Accounting Test 2 - Wrong questions
Which of the following tools may be used to calculate the volume of sales needed to cover a company's fixed expenses?
Break-even
When a customers order is filled and sold, __is debited and ___ is credited
COGS ----Finished goods
Customer's order is filled and units are sold, the cost of the units is transferred to COGS
COGS ---Finished goods
CM ratio =
Contribution margin / sales
A journal entry to record material cost in the second department would include a ___ to work in process department #2
Debit
Conversion cost
Direct labor + MOH
True or false: the equivalent units of production computed under the weighted-average method does not take into the account the percentage
False
Cost of completed units are transferred to the finished goods inventory account
Finished goods ---Work in process- bottling
When using process costing, which of the following can be added in any department?
Materials, labor and overhead
Unit CM =
P-V Selling price - variable expenses
contribution margin
sales-variable expenses
Sales =
selling price (P) * Quantity sold
Factors which determine whether cost structure with higher variable costs is better than one with high fixed costs include
the attitude of owners toward risk long-run trends in sales year-to-year fluctuations in the level of sales
When unit costs are transferred from Department A to department B, department B will treat the costs as:
transferred in
Variable expenses =
variable expenses per unit (V) *Quantity sold (Q)
The contribution margin income statement allows users to easily judge the impact change in ___ on profit
volume, cost, selling price
A processing department is an organization unit:
where work is performed on a product and labor, overhead and materials are added
Target profit: 204,000 Fixed costs: 305,000 CM: 40 Break-even point in unit sales?
7,625 units (305000/40=7,625)
Number of partially completed goods * percentage completion =
equivalent units
150 units transferred to finished goods, 215 are in ending goods inventory that are 60% complete. What are the equivalent units of production?
279
Target profit: 4,000 per month Selling price: $15 Variable costs: $13.50 Fixed costs: 3,200 Number of bottles to get target profit?
4,800 (4000+3200)/(15-13.5)
Beg WIP inventory: $3650 Materials added: $5000 Conversion costs added: $9250 250 equivalent units of production Cost per equivalent units of material?
$34.60 (3650+5000)/250
Equivalent units of production =
Units transferred to the next department or to finished goods + equivalent units in ending work in process inventory
In process costing, which account does every processing department have?
Work in process
Record materials in the second processing department
Work in process - bottling ----Raw materilas
Cost of partially completed units from the formulated department to the bottling department
Work in process - bottling ---Work in process - Formulating
Labor costs in the formulating department
Work in process - formulating -----Salaries and wages payable
Materials used in the first processing department formulating
Work in process - formulating ----Raw materials
Overhead costs applied in the formulating department
Work in process - formulating ---Manufacturing overhead
contribution margin:
becomes profit after fixed expenses are covered
Cost per equivalent unit are used to value
both units in ending inventory and units transferred to the next department
After reaching the break-even point, a company's net operating income will increase by the ______________ per unit for each additional unit sold
contribution margin
To estimate the effect on profits for a planned increase in sales, multiply the increase in units sold by the unit ________________
contribution margin
To solve for net operating income at any sales volume above the break-even point requires knowledge of the:
contribution margin per unit break-even unit sales projected unit sales
Cost per equivalent unit =
cost of beg. work in process inventory + cost added during the period / equivalent units of production
