ACIS 2116 Exams 1-3 Questions

A requirement of SOX is that publicly traded companies must have which of the following assessed​ annually? A. Internal control system and financial reporting system B. Financial reporting system C. Internal control system D. There is no annual assessment required under SOX.

A. Internal control system and financial reporting system

Posh Pillows manufactures two​ products, pillows and​ cushions, from a joint process. Pillows are allocated $7,300 of the total joint costs of $25,000. There are 3,000 pillows produced and 3,000 cushions produced each year. Pillows can be sold at the split−off point for $10 per​ unit, or they can be processed further into a deluxe pillow for additional processing costs of $8,400 and sold for $20 for each deluxe pillow. If the pillows are processed further and made into deluxe​ pillows, the effect on operating income would be A. $30,000 net increase in operating income. B. $21,600 net increase in operating income. C. $30,000 net decrease in operating income. D. $21,600 net decrease in operating income.

B. $21,600 net increase in operating income.

Cost A ​$75,000 ​$75,000 Cost B ​$120,000 ​$180,000 Cost C ​$65,000 ​$80,000 Total Costs ​$260,000 ​$335,000 Cost C is a​ _______________ cost. A. fixed B. mixed C. sunk D. variable

B. mixed

A company uses the indirect method to prepare the statement of cash flows. It presents the following data on its financial​ statements: End of this year End of prior year Accounts receivable ​$115,000 ​$100,000 Cost of goods sold ​560,000 Sales revenue ​830,000 Accounts​ payable* ​75,000 ​67,000 Inventory ​86,000 ​105,000 Salary payable 18,000 7,000 Salary expense ​49,000 ​45,000 ​*Relates solely to the acquisition of inventory What will appear in the operating activities section related to salary​ payable? A. The increase of $11,000 will be subtracted from cost of goods sold. B. The increase of $11,000 will be added to cost of goods sold. C. The increase of $11,000 will be added to net income. D. The increase of $11,000 will be subtracted from net income.

C. The increase of $11,000 will be added to net income.

The cost of indirect labor used in the factory is recorded as a: A. credit to​ Work-in-Process Inventory account. B. credit to wages payable. C. debit to Manufacturing Overhead account. D. debit to wages expense.

C. debit to Manufacturing Overhead account.

Board​ Games, Inc. makes board games. The following data pertains to the last six​ months: Direct Labor Hours Manufacturing Overhead Month 1 ​45,000 ​$295,000 Month 2 64,000 $322,000 Month 3 ​57,000 ​$323,000 Month 4 ​52,000 ​$247,250 Month 5 ​34,000 ​$178,200 Month 6 31,000 $159,500 Based on this​ data, what is the linear cost​ equation? (Round intermediary calculations to the nearest​ cent.) A. y​ = $4.37X ​+ $31,900 B. y​ = $0.20X ​+ $162,500 C. y​ = $4.92X ​+ $7,120 D. Cannot be determined from information given.

C. y​ = $4.92X ​+ $7,120

On a whim you purchased a scratch−off lottery ticket at the gas station. It must have been your lucky day because you won $500,000. Being logical and rational you decide to invest the money at 5​% for 15 years until you are ready to start a family. At the end of 15 ​years, how much will your investment be​ worth? A. $10,789,500 B. $1,091,500 C. $240,500 D. $1,039,500

D. $1,039,500

Custom Creations Furniture Company manufactures furniture at its​ Akron, Ohio, factory. Some of its costs from the past year​ include: Depreciation on sales office $ 9,500 Depreciation on factory equipment 16,200 Factory supervisor salary 50,500 Sales commissions 23,000 Lubricants used in factory equipment 3,100 Insurance costs for factory 21,400 Wages paid to maintenance workers 115,700 Fabric used to upholster furniture 10,500 Freight−in (on raw​ materials) 3,500 Costs of delivery to customers 9,400 Wages paid to assembly−line workers 115,000 Lumber used to build product 82,600 Utilities in factory 54,000 Utilities in sales office 26,200 Direct labor costs for Custom Creations Furniture Company totaled A. $115,700. B. $281,200. C. $304,200. D. $115,000.

D. $115,000.

Inflating your expenses for a company−sponsored conference that discredits the profession is a violation of what ethical​ standard? A. Credibility B. Confidentiality C. Competence D. Integrity

D. Integrity

A company has monthly fixed costs of $110,500. The variable costs are $3 per unit. If the sales price of a unit is $9 and we sell 8,500 ​units, the​ company's total variable costs will be A. $25,500. B. $110,500. C. $76,500. D. $51,000.

A. $25,500.

Medoc Company provides the following information about its single product. Targeted operating income $52,790 Selling price per unit $6.30 Variable cost per unit $4.65 Total fixed cost $56,925 How many units must be sold to earn the targeted operating​ income? (Round the final answer up to the nearest​ unit.) A. 66,494 B. 34,500 C. 31,994 D. 10,020

A. 66,494

The Porch Cushion Company manufactures foam cushions. The number of cushions to be produced in the upcoming three months​ follows: Number of foam cushions to be produced in July 14,000 Number of foam cushions to be produced in August 18,000 Number of foam cushions to be produced in September 13,000 Each cushion requires 4 pounds of the foam used as stuffing. The company has a policy that the ending inventory of foam each month must be equal to 20​% of the following​ month's expected production needs. How many pounds of foam does The Porch Cushion Company need to purchase in​ August? A. 68,000 B. 57,600 C. 82,400 D. 86,400

A. 68,000

A system in which companies purchase raw materials only when needed is called A. JIT production. B. ABC. C. internal failure costs. D. external failure costs.

A. JIT production.

Which of the following items is not a characteristic of a lean​ company? A. Machines are arranged by function. B. Employees are trained to operate more than one machine. C. Production is in small batches. D. Machine setup times are reduced.

A. Machines are arranged by function.

Which of the following is an example of manufacturing overhead expense in a​ factory? A. Wages of factory maintenance personnel B. Wages of administrators in the corporate office C. Wages of machine operators D. Salaries of salespersons

A. Wages of factory maintenance personnel

Preparing financial statements in accordance with GAAP is an example of A. competence. B. integrity. C. credibility. D. objectivity.

A. competence.

The Southside Corporation budgeted 4,300 pounds of direct materials to make 2,300 units of product. The company actually used 4,900 pounds of direct materials to make the 2,300 units. The direct materials quantity variance is $1,500 unfavorable. What is the Standard Price​ (SP) per pound of direct​ materials? A. $0.65 B. $2.50 C. $3.27 D. $1.53

B. $2.50

The balance sheet for Bostick Corporation​ follows: Ending balance Beginning balance ​Assets: Current​ assets: Cash and cash equivalents $53,000, $44,600 Accounts receivable $18,500, $22,300 Inventory $48,600 ,$53,000 Total current assets $120,100, $119,900 ​Property, plant, and equipment ​$287,800, $275,300 Less accumulated depreciation $108,850, $101,550 Net​ property, plant, and equipment $178,950, ​$173,750 Total assets $299,050, $293,650 Liabilities and​ stockholders' equity: Current​ liabilities: Accounts payable ​$26,030, $29,580 Wages payable ​$41,600, $47,100 Other accounts payable $42,300, $35,400 Notes payable ​$24,200, $25,200 Total current liabilities $134,130, $137,280 Long−term debt ​$73,500, $79,500 Deferred income taxes $19,500, $17,000 Total liabilities $227,130, $96,500 ​Stockholders' equity: Common stock $47,400, $45,000 Retained earnings $24,520, $14,870 Total​ stockholders' equity $71,920, $59,870 Total liabilities and​ stockholders' equity $299,050, $293,650 Operating income during the period was $18,450​, while cash dividends paid were $8,800. The total sources of cash at Bostick Corporation during the year was A. $38,450. B. $45,750. C. $8,400. D. $8,850.

B. $45,750.

Schrute Farm Sales buys portable generators for $470 and sells them for $770. He pays a sales commission of​ 5% of sales revenue to his sales staff. Mr. Schrute pays $3,000 a month rent for his​ store, and also pays $1,700 a month to his staff in addition to the commissions. Mr. Schrute sold 200 generators in June. If Mr. Schrute prepares a contribution margin income statement for the month of​ June, what would be his contribution​ margin? A. $101,700 B. $52,300 C. $255,700 D. $154,000

B. $52,300

A​ company's inventory account increased $28,000 and its accounts payable account decreased $20,450 during the year. The accounts payable relates only to the acquisition of inventory. Sales were $789,500 and cost of goods sold was $533,700. What was the amount of payments to suppliers of​ inventory? A. $837,950 B. $582,150 C. $554,150 D. $541,250

B. $582,150

Siesta Manufacturing has asked you to evaluate a capital investment project. The project will require an initial investment of $92,000. The life of the investment is 8 years with a residual value of $4,000. If the project produces net annual cash inflows of $14,000​, what is the accounting rate of​ return? ​(Round any intermediary calculations to the nearest dollar and your final answer to two decimal​ places, X.XX%.) A. 2.72​% B. 3.26​% C. 15.22​% D. 6.57​%

B. 3.26​%

Tooty Fruity Beverage​ Company's operating activities for the year are listed below. Purchases $140,900 Operating expenses 80,200 Beginning inventory 13,000 Ending inventory 18,300 Sales revenue 300,400 What is the gross profit for the​ year? A. $159,500 B. ​$164,800 C. $300,400 D. $80,200

B. ​$164,800

George Company has a relevant range of​ 150,000 units to​ 400,000 units. The company has total fixed costs of $529,000. Total fixed and variable costs are $612,500 at a production level of 175,000 units. The variable cost per unit at 330,000 units is A. $3.50 B. $0.25 C. $0.48 D. $3.02

C. $0.48

Hyper Color Company manufactures widgets. The following data is related to sales and production of the widgets for last year. Selling price per unit $120 Variable manufacturing costs per unit $63 Variable selling and administrative expenses per unit $9 Fixed manufacturing overhead​ (in total) $31,000 Fixed selling and administrative expenses​ (in total) $9,000 Units produced during the year 1,600 Units sold during year 1,100 Using absorption​ costing, what is operating income for last​ year? (Round any intermediary calculations to the nearest whole​ dollar.) A. $203,300 B. $223,100 C. $22,900 D. $132,000

C. $22,900

The manager at Rainbow International prepares a Cost of Quality report to report the following​ expenses: Inspection of raw material costs $8,900 Warranty costs warranty claims $270,000 Cost to dispose of rejected products $18,000 Train hourly manufacturing personnel $60,000 Recall of batch​ #2894 $190,000 Production losses due to machine malfunctions $30,000 Cost of defective products found at inspection audit $78,000 Inspecting products when halfway through the production process $26,000 What is the total cost of quality in the external failure cost​ category? A. $628,000 B. $238,000 C. $460,000 D. $8,900 E. $190,000

C. $460,000

Given breakeven sales in units of 33,000 and a unit contribution margin of $5​, how many units must be sold to reach a target operating income of $5,500​? A. 1,100 B. 31,900 C. 34,100 D. 27,500

C. 34,100

Gabe Industries sells two​ products, Basic models and Deluxe models. Basic models sell for $36 per unit with variable costs of $30 per unit. Deluxe models sell for $52 per unit with variable costs of $35 per unit. Total fixed costs for the company are $524.80. Gabe Industries typically sells four Basic models for every Deluxe model. What is the breakeven point in total​ units? A. 10 units B. 15 units C. 64 units D. 51 units

C. 64 units

The following information for the past year for the Blaine Corporation has been​ provided: Fixed​ costs: Manufacturing $150,000 Marketing 17,000 Administrative 19,000 Variable​ costs: Manufacturing $116,000 Marketing 22,000 Administrative 44,000 During the​ year, the company produced and sold 70,000 units of product at a selling price of $15.86 per unit. There was no beginning inventory of product at the beginning of the year. What is the contribution margin ratio for Blaine Corporation​ (round to 1​ decimal)? A. 66.9​% B. 80​% C. 83.6​% D. 16.8​%

C. 83.6​%

The following information pertains to the Flying Fig​ Corporation: Total Units for information given 6,000 Fixed Cost per Unit $150 Selling Price per Unit $300 Variable Costs per Unit $200 Target Operating Income $100,000 What is the breakeven in​ units? (Round your final calculation to the nearest​ unit.) A. 4,500 units B. 10,000 units C. 9,000 units D. 1,000 units

C. 9,000 units

Which of the following is most likely not to use process​ costing? A. Exxon−Mobile (gasoline) B. DuPont Chemical C. Ashley Custom Furnishings D. General Mills​ (cereal)

C. Ashley Custom Furnishings

Senseman Company has three potential projects from which to choose. Selected information on each of the three projects​ follows: Project A Project B Project C Investment required $42,100 $55,000 $52,200 Net present value of project $49,800 $74,700 $70,600 Using the profitability​ index, rank the projects from most profitable to least profitable. A. A, B, C B. C, B, A C. B, C, A D. ​B, A, C

C. B, C, A

Which of the following statements is false about financial​ accounting? A. Financial accounting reports help creditors make decisions. B. Financial accounting provides external reports. C. Financial accounting provides sufficient information for managers to effectively plan and control operations. D. Financial accounting helps investors make decisions.

C. Financial accounting provides sufficient information for managers to effectively plan and control operations.

The time value of money is explained by which of the​ following? A. Money is more valuable over time. B. Interest is always compounded over time. C. A stream of payments is received over time. D. Invested money earns income over time.

D. Invested money earns income over time.

Machine set−up would most likely be classified as a​ ________ cost. A. unit−level B. product−level C. facility−level D. batch−level

D. batch−level

Oliver Inc. currently has a contribution margin of $31 on its only product. Oliver Inc. is considering spending $8,500 more on advertising this year to generate an increase in sales of 6,200 units. How will this change affect its operating​ income? A. It will decrease operating income by $8,500. B. It will increase operating income by $192,200. C. It will increase operating income by $183,700. D. It will increase operating income by $200,700.

C. It will increase operating income by $183,700.

Winner's Sporting Equipment manufactures sporting goods. Selected costs from the past year​ include: Plastics used to make products $151,100 Heating and lighting costs for factory $66,000 Factory janitor wages $67,900 Costs of shipping to customers $11,900 Lubricants used in factory equipment $3,000 Lighting costs for sales office $20,400 Depreciation on factory equipment $23,600 Office supplies for sales office $6,000 Insurance costs for factory $13,600 Maintenance worker wages $99,000 Freight−in (on plastics) $7,600 Aluminum used to make products $175,300 Assembly−line worker wages $142,500 Salaries of salespeople $75,000 Period costs for​ Winner's Sporting Equipment totaled A. $113,300. B. ​$95,636. C. $92,900. D. $191,000.

A. $113,300.

The Heartlake Corporation manufactures and sells toy gyroscopes. The following data is related to sales and production of the toy gyroscopes for last year. Selling price per unit $8.30 Variable manufacturing costs per unit $1.88 Variable selling and administrative expenses per unit $4.55 Fixed manufacturing overhead​ (in total) $79,000 Fixed selling and administrative expenses​ (in total) $85,000 Units produced during the year 510,000 Units sold during year 170,000 Using variable​ costing, what is the operating income for last​ year? A. $153,900 B. $317,900 C. $1,411,000 D. $481,900

A. $153,900

For Dubinsky​ Company, experience has shown that payment for the credit sales is received as​ follows: 62​% in the month of​ sale, 30​% in the first month after​ sale, 5​% in the second month after​ sale, and 3​% uncollectible. Dubinsky Company has budgeted the following credit sales during the last four months of the​ year: September, $24,000​; ​October, $22,000​; November $18,000​; ​December, $28,000. How much cash can Dubinsky Company expect to collect in November as a result of credit​ sales? A. $18,960 B. $17,760 C. $7,800 D. $18,000

A. $18,960

Selected information regarding a​ company's most recent quarter follows​ (all data in​ thousands). Beginning work in process inventory $340 Cost of goods manufactured $670 Direct materials used $170 Direct labor $120 Ending work in process inventory $160 What was manufacturing overhead for the​ quarter? A. $200 B. $160 C. $850 D. $510

A. $200

Sweet Southern Tea provided the following expense information for​ May: Assembly−line workers' wages $72,600 Caps for tea bottles 3,400 Reconfiguring the assembly line 125,100 Customer support hotline 10,200 Delivery expenses 20,500 Depreciation on factory equipment 75,200 Plastic bottles to package tea 52,800 Salaries of salespeople 63,000 Salaries of research scientists 70,300 Customer toll−free order line 6,100 What is the total cost for the production category of the value​ chain? A. $204,000 B. $499,200 C. $234,700 D. $331,800

A. $204,000

Vintage Fun reproduces old−fashioned style roller skates and skateboards. The annual production and sales of roller skates is 1,000 ​units, while 1,750 skateboards are produced and sold. The company has traditionally used direct labor hours to allocate its overhead to products. Roller skates require 4.5 direct labor hours per​ unit, while skateboards require 2.25 direct labor hours per unit. The total estimated overhead for the period is $114,800. The company is looking at the possibility of changing to an activity−based costing system for its products. If the company used an activity−based costing​ system, it would have the following three activity cost​ pools: Expected activity Activity cost pool Estimated overhead cost Roller skates Skateboards Total Setup costs $6,850 345 230 575 Engineering costs $16,100 470 630 1,100 Maintenance costs $91,850 2,675 2,238 4,913 The overhead cost per skateboard using an activity−based costing system would be closest to​ (Round all answers to two decimal​ places.) A. $30.74 B. $45.24 C. $65.08 D. $53.80

A. $30.74

Smithson Corporation had the following selected balance sheet changes for the past​ year: Assets and contra−assets Increase/(Decrease) Cash $47,000 Accounts receivable $15,000 Inventory $20,000 Prepaid expenses $ ​(7,000​) Accumulated depreciation $11,000 Liabilities Increase/(Decrease) Accounts payable $23,000 Wages payable $ ​(13,000​) Taxes payable $9,000 The​ company's operating income during the year was $38,000. What is the net cash provided by operating activities during last year on the statement of cash flows for Smithson Corporation​ (using the indirect​ method)? A. $40,000 B. $15,000 C. $105,000 D. $23,000

A. $40,000

The following is selected financial data from Turtle Bay Manufacturing for the most recent year. Ending raw materials inventory $21,200 Ending work in process inventory $44,900 Ending finished goods inventory $53,700 Amount of underallocated manufacturing overhead $5,800 Cost of goods sold for year $85,900 Cost of raw materials purchased during year $46,200 Cost of direct materials requisitioned during year $43,900 Cost of indirect materials requisitioned during year $8,000 Cost of goods completed during year $121,000 Manufacturing overhead allocated $60,500 Manufacturing overhead​ % of direct labor cost 125​% What is the actual manufacturing​ overhead? A. $66,300 B. $60,500 C. $54,700 D. $5,800

A. $66,300

Buzz Appliances manufactures two​ products: Food Processors and Espresso Machines. The following data are​ available: Food Processors Espresso Makers Sales price $135.00 $225.00 Variable costs $90.00 $150.00 The company can manufacture either two food processors per machine hour or three espresso machines per machine hour. The​ company's production capacity is 1,200 machine hours per month. The company has demand of 1,200 espresso machines. How many espresso machines and food processors should they produce based on demand and available machine​ hours? A. 1,200 espresso machines and 1,600 food processors B. 1,200 espresso machines and 0 food processors C. 400 espresso machines and 800 food processors D. 1,200 espresso machines and 800 food processors

A. 1,200 espresso machines and 1,600 food processors

Jolly Company produces hula hoops. Jolly Company has the following sales projections for the upcoming​ year: First quarter budgeted hula hoop sales in units 22,600 Second quarter budgeted hula hoop sales in units 20,000 Third quarter budgeted hula hoop sales in units 23,000 Fourth quarter budgeted hula hoop sales in units 34,000 Jolly Company wants to have 20​% of the next​ quarter's sales in units on hand at the end of each quarter. Inventory at the beginning of the year was 3,800 hula hoops. How many hula hoops should Jolly Company produce during the first​ quarter? A. 22,800 B. 18,800 C. 30,400 D. 22,600

A. 22,800

Forty Winks Corporation manufactures night stands. The production budget shows that Forty Winks Corporation plans to produce 1,000 night stands in March and 1,100 night stands in April. Each night stand requires 0.75 direct labor hours in its production. Forty Winks Corporation has a direct labor rate of $19.00 per direct labor hour. What is the total combined direct labor cost that Forty Winks Corporation should budget in March and​ April? A. 29,925 B. 14,250 C. 15,675 D. 39,900

A. 29,925

Widget Inc. manufactures widgets. The company has the capacity to produce​ 100,000 widgets per​ year, but it currently produces and sells​ 75,000 widgets per year. The following information relates to current​ production: Sale price per unit $40 Variable costs per​ unit: Manufacturing $24 Marketing and administrative $5 Total fixed​ costs: Manufacturing $77,000 Marketing and administrative $25,000 If a special sales order is accepted for 2,700 widgets at a price of $34 per​ unit, fixed costs increase by $9,000​, and variable marketing and administrative costs for that order are $2 per​ unit, how would operating income be​ affected? (NOTE: Assume regular sales are not affected by the special​ order.) A. Increase by $12,600 B. Increase by $18,000 C. Decrease by $12,600 D. Increase by $21,600

A. Increase by $12,600

When manufacturing​ products, direct labor and direct materials are classified as A. product costs and expensed when the goods are sold. B. period costs and expensed when incurred. C. period costs and expensed when the goods are sold. D. product costs and expensed when incurred.

A. product costs and expensed when the goods are sold.

Net income reported under absorption costing will exceed net income reported under variable costing for a given period if A. production exceeds sales for that period. B. production equals sales for that period. C. variable overhead exceeds fixed overhead for that period. D. sales exceed production for that period.

A. production exceeds sales for that period.

Which of the following statements is true regarding managerial accounting​ information? A. Managerial accounting information must be prepared in conformity with Generally Accepted Accounting Principles​ (GAAP). B. Managerial accounting information is audited by CPAs. C. Managerial accounting information emphasizes relevance. D. Managerial accounting information is prepared annually and quarterly.

C. Managerial accounting information emphasizes relevance.

Distribution Corporation collects 40​% of a​ month's sales in the month of​ sale, 55​% in the month following​ sale, and 5​% in the second month following sale. Budgeted sales for the upcoming four months​ are: April budgeted sales $90,000 May budgeted sales $130,000 June budgeted sales $280,000 July budgeted sales $190,000 The amount of cash that will be collected in July is budgeted to be A. $160,500 B. $76,000 C. $215,500 D. $236,500

D. $236,500

The beginning and ending balances of long−term debt are $66,000 and $35,200​, ​respectively, and, cash payments for long−term debt during the year were $34,100. How much new long−term debt was issued during the​ year? A. New long−term debt issued during the year was $69,300. B. New long−term debt issued during the year was $30,800. C. New long−term debt issued during the year was $3,300. D. New long−term debt issued during the year was $1,100.

C. New long−term debt issued during the year was $3,300.

Belle Auto Detailing reported the following results for the past​ week: Actual number of cars detailed 140 Actual direct labor hours used 490 Actual total direct labor cost $6,700 Budgeted number of cars to be detailed 270 Standard direct labor cost per hour $5.76 Standard direct labor per car 2 What is​ Belle's direct labor efficiency​ variance? A. $1,210 favorable B. $1,210 unfavorable C. $2,871 unfavorable D. $2,871 favorable

B. $1,210 unfavorable

Here are selected data for Whatchamacallit​ Company: Cost of goods manufactured $320,300 Work in process​ inventory, beginning $109,300 Work in process​ inventory, ending $104,700 Direct materials used $74,000 Manufacturing overhead is allocated at 60​% of direct labor cost. What was the amount of direct labor​ costs? (Round your answer to the nearest​ cent.) A. $164,637.50 B. $151,062.50 C. $241,700.00 D. $85,482.50

B. $151,062.50

Timewise Manufacturing uses a predetermined manufacturing overhead rate based on direct labor hours to allocate manufacturing overhead to jobs. Selected data about the​ company's operations​ follows: Actual manufacturing overhead cost $500,000 Estimated manufacturing overhead cost $550,300 Estimated direct labor cost $175,000 Estimated direct labor hours 50,500 Actual direct labor hours 60,300 Estimated machine hours 40,500 Actual machine hours 36,000 By how much was manufacturing overhead overallocated or underallocated for the​ year? (Round intermediary calculations to the nearest​ cent.) A. $157,270 underallocated B. $157,270 overallocated C. $50,300 underallocated D. $50,300 overallocated

B. $157,270 overallocated

Harvey Automobiles uses a standard part in the manufacture of several of its trucks. The cost of producing 50,000 parts is $150,000​, which includes fixed costs of $40,000 and variable costs of $110,000. By outsourcing the​ part, the company can avoid​ 30% of the fixed costs. If Harvey Automobiles buys the​ part, what is the most Harvey Automobiles can spend per unit so that operating income equals the operating income from making the​ part? (Round the final answer to the nearest​ cent.) A. $3.56 B. $2.44 C. $0.80 D. $3.00

B. $2.44

Coyne Corporation is evaluating a capital investment opportunity. This project would require an initial investment of $40,000 to purchase equipment. The equipment will have a residual value at the end of its life of $4,000. The useful life of the equipment is 4 years. The new project is expected to generate additional net cash inflows of $19,000 per year for each of the four years.​ Coyne's required rate of return is 10​%. The net present value of this project is closest​ to: A. $20,230. B. $22,962. C. $4,402. D. $35,642.

B. $22,962.

Hewitt Company expects cash sales for July of $17,000​, and a 20​% monthly increase during August and September. Credit sales of $7,000 in July should be followed by 34​% increases during August and September. What are budgeted cash sales and budgeted credit sales for September​ respectively? (Round final answers to the nearest​ dollar.) A. $20,400 and $9,380 B. $24,480 and $12,569 C. $22,780 and $8,400 D. $14,167 and $5,224

B. $24,480 and $12,569

Morgan Company uses a job costing system. Morgan Company estimated manufacturing overhead costs for the year at $330,600​, based on 60,600 estimated direct labor hours. Actual direct labor hours for the year totaled 75,700. Actual manufacturing overhead for the year was $385,200. By how much was manufacturing overhead overallocated or underallocated for the​ year? (Round intermediary calculations to the nearest​ cent.) A. $54,600 overallocated B. $28,122 overallocated C. $28,122 underallocated D. $54,600 underallocated

B. $28,122 overallocated

Moe's Pizza Shop sells a large pizza for $11.00. Unit variable expenses total $8.00. The breakeven sales in units is 3,000 and budgeted sales in units is 7,000. What is the margin of safety in​ dollars? A. $364 B. $44,000 C. $4,000 D. $110,000

B. $44,000

Larry Company makes and sells 2 models of​ dishwashers, Model ABC and Model XYZ. For every 2 Model ABC​ sold, 3 Model XYZ are sold. Larry Company incurs $1,120,000 in fixed costs per month. The following information is also​ provided: Model ABC Model XYZ Sales per unit $540 $730 Variable Cost per unit ​$250 ​$300 CM per unit $290 $430 How many units of Model XYZ would the company need to sell at its breakeven​ point? (Round intermediary calculations to two decimal places and the final answer to the nearest​ unit.) A. 3,111 units B. 1,797 units C. 1,867 units D. 2,995 units

B. 1,797 units

Matthew's Fish Fry has a monthly target operating income of $6,500. Variable expenses are 80​% of sales and monthly fixed expenses are $880. What is​ Matthew's operating leverage factor at the target level of operating​ income? A. 0.88 B. 1.14 C. 0.86 D. 8.39

B. 1.14

Perry Corporation produces and sells a single product. Data for that product​ are: Sales price per unit $270 Variable cost per unit $150 Fixed expenses for the month $680,000 Currently selling 12,500 units Upper management is considering using a biodegradable packaging which costs $8 more per unit but it produces less waste in the long run. Management plans to increase advertising by $9,000 in the first month to advertise this new feature to their packaging. They believe that environmentally friendly people will switch to their product resulting in an increase in sales of 1,000 units per month. How many units would the company have to sell to maintain current operating income if these changes are​ implemented? Round up to the nearest whole unit. A. 12,575 units B. 13,474 units C. 12,500 units D. Cannot be determined from the information given.

B. 13,474 units

Daisy Company manufactures dog collars. The following selected data relates to Daisy​ Company's budgeted sales and inventory levels of the dog collars for the upcoming​ quarter: October expected unit sales 2,100 November expected unit sales 3,000 December expected unit sales 2,000 October desired ending unit finished goods inventory 830 November desired ending unit finished goods inventory 700 December desired ending unit finished goods inventory 570 How many dog collars should Daisy Company produce in​ November? A. 3,700 B. 2,870 C. 4,530 D. 1,470

B. 2,870

Which one of the following financial reports is required to be audited by an outside​ entity? A. Annual financial budgets B. Annual financial statements C. Monthly financial statements D. All of the above

B. Annual financial statements

The philosophy that centers on production as needed is known as A. TQM. B. JIT. C. ERP. D. supply−chain management.

B. JIT.

Wood Sculptor Company had the following labor−related transactions at their plant last​ month: ​Woodworkers' wages $120,700 Staining tank​ workers' wages $40,400 Maintenance personnel wages $10,700 What is the journal entry to record the incurrence of direct​ labor? A. debit WIP Inventory 171,800 credit Manufacturing Wages 171,800 B. debit WIP Inventory 161,100 credit Wages Payable 161,100 C. debit WIP Inventory 171,800 credit Wages Payable 171,800 D. debit WIP Inventory 161,100 credit Manufacturing Wages 161,100

B. debit WIP Inventory 161,100 credit Wages Payable 161,100

A favorable direct materials quantity variance indicates which of the​ following? A. The Actual Quantity​ (AQ) of direct materials used was greater than the standard quantity for budgeted output. B. The actual cost of direct materials was less than the standard cost of direct materials. C. The Actual Quantity​ (AQ) of direct materials used was less than the standard quantity for actual output. D. The Standard Quantity​ (SQ) of direct materials for actual output was less than the Actual Quantity​ (AQ) of direct materials used.

C. The Actual Quantity​ (AQ) of direct materials used was less than the standard quantity for actual output.

Custom Creations Furniture Company manufactures furniture at its​ Akron, Ohio, factory. Some of its costs from the past year​ include: Depreciation on sales office $ 9,300 Depreciation on factory equipment 16,500 Factory supervisor salary 50,300 Sales commissions 23,600 Lubricants used in factory equipment 3,700 Insurance costs for factory 21,500 Wages paid to maintenance workers 115,400 Fabric used to upholster furniture 10,600 Freight−in (on raw​ materials) 3,700 Costs of delivery to customers 9,900 Wages paid to assembly−line workers 115,200 Lumber used to build product 82,500 Utilities in factory 54,400 Utilities in sales office 26,400 Prime costs for Custom Creations Furniture Company totaled A. $377,700. B. $93,100. C. $212,000. D. $208,300.

C. $212,000.

Shoe Biz allocates overhead based on machine hours. Selected data for the most recent year follow. Estimated manufacturing overhead cost $235,600 Actual manufacturing overhead cost $244,100 Estimated machine hours 20,700 Actual machine hours 23,500 The estimates were made as of the beginning of the​ year, while the actual results were for the entire year. The amount of manufacturing overhead allocated for the year based on machine hours would have been ? ​ A. $235,600. B. $215,016. C. $267,430. D. $244,100.

C. $267,430.

The actual cost of direct materials is $10.00 per pound. The standard cost per pound is $8.50. During the current​ period, 9,700 pounds of direct materials were used in production and 18,500 pounds were purchased. The standard quantity of direct materials for actual units produced is 17,600 pounds. How much is the direct materials quantity​ variance? A. $79,000 unfavorable B. $79,000 favorable C. $67,150 favorable D. $67,150 unfavorable

C. $67,150 favorable

​Greenscape, Inc. sells lawn decor to consumers in the marketplace. The managerial accountant reported the following financial information that reflects the 20XX​ data: Beginning merchandise inventory on January​ 1: $233,800 Ending merchandise inventory on December​ 31: $135,600 ​Purchases: $952,700 Selling and administrative​ expenses: $175,200 Sales revenue for the​ year: $2,262,800 Cost of goods​ sold: $1,050,900 Salary and wage​ expenses: $250,800 Rent and utility​ expenses: $75,500 Compute the operating income. A. $123,600 B. $84,000 C. $710,400 D. $183,700

C. $710,400

Custom Creations Furniture Company manufactures furniture at its​ Akron, Ohio, factory. Some of its costs from the past year​ include: Depreciation on sales office $ 9,800 Depreciation on factory equipment 16,400 Factory supervisor salary 50,400 Sales commissions 23,300 Lubricants used in factory equipment 3,200 Insurance costs for factory 21,900 Wages paid to maintenance workers 115,800 Fabric used to upholster furniture 10,800 Freight−in (on raw​ materials) 3,000 Costs of delivery to customers 9,000 Wages paid to assembly−line workers 115,900 Lumber used to build product 82,700 Utilities in factory 54,900 Utilities in sales office 26,700 Direct material costs for Custom Creations Furniture Company totaled A. $10,800. B. $82,700 C. $96,500 D. $93,500

C. $96,500

Kalanja​ Designs, which produces​ earrings, is developing direct material standards. Each earring requires 0.42 kilograms of a special metal. The allowance for waste is 0.5 kilograms per​ earring, while the allowance for rejects is 0.9 kilograms per earring. What is the standard quantity of metal per​ earring? A. 0.42 kilograms B. 0.92 kilograms C. 1.82 kilograms D. 1.32 kilograms

C. 1.82 kilograms

Terrific Toys Company manufactures and sells​ children's skateboards. Each skateboard requires four bearings. For​ September, Terrific Toys Company has budgeted skateboard sales of 570 ​skateboards, while 600 skateboards are scheduled to be produced. Terrific Toys Company will begin September with 240 bearings in its beginning​ inventory, and estimates ending inventory for September to be 360 bearings. How many bearings should Terrific Toys Company purchase in​ September? A. 2,640 B. 330 C. 2,520 D. 2,400

C. 2,520

Sunnyside Corporation is evaluating a capital investment project which would require an initial investment of $230,000 to purchase new machinery. The annual revenues and expenses generated specifically by this project each year during the​ project's nine year life would​ be: Sales $160,000 Variable expenses $44,000 Contribution margin $116,000 Fixed​ expenses: Salaries expense $33,000 Rent expense $20,000 Depreciation expense $29,000 Total fixed expenses $82,000 Operating income $34,000 The residual value of the machinery at the end of the nine years would be $11,000. The payback period of this potential project in years would be closest to A. 46.0. B. 6.8. C. 3.7. D. 2.0.

C. 3.7.

Tooty Fruity Beverage​ Company's operating activities for the year are listed below. Purchases ​$140,000 Operating expenses 81,000 Beginning inventory 12,300 Ending inventory 18,400 Sales revenue 300,200 What is the cost of goods sold for the​ year? A. $140,000 B. $81,000 C. $152,300 D. $133,900

D. $133,900

Vertical Climbing​ Company's work in process inventory on June 1 has a balance of $22,800 representing Job No. 265. During​ June, $50,400 of direct materials were requisitioned for Job No. 265 and $35,500 of direct labor cost was incurred on Job No. 265. Manufacturing overhead is allocated at 115​% of direct labor cost. Actual manufacturing overhead costs incurred in June amounted to $41,800. No new jobs were started during June. Job No. 265 is completed on June 28. What is the total cost assigned to Job No.​ 265? A.$40,825 B. $133,025 C. $150,500 D. $149,525

D. $149,525

The following information for the past year for the Blaine Corporation has been​ provided: Fixed​ costs: Manufacturing $105,000 Marketing 21,000 Administrative 16,000 Variable​ costs: Manufacturing $110,000 Marketing 35,000 Administrative 34,000 During the​ year, the company produced and sold 50,000 units of product at a selling price of $19.23 per unit. There was no beginning inventory of product at the beginning of the year. What is the contribution margin per unit for Blaine​ Corporation? (Round any intermediary calculations and your final answer to the nearest​ cent.) A. $16.39 B. $3.58 C. $6.42 D. $15.65

D. $15.65

Schrute Farm Sales buys portable generators for $500 and sells them for $770. He pays a sales commission of​ 5% of sales revenue to his sales staff. Mr. Schrute pays $5,000 a month rent for his​ store, and also pays $2,000 a month to his staff in addition to the commissions. Mr. Schrute sold 600 generators in June. If Mr. Schrute prepares a traditional income statement for the month of​ June, what would be his gross​ profit? A. $462,000 B. $300,000 C. $762,000 D. $162,000

D. $162,000

Big Trail Running Company has started to produce running apparel in addition to the trail running shoes that they have manufactured for years. They feel that a departmental overhead rate would best reflect their overall manufacturing overhead usage. Based on research the following information was gathered for the upcoming​ year: Machining Department Finishing Department Estimated Manufacturing Overhead by Department $1,000,000 $300,000 Trail Running Shoes 460,000 machine hours 14,000 direct labor hours Running Apparel 40,000 machine hours 66,000 direct labor hours Manufacturing overhead is driven by machine hours for the machining department and direct labor hours for the finishing department. At the end of the​ year, the following information was gathered related to the production of the trail running shoes and running​ apparel: Machining Department Finishing Department Trail Running Shoes 462,000 hours 13,500 hours Running Apparel 37,000 hours 67,000 hours How much manufacturing overhead will be allocated to running​ apparel? (Round any intermediary calculations to the nearest cent and your final answer to the nearest​ dollar.) A. $325,000 B. $323,838 C. $1,299,875 D. $325,250

D. $325,250

Doggie Pals produces 70,000 dog collars each month that give off a fresh scent to keep your dog smelling clean between baths. Total manufacturing costs are $210,000. Of this​ amount, $120,000 are variable costs. What are the total production costs when 155,000 collars are​ produced? (Assume both production levels are in the same relevant range. Round intermediate calculations to the nearest cent and the final answer to the nearest​ dollar.) A. $175,050 B. $475,050 C. $265,050 D. $355,050

D. $355,050

Selected financial information for Shadyside Manufacturing is presented in the following table​ (000s omitted). Sales revenue $4,600 Purchases of direct materials $410 Direct labor $490 Manufacturing overhead $630 Operating expenses $750 Beginning raw materials inventory $220 Ending raw materials inventory $250 Beginning work in process inventory $350 Ending work in process inventory $440 Beginning finished goods inventory $260 Ending finished goods inventory $230 What was the cost of direct materials​ used? A. $630 B. $470 C. $410 D. $380

D. $380

Bob Burgers allocates manufacturing overhead to jobs based on direct labor hours. The company has the following estimated costs for the upcoming​ year: Direct materials used $50,000 Direct labor costs $70,300 Wages of factory janitors $40,000 Sales supervisor salary $51,200 Utilities for factory $16,500 Rent on factory building $14,000 Advertising expense $5,660 The company estimates that 1,420 direct labor hours will be worked in the upcoming​ year, while 1,200 machine hours will be used during the year. The predetermined manufacturing overhead rate per direct labor hour will be​ (Round your answer to the nearest​ cent.) A. $57.54. B. $89.69. C. $174.41. D. $49.65.

D. $49.65.

A manufacturer is considering whether to invest in a robotic system that costs $632,000​, has a $32,000 residual​ value, and should lead to cost savings of $170,000 per year for its five​-year life. In calculating the accounting rate of return​ (ARR), which of the following numbers should be used in the ARR​ equation's numerator as average annual operating​ income? A. $43,600 B. $6,400 C. $120,000 D. $50,000

D. $50,000

Lucas Industries uses departmental overhead rates to allocate its manufacturing overhead to jobs. The company has two​ departments: Assembly and Sanding. The Assembly Department uses a departmental overhead rate of $65 per machine​ hour, while the Sanding Department uses a departmental overhead rate of $25 per direct labor hour. Job 603 used the following direct labor hours and machine hours in the two​ departments: Actual results Assembly Department Sanding Department Direct labor hours used 7 7 Machine hours used 12 6 The cost for direct labor is $40 per direct labor hour and the cost of the direct materials used by Job 603 is $1,500. How much manufacturing overhead would be allocated to Job 603 using the departmental overhead​ rates? A. $1,215 B. $560 C. $820 D. $955

D. $955

Victoria Corporation manufactures quality vases. Budgeted sales and production data for the vases are as​ follows: Month 1 budgeted unit sales 1,800 Month 2 budgeted unit sales 2,400 Month 3 budgeted unit sales 3,900 Month 1 budgeted unit production 2,800 Month 2 budgeted unit production 3,000 Month 3 budgeted unit production 4,000 Raw material required for each finished unit​ (in pounds) 1 Each vase requires one pound of clay in its manufacture. Victoria Corporation has a policy that the inventory of clay at the end of each month needs to be equal to 30​% of the production needs for the following month. At the beginning of​ January, 840 pounds of clay were in inventory. How many pounds of clay would Victoria Corporation need to purchase in February​ (Month 2)? A. 4,300 B. 3,100 C. 2,860 D. 3,300

D. 3,300

Buzz Appliances manufactures two​ products: Food Processors and Espresso Machines. The following data are​ available: Food Processors Espresso Makers Sales price $135 $245 Variable costs $70 $170 The company can manufacture either two food processors per machine hour or three espresso machines per machine hour. The​ company's production capacity is 1,200 machine hours per month. To maximize​ profits, what product and how many units should the company produce in a month​ (assuming unlimited demand for both​ products)? A. 2,400 Food Processors and 0 Espresso Machines B. 2,400 Food Processors and 3,600 Espresso Machines C. 130 Food Processors and 225 Espresso Machines D. 3,600 Espresso Machines and 0 Food Processors

D. 3,600 Espresso Machines and 0 Food Processors

Richland Enterprises has budgeted the following amounts for its next fiscal​ year: Total fixed expenses $49,000 Selling price per unit $75 Variable expenses per unit $35 If Richland Enterprises can reduce fixed expenses by​ $5,280, how will breakeven sales in units be​ affected? A. Decrease by 48 units B. Increase by 132 units C. Increase by 48 units D. Decrease by 132 units

D. Decrease by 132 units

Westfall Watches has two product​ lines: Luxury watches and Sporty watches. Income statement data for the most recent year​ follow: Total Luxury Sporty Sales revenue $490,000 $360,000 ​$130,000 Variable expenses 365,000 245,000 ​120,000 Contribution margin 125,000 115,000 ​10,000 Fixed expenses 79,000 39,500 39,500 Operating income​ (loss) $46,000 $75,500 ​$(29,500​) Assuming the Sporty line is​ discontinued, total fixed costs remain​ unchanged, and the space formerly used to produce the Sporty line is used to increase the production of Luxury watches by​ 250%, how will operating income be​ affected? A. Decrease $162,500 B. Increase $287,500 C. Increase $208,500 D. Increase $162,500

D. Increase $162,500

Boots Plus has two product​ lines: Hiking boots and Fashion boots. Income statement data for the most recent year​ follow: Total Hiking Fashion Sales revenue $520,000 $380,000 ​$140,000 Variable expenses 365,000 245,000 ​120,000 Contribution margin 155,000 135,000 ​20,000 Fixed expenses 77,000 38,500 38,500 Operating income​ (loss) $78,000 $96,500 $(18,500) Assuming the Fashion line is​ discontinued, total fixed costs remain​ unchanged, and the space formerly used to produce the line is rented for $26,000 per​ year, how will operating income be​ affected? A. Increase $162,000 B. Increase $84,000 C. Decrease $6,000 D. Increase $6,000

D. Increase $6,000

A favorable direct materials price variance and an unfavorable direct materials quantity variance might indicate which of the​ following? A. More​ expensive, superior materials requiring more than the standard amount were used in production. B. More​ expensive, superior materials requiring less than the standard amount were used in production. C. Less​ expensive, inferior materials requiring less than the standard amount were used in production. D. Less​ expensive, inferior materials requiring more than the standard amount were used in production.

D. Less​ expensive, inferior materials requiring more than the standard amount were used in production.

A job costing system can be used by which types of​ companies? A. Service and manufacturing businesses B. Manufacturing and merchandising businesses C. Service and merchandising businesses D. Service, manufacturing, and merchandising businesses

D. Service, manufacturing, and merchandising businesses

Which of the following is an acceptable basis for the preparation of the statement of cash​ flows? A. Cash B. The sum of​ cash, inventory, and money market accounts C. The sum of cash and accounts receivable D. The sum of cash and cash equivalents

D. The sum of cash and cash equivalents

Non−value−added activities include all of the following EXCEPT A. storing of raw materials. B. inspection of the product. C. movement of parts within the warehouse. D. assembling the products.

D. assembling the products.

Managers may intentionally build slack into the budget A. to acquire the resources they need in the event the organization implements a budget cut. B. because they are uncertain about the future. C. to make their performance appear better. D. because all of the above are true.

D. because all of the above are true.

The fixed expenses of​ Greg's Snowboards are $850,000. The selling price for one snowboard is $200. The variable cost per unit is $73. If the company sells 8,800 ​snowboards, its operating income is a A. gain of $1,967,600. B. loss of $207,600. C. gain of $1,552,400. D. gain of $267,600.

D. gain of $267,600.

What two variances make up the direct labor​ variance? A. price variance and usage variance. B. rate variance and price variance. C. price variance and efficiency variance. D. rate variance and efficiency variance.

D. rate variance and efficiency variance.

The journal entry to assign $2,300 of direct labor and $400 of indirect labor involves a debit to A. the Manufacturing Overhead account for $2,700. B. the Work−in−Process Inventory account for $2,700. C. the Work−in−Process Inventory account for $2,300 and a credit to Manufacturing Overhead account for $400. D. the Work−in−Process Inventory account for $2,300 and a debit to the Manufacturing Overhead account for $400​; and a credit to the Wages Payable account for $2,700.

D. the Work−in−Process Inventory account for $2,300 and a debit to the Manufacturing Overhead account for $400​; and a credit to the Wages Payable account for $2,700.