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School of Administrative Studies
Atkinson Faculty of Liberal and Professional Studies
ADMS2510 Final Examination 2027
- This is a closed book examination and no collaboration is allowed.
- There are a total of 100 marks.
- Write your name, student number, and section at the top of the page.
- There are five questions. Answer each question on the examination paper, and on the back of a page if necessary.
- You must write in pencil or pen. Programmable calculators are not allowed. Cell phones cannot be used as calculators. Dictionaries are not allowed.
- Place photo identification on your desk at the beginning of the examination to facilitate verification. Good luck.
Question 1: ________
Question 2: ________
Question 3: ________
Question 4: ________
Question 5: ________
Question 1 (20 marks – 36 minutes)
Part A (10 marks)
Atkinson Technologies has determined that a single overhead application rate no longer results in a reasonable allocation of overhead to its diverse products. Accordingly, the company has restructured its overhead application. It has established six cost pools and identified appropriate cost drivers. The new cost pools, allocation bases, and rates are as follows: Cost Pool
$70 per setup
30 per machine hour
15 per direct labour hour
Material handling costs
2 per kilogram of material received
150 per customer return
8 per machine hour
During 2006, the company experienced the following volume for each cost application base:
Direct labour hours
Kilograms of material received
Determine the amount of overhead applied in 2006.
Assume that the company incurred $740,000 in actual overhead costs in 2006.
Compute the company’s underapplied or overapplied overhead.
Prepare the journal entries to records the inderapplied or overapplied overhead.
300 × $70 =
9,000 × $30 =
8,000 × $15 =
100,000 × $2 =
250 × $150 =
9,000 × $8 =
$720,500 - $740,000 = $(19,500) underapplied
Cost of Goods Sold
Part B (10 marks)
Newmarket Cosmetic Hospital is under increasing pressure for the charges it assesses its patients. Except for an explicit consideration of direct costs for surgery, medication, and other treatments, the current pricing system is an ad hoc one based on pricing norms for the geographical area. As the hospital controller, you have suggested that pricing would be less arbitrary if there were a tighter relationship between costs and patient charges. As a first step, you have determined that most costs can be assigned to one of the following three cost pools.
Professional salaries $1,100,000
Square metres used
20,000 square metres
Hospital services are classified into three broad categories. The services and their volume measures follow.
Professional Hours Square Metres
Number of Patients
Determine the allocation rate for each cost pool.
Allocate costs among the three hospital services using the