SET 2

Final Exam Page 1
1. (TCO B) Estimating Procedures
(a) You are the project manager for a new high rise office building. You are working on estimating the exterior landscaping for the new development. The landscaping requires the use of a special landscape stone. Based on recent experience the most likely price for the material is $120.00/ton. However, the price for this stone is volatile, and the price fluctuates over time based on market conditions and material availability. The most optimistic price estimate is $80.00/ton, and the most pessimistic estimate is $180.00/ton. (Note there are 3 data points in for this estimate.)What is the expected price of the material?
(b) In addition to price fluctuations, you are also uncertain of how much of the material will be required for the project. Scope changes and site conditions will affect the amount of material actually needed. The most likely amount required is 36 tons. However, as little as 28 tons, and as much as 56 tons might be required.What is the expected amount of the material needed for the project?
(c) Using the estimates from (a) & (b), what is the expected cost for the material over the life of the project using the COMPLEX method?(Points : 30)

2. (TCO B) Contingency Allowance:
You are a project manager for the development of Motorola’s new 4G, HD, Touch Screen Cell Phone which is supposed to take the cell phone industry by storm. Listed below are the initial cost estimates for the materials and labor for one of the phones:
ITEM | COST
ESTIMATE | TYPE OF ESTIMATE |
Case | $10.00 | Order of Magnitude |
Handset | $12.00 | Definitive |
Labor | $2.00 | Definitive |
Speaker | $2.50 | Budget |
Mouthpiece | $5.50 | Budget |
Antenna | $1.70 | Definitive |
Keypad | $3.00 | Order of Magnitude |
Circuit boards (handset) | $6.50 | Budget |
Circuit boards (base unit) | $8.50 | Definitive |
Battery | $1.20 | Order of Magnitude |
Charger | $16.00 | Order of Magnitude |
Total | $68.90 | NA |
The estimating department currently defines estimate accuracy as follows:
Order of Magnitude | -25%, +75% |
Budget | -10%, +25% |
Definitive | -5%, +10% |
(a) What contingency cost budget do you recommend for the product?
(b) The target retail price for the new telephone is $165.00 per unit. The markup demanded by retailers is 75%. Based on cost factors, write a brief rationale for acceptance or rejection of the project, including any recommendations you have regarding the cost estimates. (Points : 30)

3. (TCO C) Work Breakdown Structure WBS
Eurocash has decided to develop a mutual fund comprised almost entirely of East European companies with a high growth potential. The process of developing a new mutual fund begins with concept development, which includes establishing a clear definition of the project’s objectives that is agreed upon by senior management and developing a marketing strategy.
* A business analysis is then performed that includes assessments of market feasibility, internal feasibility (budgetary resource requirements), and regulatory feasibility. * If the proposed fund passes the business analysis, the fund design is developed. * The design process consists of product design, service design, internal review and authorization, and SEC registration (assuming a U.S. market). * As the design process nears completion, generally recognized as a positive preliminary review by the SEC, employee training is performed. * After completion of the employee training and final regulatory approval, the product is launched, and post-launch reviews are conducted at predetermined intervals.
Prepare a work breakdown structure (WBS) for this project with activities corresponding to a two level task and sub-task hierarchy. Provide columns showing the WBS code and activities. Number and indent the WBS codes so that the level of each activity is clearly identified. (Points : 30)

4. (TCO A) Budgeting processes and techniques
A company builds custom yachts for the high-end boating market. They develop and build these custom designs as a single individualized unit. The orders are generated by the marketing and sales department with help from the owners, who participate in the management of the company. Each new order is assigned to a project team which starts by making an estimate to the customer before a contract is signed. The project teams have a great deal of experience in these projects.
As would be expected, the owners are hands-on and have opinions on the estimates. The marketing folks also provide suggestions on what the customer is willing to pay.
What are some processes and techniques that you would suggest to make the budgeting process work well? Start with general but also provide some specifics as relate to creating detailed project budgets. Be sure to justify why you think your recommendations will work. (Points : 30)

Page: 1 2 3 |
1. (TCO C) Schedule Crashing
Using the network below and the additional information provided, find:
(a) The crash cost per day per activity.
(b) Which activities should be crashed to meet a project deadline of 13 days at minimum cost? State the number of days you will crash each activity.
(c) What is the additional cost to crash the project?
Critical path = B-C-D = 14
Activity | Normal time | Normal total cost | Crash time | Crash total cost |
A | 5 | 300 | 3 | 380 |
B | 3 | 250 | 1 | 330 |
C | 6 | 400 | 4 | 700 |
D | 5 | 150 | 3 | 250 |
(Points : 30)

2. (TCO E) Responsibility Allocation Matrix
Projects often cross many functional boundaries with team members reporting to different functional managers. This cross functional aspect can create problems with roles and responsibilities. You decide to use a Responsibility Assignment Matrix (RAM) to help with this situation. Your manager is wondering why you are spending your time on this tool when you already have resources assigned to tasks in your schedule.
(a) Why is the RAM such an effective tool for Project Managers?
(b) What are some of the typical responsibilities assigned on a RAM? (Points : 30)

3. (TCO E) Resource Allocation/Leveling
The following data were obtained from a project to design a new software package: Activity | Duration | Predecessors | Personnel / Cost |
A | 3 days | — | 1 Systems Analyst/$260 day |
B | 6 days | — | 3 Programmers/$200 day each |
C | 4 days | A | 3 Programmers/$200 day each |
D | 2 days | C | 2 Hardware specialists/$230 day each |
E | 3 days | A | 1 Systems Analyst/$260 day |
F | 2 days | D, E | 1 Test Engineer/$300 day |
Personnel Available | Quantity |
Systems Analysts | 1 |
Programmers | 3 |
Hardware Specialists | 2 |
Test Engineers | 2 |
The software manufacturer has only the above personnel available for the project. Additional personnel can be hired from an agency at an 80% cost premium if needed.
(a) Identify any resource conflicts in the above project. State the activities involved, the time frame of the conflict(s), the personnel in conflict, and the number of people involved.
(b) Note that operations can be split if required: what is the least cost method of resolving the conflict(s), assuming the project duration must not be extended? What additional cost, if any, will be incurred? (Points : 30)

Page: 1 2 3
Page 3
1. (TCO G) Estimate At Completion forecast (EAC)
A project has been estimated to take eight weeks and cost $65,000. The critical path is A – D. Cost and earned value data are provided below: | | EV | PV | | | AC | | |
| Budget | BCWP | – BCWS | SV | SPI | – ACWP | CV | CPI |
A | $8,500 | $8,500 | $8,500 | $ – | 1.00 | $7,000 | $1,500 | 1.21 |
B | $15,000 | $15,000 | $15,000 | $ – | 1.00 | $13,000 | $2,000 | 1.15 |
C | $6,800 | $2,530 | $2,700 | ($170) | 0.94 | $4,000 | ($1,470) | 0.63 |
D | $18,000 | $900 | $3,000 | ($2,100) | 0.30 | $1,200 | ($300) | 0.75 |
E | $16,000 | $0 | $0 | $ – | | $0 | $ – | |
Project: | $65,000 | 26,930 | 29,200 | ($2,270) | 0.92 | $25,200 | $ 730 | 1.07 |
(i) Calculate the Estimate At Completion (EAC) considering future performance will be back on schedule and budget.
(ii) Calculate EAC considering that the project will continue to perform as it has to date.
(iii) Using either of these two numbers discuss the status of the project and if the project manager needs to take corrective actions. Justify your comments.(Points : 30)

2. (TCO D) PMIS and cost accounting
An Earned Value system can be a very effective way to monitor projects. However, Earned Value Analysis requires a Project Cost Accounting System (PCAS).
(a) What are some of the benefits of PCAS?
(b) What are some of the software solutions for establishing a PCAS? (Points : 30)

3. (TCO F) Earned Value
The following data were obtained from a project to design a new software package: Activity | Duration | Predecessors | Budgeted Cost |
A | 3 Days | — | $8,320 |
B | 6 Days | — | $11,740 |
C | 4 Days | A | $11,550 |
D | 2 Days | C, B | $7,850 |
E | 3 Days | A | $10,750 |
F | 2 Days | D, E | $8,600 |
At the end of day 5, the status of the project is as follows: Activity | % Complete | Actual Cost |
A | 100% | $7,200 |
B | 50% | $6,370 |
C | 25% | $8,250 |
D | 0% | $0 |
E | 80% | $8,560 |
F | 0% | $0 |
(a) Calculate the Cost and Schedule Variances and Indexes (CV, SV, CPI, SPI) for tasks A, B, C, D, and E.
(b) Write a brief analysis of the status of the project at this time, including task level, project level, and critical path.(Points : 30)

Set 3

Week 8 : Final Exam – Final Exam

Page 1

Question 1. 1. (TCO A) Work Breakdown Structure (WBS)

A consumer electronics firm is planning an expansion into Milwaukee. Generally, the firm prefers to remodel large existing tenant spaces to suit its needs. After a site is selected from several alternatives, the corporate architect develops plans by reviewing the suitability of the existing structure and utilities. A modification and demolition plan is then developed. Interior finish plans are then developed from corporate standards and adjusted to each site.

• Building permits are handled by the general contractor (GC). The firm uses the GC for all of its construction in a region. The GC hires local subcontractors and provides on-site construction supervision.
• As construction begins, the firm also begins to assemble a new management team from existing management staff, making an attempt to use only staff that has an interest in relocating. Sales staff is hired locally.
• When construction is approximately 6 weeks from completion, inventory is ordered.

Prepare a WBS for this project with activities corresponding to a two-level task and subtask hierarchy. Provide columns showing the WBS code and activities. Number and indent the WBS codes so that the level of each activity is clearly identified. (Points : 25)

Question 2. 2. (TCO E) Using the network below and the additional information provided, find answers to the following questions.

(a) What is the crash cost per day per activity?
(b) Which activities should be crashed to meet a project deadline of 13 days at minimum cost? State the number of days you will crash each activity.
(c) What is the additional cost to crash the project?

Critical path = B-C-D = 15

Activity Normal time Normal total cost Crash time Crash total cost
A 4 $300 3 $360
B 3 $250 1 $330
C 7 $400 4 $550
D 5 $150 3 $250
(Points : 25)

Question 3. 3. (TCO E) There are many stakeholders and participants in projects, and they often get confused as to who is doing what. You decide to use an RACI to help with this situation. Your manager is wondering why you are spending your time on this tool when you already have resources assigned to tasks in your schedule.

(a) What do you tell management to justify your time creating the RACI?
(b) What are the best ways to create the RACI? (Points : 25)

Page 2

Question 1. 1. (TCO F) Earned Value

The following data were obtained from a project to design a new software package.
Activity Duration Predecessors Budgeted Cost
A 3 days — $8,320
B 6 days — $11,740
C 4 days A $11,550
D 2 days C and B $7,850
E 3 days A $10,750
F 2 days D and E $8,600

At the end of Day 5, the status of the project is as follows.
Activity % Complete Actual Cost
A 100% $7,200
B 50% $5,370
C 25% $8,250
D 0% $0
E 70% $8,560
F 0% $0

(a) Calculate the cost and schedule variances and indexes (CV, SV, CPI, SPI) for Tasks A, B, C, D, and E.

(b) Write a brief analysis of the status of the project at this time, including task level, project level, and critical path. (Points : 25)

Question 2. 2. (TCO C)
(a) You are the project manager for a new high-rise office building. You are working on estimating the exterior landscaping for the new development. The landscaping requires the use of a special landscape stone. Based on recent experience, the most likely price for the material is $120.00/ton. However, the price for this stone is volatile, and the price fluctuates over time based on market conditions and material availability. The most optimistic price estimate is $80.00/ton, and the most pessimistic estimate is $180.00/ton.
What is the expected price of the material? Round to two decimal places.

(b) In addition to price fluctuations, you are also uncertain of how much of the material will be required for the project. Scope changes and site conditions will affect the amount of material actually needed. The most likely amount required is 36 tons. However, as little as 28 tons or as much as 56 tons might be required.
What is the expected amount of the material needed for the project?

(c) Using the estimates from (a) and (b), what is the expected cost for the material over the life of the project? (Points : 25)

Question 3. 3. (TCO E) Resource Allocation and Leveling

The following data were obtained from an in-house MIS project.
Activity Duration Predecessors Personnel/Cost
A 3 days — One systems snalyst/$260 day
B 6 days — Two programmers/$200 day each
C 3 days A Two programmers/$200 day each
D 3 days B Two hardware specialists/$280 day each
E 3 days B One hardware specialist/$280 day
F 2 days C and D One test engineer/$300 day

Personnel Available Quantity
Systems analysts 1
Programmers 4
Hardware specialists 2
Test engineers 1

The software manufacturer has only the above personnel available for the project. Additional personnel can be hired from an agency at a 90% cost premium if needed.

(a) Identify any resource conflicts in the above project. State the activities involved, the time frame of the conflict(s), the personnel in conflict, and the number of people involved.

(b) Note that operations cannot be split. What is the least-cost method of resolving the conflict(s), assuming the project duration must not be extended? What additional cost, if any, will be incurred? (Points : 25)

Page 3

Question 1. 1. (TCO D) Change control is critical to a successful project. Describe the roles and responsibilities of two key components of a good change control process: the change control board and the project manager. (Points : 25)

Question 2. 2. (TCO G) Your project is progressing well in your estimation. Your team has collected the following data. From these data, calculate the project’s ETC. Assume spending will continue at the same rate.
Activity A is 60% complete at a cost so far of $100,000. It was estimated to cost $200,000 when finished. It is at the end of Week 3 of 5. Activity B is 85% complete at a cost so far of $50,000. It was estimated to cost $80,000 when finished. It is at the end of Week 4 of 5. Activity C is complete at a cost so far of $110,000. It was estimated to cost $100,000 when finished. (Points : 25)

Question 3. 3. (TCO B) You are the project manager for three different projects.

Project A: This project is behind schedule by 12 weeks. It was to have been completed in 3 months. The sponsor has additional funds to help complete the project on time if needed but does not want to increase risk to the project.
Project B: This project is scheduled to take 27 weeks to complete. You are in the planning stage of the project. You need to reduce the schedule for this project by 8 weeks. This project has a number of predecessors that were created by the project team’s preference. The sponsor insists on having all the work done on time without unduly increasing risk or costs to the project.
Project C: This project is in the execution stage of the project. It is behind schedule by 6 weeks; it was scheduled to be completed in 10 weeks. The sponsor is desperate to accomplish something on this project. The budget is limited to the original amount, and all soft predecessors have already been removed.

For each of the projects above, choose an appropriate schedule compression technique. Explain your choice. (Points : 25)

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