bus 215 final

Ethics

"______ is the lubricant that keeps the economy running" A. Process Management B. Corporate Social Responsibility C. Ethics D. Integrity E. Accounting

True

An investment project with a project profitability index of -0.05 has an internal rate of return that is less than the discount rate (true/false)

A. $7.60 per hour

The Hanson Corporation employs a standard costing system. The following data are available for February: Actual direct labor-hours worked... 6,500 hours Standard direct labor rate... $8 per hour Labor rate variance... $2,600 Favorable The actual direct labor rate for February is: A. $7.60 per hour B. $8.40 per hour C. $8.00 per hour D. $2.50 per hour

A. greater than the project's internal rate of return.

The net present value of a proposed investment is negative. Therefore, the discount rate used must be: A. greater than the project's internal rate of return. B. less than the project's internal rate of return. C. greater than the minimum required rate of return. D. less than the minimum required rate of return.

True

The payback method of making capital budgeting decisions does not give full consideration to the time value of money. (true/ false)

C. Planning

The process of establishing goals and specifying how those goals will be achieved is called: A. Enterprise Risk Management B. Strategic Management C. Planning D. Decision Making E. Monitoring

B. Unfavorable

Variable manufacturing overhead is applied to products on the basis of standard direct labor-hours. If the labor efficiency variance is unfavorable, the variable overhead efficiency variance will be: A. favorable. B. unfavorable. C. either favorable or unfavorable. D. zero

B. 0.10

Villena Corporation is considering a project that would require an investment of $48,000. No other cash outflows would be involved. The present value of the cash inflows would be $52,800. The profitability index of the project is closest to: A. 0.90 B. 0.10 C. 1.10 D. 0.09

False

When a company is involved in only one activity in the entire value chain, it is vertically integrated. (true /false)

D. Unit Contribution Margin

When solving for the quantity that must be sold to break-even, the cost-volume-profit equation uses the: A. Predetermined Overhead Rate B. Overhead Expense Ratio C. Contribution Margin Ratio D. Unit Contribution Margin

True

When using internal rate of return to evaluate investment projects, if the internal rate of return is greater than the required rate of return, the project should be accepted. (true/ false)

True

waste on the production line will result in an unfavorable materials quantity variance (true/false)

B. $4

Kosakowski Corporation processes sugar beets in batches. A batch of sugar beets costs $66 to buy from farmers and $17 to crush in the company's plant. Two intermediate products, beet fiber and beet juice, emerge from the crushing process. The beet fiber can be sold as is for $23 or processed further for $13 to make the end product industrial fiber that is sold for $36. The beet juice can be sold as is for $42 or processed further for $20 to make the end product refined sugar that is sold for $84. How much total profit (loss) does the company make by processing one batch of sugar beets into the end products industrial fiber and refined sugar? A. $(18) B. $4 C. $22 D. $(116)

$156,000

Prime costs consist of direct materials and direct labor: Direct materials $ 197,000 Direct labor 78,000 Total prime cost $ 275,000 13. What is the total amount of conversion cost listed above?

A. 4 years

(Ignore income taxes in this problem.) Buy-Rite Pharmacy has purchased a small auto for delivering prescriptions. The auto was purchased for $28,000 and will have a 6-year useful life and a $4,000 salvage value. Delivering prescriptions (which the pharmacy has never done before) should increase gross revenues by at least $32,000 per year. The cost of these prescriptions to the pharmacy will be about $25,000 per year. The pharmacy depreciates all assets using the straight-line method. The payback period for the auto is closest to: A. 4 years B. 1.8 years C. 2 years D. 1.2 years

C. 11%

. (Ignore income taxes in this problem) The management of Favreau Corporation is considering the purchase of a machine that would cost $310,464 and would have a useful life of 5 years. The machine would have no salvage value. The machine would reduce labor and other operating costs by $84,000 per year. The internal rate of return on the investment in the new machine is closest to: A. 12% B. 14% C. 11% D. 13%

C. $(63,674)

. Bullinger Corporation has provided the following data concerning an investment project that it is considering: Initial investment... $470,000 Annual cash flow... $134,000 per year Salavge value at the ned of the project... $27,000 Expected life of the project... 4 years Discount rate... 14% The net present value of the project is closest to: A. $93,000 B. $406,326 C. $(63,674) D. $(79,658)

C. Gale's lost wages at Cold Stones

. Gale currently works as the ice cream server at Cold Stones but is thinking of quitting her job to attend beauty school full time next semester. Which of the following would be considered an opportunity cost of attending beauty school? A. the cost of tuition B. the cost of rent that Gale pays for her apartment C. Gale's lost wages at Cold Stones D. the cost of commuting to Cold Stones

B.Yes Yes No

17. Which of the following would usually be found on a job cost sheet under a normal cost system? Actual direct material cost Actual labor cost Actual manufacturing overhead cost A. Yes No Yes B. Yes Yes No C. Yes Yes Yes D. No

C. Predetermined overhead rate = Estimated manufacturing overhead ÷ Estimated machine-hours

18. In a job-order costing system that is based on machine-hours, which of the following formulas is correct?

B.Manufacturing overhead is incurred only to support a limited number of jobs.

19. Assigning manufacturing overhead to a specific job is complicated by all of the below except: A. Manufacturing overhead is an indirect cost that is either impossible or difficult to trace to a particular job. B. Manufacturing overhead is incurred only to support a limited number of jobs. C. Manufacturing overhead consists of both variable and fixed costs. D. The average cost of actual fixed manufacturing overhead expenses will vary depending on how many units are produced in a period.

A. actual manufacturing overhead cost is less than the amount of manufacturing overhead cost applied to Work in Process.

25. If manufacturing overhead is overapplied, then: A. actual manufacturing overhead cost is less than the amount of manufacturing overhead cost applied to Work in Process. B. the amount of manufacturing overhead cost applied to Work in Process is less than the actual manufacturing overhead cost incurred. C. the predetermined overhead rate is too low. D. the Manufacturing Overhead account will have a debit balance at the end of the year.

D. debit to Work in Process of $44,000

27. On January 1, Schaf Corporation had $23,000 of raw materials on hand. During the month, the company purchased an additional $54,000 of raw materials. During January, $50,000 of raw materials were requisitioned from the storeroom for use in production. These raw materials included both direct and indirect materials. The indirect materials totaled $6,000. The journal entry to record the requisition from the storeroom would include a: A. debit to Work in Process of $50,000 B. debit to Raw Materials of $50,000 C. credit to Manufacturing Overhead of $6,000 D. debit to Work in Process of $44,000

B. total sales multiplied by the contribution margin ratio equals total fixed expenses.

35. Which of the following is correct? The break-even point occurs in CVP analysis where: A. total profit equals total fixed expenses. B. total sales multiplied by the contribution margin ratio equals total fixed expenses. C. total profit equals total variable expenses. D. total variable expenses equal total sales multiplied by the unit contribution margin.

B. $24,200

36. Creswell Corporation's fixed monthly expenses are $29,000 and its contribution margin ratio is 56%. Assuming that the fixed monthly expenses do not change, what is the best estimate of the company's net operating income in a month when sales are $95,000? A. $12,800 B. $24,200 C. $53,200 D. $66,000

A. decrease of $18,000

38. Data concerning Pellegren Corporation's single product appear below: Per Unit Percent of Sales Selling price $ 200 100 % Variable expenses 40 20 % Contribution margin $ 160 80 % Fixed expenses are $531,000 per month. The company is currently selling 4,000 units per month. The marketing manager would like to cut the selling price by $14 and increase the advertising budget by $35,000 per month. The marketing manager predicts that these two changes would increase monthly sales by 500 units. What should be the overall effect on the company's monthly net operating income of this change? A. decrease of $18,000 B. increase of $38,000 C. decrease of $38,000 D. increase of $58,000

A. $6,000

39. Given the following data: Selling price per unit $ 2.00 Variable production cost per unit $ 0.30 Fixed production cost $ 3,000 Sales commission per unit $ 0.20 Fixed selling expenses $ 1,500 The break-even point in dollars is: A. $6,000 B. $4,500 C. $2,647 D. $4,000

B. 6,093

40. Hettrick International Corporation's only product sells for $120.00 per unit and its variable expense is $52.80. The company's monthly fixed expense is $396,480 per month. The unit sales to attain the company's monthly target profit of $13,000 is closest to: A. 7,755 B. 6,093 C. 5,753 D. 3,412

D. Variable Cost per unit: constant, Total variable cost: Increase, Fixed Cost per unit: decrease, Total fixed cost: constant

9. Which of the following is correct concerning reactions to INCREASES in activity? Variable Cost per unit and total variable cost and fixed cost per unit and total fixed cost

False

A balanced scorecard should not contain any performance measures concerning customer satisfaction since the extent to which customers are satisfied is beyond the control of any manager in the company. (True/False)

False

A cost that can be avoided by choosing one alternative over another is not relevant for decision purposes. (true/false)

False

All other things being the same, a decrease in average operating assets will decrease return on investment (ROI). (True/False)

A. $(5,700)

A customer has requested that Gamba Corporation fill a special order for 3,000 units of product Q41 for $25.00 a unit. While the product would be modified slightly for the special order, product Q41's normal unit product cost is $21.40: Direct material... %5.70 Direct labor... 3.40 Variable manufacturing overhead... 5.80 Fixed manufacturing overhead... 6.50 Unit precut cost... $21.40 Direct labor is a variable cost. The special order would have no effect on the company's total fixed manufacturing overhead costs. The customer would like modifications made to product Q41 that would increase the variable costs by $7.00 per unit and that would require an investment of $15,000 in special molds that would have no salvage value. This special order would have no effect on the company's other sales. The company has ample spare capacity for producing the special order. If the special order is accepted, the company's overall net operating income would increase (decrease) by: A. $(5,700) B. $(21,300) C. $(25,200) D. $10,800

A. 20,000

A quantity of a particular raw material was purchased for $43,250. The standard cost of the material was $2.00 per kilogram and there was an unfavorable materials price variance of $3,250. How many kilograms were purchased? A. 20,000 B. 21,625 C. 23,250 D. 24,875

A. performance report

A schedule that provides feedback, comparing actual results with the budget, is called a:

A. decrease by $40,000 per year

A study has been conducted to determine if Product A should be dropped. Sales of the product total $400,000 per year; variable expenses total $270,000 per year. Fixed expenses charged to the product total $160,000 per year. The company estimates that $70,000 of these fixed expenses are not avoidable even if the product is dropped. If Product A is dropped, the company's overall net operating income would: A. decrease by $40,000 per year B. increase by $40,000 per year C. decrease by $30,000 per year D. increase by $30,000 per year

D. $159,842

Acheson Corporation, which applies manufacturing overhead on the basis of machine-hours, has provided the following data for its most recent year of operations. BUS 215 Estimated variable manufacturing overhead $ 20 per machine hour Estimated fixed manufacturing overhead $ 67,050 Estimated machine-hours 4,500 Actual manufacturing overhead $ 156,000 Actual machine-hours 4,580 The estimates of the manufacturing overhead and of machine-hours were made at the beginning of the year for the purpose of computing the company's predetermined overhead rate for the year. 21. The applied manufacturing overhead for the year is closest to: A. $162,682 B. $155,995 C. $158,789 D. $159,842

B. $3,842

Acheson Corporation, which applies manufacturing overhead on the basis of machine-hours, has provided the following data for its most recent year of operations. BUS 215 Estimated variable manufacturing overhead $ 20 per machine hour Estimated fixed manufacturing overhead $ 67,050 Estimated machine-hours 4,500 Actual manufacturing overhead $ 156,000 Actual machine-hours 4,580 The estimates of the manufacturing overhead and of machine-hours were made at the beginning of the year for the purpose of computing the company's predetermined overhead rate for the year. 22. The overhead for the year was: A. $2,792 underapplied B. $3,842 overapplied C. $2,792 overapplied D. $3,842 underapplied

$5,163

Acheson Corporation, which applies manufacturing overhead on the basis of machine-hours, has provided the following data for its most recent year of operations. BUS 215 Estimated variable manufacturing overhead $ 20 per machine hour Estimated fixed manufacturing overhead $ 67,050 Estimated machine-hours 4,500 Actual manufacturing overhead $ 156,000 Actual machine-hours 4,580 The estimates of the manufacturing overhead and of machine-hours were made at the beginning of the year for the purpose of computing the company's predetermined overhead rate for the year. Job 910 was recently completed at Acheson Corporation. The following data have been recorded on its job cost sheet:

B. 29.2%

Aguilera Industries is a division of a major corporation. Data concerning the most recent year appears below: Sales... $24,000,000 Net operating income... $1,752,000 Average operating assets... $6,000,000 The division's return on investment (ROI) is closest to: A. 2.1% B. 29.2% C. 22.6% D. 5.8%

C. 22.5

Brletich Corporation keeps careful track of the time required to fill orders. Data concerning a particular order appear below: Hours Wait time... 12.0 Process time... 1.1 Inspection time... 0.3 Move time... 3.7 Queue time... 5.4 The delivery cycle time was: A. 9.1 hours B. 21.1 hours C. 22.5 hours D. 3.7 hours

$189,000

Chavez Corporation reported the following data for the month of July: Beginning Ending Raw materials $ 27,000 $ 30,000 Work in process $ 16,000 $ 17,000 Finished goods $ 32,000 $ 47,000 Raw materials purchases $ 66,000 Direct labor cost $ 91,000 Actual Manufacturing overhead cost incurred $ 59,000 Indirect materials included in manufacturing overhead cost incurred $ 8,000 Manufacturing overhead cost applied to Work in Process $ 58,000 Any underapplied or overapplied manufacturing overhead is closed out to cost of goods sold. The adjusted cost of goods sold that appears on the income statement for July is:

$203,000

Chavez Corporation reported the following data for the month of July: Beginning Ending Raw materials $ 27,000 $ 30,000 Work in process $ 16,000 $ 17,000 Finished goods $ 32,000 $ 47,000 Raw materials purchases $ 66,000 Direct labor cost $ 91,000 Actual Manufacturing overhead cost incurred $ 59,000 Indirect materials included in manufacturing overhead cost incurred $ 8,000 Manufacturing overhead cost applied to Work in Process $ 58,000 Any underapplied or overapplied manufacturing overhead is closed out to cost of goods sold. The cost of goods manufactured for July is:

$55,000

Chavez Corporation reported the following data for the month of July: Beginning Ending Raw materials $ 27,000 $ 30,000 Work in process $ 16,000 $ 17,000 Finished goods $ 32,000 $ 47,000 Raw materials purchases $ 66,000 Direct labor cost $ 91,000 Actual Manufacturing overhead cost incurred $ 59,000 Indirect materials included in manufacturing overhead cost incurred $ 8,000 Manufacturing overhead cost applied to Work in Process $ 58,000 Any underapplied or overapplied manufacturing overhead is closed out to cost of goods sold. 30. The direct materials cost for July is:

C. 11%

Crockin Corporation is considering a machine that will save $8,000 a year in cash operating costs each year for the next six years. At the end of six years it would have no salvage value. If this machine costs $33,848 now, the machine's internal rate of return is closest to: A. 9% B. 10% C. 11% D. 12%

B. beet fiber should be processed into industrial fiber; beet juice should NOT be processed into refined sugar

Crooks Corporation processes sugar beets in batches that it purchases from farmers for $57 a batch. A batch of sugar beets costs $12 to crush in the company's plant. Two intermediate products, beet fiber and beet juice, emerge from the crushing process. The beet fiber can be sold as is for $28 or processed further for $17 to make the end product industrial fiber that is sold for $67. The beet juice can be sold as is for $39 or processed further for $24 to make the end product refined sugar that is sold for $54. Which of the intermediate products should be processed further? A. beet fiber should be processed into industrial fiber; beet juice should be processed into refined sugar B. beet fiber should be processed into industrial fiber; beet juice should NOT be processed into refined sugar C. beet fiber should NOT be processed into industrial fiber; beet juice should be processed into refined sugar D. beet fiber should NOT be processed into industrial fiber; beet juice should NOT be processed into refined sugar

D. $22,560

Daab Products is a division of a major corporation. The following data are for the most recent year of operations: Sales... $11,520,000 Net operating Income... $322,560 Average operating assets... $3,000,000 The company's minimum required rate of return... 10% The division's residual income is closest to: A. $322,560 B. $622,560 C. $(829,440) D. $22,560

False

Eliminating nonproductive processing time is particularly important in work stations that do not contain bottlenecks.

D. QR, XS, BJ

Fahringer Corporation makes three products that use compound W, the current constrained resource. Data concerning those products appear below: selling price per unit... BJ $480.0 XS $365.40 QR $70.29 variable cost per unit... BJ $396.00 XS $276.08 QR $51.70 Centiliters of compound W BJ 4.00 XS 5.80 QR 1.10 Rank the products in order of their current profitability from most profitable to least profitable. In other words, rank the products in the order in which they should be emphasized. A. XS,BJ,QR B. QR,BJ,XS C. BJ,QR,XS D. QR,XS,BJ

B. 8.1 hours

Garde Corporation keeps careful track of the time required to fill orders. Data concerning a particular order appear below: Hours Wait time... 28.1 Process time... 0.5 Inspection time... 0.4 Move time... 2.4 Queue time... 4.8 The throughput time was: A. 36.2 hours B. 8.1 hours C. 3.3 hours D. 32.9 hours

A. the project's internal rate of return is less than the discount rate.

If a company has computed a project profitability index of -0.015 for an investment project, then: A. the project's internal rate of return is less than the discount rate. B. the project's internal rate of return is greater than the discount rate. C. the project's internal rate of return is equal to the discount rate. D. the relationship of the internal rate of return and the discount rate is impossible to determine from the data given.

False

If the internal rate of return exceeds the required rate of return for a project, then the net present value of that project is negative (true/false)

True

In preference decision situations, a project with a lower net present value may be preferable to a project with a higher net present value (true/false)

D. Total manufacturing cost = Direct materials + Direct labor + Applied manufacturing overhead

In the Schedule of Cost of Goods Manufactured and Cost of Goods Sold, total manufacturing cost is computed according to which of the following equations? A. Total manufacturing cost = Direct materials + Direct labor + Actual manufacturing overhead B. Total manufacturing cost = Cost of goods manufactured + Beginning work in process inventory - Ending work in process inventory C. Total manufacturing cost = Raw materials + Direct labor + Actual manufacturing overhead D. Total manufacturing cost = Direct materials + Direct labor + Applied manufacturing overhead

$275,000

Marquess Corporation has provided the following partial listing of costs incurred during May: Marketing salaries $ 39,000 Property taxes, factory $ 8,000 Administrative travel $ 102,000 Sales commissions $ 73,000 Indirect labor $ 31,000 Direct materials $ 197,000 Advertising $ 145,000 Depreciation of production equipment $ 39,000 Direct labor $ 78,000 What is the total amount of prime cost listed above?

$359,000

Marquess Corporation has provided the following partial listing of costs incurred during May: Marketing salaries $ 39,000 Property taxes, factory $ 8,000 Administrative travel $ 102,000 Sales commissions $ 73,000 Indirect labor $ 31,000 Direct materials $ 197,000 Advertising $ 145,000 Depreciation of production equipment $ 39,000 Direct labor $ 78,000 11. What is the total amount of period cost listed above?

B. $5,456

Narciso Corporation is preparing a bid for a special order that would require 880 liters of material R19S. The company already has 280 liters of this raw material in stock that originally cost $6.10 per liter. Material R19S is used in the company's main product and is replenished on a periodic basis. The resale value of the existing stock of the material is $5.45 per liter. New stocks of the material can be readily purchased for $6.20 per liter. What is the relevant cost of the 880 liters of the raw material when deciding how much to bid on the special order? A. $5,006 B. $5,456 C. $4,796 D. $5,056

B. 37.5%

Nash Corporation manufactures and sells custom snowmobiles. From the time an order is placed till the time the snowmobile reaches the customer averages 50 days. This 50 days is spent as follows: Wait time... 10 days Move time... 5 days Process time... 15 days Queue time... 15 days Inspection time... days What is Nash's manufacturing cycle efficiency (MCE) for its snowmobiles? A. 30.0% B. 37.5% C. 40.0% D. 60.0%

$8,000

Nocum Corporation has provided the following contribution format income statement. Assume that the following information is within the relevant range. Sales (3,000 units) $ 120,000 Variable expenses 90,000 Contribution margin 30,000 Fixed expenses 21,000 Net operating income $ 9,000 If sales decline to 2,900 units, the net operating income would be closest to:

False

One way to increase the effective utilization of a bottleneck is to put less emphasis on preventing defects and simply discard defective units at final inspection before sending them to customers. (true/false)

C. 5.0%

Othman Inc. has a $800,000 investment opportunity with the following characteristics: Sales... $2,240,000 Contribution Margin ratio... 50% of sales Fixed Expenses... $1,008,000 The margin for this investment opportunity is closest to: A) 50.0% B) 45.0% C) 5.0% D) 55.0%

A. ($31,500)

Pankey Inc. has a $700,000 investment opportunity that would involve sales of $1,050,000, a contribution margin ratio of 40% of sales, and fixed expenses of $325,500. The company's minimum required rate of return is 18%. The residual income for this year's investment opportunity is closest to: A) ($31,500) B) $0 C) $94,500 D) $126,000

Labor Efficiency Variance: Yes, Materials Quantity Variance: Yes

Poor quality materials could have an unfavorable effect on which of the following variances? Labor Efficiency Variance and Materials Quantity Variance

D. 2.40

Runyon Inc. reported the following results from last year's operations: Sales $ 16,800,000 Variable expenses 12,230,000 Contribution margin 4,570,000 Fixed expenses 3,394,000 Net operating income $ 1,176,000 The company's average operating assets were $7,000,000. Last year's turnover was closest to: A) 0.42 B) 14.29 C) 0.07 D) 2.40

$108,000

Sales price per unit $ 1,300 per unit Units sold 200 Merchandise inventory, beginning balance $ 46,000 Merchandise inventory, ending balance $ 52,000 Purchases of merchandise inventory $ 128,000 Rent expense on corporate office $ 13,000 Advertising expense $ 10,000 Sales commission expense $ 150 per unit The contribution margin for June was:

C. $33.49

Simmons Corporation bases its predetermine overhead rate on the estimated labor-hours for the upcoming year. At the beginning of the most recently completed year, the Corporation estimated the labor-hours for the upcoming year at 70,000 labor-hours. The estimated variable manufacturing overhead was $9.93 per labor-hour and the estimated total fixed manufacturing overhead was $1,649,200. The actual labor-hours for the year turned out to be 74,000 labor-hours. the predetermined overhead rate for the recently completed year was closest to:

$85,000

Streif Inc., a local retailer, has provided the following data for the month of June: Sales price per unit $ 1,300 per unit Units sold 200 Merchandise inventory, beginning balance $ 46,000 Merchandise inventory, ending balance $ 52,000 Purchases of merchandise inventory $ 128,000 Rent expense on corporate office $ 13,000 Advertising expense $ 10,000 Sales commission expense $ 150 per unit The net operating income for June was:

$122,000

Streif Inc., a local retailer, has provided the following data for the month of June: Sales price per unit $ 1,300 per unit Units sold 200 Merchandise inventory, beginning balance $ 46,000 Merchandise inventory, ending balance $ 52,000 Purchases of merchandise inventory $ 128,000 Rent expense on corporate office $ 13,000 Advertising expense $ 10,000 Sales commission expense $ 150 per unit 14. The cost of goods sold for June was:

D. 3.8%

Tadman Inc. reported the following results from last year's operations: Sales $ 8,400,000 Variable expenses 5,120,000 Contribution margin 3,280,000 Fixed expenses 2,944,000 Net operating income $ 336,000 At the beginning of this year, the company has a $800,000 investment opportunity that involves sales of $2,800,000, fixed expenses of $756,000, and a contribution margin ratio of 30% of sales. If the company pursues the investment opportunity and otherwise performs the same as last year, the combined margin for the entire company will be closest to: A) 1.0% B) 3.0% C) 5.0% D) 3.8%

D. 9.6%

Tennill Inc. has a $1,400,000 investment opportunity with the following characteristics: Sales... $4,480,000 Contribution Margin Ration 40% Fixed Expenses... $1,657,600 The ROI for this year's investment opportunity considered alone is closest to: A) 8.1% B) 128.0% C) 3.0% D) 9.6%

Product Cost: Yes, Manufacturing Overhead: Yes, Period Cost: No

The cost of the assembly line manager is classified as: Product Cost and Manufacturing Overhead and Period Cost

A. Customer Intimacy

The customer value proposition that is predominately used by Disney to attract customers is: A. Customer Intimacy B. Product Leadership C. Lean Production D. Operating Excellence E. Supply Chain Management

C. $5,000

The following data has been provided for a company's most recent year of operations: Return on investment 20% Average operating assets $ 100,000 Minimum required rate of return 15% The residual income for the year was closest to: A) $20,000 B) $3,000 C) $5,000 D) $15,000

$62,000

The following partially completed T-accounts summarize transactions for Silva Corp during the year: Raw Materials Beg Bal 7,000 24,000 19,000 Manufacturing Overhead 9,000 31,000 16,000 8,000 5,000 Salaries and Wages Payable Beg Bal 7,000 37,000 Work In Process Beg Bal 11,000 62,000 15,000 18,000 31,000 Finished Goods Beg Bal 18,000 62,000 15,000 28. The cost of goods manufactured is:

$31,000

The following partially completed T-accounts summarize transactions for Silva Corp during the year: Raw Materials Beg Bal 7,000 24,000 19,000 Manufacturing Overhead 9,000 31,000 16,000 8,000 5,000 Salaries and Wages Payable Beg Bal 7,000 37,000 Work In Process Beg Bal 11,000 62,000 15,000 18,000 31,000 Finished Goods Beg Bal 18,000 62,000 15,000 28. The manufacturing overhead applied is:

B. $600 U

The labor efficiency variance for May is: A. $600 F B. $600 U C. $515 U D. $515 F (#7-11 Final Study Guide)

D. $510 F

The labor efficiency variance for May is: A. $483 U B. $510 U C. $483 F D. $510 F (The following information pertains to questions 12 - 17. Final study guide)

D. $450 U

The labor rate variance for May is: A. $225 F B. $225 U C. $450 F D. $450 U (#7-11 Final Study Guide)

C. $981 U

The labor rate variance for May is: A. $1,008 F B. $981 U C. $981 F D. $1,008 U (The following information pertains to questions 12 - 17. Final study guide)

C. S, T, R

The management of Edelmann Corporation is considering the following three investment projects: Investment required project r $13,000 project s $59,000 project t $79,000 print value pf cash inflows project r $13,520 project s $66,080 project t $87,690 Rank the projects according to the profitability index, from most profitable to least profitable. A. T, S, R B. R, T, S C. S, T, R D. T, R, S

A. 17.7%

The management of Stanforth Corporation is investigating automating a process. Old equipment, with a current salvage value of $24,000, would be replaced by a new machine. The new machine would be purchased for $516,000 and would have a 6 year useful life and no salvage value. By automating the process, the company would save $173,000 per year in cash operating costs. The simple rate of return on the investment is closest to: A. 17.7% B. 16.9% C. 33.5% D. 16.7%

D. $1,400 U

The materials price variance for May is: A. $1,264 F B. $1,400 F C. $1,264 U D. $1,400 U (The following information pertains to questions 12 - 17. Final study guide)

A. $360 F

The materials price variance for May is: A. $360 F B. $360 U C. $740 F D. $740 U (#7-11 Final Study Guide)

B. $1,200 F

The materials quantity variance for May is: A. $1,200 U B. $1,200 F C. $1,215 F D. $1,215 U (The following information pertains to questions 12 - 17. Final study guide)

C. $550 U

The materials quantity variance for May is: A. $1,650 F B. $1,650 U C. $550 U D. $720 F (#7-11 Final Study Guide)

C. $280

The variable overhead efficiency variance for May is A. $350 F B. $350 U C. $280 U D. $280 F (#7-11 Final Study Guide)

D. $30 F

The variable overhead efficiency variance for may is: A. $27 F B. $27 U C. $30 U D. $30 F (The following information pertains to questions 12 - 17. Final study guide)

C. $109 U

The variable overhead rate variance for May is: A. $112 F B. $112 U C. $109 F D. $109 U (The following information pertains to questions 12 - 17. Final study guide)

C. Work in Process inventory, Finished Goods inventory, Cost of Goods Sold

There are two acceptable methods for closing out any balance of underapplied or overapplied manufacturing overhead. One method involves closing any balance directly to Cost of Goods Solds, whereas the other allocates any balance among: A. Raw Materials, Work in Process inventory, Finished Goods inventory. B. Work in Process inventory, Finished Goods inventory, Cost of Goods Manufactured. C. Work in Process inventory, Finished Goods inventory, Cost of Goods Sold. D. Raw Materials, Work in Process inventory, Cost of Goods Manufactured.

A. $1,197,658

Timchak Corporation reports that at an activity level of 9,900 units, its total variable cost is $919,116 and its total fixed cost is $259,974. What would be the total cost, both fixed and variable, at an activity level of 10,100 units? Assume that this level of activity is within the relevant range. A. $1,197,658 B. $1,191,000 C. $1,179,090 D. $1,202,910

C. $3 advantage

Tish Corporation produces a part used in the manufacture of one of its products. The unit product cost is $26, computed as follows: Direct materials... $10 Direct labor... 7 Variable manufacturing overhead... 1 Fixed manufacturing overhead... 8 Unit procure cost... An outside supplier has offered to provide the annual requirement of 5,000 of the parts for only $21 each. The company estimates that 75% of the fixed manufacturing overhead cost above could be eliminated if the parts are purchased from the outside supplier. Assume that direct labor is an avoidable cost in this decision. Based on these data, the per-unit dollar advantage or disadvantage of purchasing from the outside supplier would be: A. $1 disadvantage B. $5 advantage C. $3 advantage D. $4 disadvantage

False

True or False. Enterprise risk management consists of identifying the major business functions (i.e. marketing, human resources, manufacturing, etc.) that add value to a company's products and services.

False

True or False. The cost object is irrelevant in determining whether a cost is direct or indirect. What matters is whether the cost is a product cost or period cost.

B. $34.90

Use the following data for questions 20 through 23: Acheson Corporation, which applies manufacturing overhead on the basis of machine-hours, has provided the following data for its most recent year of operations. BUS 215 Estimated variable manufacturing overhead $ 20 per machine hour Estimated fixed manufacturing overhead $ 67,050 Estimated machine-hours 4,500 Actual manufacturing overhead $ 156,000 Actual machine-hours 4,580 The estimates of the manufacturing overhead and of machine-hours were made at the beginning of the year for the purpose of computing the company's predetermined overhead rate for the year. 20. The predetermined overhead rate is closest to: A. $34.06 B. $34.90 C. $14.90 D. $14.64

E. Managerial accounting emphasizes relevance and financial accounting emphasizes objectivity and verifiability.

Which of the following is true regarding financial accounting and managerial accounting? A. Both managerial accounting and financial accounting must follow generally accepted accounting principles. B. Managerial accounting has a historical perspective and financial accounting has a future emphasis. C. Managerial accounting focuses on companywide reports and financial accounting focuses on segment reports. D. Managerial accounting is primarily for external users and financial accounting is primarily for internal users. E. Managerial accounting emphasizes relevance and financial accounting emphasizes objectivity and verifiability.

C. The contribution margin ratio equals the difference between the selling price per unit and the variable expense per unit divided by the selling price per unit.

Which of the following is true regarding the contribution margin ratio of a company that produces only a single product? A. As fixed expenses decrease, the contribution margin ratio increases. B. The contribution margin ratio multiplied by total sales equals total net operating income. C. The contribution margin ratio equals the difference between the selling price per unit and the variable expense per unit divided by the selling price per unit. D. The contribution margin ratio will increase as unit sales increase.

Return on Investment: No, Residual Income: Yes

Which of the following performance measures will decrease if the minimum required rate of return increases? Return on Investment and Residual Income

C. Shipping materials to the plant by air freight than by truck

Which of the following would produce a materials price variance? A. An excess quantity of materials used. B. An excess number of direct labor-hours worked in completing a job. C. Shipping materials to the plant by air freight rather than by truck. D. Breakage of materials in production.

D. ($60,000)

Worsell Inc. reported the following results from last year's operations: Sales $ 11,000,000 Variable expenses 8,200,000 Contribution margin 2,800,000 Fixed expenses 2,360,000 Net operating income $ 440,000 Average operating assets $ 5,000,000 The company's minimum required rate of return is 10%. Last year's residual income was closest to: A) $440,000 B) $500,000 C) ($638,000) D) ($60,000)