Exam 2 Mang Acc

Ferguson Company recognized $400 of estimated manufacturing overhead costs at the end of the month. How does this transaction affect the financial statements? Assets=Liabilities+EquityRevenue−Expenses=Net IncomeManufacturing Overhead+Work in Process Inventory

(400)+400=NA+NANA−NA=NA

Which manager is generally held responsible for the sales volume variance?

Marketing manager

Which of the following is generally included in a sales budget?

Schedule of cash receipts for the projected sales

Which of the following statements regarding the schedule of cost of goods manufactured and sold is correct?

The schedule is an internal document that is not presented with the company's financial statements, and, in addition, the schedule of cost of goods manufactured and sold reports the amount of direct raw materials used during the period.

Planning concerned with long-range decisions such as defining the scope of the business is referred to as:

strategic planning.

Furst Company pays production workers' salaries on account. The cost will be recognized as an expense when:

the goods made by the production workers are sold.

All of the following are reasons to assign estimated overhead to inventory except:

managers need to use estimated overhead to control earnings.

Cheyenne Company has budgeted the following information for June: Cash receipts$271,000 Beginning cash balance 5,000 Cash payments 280,000 Desired ending cash balance 25,000 If there is a cash shortage, the company borrows money from the bank. All cash is borrowed at the beginning of the month in $1,000 increments, and interest is paid monthly at 1% on the first day of the following month. The company had no debt before June 1. The amount of interest paid on July 1 would be:

$290

Benton Company's sales budget shows the following expected total sales: Month Sales January$22,000 February$26,000 March$31,000 April$44,000 The company expects 80% of its sales to be on account (credit sales). Credit sales are collected as follows: 25% in the month of sale and 70% in the month following the sale, with the remainder being uncollectible and written off. The total cash receipts during April would be:

$34,960

Skymont Company wants an ending inventory each month equal to 30% of that month's cost of goods sold. Cost of goods sold for February is projected at $93,000. Ending inventory at the end of January was $21,000. Based on this information, purchases for February would be:

$99,900.

What is the result when the actual rate paid for labor is less than the standard rate?

A favorable labor price variance

Which of the following accounts would appear on the inventory purchases budget and pro forma balance sheet?

Accounts Payable

The Russell Company provides the following standard cost data per unit of product: Direct material (2 gallons @ $5 per gallon)$10.00 Direct labor (1 hours @ $10 per hour)$10.00 During the period, the company produced and sold 20,000 units, incurring the following costs: Direct material42,000gallons@$4.90per gallonDirect labor20,500hours@$9.75per hour The direct material usage variance was:

$10,000 unfavorable.

Frost Corporation incurred the following transactions during its first year of operations. (Assume all transactions involve cash.) 1) Acquired $1,900 of capital from the owners. 2) Purchased $435 of direct raw materials. 3) Used $290 of these direct raw materials in the production process. 4) Paid production workers $490 cash. 5) Paid $290 for manufacturing overhead (applied and actual overhead are the same). 6) Started and completed 250 units of inventory. 7) Sold 140 units at a price of $6 each. 8) Paid $130 for selling and administrative expenses. The amount of raw material inventory on the balance sheet at the end of the accounting period would be:

$145.

Travis Company had no beginning work in process or finished goods. Its total manufacturing costs for the year were $872,000. If cost of goods manufactured was $673,000 and cost of goods sold was $513,500, the amount of ending work in process would have been:

$199,000

The Ferguson Company estimated that October sales would be 100,000 units with an average selling price of $6.00. Actual sales for October were 105,000 units, and average selling price was $5.95.The sales revenue flexible budget variance was:

$5,250 unfavorable.

Dobson Company expects to begin operating on January 1. The company's master budget contained the following operating expense budget: January February MarchSalary expense$40,000 $36,000 $36,000 Sales commissions, 5% of sales 24,000 30,000 28,000 Utilities 2,800 2,800 2,800 Depreciation on store equipment 1,800 1,800 1,800 Rent 7,200 7,200 7,200 Miscellaneous 1,800 1,800 1,800 Total operating expenses$77,600 $79,600 $77,600 Sales commissions are paid in cash in the month following the month in which the expense is recognized. All other expense items requiring cash payment are paid in the month in which they are recognized. The amount of cash to be paid for operating expenses during the month of January is:

$51,800.

The Boyle Company estimated that April sales would be 150,000 units with an average selling price of $6.00. Actual sales for April were 149,000 units, and average selling price was $6.12.The sales volume variance was:

$6,000 unfavorable.

Jones Company developed the following static budget at the beginning of the company's accounting period: Revenue (8,000 units)$16,000 Variable costs 4,000 Contribution margin$12,000 Fixed costs 4,000 Net income$8,000 If actual production totals 8,200 units, the flexible budget would show total costs of:

$8,100

White Company budgeted for $245,100 of fixed overhead cost and volume of 43,000 units. During the year, the company produced and sold 42,000 units and spent $253,700 on fixed overhead.The fixed overhead cost spending variance is:

$8,600 unfavorable.

Which of the following budgets or schedules uses data contained in the selling and administrative expense budget?

Cash payments schedule

Select the correct equation format for the purchases budget.

Cost of budgeted sales + desired ending inventory - beginning inventory = required purchases.

Which of the following items will not appear on a cash budget?

Expected credit sales

Item to ClassifyStandardActualSales volume 100,000units 96,000unitsSales price$4per unit$3.90per unitMaterial usage 40,000gallons 42,000gallonsLabor price 12.50per hour 12.45per hour All of the following variances are unfavorable except?

Labor Price

Which of the following is not an inventory account maintained by a manufacturing company?

Merchandise Inventory

Which manager is usually held responsible for materials usage variances?

Production supervisor

The cost of direct materials purchased on account is expensed at the time the:

goods made in the manufacturing process are sold.

The Winchester Company estimates that its overhead costs will amount to $595,000 and the company's manufacturing employees will work 85,000 direct labor hours during the current year. If actual overhead costs for the year amounted to $599,000 and actual labor hours amounted to 87,000, then overhead would be:

overapplied by $10,000.