Accounting midterm 2

True

A benefit from budgeting is that it forces managers to think about and plan for the future.

the standard rate exceeds the actual rate.

A favorable labor rate variance indicates that

34.3%

A manufacturer of cedar shingles has supplied the following data: The company's contribution margin ratio is closest to:

$51,000

All of Gaylord Corporation's sales are on account. Thirty-five percent of the sales on account are collected in the month of sale, 45% in the month following sale, and the remainder are collected in the second month following sale. The following are budgeted sales data for the company: What is the amount of cash that should be collected in March?

False

All other things the same, if a division's traceable fixed expenses decrease then the division's segment margin will decrease.

33,000

Azuki Corporation operates in two sales territories, Urban and Rural. Data concerning last year's operations appear below: Azuki's common fixed expenses were $25,000 last year. What was Azuki Corporation's overall net operating income for last year?

3.66

Bois Corporation has provided its contribution format income statement for January. The degree of operating leverage is closest to:

26%

Bois Corporation has provided its contribution format income statement for January. f the company's sales volume increases by 7%, its net operating income should increase by about:

Unit variable expense is constant.

Break-even analysis assumes that:

$320 U

Brummer Corporation makes a product whose variable overhead standards are based on direct labor-hours. The quantity standard is 0.1 hours per unit. The variable overhead rate standard is $8.00 per hour. In January the company produced 8,700 units using 910 direct labor-hours. The actual variable overhead rate was $7.90 per hour. The variable overhead efficiency variance for January is:

$91 F

Brummer Corporation makes a product whose variable overhead standards are based on direct labor-hours. The quantity standard is 0.1 hours per unit. The variable overhead rate standard is $8.00 per hour. In January the company produced 8,700 units using 910 direct labor-hours. The actual variable overhead rate was $7.90 per hour. The variable overhead rate variance for January is:

9,400 units

Cassius Corporation has provided the following contribution format income statement. Assume that the following information is within the relevant range. The number of units that must be sold to achieve a target profit of $31,500 is closest to:

$21.00

Coultrap Corporation has provided the following contribution format income statement. Assume that the following information is within the relevant range. The contribution margin per unit is closest to:

$544,500

Crocetti Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations: The budgeted accounts receivable balance at the end of February is closest to:

151,100

Dukelow Corporation has two divisions: the Governmental Products Division and the Export Products Division. The Governmental Products Division's divisional segment margin is $255,000 and the Export Products Division's divisional segment margin is $59,800. The total amount of common fixed expenses not traceable to the individual divisions is $163,700. What is the company's net operating income?

219,000

In addition, common fixed expenses totaled $179,000 and were allocated as follows: $93,000 to the North business segment and $86,000 to the South business segment. The contribution margin of the South business segment is:

False

In general, the production manager is responsible for the materials price variance.

98,200

J Corporation has two divisions. Division A has a contribution margin of $79,300 and Division B has a contribution margin of $126,200. If total traceable fixed expenses are $72,400 and total common fixed expenses are $34,900, what is J Corporation's net operating income?

40%

Kelchner Corporation has provided the following contribution format income statement. Assume that the following information is within the relevant range. The contribution margin ratio is closest to:

$113.00

Knappert Corporation makes one product and has provided the following information: Each unit of finished goods requires 3 pounds of raw materials. The raw materials cost $5.00 per pound. The direct labor wage rate is $24.00 per hour. Each unit of finished goods requires 2.8 direct labor-hours. Manufacturing overhead is entirely variable and is $11.00 per direct labor-hour. The variable selling and administrative expense per unit sold is $3.80. The fixed selling and administrative expense per month is $50,000. The unit product cost is closest to:

$162,000

Nussbaum Corporation has provided the following contribution format income statement. Assume that the following information is within the relevant range. The break-even point in dollar sales is closest to:

$555,750

Pabon Corporation makes one product. Budgeted unit sales for August and September are 11,100 and 12,600 units, respectively. The ending finished goods inventory equals 40% of the following month's sales. The direct labor wage rate is $19.00 per hour. Each unit of finished goods requires 2.5 direct labor-hours. The estimated direct labor cost for August is closest to:

24,000

Parwin Corporation plans to sell 23,000 units during August. If the company has 8,000 units on hand at the start of the month, and plans to have 9,000 units on hand at the end of the month, how many units must be produced during the month?

670 units

Roberts Enterprises has budgeted sales in units for the next five months as follows: Past experience has shown that the ending inventory for each month must be equal to 10% of the next month's sales in units. The inventory on May 31 contained 450 units. The company needs to prepare a production budget for the second quarter of the year. The desired ending inventory for August is:

True

Segment margin is sales less variable expenses less traceable fixed expenses.

False

Segmented statements for internal use should not be prepared using the contribution format

$4,000 U

Solly Corporation produces a product for national distribution. Standards for the product are: Materials: 12 ounces per unit at 60¢ per ounce. Labor: 2 hours per unit at $8 per hour. During the month of December, the company produced 1,000 units. Information for the month follows: Materials: 14,000 ounces purchased and used at a total cost of $7,700. Labor: 2,500 hours worked at a total cost of $20,625. The labor efficiency variance is:

$625 U

Solly Corporation produces a product for national distribution. Standards for the product are: Materials: 12 ounces per unit at 60¢ per ounce. Labor: 2 hours per unit at $8 per hour. During the month of December, the company produced 1,000 units. Information for the month follows: Materials: 14,000 ounces purchased and used at a total cost of $7,700. Labor: 2,500 hours worked at a total cost of $20,625. The labor rate variance is:

$700 F

Solly Corporation produces a product for national distribution. Standards for the product are: Materials: 12 ounces per unit at 60¢ per ounce. Labor: 2 hours per unit at $8 per hour. During the month of December, the company produced 1,000 units. Information for the month follows: Materials: 14,000 ounces purchased and used at a total cost of $7,700. Labor: 2,500 hours worked at a total cost of $20,625. The materials price variance is:

$1,200 U

Solly Corporation produces a product for national distribution. Standards for the product are: Materials: 12 ounces per unit at 60¢ per ounce. Labor: 2 hours per unit at $8 per hour. During the month of December, the company produced 1,000 units. Information for the month follows: Materials: 14,000 ounces purchased and used at a total cost of $7,700. Labor: 2,500 hours worked at a total cost of $20,625. The materials quantity variance is:

$59,800

Sorin Incorporated, a company that produces and sells a single product, has provided its contribution format income statement for January. If the company sells 4,600 units, its total contribution margin should be closest to:

$6,000

Sparks Corporation has a cash balance of $18,000 on April 1. The company must maintain a minimum cash balance of $10,000. During April, expected cash receipts are $98,000. Cash disbursements during the month are expected to total $112,000. Ignoring interest payments, during April the company will need to borrow:

$16,000

Stockmaster Corporation has provided the following contribution format income statement. Assume that the following information is within the relevant range. The margin of safety in dollars is closest to:

False

The cash budget is the starting point in preparing the master budget.

Y = $14,000 + $2.50 X

The following data pertains to activity and maintenance cost for two recent periods: Maintenance cost is a mixed cost with both fixed and variable components. Using the high-low method, the cost formula for maintenance cost is:

$48,840

The manufacturing overhead budget at Franklyn Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 4,400 direct labor-hours will be required in January. The variable overhead rate is $1.30 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $60,280 per month, which includes depreciation of $17,160. All other fixed manufacturing overhead costs represent current cash flows. The January cash disbursements for manufacturing overhead on the manufacturing overhead budget should be:

rush orders arising from poor scheduling.

The production department should generally be responsible for materials price variances that resulted from:

False

The salary paid to a store manager is not a traceable fixed expense of the store.

(Fixed expenses + Target net profit)/Contribution margin ratio

To obtain the dollar sales volume necessary to attain a given target profit, which of the following formulas should be used?

84,000

Tubaugh Corporation has two major business segments--East and West. In December, the East business segment had sales revenues of $690,000, variable expenses of $352,000, and traceable fixed expenses of $104,000. During the same month, the West business segment had sales revenues of $140,000, variable expenses of $56,000, and traceable fixed expenses of $24,000. The common fixed expenses totaled $162,000 and were allocated as follows: $89,000 to the East business segment and $73,000 to the West business segment. The contribution margin of the West business segment is:

True

When more hours of labor time are necessary to complete a job than the standard allows, the labor efficiency variance is unfavorable.

raw materials needed to meet the production schedule + desired ending inventory of raw materials − beginning inventory of raw materials.

When preparing a direct materials budget, the required purchases of raw materials in units equals:

False

When using segmented income statements, the dollar sales for a company to break even equals the traceable fixed expenses divided by the overall CM ratio

In essence, the high-low method draws a straight line through two data points.

Which of the following statements is true when referring to the high-low method of cost analysis?

(73,080)

Wyrich Corporation has two divisions: Blue Division and Gold Division. The following report is for the most recent operating period: What is the company's overall net operating income if it operates at the break-even points for its two divisions?

518,750

Wyrich Corporation has two divisions: Blue Division and Gold Division. The following report is for the most recent operating period: The company's overall break-even sales is closest to:

310,390

Wyrich Corporation has two divisions: Blue Division and Gold Division. The following report is for the most recent operating period: The Blue Division's break-even sales is closest to:

$81,400

Yerkey Corporation makes one product and has provided the following information to help prepare the master budget: The estimated selling and administrative expense for February is closest to: