ACCTG 231 Homeworks
ABC Company's sales for January, 2017, were $1,350,000. ABC projects a 10% increase in sales every month through December. The sales for March, 2017 are estimated at: -$1,633,500 $1,796,850 $1,620,000 $1,755,000
$1,633,500
Obuya, Inc. plans to pay its managers a bonus to encourage performance. The bonus rate is 10% and the bonus base is net income AFTER bonus and AFTER taxes (net income). Obuya's expected income before bonus or taxes is $200,000. Its tax rate is 30%. Determine the amount of the expected bonus. -13,084.11 $12,000.00 $12,727.27 $14,980.00
$13,084.11
ABC Company's sales were budgeted for the first six months of its fiscal year as follows: April $170,000 July $195,000 May $210,000 August $180,000 June $275,000 September $240,000 All sales are on credit and management estimates that 55% will be collected in the month following the sale, with the remaining 45% collected the second month following the sales. Cash collections during June are estimated to be: -$192,000 $188,000 $245,750 $275,000
$192,000
Alarid Inc. currently sells its product for $3.25 per unit. The variable cost per unit is $0.80 and fixed costs are $90,000. The company plans for sales of 90,000 units. What is the contribution margin per unit? -$2.45 per unit $4.05 per unit $1.45 per unit $2.25 per unit
$2.45/ unit
ABC Company's sales were budgeted for the first six months of its fiscal year as follows: April $170,000 July $195,000 May $210,000 August $180,000 June $275,000 September $240,000 All sales are on credit and management estimates that 55% will be collected in the month following the sale, with the remaining 45% collected the second month following the sales. What is the balance in Accounts Receivable at the beginning of June before June sales are recorded? -$286,500 $94,500 $210,000 $192,000
$286,500
Bowles Company's expected gross payroll for the period is $250,000. Assuming that its FICA rate is 7.65%, its FUTA rate is 0.6%, and its SUTA rate is 5.4%, what is the expected payroll tax for the period? -$15,000 -$19,125 -$34,125 -$67,375
$34,125
Arima Company estimates its cost per unit at $500. Its markup is 80%. What is the selling margin? - $900 $400 $860 $540
$400
Brinklow Company plans to pay its managers a bonus to encourage performance. The bonus rate is 12% and the bonus base is net income AFTER bonus but before taxes. Brinklow's expected income before bonus or taxes is $400,000. Its tax rate is 30%. Determine the amount of the expected bonus. - $40,000.00 $42,240.00 $42,857.14 $48,000.00
$42,857.14
Zhang Enterprises plans to pay its managers a bonus to encourage performance. The bonus rate is 15% and the bonus base is net income before bonus or taxes. Zhang's expected income before bonus or taxes is $400,000. Its tax rate is 30%. Determine the amount of the expected bonus. - $18,000 -$42,000 -$60,000 -$120,000
$60,000
Craft, Inc. expects its gross payroll for the period to be $90,000. It expects to withhold 7.65 percent of gross payroll for FICA taxes, 15% for federal income taxes, and 5% for state income taxes. What is the expected net pay for the period? -$114,885 -$24,885 -$65,115 -$81,315
$65,115
Use the following information to determine the EOQ for Albert Company. Units required during the year 20,000 Cost to place an order $60 Cost of carrying a unit in inventory $2 Round to the nearest unit. -600,000 -37 -775 -1,095
1,095
ABC Company sells its product at $40 per unit. ABC wants to have 15% of the next month's total needs in ending inventory. It begins March with 15,750 units in inventory. Unit sales information is presented below: March (actual) April (estimated) May (estimated) Cash Sales 30,000 31,500 33,000 Credit Sales 75,000 82,000 89,000 How many units does ABC need to purchase in March? -106,275 units 105,000 units 103,725 units 122,025 units
106,275 units
The following is the output of a regression analysis applied to Bogard's data. Coefficients R square Intercept 36171.23 Units 10.047 0.9645 Estimate the total cost if 11,000 units are made during July. - $146,688.23 -$36,181.28 -$74,345.77 -$110,517.00
146,688.23
JCP accepts Visa, MasterCard, Discover, and American Express as well as its own JCP charge cards. Assume that Visa and MasterCard charge a 1.8% processing fee with Discover and American Express charge a 3.5 % processing fee. During the period, the following charge card sales occurred at a particular JCP store. JCP customers are billed on the first day of the following month for purchases during the current month. What is the net amount of cash received from credit sales during the period? Visa $8,650 MasterCard 10,625 Discover 6,175 American Express 2,130 JCP 25,843 -26,942.38 -53,423.00 -52,785.38 -25,843.00
26,942.38
Bogard is estimating costs for the last half of the year based on activity during the first half of the year. The results from January through June are as follows: Month Units Production Costs January 3,500 $68,040 February 6,200 $98,160 March 4,600 $83,760 April 12,500 $154,680 May 8,100 $114,960 June 9,800 $146,520 Using the high/low estimation method, determine the total fixed cost per month. -$34,346.55 -$68,040.00 -$31,675.00 -$69,836.45
34,346.55
Alarid Inc. currently sells its product for $3.25 per unit. The variable cost per unit is $0.80 and fixed costs are $90,000. The company plans for sales of 90,000 units. What is the breakeven point for the company? -36,735 units 90,000 units 27,692 units 112,500 units
36,735 units
Alarid Inc. currently sells its product for $3.25 per unit. The variable cost per unit is $0.80 and fixed costs are $90,000. Purchasing a new machine will increase fixed costs by $6,000 but variable costs will be cut by 20%. What is the new breakeven point? (round to the nearest unit) -36,782 units 41,921 units 39,184 units 36,226 units
36,782 units
Hanson Enterprises has set its selling price at $400. At this price, its selling margin is $300. What is Hanson's selling margin? - 42.86% 57.14% 75% 25%
75%
Alarid Inc. currently sells its product for $3.25 per unit. The variable cost per unit is $0.80 and fixed costs are $90,000. The company plans for sales of 90,000 units. What is the contribution margin ratio (i.e., CM%)? -75.38% 24.62% 69.23% The correct answer is not listed
75.38%
Clark has determined its EOQ to be 1500 units. Demand for the year is 54,000. 5 days elapse between the time an order is placed until it is received. Clark conducts business 360 days per year. What is the reorder point? -1972 units -3,888,000 units -750 units -740 days
750 units
Alarid Inc. currently sells its product for $3.25 per unit. The variable cost per unit is $0.80 and fixed costs are $90,000. If the company wants to earn $100,000 in pre-tax profit, how many units must it sell? (round to the nearest unit) -77,551 units 40,816 units 58,462 units 67,494 units
77,551 units
Bogard is estimating costs for the last half of the year based on activity during the first half of the year. The results from January through June are as follows: Month Units Production Costs January 3,500 $68,040 February 6,200 $98,160 March 4,600 $83,760 April 12,500 $154,680 May 8,100 $114,960 June 9,800 $146,520 Using the high/low cost estimation method, determine the variable cost per unit made. -$9.63 -$12.37 -$3,493.07 -$10.39
9.63
On December 20, 2013, Miller Company ships $250,000 of merchandise by common carrier to Jackson, Inc. The terms of the sale are 2/10, n/60, FOB shipping point. It takes three days for the merchandise to arrive at Jackson, Inc. Both Miller and Jackson have December 31 year-ends. Which of the following statements best describes the sales discount policy? -A 2% discount off the invoice amount is available if paid within 10 days. -A 10% discount off the invoice amount is available if paid within 2 days. -A 2% discount is available if paid within 30 days. -A 10% discount is available if paid within 60 days.
A 2% discount off the invoice amount is available if paid within 10 days.
Which of the following statements is true? - Cash is decreased with a debit. Gas Expense is decreased with a debit Accounts Payable is increased with a credit Capital (OE) is decreased with a credit.
Accounts Payable is increased with a credit
Which of the following is NOT one of the four primary influences on selling price? -Customers -All of the answers are correct. -Competition -Legal and Social Issues
All of the answers are correct
Which of the following statements is true regarding changes in fixed costs? -An increase in fixed costs causes the breakeven point to increase. -An increase in fixed costs does not impact the breakeven point. -A decrease in fixed costs causes the breakeven point to increase. -A decrease in fixed costs causes the contribution margin to increase.
An increase in fixed costs causes the breakeven point to increase.
The first two steps of the accounting cycle involve: - Analyzing transactions and recording them in the Journal Analyzing transactions and preparing a trial balance. Analyzing transactions and posting them into the Ledger. Analyzing transactions and recording transactions in the Ledger.
Analyzing transactions and recording them in the Journal
Which of the following is correct? -CM = Sales Price less Variable Cost -CM = Fixed Cost plus Variable Cost -CM = Sales Price less Fixed Cost -CM =Fixed Cost less Variable Cost
CM = Sales Price less Variable Cost
The study of how costs, revenues, and profits change in response to changes in the volume of goods or services provided to customers is known as: - CVP analysis -sensitivity analysis -short-term operating decision making -breakeven point
CVP analysis
Which of the following is true regarding a change in selling price? -Increase in selling price causes a decrease in the breakeven point. -Increase in selling price causes an increase in the breakeven point. -A decrease in selling price causes a increase in contribution margin. -A decrease in selling price has no impact on contribution margin.
Increase in selling price causes a decrease in the breakeven point.
Which of the following statements is TRUE? - JIT requires a company to work closely with its suppliers. -The JIT philosophy is based on maintaining the status quo. -JIT is a short-run model. -JIT is a push system.
JIT requires a company to work closely with its suppliers.
On December 30, 2013, Miller Company ships $250,000 of merchandise by common carrier to Jackson, Inc. The terms of the sale are 2/10, n/60, FOB shipping point. It takes three days for the merchandise to arrive at Jackson, Inc. Both Miller and Jackson have December 31 year-ends. Which company should report the merchandise on their balance sheet? -Jackson because title passes at the shipping point -Jackson because the order was placed during 2013 -Miller because title passes when loaded on the truck -Miller because the items won't be delivered until 2014.
Jackson becuase title passes at the shipping point
A company uses Cash to buy Equipment. What is the effect on the Accounting Equation? -No effect on Assets, Liabilities or Owners' Equity Assets are increased and Liabilities are decreased. Liabilities are decreased and Owners' Equity is increased. Assets are decreased and Owners' Equity is increased.
No effect on Assets, Liabilities or Owners' Equity
Which phase did the following activity occur in and is the activity investing or financing in nature? Clothing is purchased for resale -Operating; neither investing or financing in nature. -Capital resources; investing -Capital resources; financing -operating; investing
Operating; neither investing or financing in nature
Which of the following ratios measures the profit earned by the firm for those who have invested in the company? -Return on Owners' Equity -Return on Assets -Quick Ratio -Current Ratio
Return on Owners' Equity
Bogard is estimating costs for the last half of the year based on activity during the first half of the year. The results from January through June are as follows: Month Units Production Costs January 3,500 $68,040 February 6,200 $98,160 March 4,600 $83,760 April 12,500 $154,680 May 8,100 $114,960 June 9,800 $146,520 How would Bogard's cost estimation equation be written out in words? -Total Production Costs = Fixed Costs + Variable Cost times Units Produced -Fixed Production Costs = Total Production Costs + Variable Cost per Unit -Variable Production Costs = Fixed Costs - Variable Cost times units produced -Total Production Costs = Fixed costs - Variable cost per unit
Total Production Costs = Fixed Costs + Variable Cost times Units Produced
The entry on January 1 to record the payment with cash of insurance for a full year would include: - a debit to Rent expense a credit to Prepaid Insurance a debit to Cash a debit to Prepaid Insurance
a debit to Prepaid Insurance
A T-account represents: - a tool to ensure that total debits in the accounts equal total credits. a page from the Ledger a page from the Journal a place to record transactions as they occur.
a page from the Ledger
Accountants use the term "debit" to refer to: -events that increase accounts a reduction in amounts owed by the company when the firm has incurred debt an amount entered on the left-hand side of an account.
an amount entered on the left-hand side of an account
Seitz Company bought and has not yet sold $60,000 of inventory -asset -liability -owner's equity
asset
Seitz Company has office and other supplies costing $2,500 -asset -liability -owner's equity
asset
Seitz Company owns a piece of land costing $175,000 for a future building site -asset -liability -owner's equity
asset
account payable -income statement -statement of cash flows -balance sheet
balance sheet
accounts receivable -income statement -statement of cash flows -balance sheet
balance sheet
accumulated depreciation on equipment -income statement -statement of cash flows -balance sheet
balance sheet
equipment -income statement -statement of cash flows -balance sheet
balance sheet
inventory -income statement -statement of cash flows -balance sheet
balance sheet
retained earnings -income statement -statement of cash flows -balance sheet
balance sheet
cash balance at the end of the period -income statement -statement of cash flows -balance sheet -both balance sheet and statement of cash flows
both balance sheet and statement of cash flows
The process of expressing a company's goals and objectives in quantitative terms is known as: -budgeting strategic planning evaluation conversion activities
budgeting
a company has 10,000 shareholders. Subsequently 200 shareholders sell their shares to others. The company's financial statements are not affected. -business entity -going concern -going concern & business entity -periodicity
business entity
Which phase did the following activity occur in and is the activity investing or financing in nature? A bank loan is obtained to finance operations -capital resources; financing -operating; financing -operating; neither investing nor financing -capital resources; investing
capital resources; financing
comparing planned sales to actual sales occurs in which of the following phases? -planning phase -performing phase -evaluating phase -all
evaluating
Adams Company pays $250 in cash for this week's advertising -revenue -expense
expense
Adams Company receives a bill for $200 for utilities from the power company -revenue -expense
expense
Adams Company's employees work all week earning $4,000. Adams pays its employees monthly -revenue -expense
expense
All of the following are prevention types of quality costs EXCEPT: -final product testing -employee quality circles -product design -technical support provided to suppliers
final product testing
Raper is a manufacturing firm that makes ping-pong paddles. Each pin-pong paddle consists of a handle, a wooden paddle, and a rubber backing for the wooden paddle. As the paddles progress through the assembly process, workers attach the handles and glue on the rubber backing. Identify the following cost as Variable, Fixed, or Mixed. Activity is measured as the number of pin-pong paddles produced. Production Supervisor's salary -fixed -variable -mixed
fixed
Raper is a manufacturing firm that makes ping-pong paddles. Each pin-pong paddle consists of a handle, a wooden paddle, and a rubber backing for the wooden paddle. As the paddles progress through the assembly process, workers attach the handles and glue on the rubber backing. Identify the following cost as Variable, Fixed, or Mixed. Activity is measured as the number of pin-pong paddles produced. Rent on production facilities -fixed -variable -mixed
fixed
a company continues in business even though the founder died --business entity -going concern -going concern & business entity -periodicity
going concern
cost of sales (COGS) -income statement -statement of cash flows -balance sheet
income statement
depreciation expense -income statement -statement of cash flows -balance sheet
income statement
A strategy whereby a company uses the current period's budget as a starting point in preparing next period's budget is referred to as: -incremental budgeting mandated budgeting zero-based budgeting participative budgeting
incremental budgeting
Seitz Company owes $10,000 to the bank on a three-year note payable -asset -liability -owner's equity
liability
Seitz Company owes the internal revenue service $2,00 for taxes -asset -liability -owner's equity
liability
Seitz Company owes the utility company $1,250 for services received last month -asset -liability -owner's equity
liability
what type of company is Microsoft Corp.? -service -merchandising -manufacturing -none
manufacturing
when a company operates in a static environment and focuses on reducing cost and increasing efficiency, it is most likely to use: -mechanistic organizational structure with efficiency strategy -organic organizational structure with a flexible strategy -holistic organizational structure with an organic strategy -synthetic organizational structure with a decentralized strategy
mechanistic organizational structure with efficiency strategy
what type of companies are Sears, Inc. and Target? -service -merchandising -manufacturing -none
merchandising
Raper is a manufacturing firm that makes ping-pong paddles. Each pin-pong paddle consists of a handle, a wooden paddle, and a rubber backing for the wooden paddle. As the paddles progress through the assembly process, workers attach the handles and glue on the rubber backing. Identify the following cost as Variable, Fixed, or Mixed. Activity is measured as the number of pin-pong paddles produced. Utilities for the production facilities: water, electricity, and heat -mixed -variable -fixed
mixed
a company trades a delivery truck for computer equipment. The truck is valued at $5,000 -business entity -going concern -monetary unit -periodicity
monetary unit
Internal and external auditors are responsible for which component of internal control per the COSO Integrated Framework? -monitoring -control environment -risk assessment -control activities
monitoring
What is the definition of liquidity? -nearness to Cash -ability to pay long-term debts -ability to quickly turnover inventory -a measure of how quickly a company pays its debts
nearness to cash
A standard that can be achieved under practical operating conditions is a: -normal standard ideal standard practical standard perfect standard
normal standard
Which of the following is NOT one of the four perspectives of the Balanced Scorecard Approach? -Operating Perspective -Financial Perspective -Customer Perspective -Learning & Growth Perspective
operating perspective
Seitz Comapany's owners have contributed $200,000 to the company? -asset -liability -owner's equity
owner's equity
A budgeting system that allows individuals who are affected by the budget to have input into the budgeting process is called: -participative budgeting zero-based budgeting incremental budgeting mandated budgeting
participative budgeting
Which of the following describes the practice of setting the initial price low in an attempt to get a share of the market? - dumping penetration pricing predatory pricing price skimming
penetration pricing
which of the following is NOT one of the management cycle phases? -performance measurement and management phase -planning phase -performing phase -evaluating phase
performance measurement and management phase
making sales to customers occurs in which phase? -planning phase -performing phase -evaluating phase -all
performing
a company prepares annual financial statements -business entity -going concern -going concern & business entity -periodicity
periodicity
deciding to finance 40% of the company with debt financing occurs in which of the following phases? -planning phase -performing phase -evaluating phase -all
planning
Prescription Drug Research (PDR) has discovered a new cancer medicine and has just received FDA approval to market the product. It costs PDR $0.50 per pill to produce the new drug. PDR plans to take advantage of the demand for the product and has priced the pills at $20 per pill. This is an example of which pricing strategy? - pioneer price life-cycle pricing price skimming penetration pricing
price skimming
Which of the following is considered value added time? -processing time -order time response -queue time -shipping time
processing time
All of the following are internal failure types of quality costs EXCEPT: -product recalls -downtime increased labor due to rework -scrap
product recalls
The sales budget and the desired level of ending merchandise inventory are primary inputs into the preparation of the: -purchases budget cash budget selling & administrative budget direct labor budget
purchases budget
The seller of a product is a price taker in which of the following environments? -Pure Competition Monopoly Supply and Deman Oligopoly
pure competition
The most common explanation for the following journal entry would be: Cash xxx Accounts Receivable xxx -performed a service and immediately received the cash performed a service and billed the customer performed a service for a customer who had paid for the service ahead of time. recorded the receipt of cash from a customer for services previously performed
recorded the receipt of cash from a customer for services previously performed
The components of the COSO Integrated Framework include all of the following EXCEPT: -regulatory compliance -control environment -risk assessment -information & communication
regulatory compliance
The budgeting process impacts all of the following EXCEPT: -relationships with competitors resource allocation communication and coordination among the departments of a business The evaluation and control of actual performance
relationships with competitors
Adams Company provides $1,500 in services to a client who pays in cash -revenue -expense
revenue
Adams Company provides $4,500 in service to a client and sent the client a bill -revenue -expense
revenue
what type of companies are MasterCard and KPMG, LLP (accounting firm)? -service -merchandising -manufacturing -none
service
cash paid for equipment -income statement -statement of cash flows -balance sheet
statement of cash flows
cash received from customers -income statement -statement of cash flows -balance sheet
statement of cash flows
The pricing strategy where a company determines the selling price and then decides whether to enter the market is called: - penetration pricing price skimming target pricing life-cycle pricing
target pricing
Which of the following statements is correct? -The normal balance of Sales Revenue is a credit. The normal balance of Capital is a debit. The normal balance of Accounts Payable is a debit. The normal balance of Cash is a credit.
the normal balance of Sales Revenue is a credit.
Which of the following statements is TRUE regarding short-term operating decisions? -They assume that capacity is fixed. -They can be easily solved using one model that fits all environments. -They can be planned for during the company's normal short and long-term planning process. -They rarely occur in practice.
they assume that capacity is fixed
Raper is a manufacturing firm that makes ping-pong paddles. Each pin-pong paddle consists of a handle, a wooden paddle, and a rubber backing for the wooden paddle. As the paddles progress through the assembly process, workers attach the handles and glue on the rubber backing. Identify the following cost as Variable, Fixed, or Mixed. Activity is measured as the number of pin-pong paddles produced. Cost of glue -variable -mixed -fixed
variable
Raper is a manufacturing firm that makes ping-pong paddles. Each pin-pong paddle consists of a handle, a wooden paddle, and a rubber backing for the wooden paddle. As the paddles progress through the assembly process, workers attach the handles and glue on the rubber backing. Identify the following cost as Variable, Fixed, or Mixed. Activity is measured as the number of pin-pong paddles produced. Cost of handles for the paddles -Variable -Fixed -Mixed
variable