Managerial Acct Final
The following company information is available. The direct materials quantity variance is: DM used for production = 36,000 gallons Standard quantity for units produced= 34,400 gallons Standards cost per gallon of direct material = $6 Actual cost per gallon of direct material = $6.10
$9,600 unfavorable
Yeats Corporation's sales in Year 1 were $396,000 and in Year 2 were $380,000. Using Year 1 as the base year, the percent change for Year 2 compared to the base year is:
-4%
A company's prime costs total $9,400,000 and its conversion costs total $19,400,000. If direct materials are $5,400,000 and factory overhead is $15,400,000 then direct labor is
4,000,000
J corporation uses the weighted average method in its process costing system. Given the operating rate for the painting department for the month of April appear below, what we're the equivalent units for direct materials in the painting department for April? Beginning inventory: units: 6,300 %complete: 10% Units started: units: 65,600 Ending inventory: units 4,600 %complete: 70%
70,520
BVD Company uses a job order cost accounting system and last period incurred $80,000 of overhead and $100,000 of direct labor. BVD estimates that its overhead next period will be $75,000. It also expects to incur $100,000 of direct labor. If BVD bases applied overhead on direct labor cost, their overhead application rate for the next period should be:
75%
The comprehensive set of budgets that serves as a company's overall financial plan is commonly known as
A master budget
Which of the following statements is true?
A per unit cost that is constant at all production levels is a variable cost per unit
Which of the following costing mentors charges all manufacturing costs to its products
Absorption costing
A budget system based on expected activities and their levels that enables management to plan for resources required to perform the activities is:
Activity-based budgeting
A performance report compares the differences between
Actual results and predicted results
A typical job-cost record would provide information about all of the following items related to an order except: A. the cost of direct materials used. B. administrative costs. C. direct labor costs incurred. D. applied manufacturing overhead. E. direct labor hours worked.
Administrative costs
Which of the following is not a benefit of budgeting? Provide a benchmark for evaluating performance Planning Coordination Communication management plans throughout the organization All are benefits of budgeting
All are benefits of budgeting
Which of the following costs generally can be traced directly to units of product?
Assembly labor
A formal statement of future plans, usually expressed in monetary terms, is a:
Budget
A plan that shows the expected cash inflows and cash outflows during the budget period, including receipts from loans needed to maintain a minimum cash balance and repayments of such loans, is called a(n):
Cash budget
A source document that employees use to record the number of hours at work and that is used to determine the total labor cost for each pay period is a:
Clock card
The schedule of cost of goods manufactured is divided into four parts consisting of all of the following except: Direct Materials Computation or cost of goods sold Applied overhead Computation of cost of goods manufactured Direct labor
Computation of cost of goods sold
Which of the following would not be considered a product cost?
Cost accountant's salary.
The total cost of goods completed and transferred to finished goods inventory during the accounting period for a manufacturer is called:
Cost of goods manufactured
Which of the following costs would not increase the work in process inventory account?
Cost of selling supplies
Which of the following best describes costs assigned to the product under the variable costing method?
DL, DM, and variable manufacturing overhead
Juarez Builders incurred $285,000 of labor costs for construction jobs completed during the month of August, of which $212,000 was direct and $73,000 was indirect supervisory costs. The correct journal entry to record the $73,000 indirect labor for the month is:
Debit Factory Overhead; Credit Factory Wages Payable
A flexible budget is appropriate for a
Direct labor budget (yes), marketing budget (yes), administrative expense budget (yes)
Raw materials that physically become part of the product and can be traced to specific units or batches of product are called
Direct materials
Which of the following represents the correct formula for calculating cost of goods manufactured
Direct materials used + direct labor + applied factory overhead + beginning goods in process - ending goods in process.
Which of the following is the correct formula to compute the predetermined overhead rate
Estimated total manufacturing overhead costs divided by estimated total units in the allocation base.
Reducing greenhouse gas emissions would be an example of what type of activity
Facility level
Which of the following concerning pricing is NOT true
Fixed production costs such as the cost to maintain plant capacity will change with changes in production levels
An internal report that helps management analyze the difference between actual performance and budgeted performance based on the actual sales volume (or other level of activity) and that presents the differences between actual and budgeted amounts as variances is called a
Flexible budget performance report
The most useful budget figures are developed:
From the "bottom-up" following a participatory process.
Reporting of discontinued segments includes
Income or loss from operating the discontinued segment net of tax and gain or loss from disposal of the segment's net assets net of tax
Managerial accounting information
Involves gathering information about costs for planning and control decisions.
an analytical technique used by management to focus on the most significant variances and gives less attention to the areas where performance is satisfactory is known as
Management by exception
Managerial accountants must possess all of the following skill sets except
Managerial accountants should possess all of the above
Which of the following would usually not be used in computing plantwide overhead rates
Number of quality inspections
General standards of comparisons (rule of thumb) are developed from
Past experience
When computing standard cost variances the difference between actual and standard price multiplied by actual quantity yields a
Price or rate variance
Which of the following costs are most likely to be classified as fixed
Property taxes
Which of the following would not be an example of a volume based measure
Purchase orders
In a job-order costing system, the use of indirect materials is recorded as a credit to
Raw materials inventory
A quantity of merchandise or materials over the minimum needed reduce the risk of running short is called:
Safety stock
A flexible budget is appropriate for a
Sales commission budget (yes), direct materials budget (yes), variable overhead budget (yes)
If a company experiences an increase in fixed cost, the total cost line on the cost volume profit graph will
Shift upward and the break even point will also shift upwars
In preparing financial budgets
The budgeted balance sheet is usually prepared last.
Which of the following statements about budgeting is false
The master budget should only be prepared by top management.
Equivalent units of production are equal to
The number of units that could have been started and completed given the costs incurred during the period
Which of the following statements is NOT true
Total variable costs decrease as the volume increases
The amount by which actual overhead incurred during a period exceeds the overhead applied to jobs is
Under applied overhead
The contribution margin ratio is
Unit contribution margin divided by the selling price
With ABC, overhead costs should be traced to which cost object first?
activities
Which of the following would NOT be treated as a product cost for external financial reporting purposes
advertising expenses
Manufacturing overhead consists of
all manufacturing costs except direct materials and direct labor
Overapplied manufacturing overhead occurs when
applied overhead exceeds actual overhead
Which of the following is a financial budget
budgeted balance sheet
A fixed cost
does not change with changes in the volume of activity within the relevant range
A planning budget based on a single predicted amount of sales or production volume is called a
fixed budget
The cost of indirect labor will initially be charged (debited) to:
manufacturing overhead
A source document that production managers use to request materials for manufacturing and that is used to assign materials costs to specific jobs or overhead is a:
materials requisition
Variable costs:
per unit remain the same regardless of the volume
To compute equivalent units of production, one must be able to reasonably estimate:
percentage of completion
A company's flexible budget for 12,000 units of production showed sales $48,000 variable costs $18,000 and fixed costs $16,000. The operating income expected if the company produces and sells 16,000 units is
$24,000
O Corporation produces and sells a single product. It's contribution format income statement for March below. If the company sells 5,400 units, it's net operating income should be closed to which or the possible answers? Sales (5,000 units) $205,000 Variable expenses $125,000 Contribution Margin $80,000 Fixed expenses $62,400 Net Operating Income $17,600
$24,000
A company manufactures and sells a product for $120 per unit. The company's fixed costs are $68,760, and it's variable costs are $90 per unit. What is the company's break even point in dollars?
$275,040
Which of the following is a disadvantage of the departmental overhead rate method?
It may fail to accurately assign many overhead costs that are not driven by production volume.
Financial reporting refers to
The communication of relevant financial information to decision makers
All of the following factors should influence the decision to investigate a variance EXCEPT
The direction of the variance (favorable or unfavorable).
The salaries of a manufacturing plant's management are said to arise from:
facility-level activities
At the end of the month, a company transferred out 150,000 units and had 41,000 units in ending inventory. Ending inventory was 80% complete with respect to materials and 30% complete with respect to conversion cost. Give the cost information below, what was the value of the inventory transferred to finished goods? Cost per EUP: DM: $2.65 DL: $2.15 Factory OH: $2.40
$1,080,000
Frankie's chocolate co reports the following information from its sales budget in the table below. Cash sales are normally 25% of total sales and all credit sales are expected to be collected in the month following the date of sale. The total amount of cash expected to be received from customers in September is: Expected sales: July $90,000 August $104,000 September $120,000
$108,000
If the raw materials used in manufacturing during the year totaled $122,000 and the beginning and ending inventory balances are provided below, what were raw materials purchases for the year? Raw materials inventory: ending: $61000 beginning: $64000 Finished goods inventory: ending: $72000 beginning: $64000
$119,000
The fabricating department started the current month with a beginning work in process inventory of $10,000. During the month, it was assigned the following costs: direct materials: $76,000 direct labor: $24,000 and factory overhead equal to 50% of direct labor cost. Also, inventory with w cost of $109,000 was transferred out of the department to the next phase in the process. The ending balance of the work in process inventory account for the fabricating department is:
$13,000
Junior Snacks reports the following information from its sales budget: Expected Sales: October$143,000 November 151,000 December 187,000 All sales are on credit and are expected to be collected 40% in the month of sale and 60% in the month following sale. The total amount of cash expected to be received from customers in November is:
$146,200
Based on predicted production of 22,000 units, a company anticipates $15,000 of fixed costs and $27,500 of variable costs. The flexible budget amounts or fixed and variable costs for 16,000 units are
$15,000 fixed and $20,000 variable
Flagstaff Company has budgeted production units of 7,900 for July and 8,100 for August. The direct labor requirement per unit is 0.50 hours. Labor is paid at the rate of $21 per hour. The total cost of direct labor budgeted for the months of July and August is:
$168,000
A company estimates that overhead costs for the next year will be $9,234,000 for indirect labor and $156,800 for factory utilities. The company uses machine hours as it's overhead allocation base. If 500,000 machine hours are planned for this next year, what is the company's plantwide overhead rate?
$18.78 per machine hour
Given the information in the table below, what would be the costs per equivalent unit of materials and conversion respectively if skye manufacturing used the weighted average method of process costing?
$2.00, $4.50
Company A manufactures a product called Zee. All direct materials are added at the beginning of the process, and direct labor and overhead are added uniformly throughout production. The beginning work in process inventory is 60% complete with respect to direct labor and 50% complete for overhead. The ending work in process inventory is 20% complete for direct labor and 30% as to overhead. Given the information below and using the weighted average method of process costing, what is the cost per equivalent unit of direct labor?
$2.70
Madison Corporation sells three products (M, N, and O) in the following mix: 3:1:2. Total fixed costs are $340,000. Unit price and cost data are provided in the table below. What is the contribution margin per composite unit for the current sales mix (round to the nearest cent)? Unit sales price (M,N,O): $7,$4,$6 Unit variable costs (M,N,O): $3,$2,$3
$20
The following information is available for a company's cost of sales over the last five months. Using the high-low method, what is the estimated total fixed cost? Jan: units sold 400 cost of sales $31,000 Feb: units sold 800 cost of sales $37,000 March: units sold 1,600 cost of sales $49,000 April: units sold 2,400 cost of sales $61,000
$25,000
Canberra Company uses a job order cost accounting system. During the current month, the factory payroll of $180,000 was paid in cash. The amount of labor classified as direct labor was three times greater than the amount classified as indirect labor. Canberra uses an overhead application rate of 100% of direct labor. What amount should be debited to Factory Overhead for indirect labor for this month?
$45,000
Summerlin Company budgeted 4,000 pounds of material costing $5.00 per pound to produce 2,000 units. The company actually used 4,500 pounds that cost $5.10 per pound to produce 2,000 units. What is the direct materials price variance?
$450 unfavorable
The following costs are included in a recent summary of data for a company: $85,000 in advertising expense, $133,000 in factory building depreciation expense, $250,000 in direct labor costs, $300,000 in direct materials used, $105,000 in factory utilities, and $150,000 in sales salaries expense. Determine the dollar amount of prime costs.
$550,000
Webster corporation is preparing a master budget for the first quarter of the year. The company budgets production of 2,680 units in January, 2,600 units in February, and 2740 units in March. Each unit requires 0.6 hours of direct labor. The direct labor rate is $12 per hour. Compute the budgeted direct labor cost for the first quarter budget
$57,744
Compute cost of goods manufactured for this period given the following amounts: Ending finished goods inventory $66,000 Cost of goods sold 54,000 Beginning finished goods inventory 60,000
$60,000
Company "A" uses a job order cost accounting system. The company'a executives estimated that direct labor would be $2,000,000 (200,000 hours at $10/hour) and that factory overhead would be $1,500,000 for the current period. At the end of the period, the records show that there had been 180,000 hours of direct labor and $1,200,000 of actual overhead costs. Using direct labor hours as a base, what was the predetermined overhead allocation rate?
$7.50 per direct labor hour
Cameron corp. manufactures and sells electric staplers for $16 each. If 10,000 units were sold in December and management forecasts 4% growth in sales each month, the number of electric stapler sales budgeted for February should be
10,816
A company's comparative income statements over the last four years are shown below. Suppose that the company employs trend percentages to analyze performance. With 2011 as the base year, sales for 2014 expressed as a trend percentage would be closest to which of the following
135%
A company's product sells at $12 per unit and has a $5 per unit variable cost. The company's total fixed costs are $98,000. What is the break even point in units
14,000
Simon Company's year-end balance sheets are shown below. Express the accounts payable for 2016 in common-size percents
16.56%
Carver packaging company reports total contribution margin of $72,000 and pretax net income of $24,000 for the current month. In the next month, the company expects sales volume to increase by 8%. The degree of operating leverage and the expected percent change in income, respectively, are:
3.0 and 24%
A firm sells two products, regular and ultra. For every unit of regular the firm sells, two units of ultra are sold. The firm's total fixed costs are $1,612,000. Selling prices and cost information for both products follow. What is the firms break even point in units of regular and ultra? Regular: unit sales price: $20 variable cost per unit:$8 Ultra: unit sales price: $24 variable cost per unit: $4
31,000 regular units and 62,000 ultra units
The ending balance of the Goods in process inventory account $7,750. The manufacturing company uses an overhead rate based on direct labor cost. The cost sheet of the one job still in process shows direct material cost of $6,000 and direct labor cost of $1,000. Therefore, the company's overhead application rate is:
75.0%
A corporation reported cash of $16,000 and total assets of $180,300 on its balance sheet. It's common size percent for cash equals
8.87%
Which of the following concerning pricing is true? Over the long run, price must be high enough to cover all costs, including variable and fixed costs and still provide an acceptable return to owners Fixed production costs such as the cost to maintain plant capacity do not change with changes in production levels With excess capacity, increases in production level would increase variable production costs but not fixed costs Managers should accept special orders provided the special order price exceeds variable cost
All of the above are true
Industry standards for financial statement analysis
Are set by the financial performance and condition of the company's industry.
Direct material costs used in the manufacturing process are recorded:
As debits to a goods in process account
Financial statement analysis involves all of the following except:
Assuring that the company will be more profitable in the future.
The difference between sales price per unit and variable cost per unit is the
Contribution margin per unit
Which types of overhead allocation methods result in the use of more than one overhead rate during the same time period?
Departmental overhead rate method and activity-based costing.
The amount by which a company's sales can decline before losses are incurred is called the
Margin of safety
The excess of expected sales over the sales level at the break even point is known as the
Margin of safety
Which of the following statements pertain to variable costing?
Statements C and D The income statement discloses a company's contribution margin Variable manufacturing overhead becomes part of a units cost
In horizontal analysis the percent of change is computed by
Subtracting the base period amount from the analysis period amount, dividing the result by the base period amount, then multiplying that amount by 100.
Which of the following types of companies would least likely use job-order costing
Textile manufacturers
