Accounting 2 Final Mize
21)Pell Manufacturing is preparing its direct labor budget for May. Projections for the month are that 33,400 units are to be produced and that direct labor time is three hours per unit. If the labor cost per hour is $12, what is the total budgeted direct labor cost for May A)$1,296,000. B)$1,202,400. C)$1,159,200. D)$1,180,800
B)$1,202,400.
49)For Franklin, Inc., sales is $2,000,000, fixed expenses are $600,000, and the contribution margin ratio is 36%. What are the total variable expenses? A)$384,000 B)$1,280,000 C)$2,000,000 D)$720,000
B)$1,280,000
43)A company is considering the following alternatives:Alternative 1Alternative 2Revenues$120,000$120,000Variable costs60,00070,000Fixed costs35,00035,000Which of the following are relevant in choosing between the alternatives? A)Revenues B)Fixed costs C)Variable costs D)Variable costs and fixed costs
C)Variable costs
13)If budgets are to be effective, all of the following must be present except A)acceptance at all levels of management. B)research and analysis in setting realistic goals. C)sound organizational structure. D)stockholders' approval of the budget.
D)stockholders' approval of the budget.
Use the following information for the questions below. The Can Division of Fruit Products Inc. manufactures and sells tin cans externally for $0.60 per can. Its unit variable costs and unit fixed costs are $0.24 and $0.08, respectively. The Packaging Division wants to purchase 50,000 cans at $0.32 a can. Selling internally will save $0.02 a can.32)32)Assuming the Can Division has sufficient capacity, what is the minimum transfer price it should accept? A)$0.22 B)$0.32 C)$0.24 D)$0.30
A)$0.22
Chung, Inc. sells 100,000 wrenches for $24 per unit. Fixed costs are $700,000 and net income is$500,000. What should be reported as variable expenses in the CVP income statement? A)$1,200,000 B)$1,700,000 C)$1,080,000 D)$1,900,000
A)$1,200,000
Barton Company has beginning work in process inventory of $144,000 and total manufacturing costs of $686,000. If cost of goods manufactured is $660,000, what is the cost of the ending work in process inventory? A)$170,000. B)$118,000. C)$150,000. D)$190,000.
A)$170,000.
15)Strand Company is planning to sell 400 buckets and produce 380 buckets during March. Each bucket requires 500 grams of plastic and one-half hour of direct labor. Plastic costs $10 per 500grams and employees of the company are paid $15.00 per hour. Manufacturing overhead is applied at a rate of 110% of direct labor costs. Strand has 300 kilos of plastic in beginning inventory and wants to have 200 kilos in ending inventory. How much is the total amount of budgeted direct labor for March? A)$2,850 B)$3,000 C)$6,000 D)$5,700
A)$2,850
23)Papillion Co. has determined the following per unit amounts: Direct materials$30Fixed selling and administrative$60Direct labor36Variable overhead24Desired ROI33Variable selling and administrative15Fixed overhead45The target selling price using the variable-cost approach is A)$242.97 B)$212.10. C)$207.90. D)$311.85. Use the following information for the questions below. Papillion Co. has determined the following per unit amounts: Direct materials$30 Fixed selling and administrative$60 Direct labor36 Variable overhead24Desired ROI33Variable selling and administrative 15 Fixed overhead
A)$242.97
Long Company has recently tried to improve its analysis for its manufacturing process. Units started into production equaled 6,000 and ending work in process equaled 400 units. Long had no beginning work in process inventory. Conversion costs are applied equally throughout production, and materials are applied at the beginning of the process. How much is the materials cost per unit if ending work in process was 25% complete and total materials costs equaled$18,000? A)$3.00 B)$11.25 C)$3.16 D)$2.81
A)$3.00
12)Bear, Inc. estimates its sales at 200,000 units in the first quarter and that sales will increase by20,000 units each quarter over the year. They have, and desire, a 25% ending inventory of finished goods. Each unit sells for $35. 40% of the sales are for cash. 70% of the credit customers pay within the quarter. The remainder is received in the quarter following sale. Cash collections for the third quarter are budgeted at A)$8,274,000. B)$4,746,000. C)$6,888,000. D)$9,576,000.
A)$8,274,000.
Charley Company's Assembly Department has materials cost at $2 per unit and conversion cost at$4 per unit. There are 20,000 units in ending work in process, all of which are 70% complete as to conversion costs and 100% complete as to materials. How much are total costs to be assigned to inventory? A)$96,000 B)$84,000 C)$120,000 D)$56,000
A)$96,000
Use the following information for the questions below. Lonely Guy Repair Service recently performed repair services for a customer that totaled $400. Somehow the bill was lost and the company accountant was trying to recreate the bill from memory. This is what was remembered: Total bill$600Labor profit margin$10Materials profit margin20%Total labor charges$390Cost of materials used$120Total hourly cost$22.5026) 26)How many hours were billed on the job? A)12.0 B)18.5 C)17.3 D)19.5
A)12.0
Barnes and Miller Manufacturing is trying to determine the equivalent units for conversion costs with 10,000 units of ending work in process at 80% completion and 32,000 physical units. There are no beginning units in the department. Conversion costs occur evenly throughout the entire production period. What are the equivalent units for conversion costs for the current period? A)30,000 B)42,000 C)40,000 D)8,000
A)30,000
Bruno & Court is a nonprofit organization that captures stray deer bewildered within residential communities. Fixed costs are $20,000. The variable cost of capturing each deer is $10 each. Bruno & Court is funded by a local philanthropy in the amount of $64,000 for 2019. How many deer can Bruno & Court capture during 2019? A)4,400 B)8,400 C)4,000 D)6,400
A)4,400
Aero, Inc. requires sales of $2,000,000 to cover its fixed costs of $600,000 and to earn net income of$500,000. What percent are variable costs of sales? A)45% B)30% C)25% D)55%
A)45%
14)Long-range planning usually encompasses a period of at least A)5 years. B)six months. C)1 year. D)10 years.
A)5 years.
Debits to Work in Process Inventory are accompanied by a credit to all but which one of the following accounts? A)Cost of Goods Sold B)Raw Materials Inventory C)Manufacturing Overhead D)Factory Labor
A)Cost of Goods Sold
In applying the high-low method, which months are relevant?Month Miles Total Cost January 80,000$192,000 February 50,000160,000March70,000188,000 April 90,000260,000 A)February and April B)February and March C)January and April D)January and February
A)February and April
Which of the following is not an example of an activity cost pool?A)Machine hours B)Inspecting C)Machining D)Setting up machines
A)Machine hours
Which of the following is not viewed as part of assigning manufacturing costs in a job order cost system? A)Manufacturing overhead is incurred B)Completed goods are recognized C)Manufacturing overhead is applied D)Raw materials are used
A)Manufacturing overhead is incurred
Eddy Company is starting business and is unsure of whether to sell its product assembled or unassembled. The unit cost of the unassembled product is $60 and Eddy Company would sell it for $135. The cost to assemble the product is estimated at $27 per unit and Eddy Company believes the market would support a price of $174 on the assembled unit. What is the correct decision using the sell or process further decision rule? A)Process further, the company will be better off by $12 per unit. B)Sell before assembly, the company will be better off by $27 per unit. C)Process further, the company will be better off by $39 per unit. D)Sell before assembly, the company will be better off by $39 per unit.
A)Process further, the company will be better off by $12 per unit.
40)If a company must expand capacity to accept a special order, it is likely that there will be A)an increase in fixed costs. B)no increase in fixed costs. C)an increase in variable and fixed costs per unit. D)an increase in unit variable costs.
A)an increase in fixed costs.
In a process cost system, unit costs are determined using a A)denominator of units produced during the period. B)denominator of units produced for the day. C)denominator of units produced for the job. D)numerator of costs of each job
A)denominator of units produced during the period.
If the activity level increases 10%, total variable costs will A)increase 10%. B)increase by more than 10%. C)decrease by less than 10%. D)remain the same.
A)increase 10%.
Assigning overhead using ABC will usually A)increase the cost per unit for low volume products as compared to a traditional overhead allocation. B)result in the same cost per unit for low volume products as does traditional costing. C)provide less accurate cost per unit for low volume products than will traditional costing. D)decrease the cost per unit for low volume products as compared to a traditional overhead allocation.
A)increase the cost per unit for low volume products as compared to a traditional overhead allocation.
As compared to a high-volume product, a low-volume product A)is usually responsible for more overhead costs per unit. B)requires use of direct labor hours as the primary cost driver to ensure proper allocation of overhead. C)usually requires less special handling. D)requires relatively fewer machine setups.
A)is usually responsible for more overhead costs per unit.
Outsourcing production will A)reduce fixed costs and increase variable costs. B)reduce variable costs and increase fixed costs. C)make the company more susceptible to economic swings. D)have no effect on the relative proportion of fixed and variable costs
A)reduce fixed costs and increase variable costs
46)Reducing reliance on human workers and instead investing heavily in computers and online technology will A)reduce variable costs and increase fixed costs. B)have no effect on the relative proportion of fixed and variable costs. C)make the company less susceptible to economic swings. D)reduce fixed costs and increase variable costs.
A)reduce variable costs and increase fixed costs.
A fixed cost is a cost which A)remains constant in total with changes in the level of activity. B)varies inversely in total with changes in the level of activity. C)remains constant per unit with changes in the level of activity. D)varies in total with changes in the level of activity
A)remains constant in total with changes in the level of activity.
44)A cost that cannot be changed by any present or future decision is a(n) A)sunk cost. B)incremental cost. C)opportunity cost. D)variable cost.8
A)sunk cost.
31)Under the variable-cost approach, the cost base includes all of the following except A)total fixed costs. B)variable manufacturing costs. C)variable selling and administrative costs. D)All of these answers are included.
A)total fixed costs.
53)Only direct materials, direct labor, and variable manufacturing overhead costs are considered product costs when using A)variable costing. B)absorption costing. C)product costing. D)full costing.
A)variable costing.
Madison Inc. uses job order costing for its brand new line of sewing machines. The cost incurred for production during 2019 totaled $18,000 of materials, $9,000 of direct labor costs, and $6,000 of manufacturing overhead applied. The company ships all goods as soon as they are completed which results in no finished goods inventory on hand at the end of any year. Beginning work in process totaled $15,000, and the ending balance is $9,000. During the year, the company completed 25 machines. How much is the cost per machine? A)$1,320 B)$1,560 C)$1,080 D)$1,920
B)$1,560
24)The cost base using the absorption-cost approach is A)$195. B)$135. C)$90. D)$105.25
B)$135.
20)Teller Co. is planning to sell 900 boxes of ceramic tile, with production estimated at 870 boxes during May. Each box of tile requires 44 pounds of clay mix and a quarter hour of direct labor. Clay mix costs $0.40 per pound and employees of the company are paid $12.00 per hour. Manufacturing overhead is applied at a rate of 110% of direct labor costs. Teller has 3,900 pounds of clay mix in beginning inventory and wants to have 4,500 pounds in ending inventory. What is the total amount to be budgeted for manufacturing overhead for the month? A)$11,484 B)$2,871 C)$11,880 D)$2,970
B)$2,871
38)Alvarez Company is considering the following alternatives: Alternative A)Alternative BRevenues$50,000$60,000Variable costs30,00030,000Fixed costs10,00016,000What is the incremental profit? A)$6,000 B)$4,000 C)$10,000 D)$0
B)$4,000
Reynoso Corporation manufactures titanium and aluminum tennis racquets. Reynoso's total overhead costs consist of assembly costs and inspection costs. The following information isavailable:CostTitaniumAluminumTotal CostAssembly500 mach. hours500 mach. hours$45,000 Inspections 350150 $75,0002,100 labor hours 1,900 labor hours Reynoso is considering switching from one overhead rate based on labor hours to activity-based costing.Using activity-based costing, how much inspections cost is assigned to titanium racquets? A)$30,000 B)$52,500 C)$50,000 D)$47,500
B)$52,500
Cost of goods manufactured equals $85,000 for 2019. Finished goods inventory is $2,000 at the beginning of the year and $5,500 at the end of the year. Beginning and ending work in process for 2019 are $4,000 and $5,000, respectively. How much is cost of goods sold for the year? A)$88,500 B)$81,500 C)$87,500 D)$83,000
B)$81,500
Which of the following costs are variable? Cost10,000 Units 30,000 Units$100,000$300,0002.40,000240,0003.90,00090,0004.50,000150,000 A)only 1 B)1 and 4 C)only 2 D)1 and 2
B)1 and 4
A department had the following information for the month:Total materials costs$300,000 Conversion cost per unit$3.00 Total manufacturing cost per unit$5.00What are the equivalent units of production for materials? A)100,000 B)150,000 C)60,000 D)Cannot be determined
B)150,000
48)Capitol Manufacturing sells 4,000 units of Product A annually, and 6,000 units of Product Bannually. The sales mix for Product A is A)67%. B)40%. C)60%. D)Cannot determine from information given.
B)40%
Use the following information for the questions below. Jaycee Auto Repair has the following budgeted costs for the next year: Time Charges Material Charges Shop employees' wages and benefits$120,000$-Parts manager's salary and benefits-45,000Office employee's salary and benefits30,00015,000Other overhead15,00040,000Invoice cost of parts and materials-400,000Total budgeted costs$165,000$500,000 30)The material loading charge to be used next year assuming a 40% markup on material cost is A)20%. B)65%. C)40%. D)80%.
B)65%.
5)Which of the following is a value-added activity? A)Inspections B)Engineering design C)Inventory storage D)Machinery repair
B)Engineering design
27)Why does the unit selling price increase when expected volume is lower than budgeted volume? A)Variable costs and desired ROI have to be spread over fewer units. B)Fixed costs and desired ROI have to be spread over fewer units. C)Fixed costs only have to be spread over fewer units. D)Variable costs and fixed costs have to be spread over fewer units.
B)Fixed costs and desired ROI have to be spread over fewer units.
36)Which of the following is not a true statement? A)Incremental analysis is useful in making decisions. B)Incremental analysis is the same as CVP analysis. C)Incremental analysis focuses on decisions that involve a choice among alternative courses ofaction. D)Incremental analysis might also be referred to as differential analysis.
B)Incremental analysis is the same as CVP analysis.
37)Which of the following terms are synonymous? A)Avoidable costs and irrelevant costs B)Joint costs and sunk costs C)Sunk costs and relevant costs D)Unavoidable costs and incremental costs
B)Joint costs and sunk costs
Which of the following is a unit-level activity? A)Purchase ordering B)Painting C)Material handling D)Inspection
B)Painting
7)Under absorption costing and variable costing, how are fixed manufacturing costs treated? Absorption Variable A)Product Cost Product Cost B)Product Cost Period Cost C)Period Cost Product Cost D)Period Cost Period Cost
B)Product Cost Period Cost
An increase in the level of activity will have the following effects on unit costs for variable and fixed costs:Unit Variable Cost Unit Fixed Cost A)Increases Decreases B)Remains constant Decreases C)Decreases Remains constant D)Remains constant Remains constant
B)Remains constant Decreases
19)The single most important output in preparing financial budgets is the A)budgeted income statement. B)cash budget. C)sales forecast. D)determination of the unit cost of the product.
B)cash budget.
8)Incremental analysis is most useful A)in choosing between capital budgeting methods. B)in developing relevant information for management decisions. C)in evaluating the master budget. D)as a replacement technique for variance analysis.
B)in developing relevant information for management decisions.
22)A budget is most likely to be effective if A)it is used to assess blame when things do not occur according to plans. B)it has top management support. C)employees and managers at the lower levels do not get involved in the budgeting process. D)it is not used to evaluate a manager's performance.
B)it has top management support.
25)All of the following are correct statements about the market-based approach except that it A)provides a fairer allocation of the company's contribution margin to each division. B)produces a higher company contribution margin than the cost-based approach. C)ensures that each division manager is properly motivated and rewarded. D)assumes that the transfer price should be based on the most objective inputs possible
B)produces a higher company contribution margin than the cost-based approach.
Non-value-added activities A)increase both the cost and perceived value of a product. B)should be minimized or eliminated. C)involve those activities that are essential to a company's operations. D)cannot be differentiated from value-added activities.
B)should be minimized or eliminated.
3)Cost of goods sold is obtained from A)analysis of all the control accounts in the cost system. B)the finished goods inventory records. C)the Raw Materials Inventory control account. D)the work in process inventory records.
B)the finished goods inventory records.
A company expected its annual overhead costs to be $1,500,000 and direct labor costs to be$1,000,000. Actual overhead was $1,450,000, and actual labor costs totaled $1,100,000. How much is the company's predetermined overhead rate to the nearest cent? A)$1.37 B)$1.45 C)$1.50 D)$1.31
C)$1.50
Tidwell Industries has the following overhead costs and cost drivers. Direct labor hours are estimated at 100,000 for the year.Activity Cost Pool Cost DriverEst. Overhead Cost Driver Activity Ordering and Receiving Orders$ 120,000500 orders Machine Setup Setups 297,000450 setups Machining Machine hours 1,500,000125,000 MH Assembly Parts 1,200,0001,000,000 parts Inspection Inspections 300,000500 inspections If overhead is applied using traditional costing based on direct labor hours, the overhead application rate is A)$9.60. B)$12.00. C)$34.17. D)$15.00.
C)$34.17.
54)For Wilder Corporation, sales is $1,600,000 (8,000 units), fixed expenses are $480,000, and the contribution margin per unit is $80. What is the margin of safety in dollars? A)$720,000 B)$80,000 C)$400,000 D)$1,120,000
C)$400,000
16)Corey Inc. reported the following information for 2019:OctoberNovemberDecemberBudgeted sales$460,000$440,000$540,000Budgeted purchases$240,000$256,000$288,000•All sales are on credit. Customer amounts on account are collected 50% in the month of sale and 50% in the following month. Cost of goods sold is 35% of sales. Corey purchases and pays for merchandise 60% in the month of acquisition and 40% in the following month. Accounts payable is used only for inventory acquisitions. How much cash will Corey receive during November? A)$220,000 B)$440,000 C)$450,000 D)$490,000
C)$450,000
Greer Company developed the following data for the current year:Beginning work in process inventory$ 136,000 Direct materials used 208,000 Actual overhead1 76,000 Overhead applied184,000Cost of goods manufactured900,000Total manufacturing costs856,000How much is Greer Company's direct labor cost for the year? A)$600,000 B)$328,000 C)$464,000 D)$508,000
C)$464,000
Simpson Company applies overhead on the basis of 200% of direct labor cost. Job No. 305 is charged with $180,000 of direct materials costs and $200,000 of manufacturing overhead. The total manufacturing costs for Job No. 305 is A)$380,000. B)$560,000. C)$480,000. D)$580,000
C)$480,000.
6)Montoya Manufacturing has fixed costs of $3,000,000 and variable costs are 40% of sales. What are the required sales if Montoya desires net income of $300,000? A)$8,250,000 B)$7,500,000 C)$5,500,000 D)$5,000,000
C)$5,500,000
Madison Industries has equivalent units of 8,000 for materials and for conversion costs. Total manufacturing costs are $200,000. Total materials costs are $150,000. How much is the conversion cost per unit? A)$25.00 B)$5.00 C)$6.25 D)$2.50
C)$6.25
Use the following information for the questions below.Nielson Corp. sells its product for $6,600 per unit. Variable costs per unit are: manufacturing, $3,600, and selling and administrative, $75. Fixed costs are: $18,000 manufacturing overhead, and $24,000 selling and administrative. There was no beginning inventory at 1/1/15. Production was 20 units per year in 2018-2020. Sales were 20 units in 2018, 16 units in 2019,and 24 units in 2020 55)Income under absorption costing for 2019 is A)$9,600. B)$4,800. C)$8,400. D)$13,200.
C)$8,400.
Reliable Manufacturing wants to sell a sufficient quantity of products to earn a profit of $100,000.If the unit sales price is $10, unit variable cost is $8, and total fixed costs are $200,000, how many units must be sold to earn income of $100,000? A)37,500 units B)1,500,000 units C)150,000 units D)100,000 units
C)150,000 units
17)The production budget shows expected unit sales of 32,000. Beginning finished goods units are3,600. Required production units are 33,600. What are the desired ending finished goods units? A)3,600 B)2,000 C)5,200 D)6,4001
C)5,200
Rama Company reported the following on its income statement :Income before income taxes$500,000Income tax expense150,000Net income$350,000An analysis of the income statement revealed that interest expense was $80,000. Rama Company's times interest earned was A)5.4 times. B)6.3 times. C)7.3 times. D)4.4 times
C)7.3 times.
4)Which of the following is a true statement about process cost systems? A)In process cost systems, costs are summarized on job cost sheets. B)Unit costs are not computed in process cost systems. C)A process cost system has one work in process account for each process. D)In process cost systems, costs are accumulated but not assigned.
C)A process cost system has one work in process account for each process.
Which of the following is considered a difference between a job order cost and a process cost system? A)The manufacturing cost elements B)The flow of costs C)Documents used to track costs D)The accumulation of the costs of materials, labor, and overhead
C)Documents used to track costs
Which of the following is a value-added activity? A)Inventory storage B)Bookkeeping C)Machining D)Building maintenance
C)Machining
Use the following information for the questions below.Nielson Corp. sells its product for $6,600 per unit. Variable costs per unit are: manufacturing, $3,600, and selling and administrative, $75. Fixed costs are: $18,000 manufacturing overhead, and $24,000 selling and administrative. There was no beginning inventory at 1/1/15. Production was 20 units per year in 2018-2020. Sales were 20 units in 2018, 16 units in 2019,and 24 units in 2020. 52)For the three years 2018-2020, A)absorption costing income may be greater than, equal to, or less than variable costing income, depending on the situation. B)variable costing income exceeds absorption costing income by $8,000. C)absorption costing income equals variable costing income. D)absorption costing income exceeds variable costing income by $8,000
C)absorption costing income equals variable costing income.
28)The last step in determining the material loading charge percentage is to A)estimate the total cost of parts and materials B)divide material charges by the total estimated costs of parts and materials. C)add a desired profit margin on the materials themselves. D)estimate annual costs for purchasing, receiving, and storing materials.29)
C)add a desired profit margin on the materials themselves.
A well-designed activity-based costing system starts with A)identifying the activity-cost pools. B)assigning overhead costs to products. C)analyzing the activities performed to manufacture a product. D)computing the activity-based overhead rate
C)analyzing the activities performed to manufacture a product.
47)The CVP income statement classifies costs A)as variable or fixed and computes gross margin. B)by function and computes a gross margin. C)as variable or fixed and computes contribution margin. D)by function and computes a contribution margin.
C)as variable or fixed and computes contribution margin.
9)The transfer price approach that will result in the largest contribution margin to the buying division is the A)market-based approach. B)time-and-material pricing approach. C)cost-based approach. D)negotiated price approach.
C)cost-based approach.
Factory labor costs A)are based on workers' net pay. B)are accumulated in a control account. C)include vacation pay. D)do not include pension costs
C)include vacation pay.
100)The flow of costs in a job order cost system A)cannot be measured until all jobs are complete. B)generally follows a LIFO cost flow assumption. C)involves accumulating manufacturing costs incurred and assigning the accumulated costs to work done. D)measures product costs for a set time period.
C)involves accumulating manufacturing costs incurred and assigning the accumulated costs to work done.
39)If a company anticipates that other sales will be affected by the acceptance of a special order, then A)the order should not be accepted. B)lost sales should not be considered in the incremental analysis. C)lost sales should be considered in the incremental analysis. D)the order will only be accepted if the plant is below capacity.
C)lost sales should be considered in the incremental analysis.
18)The financing section of a cash budget is needed if there is a cash deficiency or if the ending cash balance is less than A)the prior years . B)the amount needed to avoid a service charge at the bank . C)management's minimum required balance. D)the industry average.
C)management's minimum required balance.
29)All of the following are correct statements about the cost-based transfer price approach except that it A)can understate the actual contribution to profit by the selling division. B)can reduce a division manager's control over the division's performance. C)provides incentive for the selling division to control costs. D)bases the transfer price on standard cost instead of actual cost.5
C)provides incentive for the selling division to control costs.
An example of a mixed cost is A)supervisory salaries. B)property taxes. C)utility costs. D)direct materials.
C)utility costs.
34)Moreland Clean Company spent $8,000 to produce Product 89, which can be sold as is for $10,000,or processed further incurring additional costs of $3,000 and then be sold for $14,000. Which amounts are relevant to the decision about Product 89? A)$8,000, $3,000, and $14,000 B)$8,000, $10,000, $3,000 and $14,000 C)$8,000, $10,000, and $14,000 D)$10,000, $3,000, and $14,000
D)$10,000, $3,000, and $14,000
Wendy Industries produces only one product. Monthly fixed expenses are $12,000, monthly unit sales are 4,000, and the unit contribution margin is $10. How much is monthly net income? A)$40,000 B)$0 C)$52,000 D)$28,000
D)$28,000
42)Crigui Music produces 60,000 CDs on which to record music. The CDs have the following costs:Direct Materials$13,000 Direct Labor 15,000 Variable Overhead 3,000 Fixed Overhead 7,000 None of Crigui's fixed overhead costs can be reduced, but another product could be made that would increase profit contribution by $4,000 if the CDs were acquired externally. If cost minimization is the major consideration and the company would prefer to buy the CDs, what isthe maximum external price that Crigui would be willing to accept to acquire the 60,000 units externally? A)$42,000 B)$38,000 C)$34,000 D)$35,000
D)$35,000
Madison Industries has equivalent units of 8,000 for materials and for conversion costs. Total manufacturing costs are $128,000. Total materials costs are $96,000. How much is the conversion cost per unit? A)$3 B)$16 C)$2 D)$4
D)$4
10)Dolce Co. estimates its sales at 180,000 units in the first quarter and that sales will increase by18,000 units each quarter over the year. They have, and desire, a 25% ending inventory of finished goods. Each unit sells for $25. 40% of the sales are for cash. 70% of the credit customers pay within the quarter. The remainder is received in the quarter following sale. Cash collections for the third quarter are budgeted at A)$3,051,000. B)$4,428,000. C)$6,156,000. D)$5,319,000.
D)$5,319,000.
O'Malley Company sells 100,000 units for $13 a unit. Fixed costs are $350,000 and net income is$250,000. What should be reported as variable expenses in the CVP income statement? A)$1,050,000. B)$600,000. C)$950,000. D)$700,000.
D)$700,000.
Hanker Company had the following department data on physical units:Work in process, beginning 2,500 Completed and transferred out 18,000 Work in process, ending 2,000 Materials are added at the beginning of the process. What is the total number of equivalent units for materials if the FIFO method is used? A)20,000 B)18,500 C)15,500 D)17,500
D)17,500
n Moyer Company, the Cutting Department had beginning work in process of 6,000 units,transferred out 24,000 units, and had an ending work in process of 3,000 units. How many units were started by Moyer during the month? A)24,000 B)27,000 C)18,000 D)21,000
D)21,000
11)Bear, Inc. estimates its sales at 200,000 units in the first quarter and that sales will increase by20,000 units each quarter over the year. They have, and desire, a 25% ending inventory of finished goods. Each unit sells for $35. 40% of the sales are for cash. 70% of the credit customers pay within the quarter. The remainder is received in the quarter following sale. Production in units for the third quarter should be budgeted at A)240,000. B)305,000. C)230,000. D)245,000.
D)245,000.
Use the following information for questions for the questions below.MacCloud Industries has two divisions-Standard and Premium. Each division has hundreds of different types of tennis racquets and tennis products. The following information is available:Standard Division Premium Division Total Sales$400,000$600,000$1,000,000 Variable costs 280,000360,000 Contribution margin$120,000$240,000 Total fixed costs$300,000 51)What is the weighted-average contribution margin ratio? A)50% B)35% C)34% D)36%
D)36%
Chicotti Company has 6,000 units in beginning work in process, 30% complete as to conversion costs, 75,000 units transferred out to finished goods, and 2,000 units in ending work in process 20% complete as to conversion costs. The beginning and ending inventory is fully complete as to materials costs. How much are equivalent units for conversion costs if the FIFO method is used?A)79,600 B)75,400 C)71,000 D)73,600
D)73,600
To use activity-based costing, it is necessary to know A)the estimated use of cost drivers per activity. B)the cost driver for each activity cost pool. C)the estimated use of cost drivers per product. D)all of the above
D)all of the above
A process cost system would most likely be used by a company that makes A)motion pictures. B)college graduation announcements. C)repairs to automobiles. D)breakfast cereal.
D)breakfast cereal.
33)In most cases, prices are set by the A)selling company. B)customers. C)largest competitor. D)competitive market.
D)competitive market.
41)A company has three product lines, one of which reflects the following results:Sales$215,000Variable expenses125,000Contribution margin90,000Fixed expenses130,000Net loss$ (40,000)If this product line is eliminated, 60% of the fixed expenses can be eliminated and the other 40%will be allocated to other product lines. If management decides to eliminate this product line, the company's net income will A)increase by $12,000. B)decrease by $90,000. C)increase by $40,000. D)decrease by $12,000.
D)decrease by $12,000.
45)The margin of safety ratio A)is used to determine the break-even point B)is computed as actual sales divided by break-even sales. C)measures the ratio of fixed costs to variable costs. D)indicates what percent decline in sales could be sustained before the company would operate at a loss.
D)indicates what percent decline in sales could be sustained before the company would operate at a loss.
50)Cost structure refers to the relative proportion of A)contribution margin versus sales. B)selling expenses versus administrative expenses. C)selling and administrative expenses versus cost of goods sold. D)none of the above.
D)none of the above.
The presence of any of the following factors would suggest a switch to ABC except when A)the manufacturing process has changed significantly. B)product lines differ greatly in volume. C)production managers are ignoring data provided by the existing system. D)overhead costs constitute a minor portion of total costs.
D)overhead costs constitute a minor portion of total costs.
