Accounting study

Loopy Inc. purchased equipment on January 1 by signing 10 year, $200,000 note payable with monthly payments of $2,025. The note carries an interest rate of 4% per year. How much of the first payment will reduce the note payable balance (i.e. how much of the first payment will reduce the principal)? $1,358 $667 $2,025 $5,975

$1,358

Opal Inc. applies overhead based on machine hours. At the beginning of 2022, Opal estimated overhead to be $400,000, machine hours to be 25,000, and direct labor hours to be 40,000. During April, Opal recorded 3,000 actual direct labor hours and 2,200 actual machine hours. If actual overhead cost for April is $33,750, what is the overhead variance for the month? $3,750 under applied $3,750 over applied $1,450 under applied $1,450 over applied None of these are correct.

$1,450 over applied

Just Right Corporation reported the following for the year 2021: Direct material used: $47,800 Direct labor cost incurred: $69,100 Overhead cost incurred: $57,400 Work in process, Jan. 1: $13,600 Work in process, Dec. 31: $18,200 What was the cost of goods manufactured for the company for 2021? $174,300 $178,900 $112,300 $169,700

$169,700

Trust Company applies overhead based on direct labor hours. At the beginning of the year, Trust estimates overhead to be $700,000, machine hours to be 50,000, and direct labor hours to be 35,000. At the end of the year, the company actually incurred $720,000 in overhead, recorded 45,000 machine hours and 40,000 direct labor hours. What was the company's predetermined overhead rate? $16 per machine hour $14 per direct labor hour $20 per direct labor hour $18 per machine hour None of these are correct

$20 per direct labor hour

Link Inc. manufactures custom cabinets and applies overhead at a rate of $75 per direct labor hour. Job 1534 was started April 2. The company reports the following data for Job 1534 during April: Item Amount Direct materials placed into production $18,500 Direct labor hours 150 hours Direct labor rate per hour. $28 per hour Machine hours 90 hours What is the total cost of Job 1534 at the end of April? (Round to the nearest dollar) $22,700 $11,250 $33,950 $29,450 None of these are correct

$33,950

Andover Inc. had a gross profit for the month of March totaling $56,000. They sold 6,000 units during the month at a sales price of $23 per unit. What was the amount of cost of goods sold for the month? $138,000 $56,000 $82,000 None of these are correct.

$82,000

Hats Off Inc had materials inventory on January 1, 2021 of $24,600. The materials inventory at December 31, 2021 of $33,500. The cost of direct materials purchased during 2021 was $98,300. What was the cost of materials used in production during 2021? $89,400 $98,300 $107,200 $64,800

$89,400

Wilson Inc. has the following projected figures for the next year: Item Amount Selling price per unit $200 Variable cost per unit $150 Total fixed costs $700,000 How many units will the company need to sell to break even? 3,500 4,667 14,000 15,000 None of these are correct

14,000

John applies overhead based on direct labor hours. At the beginning of the year, total overhead cost was estimated to be $1,120,000. For the month of November, John applied overhead of $80,000, which was based on 10,000 actual direct labor hours. How many direct labor hours were estimated at the beginning of the year? 225,200 hours 140,000 hours 500,000 hours 150,000 hours None of these are correct

140,000 hours

If a company uses normal costing, which costs would be added to work in process inventory? Actual costs for direct materials; estimated costs for direct labor and overhead. Actual costs for direct materials and direct labor; estimated costs for overhead. Actual costs for direct materials and overhead; estimated costs for direct labor. Estimated costs for direct materials, direct labor, and overhead. None of these are correct.

Actual costs for direct materials and direct labor; estimated costs for overhead.

Which of the following equations is true? Contribution margin = Sales revenue x Variable cost ratio Contribution margin = Contribution margin ¸ Variable costs Contribution margin = Sales revenue - Variable costs Contribution margin = Fixed costs

Contribution margin = Sales revenue - Variable costs

When the board of directors approves a dividend be paid to its shareholders in 30 days, the company should: Decrease net income by recording dividend expense and decrease cash. Decrease net income by recording dividend expense and increase dividends payable. Decrease retained earnings and decrease cash Decrease retained earnings and increase dividends payable.

Decrease retained earnings and increase dividends payable.

Conversion cost is the sum of: Direct labor cost and overhead cost Product costs and period costs Selling cost and administrative cost Direct labor cost and direct material cost

Direct labor cost and overhead cost

What is the typical cost system used by companies that make unique or special-order products, such as customized publications, built-in cabinets, or made-to-order jewelry? Job order costing Adjusted basis costing Process costing All of the above

Job order costing

The provision of accounting information for internal users is known as: Accounting for planning and control. Information provision Managerial accounting. Financial accounting.

Managerial accounting.

Dougherty Company employs 20 individuals. Eight employees are paid $12 per hour and the rest are salaried employees paid $3,000 a month. How would total costs of personnel be classified? Variable cost. Fixed cost. Mixed cost. Indirect cost.

Mixed cost.

As the volume of activity increases within a company's normal range of operating, the variable cost per unit: Remains constant. Increases. Decreases. Can be misleading and lead to poor decisions.

Remains constant.

Which of the following would not be considered a product cost? The cost of electricity in the manufacturing plant. Fabric used to manufacture t-shirts. The company's CEO salary. Depreciation on a delivery truck.

The company's CEO salary.

The property tax paid on the factory is a direct cost if the cost object is the factory is an indirect cost if the cost object is the product produced could be either a direct cost or an indirect cost, depending on the cost object all of these

all of these

If a company decreases the number of units it produces, within their normal range of operating total variable costs will increase. total fixed costs will decrease. fixed costs per unit will increase. All of these are correct

fixed costs per unit will increase.

Long-term debt generally includes: obligations that will be satisfied within one year. accounts payable, because they are interest-bearing. obligations that extend beyond one year. accrued expenses.

obligations that will be satisfied within one year.

Dusty sells a single product for $50. Variable costs are 60% of the selling price, and the company has fixed costs that amount to $400,000. Current sales total 16,000 units. If Dusty sells one more unit: operating income decreases by $5 operating income increases by $50 operating income increases by $20 operating income decreases by $30

operating income increases by $20

Cia Inc has the following amounts listed before reconciling the overhead variance: Estimated overhead $310,000 Applied overhead $250,000 Actual overhead $275,000 Cost of goods sold $1,525,000 What amount will be reported on the income statement for cost of goods sold after adjusting for any overhead variance? $1,525,000 $1,490,000 $1,550,000 $1,500,000 None of these are correct.

$1,550,000

Shoney's produces Szechuan sauce and had the following beginning and ending inventory balances for the year 2021: Item January 1 December 31 Raw materials $22,000 $15,000 Work in process $35,000 $24,000 Finished goods $7,000 $46,000 In addition, direct labor costs of $83,000 were incurred, overhead equaled $27,000, materials purchased were $33,000, and selling and administrative costs were $64,000. Shoney's sold 15,000 units of product during the year at a sales price of $8.50 per unit. What was the amount of cost of goods sold for the year? $158,000. $127,500. $185,000. $122,000.

$122,000

On November 1, 2021, Fruit Co. borrows $200,000 by signing a three-year, 4% note. The note requires annual interest payments on November 1 of each year. The repayment of the principal plus the final year's interest is due November 1, 2024. How are the financial statements affected on November 1, 2021? Increase assets $200,000; Increase liabilities $200,000. Decrease assets $200,000; Increase liabilities $200,000. Increase assets $192,000; Increase liabilities $200,000; Decrease retained earnings $8,000. Increase assets $192,000; Increase liabilities $192,000

Increase assets $200,000; Increase liabilities $200,000.

On November 1, 2021, Fruit Co. borrows $200,000 by signing a three-year, 4% note. The note requires annual interest payments on November 1 of each year. The repayment of the principal plus the final year's interest is due November 1, 2024. How are the financial statements affected on December 31, 2021? No affect. Increase liabilities $1,333; Decrease retained earnings $1,333 Increase liabilities $8,000; Decrease retained earnings $8,000 Decrease assets $1,333; Decrease liabilities $1,333. Decrease assets $8,000; Decrease retained earnings $8,000.

Increase liabilities $1,333; Decrease retained earnings $1,333

Dusty Corporation began business on January 1, 2020. The corporate charter authorizes issuance of 100,000 shares of .01 par value common stock and 10,000 shares of $1 par value, 10% cumulative preferred stock. On July 1, 2020, Dusty issued 30,000 shares of common stock in exchange for three years of rent on a retail location. The cash rental price is $4,200 per month and the rental period begins July 1. How should Dusty adjust its financial statement for the issuance of the shares on July 1? Increase cash by $151,200, and increase prepaid rent by $151,200. Increase prepaid rent by $151,200, and increase common stock by $151,200. Increase prepaid rent by $151,200, increase common stock by $300, and increase additional paid-in capital by $150,900. Increase prepaid rent by $151,200, increase common stock by $150,900, and increase additional paid-in capital by $300.

Increase prepaid rent by $151,200, increase common stock by $300, and increase additional paid-in capital by $150,900.

The breakeven point is when the company is operating at a loss. the company is earning a small profit total sales equals total variable costs. total revenue equals total cost. total sales equals operating income.

total revenue equals total cost.

Biomet sell hip, knee, and shoulder implants. The manager observed the following costs for the months of August and September: Cost August September Insurance $22,000 $22,000 Utilities $25,500 $39,000 Depreciation. $8,550 $8,550 Materials $12,000 $18,000 Biomet produced 20,000 units in August and 30,000 units in September. What is the company's expected material cost for October if the company expects to produce 26,000 units? $15,000 $12,000 $15,600 $18,000 None of these are correct

$15,600

Big Ed sells cowboy hats for $75 each. The following cost formula is used to estimate Big Ed's production costs: Y = $2,400 + $42X If Big Ed sell 150 cowboy hats, what is the company's gross profit? $11,250 $8,700 $2,550 $4,950 None of these are correct

$2,550

Cowboy Grub has provided the following production and average cost data for two level of monthly production volume. The company produces only one product. Production volume 5,000 units 8,000 units Direct materials $52.50 per unit $52.50 per unit Direct labor $43.50 per unit $43.50 per unit Overhead $76.00 per unit. $61.00 per unit What is the best estimate of the total monthly fixed manufacturing cost? $200,000 $380,000 $434,000 $488,000 None of these are correct

$200,000

Border Inc. had a balance in retained earnings of $14,700 on January 1, 2021. The company declared and paid dividends of $13,200 during 2021. The company's retained earnings balance on December 31, 2021 was $23,400. What net income did the company report for 2021? $23,400 $4,500 $21,900 $10,200

$21,900

Biomet sell hip, knee, and shoulder implants. The manager observed the following costs for the months of August and September: Cost August September Insurance. $22,000 $22,000 Utilities $25,500 $39,000 Depreciation $8,550 $8,550 Materials $12,000 $20,000 Biomet produced 20,000 units in August and 30,000 units in September. What is the company's expected insurance cost for October if the company expects to produce 26,000 units? $28,600 $19,067 $22,880 $22,000 None of these are correct

$22,000

Valentine Corporation is a company that produces and sells one product. It has provided the following projected contribution format income statement: Item Amount Sales (8,500 units) $637,500 Variable expenses $357,000 Contribution margin $280,500 Fixed expenses $102,000 Operating Income $178,500 What is the projected operating income if the company plans to sell 11,000 units? $231,000 $261,000 $366,000 $363,000 None of these are correct.

$261,000

Fancy Corporation provided the following projected information: Item Amount Sales $315,000 Variable costs $220,500 Total fixed costs. $81,900 Expected sales unit. 21,000 units What is the projected break-even point in sales dollars? $315,000 $273,000 $12,600 $94,500 None of these are correct.

$273,000

Biomet sell hip, knee, and shoulder implants. The manager observed the following costs for the months of August and September: Cost August September Insurance $22,000 $22,000 Utilities $33,000 $39,000 Depreciation $8,550 $8,550 Materials $12,000 $20,000 Biomet produced 20,000 units in August and 30,000 units in September. What is the company's expected utility cost for October if the company expects to produce 26,000 units? $33,800 $33,150 $36,600 $33,540 $35,100 None of these are correct

$36,600

The income statement for Elite Manufacturing Company for the current year is as follows Item Amount Sales (15,000 units) $180,000 Variable production expenses. $90,000 Fixed production expenses $22,500 Gross Profit $67,500 Variable administrative expenses $18,000 Fixed administrative expenses $22,500 Operating Income $27,000 What is the company's contribution margin per unit? $4.80 $4.50 $1.80 $6.00 None of these are correct.

$4.80

Bargain Town recently reported sales revenues of $800,000, a total contribution margin of $300,000, and fixed costs of $180,000. If sales volume amounted to 10,000 units, the company's variable cost per unit must have been: $50 $30 $32 $12

$50

Period costs are: Prime costs, direct labor, and selling costs All costs that aren't product costs Conversion costs Direct materials, direct labor, and overhead

All costs that aren't product costs

CVP analysis can be used to study the effect of: changes in the selling price on a company's profitability changes in the variable cost on a company's profitability changes in the fixed cost on a company's profitability All of the above are correct.

All of the above are correct.

Which of the following would be considered a direct material? A memory chip included in a computer built by Dell An air conditioner installed in a new home built by a developer Pepperoni included on a Domino's pizza (measured by weight) All of the above would be considered a direct material.

All of the above would be considered a direct material.

Which of the following is a correct statement about retained earnings? Tracks the company's cumulative net income and losses, and dividends paid or declared. Is decreased by dividends to shareholders. Is increased by the company's net income. Is decreased by the company's losses All of these are correct. None of these are correct.

All of these are correct.

Which of the following businesses would most likely use a process costing system? A printing business A dental clinic An automobile service center An oil refinery A tailor shop

An oil refinery

Outstanding stock represents the: Number of shares that are currently held by stockholders. Number of shares that have been sold. Number of shares that have been repurchased by the corporation Maximum number of shares that can be issued.

Number of shares that are currently held by stockholders.

Which of the following formulas is used to calculate a predetermined overhead rate? Predetermined Overhead Rate = Estimated Annual Manufacturing Cost / Estimated Quarterly Activity Level Predetermined Overhead Rate = Actual Annual Cost of Goods Sold / Estimated Semi-annual Labor Hours Predetermined Overhead Rate = Estimated Annual Overhead / Actual Annual Activity Level Predetermined Overhead Rate = Actual Annual Overhead / Actual Annual Activity Level Predetermined Overhead Rate = Estimated Annual Overhead / Estimated Annual Activity Level

Predetermined Overhead Rate = Estimated Annual Overhead / Estimated Annual Activity Level

A company that desires to lower its break-even point should strive to: Decrease selling price per unit Reduce variable cost per unit Increase total fixed costs Sell more units

Reduce variable cost per unit

What is the range of activity, defined by a company's normal operating volume, that limits the validity of using a linear equation to estimate costs? Normal range. Relevant range. Activity range. Validity range.

Relevant range.

For January, the cost components of a picture frame include $0.35 for the glass, $.65 for the wooden frame, and $0.80 for assembly. The assembly desk and tools cost $400. 1,000 frames are expected to be produced in the coming year. What cost function best represents these costs? Y = $1.80 + $400X Y = $2.20X Y = $1.80X + $400 Y = $1.80X + $1,800.

Y = $1.80X + $400

A landlord records the collection of a tenant's security deposit as a(n): prepaid expense. liability. contingent liability. contra liability.

liability

Manufacturing overhead: includes direct materials, indirect materials, indirect labor, and factory depreciation. is easily traced to jobs. is a pool of indirect production costs that must somehow be attached to each unit manufactured. includes all selling costs. should not be assigned to individual jobs because it bears no obvious relationsip to them.

is a pool of indirect production costs that must somehow be attached to each unit manufactured.