COMM305_FT2023_Practice_Final_Exam_Update_20231211
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Concordia University *
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305
Subject
Communications
Date
Jan 9, 2024
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COMM 305 Final Practice Exam Page 1 OF 13 !!!You will receive a printed copy of the exam on the real exam!!! COMM 305 PRACTICE FINAL EXAMINATION ALL SECTIONS First Name: ______________________________ Last Name ______________________________ Student ID ______________________________ Section Number ______________________________ Your exam number is 4 Instructions: You find the same instructions on COLE. These instructions were distributed in the Detailed Exam Information document ahead of the exam.
1.
Log-into COLE and go to your COMM 305 section https://cole.concordia.ca/ 2.
Download the Excel spreadsheet. The Excel spreadsheet will become visible on COLE when the exam starts. 3.
Save the Excel spreadsheet on your computer as “COMM305_FT2023_FE_
STUDENT ID
”. Add your student ID to the file name. For example… COMM305_FT2023_FE_ 400….xlsx 4.
You will receive a copy of the printed exam questions and answer booklet.
COMM 305 Final Practice Exam Page 2 OF 13 5.
Very important:
In the Excel worksheet called “Cover Page”, enter your first name, last name, student ID, and exam number
. 6.
Solve the exam questions in your Excel spreadsheet in the designated Excel worksheet
. This means go to the worksheet “Q1” to solve question 1 and so forth. Depending on the question, there might be an additional sheet with the corresponding data set for a question. You have three hours
to solve the exam questions. Make sure to budget your time appropriately. 7.
Exam upload on COLE. You have 10 minutes after the end of the exam to upload your filled-out Excel spreadsheet
“COMM305_FT2023_FE_STUDENT ID”. 8.
Return the printed exam copy and answer booklet
at the end of the exam. Remark: You will not be writing directly into the COLE interface. You will use COLE to download and upload your Excel sheet.
COMM 305 Final Practice Exam Page 3 OF 13 VERY IMPORTANT – PLEASE READ •
You have 3 hours to solve the exam. The invigilators will announce the end of the exam. Subsequently, you need immediately to upload your Excel exam one time only on COLE. In case the exam upload does not work, send your Excel exam immediately to your instructor before you leave the assigned room: Section Days/Time Instructor Email Section A Tuesdays, 11:45-
14:30 Matthäus Tekathen matthaeus.tekathen@concordia.ca Section B Tuesdays, 14:45-
17:30 Jonathan Schacter jonathan.schacter@concordia.ca Section C Thursdays, 14:45-
17:30 Sabrina Lairy sabrina.lairy@concordia.ca Section E Fridays, 08:45-
11:30 Jim Parthimos jim.parthimos@concordia.ca Section AA Wednesdays, 17:45-20:15 Sabrina Lairy sabrina.lairy@concordia.ca Section EC Online Matthäus Tekathen matthaeus.tekathen@concordia.ca •
Save your spreadsheet frequently. This is at least after a calculation step. •
You are only allowed to have the following two taps/files open during the time of the exam: 1)
Your Excel exam saved as “COMM305_FT2023_FE_STUDENT ID” 2)
A browser with one single tap open to COLE (
https://cole.concordia.ca/
). All other files/taps/programmes must be closed
. Also make sure to disconnect to all applications
, including chats, messengers etc. If not, it is academic misconduct
. •
Invigilators have the right to check which taps/files/software you have open. •
There are multiple exam versions to prevent academic misconduct. Make sure to enter your exam number in the Excel worksheet called “Cover Page”. •
The Excel spreadsheet will become visible on COLE when the exam starts. If not, first refresh your browser. In case you cannot download the Excel spreadsheet directly from COLE, inform the COLE online chat and provide your email. You will receive the Excel spreadsheet per email. Make sure to close your email account
immediately after having downloaded the Excel spreadsheet.
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COMM 305 Final Practice Exam Page 4 OF 13 Exam Questions: Question Marks Q-1 24 Q-2 18 Q-3 20 Q-4 18 Q-5 20 100 We wish you a successful exam!
COMM 305 Final Practice Exam Page 5 OF 13 QUESTION I. 24 MARKS Oak Hammock Company prepared the following income statement for its 15,000 bucket sales for the last quarter of 2023: Pro Format Income Statement – Quarter 4, 2023 Sales $ 120,000.00 COGS (40% variable and 60% fixed) $ 75,000.00 Gross Profit $ 45,000.00 S&A expenses: Sales commissions (10% of sales as a network sales agents) $ 12,000.00 Fixed selling expense $ 4,000.00 Fixed administrative expense $ 3,000.00 Total S&A expenses $ 19,000.00 Operating Income before taxes $ 26,000.00 Income taxes (40%) $ 10,400.00 Operating Income after taxes $ 15,600.00 Tasks: Answer the following questions: a)
Calculate the contribution margin ratio. 2 marks b)
Calculate the total fixed costs. 2 marks c)
Calculate the break-even point in units. 2 marks d)
Calculate the break-even point sales dollars. 2 marks e)
Calculate how much sales dollars the company need to generate to earn a target operating income after taxes of $31,200. 2 marks f)
Assume that the company expects to sell 20,000 buckets. What is the operating leverage? 2 marks g)
Using the operating leverage, if sales increase by 10% of the expected sales, by how much will operating income increase? 2 marks h)
Using the operating leverage, if sales decrease by 15% of the expected sales, what is the projected operating income? 2 marks
COMM 305 Final Practice Exam Page 6 OF 13 Assume the following scenario for your answers to i) and j). Treat both scenarios independent of each other: Management wants to examine the possibility of employing the company's own sales force. The company would need a sales manager at an annual
salary of $60,000 and two sales personnel at an annual
salary of $20,000 each, plus a commission of 5% of sales. All other fixed costs, as well as the variable cost percentages would remain the same as in the above income statement. i)
Calculate the sales dollars required for the Quarter 4 2023, to have the same operating income as projected in the pro forma income statement above if the company employs its own sales force. 6 marks j)
Calculate the required unit selling price to have the same operating income as projected in the pro forma income statement above if the company employs its own sales force. Assume that a change in the selling price does not affect demand for buckets. 2 marks QUESTION II. 18 MARKS QUESTION II-Part A. 8 MARKS Montsela Company uses time-and-material pricing. The following budgeted cost data is available for 2022: Time Material Charges Charges Technicians' wages and benefits $ 75,000 Parts manager’s salary and benefits $50,000 Office manager’s salary and benefits 55,000 25,000 Other overhead 15,000 20,000 Total budgeted costs $145,000 $95,000 Montsela has budgeted for 5,000 hours of technician time during the coming year. It desires a $25 profit margin per hour of labour and a 30% profit margin on parts. Montsela estimates the total invoice cost of parts and materials in 2022 will be $200,000. Tasks: Answer the following questions: a)
Calculate the labour charge per hour 2 marks b)
Calculate the material loading charge as percentage 2 marks c)
Montsela has received a request for a job. The company estimates that it would take 100 hours of labour time and $600 in materials. Calculate the total charge for the job. 4 marks
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COMM 305 Final Practice Exam Page 7 OF 13 QUESTION II-Part B. 10 MARKS Escher Skateboards has been manufacturing its own wheels for its skateboards. Normal production is 200,000 wheels per year. The company is currently operating at 100% capacity, and variable manufacturing overhead is charged to production at the rate of 30% of direct labour cost. The direct materials and direct labour cost per unit to make the wheels are $1.50 and $1.80, respectively. The production of wheels incurs scope 1 emissions of 150 grams of CO2-equivalents per wheel and scope 2 emissions of 50 grams of CO2-equivalents per wheel. Assume that the company is exposed to a carbon tax of $50 per tonne of CO2-equivalents. The company expects to continue to produce at maximum capacity next year. Further, direct materials costs are expected to increase by 30% next year, while all other costs are expected to remain the same. A supplier offers a two-year contract to make the wheels at a price of $4 each for this year and $4.50 next year. If the skateboard company accepts this two-year contract, all variable manufacturing costs will be eliminated, but the $42,000 of fixed manufacturing overhead currently being charged to the skateboard wheels will have to be absorbed by other products. The CO2-equivatents emissions for wheels will be scope 3 emissions of 300 grams of CO2-equivalents per wheel. Tasks: Answer the following questions: a)
Classify each cost/benefit item as relevant cost/benefit, sunk cost, or opportunity cost. 3 marks b)
Using the answer template in the corresponding Excel file, conduct an incremental analysis for the two years that shows whether Escher Skateboards should produce the wheels or outsource their production. 6 marks c)
Based on the incremental analysis, should the company continue to produce the wheels or outsource their production. Select the right answer. 1 mark Note: Use a negative sign
for costs in the incremental analysis template.
COMM 305 Final Practice Exam Page 8 OF 13 QUESTION III. 20 MARKS QUESTION III-Part A. 12 MARKS Conan Company produces sporting equipment. In 2021, the first year of operations, Conan produced 25,000 units and sold 18,000 units. In 2022, the production and sales results were exactly reversed. In each year, selling price was $100, direct materials costs were $20 per unit, direct labour costs were $10 per unit, variable manufacturing overhead costs were $10 per unit, variable selling expenses were $8 per unit, fixed manufacturing costs were $540,000, and fixed administrative expenses were $200,000. Tasks: Answer the following questions. Pay attention to the year: a)
What are the unit product cost under throughput costing in 2021
? 1 mark b)
What are the unit product cost under absorption costing in 2021
? 1 mark c)
What are the unit product cost under variable costing in 2022
? 1 mark d)
What is gross profit in 2021
? 1 mark e)
What is the ending finished goods inventory under throughput costing in 2021
? 2 marks f)
What is the contribution margin amount in 2022
? 2 marks g)
What is the difference in operating income between absorption and variable costing in 2021
? Reconcile, do not prepare a separate income statement! Only enter the numerical value, do not add a “plus” or “minus” sign. 1.5 marks h)
What is
operating income under variable costing in 2021
? 0.5 marks i)
What is the difference in operating income between variable and throughput costing in 2022
? Reconcile, do not prepare a separate income statement! Only enter the numerical value, do not add a “plus” or “minus” sign. 1.5 marks j)
What is operating income under throughput costing in 2022
? 0.5 marks
COMM 305 Final Practice Exam Page 9 OF 13 QUESTION III-Part B. 8 MARKS Two Wheel Green Machines manufactures and sells bicycles. The tire manufacturing division sells its product to customers for $15 each. The variable cost per tire is $7.50, and fixed costs per tire are $3.00. The bicycle assembly division has been buying tires from an outside source for $13 each. Upper management wants the tire division to transfer 50,000 tires to the assembly division within the company at a price of $12 per tire. The tire division is operating at full capacity. Tasks: Answer the following questions: a)
What is the minimum transfer price? 3 marks b)
What is the maximum transfer price? 1 mark c)
How much will the tire manufacturing division gain/lose by selling its tires at a set transfer price of $12 per tire? 2 marks Note: Use a negative sign to indicate a loss. d)
How much will the assembly division gain/lose by buying the tire at a set transfer price of $12 per tire? 2 marks Note: Use a negative sign to indicate a loss.
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COMM 305 Final Practice Exam Page 10 OF 13 QUESTION IV. 18 MARKS DecorRetail buys and sells seasonal decoration items. The President has collected the following information about her operations as of December 31: 1. Balances of selected general ledger accounts: Cash
$20,000 Accounts payable
5,250
2. Sales history and forecast (unit selling price, $10): October
(actual)
$43,000 November
(actual)
35,000
December (actual)
40,000
January (forecast)
50,000
February (forecast)
60,000
March (forecast)
40,000
3. All sales are on credit. Fifty percent of a month's sales are collected in the month of sale; 45% are collected one month after the sale; and 5% are uncollectible. 4. DecorRetail wants to have 20% of next month’s expected sales units as merchandise inventory. Cash payments for purchases are as follows: three-quarters in the month of purchase; one-
quarter in the month after the purchase. 5. Accounts payable as shown above relate solely to merchandise inventory purchases. Merchandise inventory costs are $5 per unit. 6. Other expenses average about 50% of the sales dollar amount. Depreciation is part of these expenses and costs $3,000 per month. All other cash-effective items are paid in the month incurred. 7. The company can borrow and repay in multiples of $500 from its line of credit at a rate of 8% per annum. It makes all borrowings from the line of credit at the beginning of a month and all repayments at the end of a month. It pays interest only on the portion of the short-term loan (line of credit) that is repaid. DecorRetail wants to maintain a minimum cash balance of $20,000. In February, DecorRetail plans to sell one of its short-term investments for $30,000.
COMM 305 Final Practice Exam Page 11 OF 13 Tasks: Prepare a merchandise inventory budget and cash budget for January, February, and the total of the two months in order to answer the following questions: Note: Only enter the numerical value, do not add a “plus” or “minus” sign
. a)
What are the accounts receivables at the end of February? 2 marks b)
What are the total merchandise purchasing costs in January? 2 marks c)
What are the merchandise accounts payables at the end of February? 2 marks d)
What are the total cash receipts in January and February? 2 marks e)
What are the total cash disbursements in January and February? 2 marks f)
What is the amount borrowed in January? 2 marks g)
What is the amount of interest paid in February? 2 marks h)
What is the ending cash balance in February? 2 marks i)
What is the ending balance of merchandise inventory in February? 2 marks
COMM 305 Final Practice Exam Page 12 OF 13 QUESTION V. 20 MARKS QUESTION V-Part A. 12 MARKS BikeGo Inc. produces bikes. The standard cost for one unit is as follows: Standard Manufacturing Cost Elements Quantity Price Cost Direct materials 3 kg $28.00 per kg $ 84.00 Direct labour 2 hours $22.00 per hour $ 44.00 Manufacturing overhead 2 hours $48.00 per hour $ 96.00 $224.00 Please refer to the Excel worksheet “Q5 Data Set” to obtain information on the actual manufacturing costs incurred related to the production of 400 bikes during August. Important Note: For each variance, only enter the numerical value, do not
add a “plus” or “minus” sign
. Tasks: Calculate the following a)
Direct materials price variance. 2 marks Indicate whether variance is Favourable or Unfavourable. 0.5 marks b)
Direct materials usage variance. 2 marks Indicate whether variance is Favourable or Unfavourable. 0.5 marks c)
Total direct materials variance. 0.5 marks Indicate whether variance is Favourable or Unfavourable. 0.5 marks d)
Direct labour rate variance. 2 marks Indicate whether variance is Favourable or Unfavourable. 0.5 marks e)
Direct labour efficiency variance. 2 marks Indicate whether variance is Favourable or Unfavourable. 0.5 marks f)
Total direct labour variance. 0.5 marks Indicate whether variance is Favourable or Unfavourable. 0.5 marks
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COMM 305 Final Practice Exam Page 13 OF 13 QUESTION V-Part B. 8 MARKS The latest monthly performance report of the company’s three retail stores is shown below. Tasks: Analyse the chart above as follows. a)
Answer “The What?” in one sentence. This summarizes your main finding from the visual prepared based on the data. b)
Answer the “So What?” in up to two sentences. This puts forward the key implication or takeaway from the finding. c)
Answer the “Now What?” in up to two sentences. This provides a concrete recommendation on what needs to be done. d)
Answer the “How to Implement?” in up to two sentences. This explains concretely how to implement the recommended action. Store 1
Store 2
Store 3
Sales
$200,000
$70,000
$15,000
Contribution Margin Ratio
30%
60%
30%
0%
10%
20%
30%
40%
50%
60%
70%
$-
$50,000
$100,000
$150,000
$200,000
$250,000
Dollars
Monthly Stores' Performance Report