acc102 pt 2

Assume the indirect method is used to compute net cash flows from operating activities. For this item extracted from the financial statements-Decrease in Accounts Receivable-indicate the effect on net income in arriving at net cash flows from operating activities by choosing one of the following:

Add to net income to arrive at net cash flows from operating activities

Assume the indirect method is used to compute net cash flows from operating activities. For this item extracted from the financial statements-Decrease in Inventory-indicate the effect on net income in arriving at net cash flows from operating activities by choosing one of the following:

Add to net income to arrive at net cash flows from operating activities

Assume the indirect method is used to compute net cash flows from operating activities. For this item extracted from the financial statements-Loss on Disposal of Equipment-indicate the effect on net income in arriving at net cash flows from operating activities by choosing one of the following:

Add to net income to arrive at net cash flows from operating activities

If the indirect method is used to prepare a statement of cash flows, which of the following would be added to net income to arrive at net cash flows from operating activities?

Decrease in accounts receivable

If the indirect method is used, each of the following is a proper adjustment to net income to arrive at net cash flows from operating activities except:

Deducting a decrease in Prepaid Expenses

If the indirect method is used to prepare a statement of cash flows, which of the following would be added to net income to arrive at net cash flows from operating activities?

Depreciation and amortization expenses and loss on sale of land

Which of the following is not a product cost?

Depreciation on office furniture

Edward Cheezer's Inc. makes and sells frozen four-cheese pizzas, New York-style. The expected selling price is $10 per pizza. The projected variable cost per pizza is $6. The estimated fixed costs per month are $10,000. The number of pizzas that must be sold to obtain a monthly profit of $20,000 is

FC/(sell price - variable cost(or CM per unit)) = 7500

Lincoln Company engaged in this transaction: Retired long-term debt with cash. Indicate which section, if any, the above transaction would appear in, or relate to, on a statement of cash flows.

Financing activities section

Which of the following labor costs would be included in direct labor

Machine operators

Which of the following is a product cost?

Material handling expenses

In a job order costing system, the purchase of materials on account should be recorded as follows:

Materials Inventory Accounts Payable

Lincoln Company engaged in this transaction: Collected accounts receivable. Indicate which section, if any, the above transaction would appear in, or relate to, on a statement of cash flows.

Operating activities section

Lincoln Company engaged in this transaction: Issued stock for land. Indicate which section, if any, the above transaction would appear in, or relate to, on a statement of cash flows.

Schedule of noncash investing and financing transactions.

Assume the indirect method is used to compute net cash flows from operating activities. For this item extracted from the financial statements-Decrease in Accrued Liabilities-indicate the effect on net income in arriving at net cash flows from operating activities by choosing one of the following:

Subtract from net income to arrive at net cash flows from operating activities

When direct materials are issued from inventory to production under a job order costing system, an increase is recorded in the

Work in Process Inventory account

If the contribution margin on a new product line is $15, fixed costs are $165,000, and the total market for the product is 22,000 units, then the breakeven analysis would recommend that the company

adopt the new product line.

Under a job order costing system, the dollar amount of the entry to record the transfer of goods from Work in Process Inventory to Finished Goods Inventory is the total of the costs charged to all jobs

completed during the period.

For every unit that a company produces and sells above the breakeven point, its profitability is improved (ignoring taxes) by the unit's

contribution margin

The applied overhead of a job is more than the actual overhead and it is considered immaterial by the company. An entry to record this would involve a

credit to the Cost of Goods Sold account

he three elements of product costs are

direct materials, direct labor, and overhead.

The factory personnel whose wages are traceable directly to a product include

employees who help to shape the product

Kingston Company settled a long-term note payable it owed to Creative Company by issuing capital stock. Kingston would report this

in the schedule of noncash investing and financing transactions.

Materials and supplies that cannot be traced conveniently to specific products are called

indirect materials

Consider the following information: direct materials used totaled $124,700; direct labor amounted to $412,000; overhead was computed to be $789,600; Work in Process Inventory on March 1, 2014, was $482,500; and Work in Process Inventory on March 31, 2014, was $597,100. What was the cost of goods manufactured?

$1,211,700

Ad-on International is an advertising company. It estimated the overhead costs for March, 2014, to be $950,000 and direct labor hours to be 5,000 hours. In March, it incurred overhead costs of $1,150,000 and 5,100 labor hours. What is the overapplied or underapplied overhead for Ad-on International for March, 2014?

$181,000 underapplied

Ad-on International is an advertising company. It estimated the overhead costs for March, 2014, to be $950,000 and direct labor hours to be 5,000 hours. In March, it incurred overhead costs of $1,150,000 and 5,100 labor hours. What is the predetermined overhead rate for March, 2014?

$190 per direct labor hour

Ad-on International is an advertising company. It estimated the overhead costs for March, 2014, to be $950,000 and direct labor hours to be 5,000 hours. In March, it incurred overhead costs of $1,150,000 and 5,100 labor hours. The amount of overhead costs applied by the company in March, 2014, is:

$969,000

The following are costs for a selected period: direct materials used in production, $75,000; direct labor cost of converting materials into product, $150,000; total indirect costs of manufacturing, $45,000. What is the unit cost of manufacturing 30,000 units in this period?

(DM+DL+O)/Units = $9.00

The balance in the Work in Process Inventory account on October 1 was $14,000, and the balance on October 31 was $85,400. Costs incurred during the month were as follows: direct materials, $55,820; direct labor, $58,420; and overhead, $40,000. What amount was transferred to the Finished Goods Inventory account during October?

(DM+DL+OH+BEG WPI)-END WPI =$82,840

Lilly LLC wants to make a profit of $30,000. It has variable costs of $99 per unit and fixed costs of $20,000. How much must it charge per unit if 5,000 units are sold?

109

The following budget data are available for Howers Company: Estimated direct labor hours 16,000 Estimated direct labor dollars $170,000 Estimated overhead costs $207,200 If overhead is to be applied based on direct labor hours, the predetermined overhead rate per hour (rounded) is

12.95

The delivery trucks of Italiana's Pizzeria incurred maintenance costs of $2,400 during its busiest month of 2014, in which 8,000 miles were driven collectively. During its slowest month, the trucks were driven for only 5,000 miles, for a maintenance cost of $1,800. Using the high-low method, calculate the expected maintenance cost for a month in which trucks are driven for 5,350 miles?

1870

Excerpts from a cost-volume-profit analysis indicate fixed costs of $30,000, a variable cost per unit of $36, a selling price of $60, and a sales level of $125,000. The targeted level of profit must be

20,000

Johnson Technology specializes in graphic design and video production. In October 2014, the company incurred the following costs for providing services to one of its clients. Supplies $ 200 Labor 1,500 Overhead 1,800 Johnson Technology's contract with the client discloses 20% profit margin on the cost incurred. Determine the total amount to be received by the company from its client.

3500+700 = 4200

Delaware Inc. incurred the following costs in October, 2014, for producing 5,000 good units of personalized photo frames. Direct materials $ 15,000 Direct labor 10,000 Overhead applied 13,500 The company sold 4,500 units. Determine the product unit cost of photo frames.

7.70

Johnson Technology specializes in graphic design and video production. In October 2014, the company incurred the following costs for providing services to one of its clients. Supplies $ 200 Labor 1,500 Overhead 1,800 Johnson Technology's contract with the client discloses a 20% profit margin on the cost incurred. Determine the profit earned by the company by providing services.

700

Edward Cheezer's Inc. makes and sells frozen four-cheese pizzas, New York-style. The expected selling price is $10 per pizza. The projected variable cost per pizza is $6. The estimated fixed costs per month are $10,000. If 6,000 pizzas are sold in a given month and fixed costs increase by $5,000, the overall profit is

9,000

Share and Care International is trying to determine how many clients must be serviced in order to cover its monthly service overhead. Using the high-low method, it has determined that the variable cost per client is $800 and that the monthly fixed overhead is $28,000. Assuming an average fee of $1,400 per client and a targeted profit of $26,000, the number of clients to be serviced is

90 clients

If the indirect method is used, which of the following would be subtracted from net income to arrive at net cash flows from operating activities?

Decrease in Accounts Payable

Cost of goods manufactured is equal to

Beginning Work in Process Inventory + Total Manufacturing Costs - Ending Work in Process Inventory

The Finished Goods Inventory and the Cost of Goods Sold for a manufacturing company for the year 2014 are as follows: May 1 Finished Goods Inventory, $470,500; May 31 Finished Goods Inventory, $125,000; Cost of Goods Sold for the year, $1,110,000. The cost of goods manufactured for the month was

COG - Beg FGI + End FGI = $764,500

Applied overhead is less than actual overhead incurred during the year. Which of the following journal entries is made to close the Overhead account if this difference is immaterial?

Cost of Goods Sold Overhead

Assume the indirect method is used to compute net cash flows from operating activities. For this item extracted from the financial statements-Gain on Sale of Investment-indicate the effect on net income in arriving at net cash flows from operating activities by choosing one of the following:

Subtract from net income to arrive at net cash flows from operating activities

During 2011, the accounts receivable balance of Big Buck Corp. increased. On Big Buck's Statement of Cash Flows, the financial reader would conclude which of the following?

This indicates that Big Buck sold more than it collected in cash during the period

Which of the following equations is correct?

Total Manufacturing Costs = Direct Materials + Direct Labor + Overhead

Upon review of Bert's Statement of Cash Flows, the following was noted: Cash flows from operating activities $ 60,000 Cash flows from investing activities (125,000) Cash flows from financing activities 115,000 From this information, the most likely explanation is that Bert is

Using cash from operations and borrowing to purchase long-term assets

Speed Zone Inc., dealers in automobiles, pays its employees a commission of 5 percent on each sale. What is the proper classification of the cost of sales commissions?

Variable cost

From Jolier's year-end income statement, you observe that the finished goods inventory has doubled during the year. This would indicate that during the year Jolier

produced more goods than were sold.