Managerial accounting test 3, Accounting exam # 2, Accounting exam 1, Accounting 2, Accounting new

On November 1, 2021, a company signed a $100,000, 6%, six-month note payable with the amount borrowed plus accrued interest due six months later on May 1, 2022. The company should report interest payable at December 31, 2021, in the amount of:

$1,000. ($100,000 × 6%) × 2/12] = $1,000

Camp Elim obtains a $125,000, 6%, five-year loan for a new camp bus on January 1, 2021. If the monthly paymen $2,416.60, by how much will the carrying value decrease when the first payment is made on January 31, 2021?

$1,791.60 $125,000 × 6% × 1/12 = $625.00 interest expense $2,416.60 − $625.00 = $1,791.60 decrease in carrying value

The Pita Pit borrowed $100,000 on November 1, 2021, and signed a six-month note bearing interest at 12%. Principal and interest are payable in full at maturity on May 1, 2022. In connection with this note, The Pita Pit should report interest expense in 2022 for the amount of:

$4,000. [($100,000 × 12%) × 4/12] = $4,000.

Glascro Company manufactures skis. The management accountant wants to calculate the fixed and variable costs associated with the leasing of machinery. Data for the past four months were collected as follows: ​ Month Lease cost Machine hours April $15,000 800 May 10,000 600 June 12,000 770 July 16,000 1,000 What would be the total lease cost of Glascro Company's at a level of 500 machine hours?

(15$ * 500 machine hours) + 1000 hours 7500 + 1000 = 8500

Craydye makes all sorts of moldings. Its standard quantity of material allowed is 1 foot of wood per 1 foot of molding at a standard price of $3.00 per foot. During August, it purchased 200,000 feet of wood at a cost of $2.00 per foot, which produced only 199,000 feet of molding. Calculate the materials price variance and the materials usage variance.

(3 X 200,000) - (2- 200,000) = 600,000 - 400,000 = 200,000 F (3 X 199,000) - (3 X 200,000) = 597,000 - 600,000 = - 3000 U

Atlas Company provided the following information for last year: Operating income $ 92,000 Sales 235,000 Beginning operating assets 410,000 Ending operating assets 440,000 Which of the following is Atlas's return on investment (ROI) for last year? (Note: Round answer to two decimal places.)

(410,000 + 440,000)/2 = 425,000 Operating income / Average operating assets 92,000/ 425,000

Lambert Company purchased $140,000 of goods in September and expects to purchase $130,000 of goods in October. Lambert typically pays for 20% of purchases in the month of purchase and 80% in the following month.Every month, Lambert must make the following payments: ​ Rent $5,000 Wages 14,000 Utilities 3,000 Telephone 400 Loan on equipment 1,200 ​ In mid-October, Lambert expects to buy a new computer for $4,500 using the company credit card. Typically, the credit card bill is paid in full in the following month. September credit card purchases totaled $6,000. What are the total cash disbursements expected by Lambert during the month of October?

(5000+14000+3000+400+1200) +(140,000x 80% in the following month) +(130,000 x 20% in the month of purchase, October ) +(6000 September credit card bill paid in October) =23600+112000+26000+6000 =167,600

Hexene, Inc. produces a specialized machine part used in forklifts. For last year's operations, the following data were gathered: ​ Units produced 40,000 Direct labor 32,000 hours @ $10.00 Actual variable overhead $140,000 Hexene employs a standard costing system. During the year, a variable overhead rate of $6.00 was used. The labor standard requires 0.75 hours per unit produced. The variable overhead spending and efficiency variances are:

(6 X 32000) - 140,000 = 52,000 F (6$(0.75 X 40,000) - (6X 32,000) = 12,000 U

If the operating asset turnover ratio increased by 30% and the margin increased by 20%, the divisional ROI

1.20 X 1.30 = 1.56 INCREASE OF 56%

The sports zone reports net income of 50,000, net sales of 500,000, and average total assets of 400,000. what is their asset turnover.

1.25 500,000/400,000

The sports zone reports net income of 50,000, net sales of 500,000, and average total assets of 400,000. what is their profit margin.

10% met income/net sale 50,000/500,000

During August, 10,000 units were produced. The standard quantity of material allowed per unit was 10 pounds at a standard cost of $3 per pound. If there was an unfavorable usage variance of $18,750 for August, the actual quantity of materials used must be

10,000 units x 10 pounds x 3# per pound = 300,000 300,000 + 18,750 = 318,750 318750/ 3$ = 106250

Rocha & Noel Company makes and sells dolls. The price is $15 and the variable expense per unit is $10. What is the contribution margin ratio? (Note: Round answer to two decimal places.)

10/15 = .67% .33 + .67 = 1.00% =.33

During June, Cisco Company produced 12,000 chainsaw blades. The standard quantity of material allowed per unit was 1.5 pounds of steel per blade at a standard cost of $8 per pound. The actual cost was $7 per pound. The actual pounds of steel that Cisco purchased were 19,500 pounds. All materials purchased were used. Calculate Cisco's materials usage variance.

12,000 U

The sports zone reports net income of 50,000, net sales of 500,000, and average assets of 400,000. what is their return on assets.

12.5% 50,000/400,000

Last week, John worked for 40 hours and produced 200 business card boxes. What is the velocity in business card boxes per hour?

15 units per hour Actual Velocity = Actual units produced in a week / Productive hours in one week = 200 business card boxes / 40 hours in one week = 5 units per hour

Majenta Company uses a standard costing system. The following information pertains to direct labor costs for February: ​ Standard direct labor rate per hour $12.00 Actual direct labor rate per hour $10.00 Labor rate variance $15,000 F Actual output 1,200 units Standard hours allowed for actual production 13,000 hours How many actual labor hours were worked during February for Majenta Company?

15,000 / (12-10) = 7500

Workshape Manufacturing has two classes of distributors: JIT distributors and non-JIT distributors. The JIT distributor places small, frequent orders, and the non-JIT distributor tends to place larger, less frequent orders. Both types of distributors purchase the same product. The customer activities and costs for the previous quarter are as follows: Activity JIT distributors Non-JIT distributors Sales Orders 500 30 Sales Calls 30 30 Service Calls 200 90 Average Order Size 90 1,400 Manufacturing Cost/Unit $50 $50 ​ ​ ​ ​ ​ ​ Customer Costs: ​ ​ Processing Sales Orders $160,000 ​ Selling Goods $155,000 ​ Servicing Goods $195,000 ​ Total $500,000 ​ Calculate the activity rate for selling goods. (Note: Round answer to two decimal places.)

155,000/(30+30) = 2583 sales call

Glascro Company manufactures skis. The management accountant wants to calculate the fixed and variable costs associated with the leasing of machinery. Data for the past four months were collected as follows: ​ Month Lease cost Machine hours April $15,000 800 May 10,000 600 June 12,000 770 July 16,000 1,000 Using the high-low method, calculate the fixed cost of leasing.

16,000 highest price - (15$ *highest machine hour 1000) 16,000 - 15,000 = 1,000

Foray Company finds that typically 40% of a month's sales are for cash. Payments on accounts receivable are 70% in the month of sale and 28% in the month following sale. Budgeted sales for June are $120,000, for July $160,000, and for August $140,000. What are the total cash receipts budgeted for July?

160,000*.40% = 64,000 160,000*(100-40%) = 96,000 96,000* .70% = 67,200 add all up get 151,360

On December 31 before adjusting entries, a company reports the following balances: Accounts Receivable $100,000 Allowance for Uncoll. Accts. $2,000 (credit) The company estimates bad debts to be 20% of accounts receivable. The adjusting entry would include

18,000 100,000x.20% -allowance for uncollectible accounts 2000 =18000

On December 31 before adjusting entries, a company reports the following balances: Accounts Receivable $100,000 Allowance for Uncoll. Accts. $2,000 (credit) Credit Sales $500,000 The company estimates bad debts to be 4% of credit sales. The adjusting entry would include

20,000 500,000 credit sales x bad debt %4

Foster Industries manufactures 20,000 components per year. The manufacturing cost of the components was determined as follows: Direct materials $150,000 Direct labor 240,000 Inspecting products 60,000 Providing power 30,000 Moving materials 20,000 Setting up equipment 60,000 Providing supervision 40,000 Total $600,000 If the component is not produced by Foster, inspection of products and provision of power costs will only be 10% of the current production costs; moving materials costs and setting up equipment costs will only be 50% of the production costs; and supervision costs will amount to only 40% of the production amount. An outside supplier has offered to sell the component for $25.50. What is the effect on income if Foster Industries purchases the component from the outside supplier?

20,000 components x 25.50 offered to sell. = 510,000 Add inspection and power cost (60,000 + 30,000) = (90,000) x 10% = 9,000 Moving materials + setting up equipment 20,000 + 60,000 = 80,000 X 50% = 40,000 supervision 40,000 x40% = 16,000 510,000+ 9,000+ 40,000+ 16,000 = 575,000 total 600,000 increase of 25,000

The operations of Smits Corporation are divided into the Child Division and the Jackson Division. Projections for the next year are as follows: ​ ​ Child Jackson ​ ​ Division Division Total Sales revenue. 250,000 $180,000. $430,000 Variable expenses 90,000 100,000 190,000 Contribution margin $160,000 $ 80,000 $240,000 Direct fixed expenses 75,000 62,500 137,500 Segment margin. $ 85,000 $ 17,500 $102,500 Allocated common costs 35,000 27,500 62,500 Total relevant benefit (loss) $ 50,000 $(10,000) $ 40,000 ​ Operating income for Smits Corporation as a whole if the Jackson Division were dropped would be

22,500

Union Apparel has sales including sales taxes for the month of $551,200. If the sales tax rate is 6%, how much does Union Apparel owe for sales tax?

31,200. $551,200/1.06 = $520,000; $551,200 − $520,000 = $31,200.

Yummy Jams Company produces a line of jams. Yummy's estimated production of jars of jam for the fourth quarter of the year is as follows: ​ October 75,000 November 98,000 December 63,000 ​ Each jar requires half a pound of berries. Yummy prefers to buy the freshest berries, so its policy is to have just 3% of the following month's production needs in ending inventory. On October 1, the company had 1,125 pounds of berries in inventory. Yummy's pays $0.60 per pound of berries. It buys all berries on account and typically pays 40% of a month's purchases in that month, and the remaining 60% the following month. How many pounds of berries will be purchased during the month of November?

48,475

Santorino Company produces two models of a component, Model K-3 and Model P-4. The unit contribution margin for Model K-3 is $6; the unit contribution margin for Model P-4 is $14. Each model must spend time on a special machine. The firm owns two machines that together provide 4,000 hours of machine time per year. Model K-3 requires 15 minutes of machine time; Model P-4 requires 30 minutes of machine time. Now suppose that Santorino Company can sell only 5,500 units of each model. How many units of Model K-3 should be produced?

5,000 units

A company expects the following sales for the coming year: ​ ​ ​ 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Units50,000 40,000 70,000. 90,000 Average selling price $6 $6 $6 $8 ​ Budgeted sales revenue for the year is:

50,000 *6 = 300,000 40,000*6 = 240,000 70,000*6 = 420,000 90,000*8 = 720,000 add all up 1,680,000

The Auto Division of Big Department Store had a net operating income of $560,000, a net asset base of $4,000,000, and a required rate of return of 12%. Sales for the period totaled $3,000,000. The residual income for the period is

560,000 - (4,000,000X12%) = 80,000

Synergy Inc. manufactured 6,000 units during the month of March. They incurred direct materials cost of $120,000 and manufacturing overhead costs of $48,000. If their per-unit prime cost was $31.20 per unit, how much direct labor cost did it incur during March?

6000 units * price per unit 31.20 = 187,200 187,200 - direct materials cost 120,000 = 67,200

Extreme Builders constructs houses. The standard labor rate is $25 per hour and the standard number of hours is 15,000 hours per home. During the year, it constructed 12 homes using 18,000 labor hours per home and a rate of $28 per hour Calculate the Extreme Builders' labor rate variance.

648,000

Mover Company has developed the following standards for one of its products: Direct materials: 7.5 pounds × $8 per pound Direct labor: 2 hours × $12 per hour The following activity occurred during March: Materials purchased: 5,000 pounds costing $42,500 Materials used: 3,600 pounds Units produced: 500 units Direct labor: 1,150 hours at $11.80/hour The company records materials price variances at the time of purchase. The variable standard cost per unit for materials and labor is

7.5 X 8 = 60 2 X 12 = 24 = 84

The manager of Synergy Company's Stock Division projects the following for next year: Sales $195,000 Operating income 70,000 Operating assets 385,000 The manager can invest in an additional project that would require $50,000 investment in additional assets and would generate $9,000 of additional income. The company's minimum rate of return is 15%. What is the residual income for the Stock Division without the additional investment?

70,000 + 9,000 = 79,000 385,000+ 50,000 = 435,000 79,000 - (15% X 435,000) = 13,750

A company makes a basket purchase of land, buildings, and equipment with estimated fair values of $70,000, $150,000, and $30,000, respectively. The purchase price is $210,000. How much should be recorded to the Land account

70,000/ 250,000= .28 .28 x 210,000 =58,800

Victryl Company applies overhead based on direct labor hours. At the beginning of the year, Victryl last year's overhead to be $700,000, machine hours to be 200,000, and direct labor hours to be 35,000. During February, Victryl has 5,000 direct labor hours and 10,000 machine hours. If the actual overhead for February is $98,300, what is the overhead variance ?

700,000/ 35,000 = 20 5,000 * 20 = 100,000 100,000 - 98,300 = 1700

A company has two inspectors, each earning a salary of $75,000. One inspector works exclusively on inspecting parts received from outside suppliers, while the other spends 30% of her time inspecting parts and 70% of her time inspecting final products. How much labor cost should be assigned to the activity, inspecting parts?

75,000 + (0.3 × $75,000) = $97,500

Opal Production Company uses a standard costing system. The following information pertains to the current year: Actual factory overhead costs ($15,000 is fixed) $50,000 Actual direct labor costs (10,000 hours) $130,000 Standard direct labor for 6,000 units: ​ Standard hours allowed 9,500 hours Labor rate $10.00 ​ The factory overhead rate is based on an activity level of 12,000 hours. Standard cost data on an activity level of 12,000 hours is as follows: Variable factory overhead $18,000 Fixed factory overhead 12,000 Total factory overhead $30,000 ​ What is the variable overhead efficiency variance for Opal Production Company?

750 U

(Ch. 2 )In July, Noel & Vang Company purchased materials costing $23,100 and incurred direct labor cost of $19,800. Manufacturing overhead totaled $35,200 for the month. Information on inventories was as follows: ​ July 1. July 31 Materials $6,820. $7,810 Work in process 770. 1,320 Finished goods 3,630. 2,970 ​ What was the total manufacturing costs in July?

77110 materials 6820+ materials costing 23100- July materials 7810= 22110+direct labor cost 19800+ overhead total 35200= 77110

Atlas Company provided the following information for last year: Operating income $ 92,000 Sales 235,000 Beginning operating assets 410,000 Ending operating assets 440,000 Calculate Atlas's margin for last year. (Note: Round answer to two decimal places.)

92,000/ 235,000= 0.39

The receiving department of Owen has three activities: unloading, counting goods, and inspecting. Unloading requires a forklift that is leased for $15,000 per year. The forklift is used only for unloading. The fuel for the forklift is $2,000 per year. Inspection requires special testing equipment that has a depreciation of $500 per year and an operating cost of $1,000 per year. Receiving has four employees who each have an average salary of $35,000 per year. The work distribution matrix for the receiving personnel is as follows: ​ ​ Percentage of Time Activity on Each Activity Unloading 25% Inspecting 35% Counting 40%

= $500 + $1000 + {($35000 x 4) x 35%) = $500 + $1000 + $49000 = $50500

Rizzo Manufacturing produces two types of cameras: 35mm and digital. The cameras are produced using one continuous process. Four activities have been identified: machining, setups, receiving, and packing. Resource drivers have been used to assign costs to each activity. The overhead activities, their costs, and the other related data are as follows: Product Machine Hours Setups Receiving Orders Packing Orders 35mm 10,000 100 200 400 Digital 10,000 250 800 2,000 Costs $60,000 $40,000 $8,000 $24,000 Calculate an activity rate for packing based on packing orders.

= overhead cost / cost allocation base = 24,000 / (400+2000) = 24000/2400 = 10 packing orders

Which of the following statements is NOT true of the Sarbanes-Oxley Act of 2002

All companies in the U.S. fall under its provisions.

Why would a corporation purchase its own stock?

All of the other answer choices are correct.

Several transfer pricing policies are used in practice. These transfer pricing policies include

All of these

Which of the following is true of total quality management?

All of these are correct.

A positive result that stems from the use of return on investment (ROI) is that it encourages managers to focus on

All of these.

In setting price standards for materials and labor,

All of these.

Which of the following is an absolute dollar measure rather than a percentage?

All of these.

Qualitative factors that should be considered when evaluating a make-or-buy decision are

All of these. whether the outside supplier can provide the needed quantities. whether the outside supplier can provide the product when it is needed. the quality of the outside supplier's product. Answer all of these

Victor's Detailing requires an 80% markup on each job. The average job would cost $30. Victor's Detailing uses markup pricing to set the price on each job. What is the price Victor should quote a customer?

Ans. C ($54) Explanation: Price = Cost + Markup Cost = $ 30 and Markup = 80% on cost Price = $30 + ($ 30 * 80%) = $ 30 + $ 24 = $ 54

A company accepts a note receivable of $5,000 on September 1, 2021, that matures in 10 months and has stated interest of 6%. What amount of interest revenue will the company record in 2021 and 2022

Answer 100 and 150 5000 x 4/12 x .06 =100 5000 x 6/12 x .06 =150

The strategic management system that translates an organization's mission and strategy into operational objectives and performance measures is

Balanced Scorecard.

Santorino Company produces two models of a component, Model K-3 and Model P-4. The unit contribution margin for Model K-3 is $6; the unit contribution margin for Model P-4 is $14. Each model must spend time on a special machine. The firm owns two machines that together provide 4,000 hours of machine time per year. Model K-3 requires 0.25 hours of machine time; Model P-4 requires 0.5 hours of machine time. What is the contribution margin per unit of scarce resource (machine time) for Model K-3?

Calculation of contribution margin per unit of scare resources for Model K-3 Contribution margin per unit of scare resources for Model K-3 = Unit contribution margin for K-3 / [15/60 hours] =6/.25 hours =24

Preferred stock:

Can have features of both liabilities and stockholders' equity.

Discount-Mart issues $10 million in bonds on January 1, 2021. The bonds have a ten-year term and pay interest semiannually on June 30 and December 31 each year. Below is a partial bond amortization schedule for the bonds:

Cash paid* 10million*2payments =6%

Paney Company makes calendars. Information on cost per unit is as follows: Direct materials $1.50 Direct labor 1.20 Variable overhead 0.90 Variable marketing expense 0.40 Fixed marketing expense totaled $13,000 and fixed administrative expense totaled $35,000. The price per calendar is $10. What is the contribution margin per unit?

Contribution margin = Sale Price- Variable cost Sale price = $ 10 Variable cost = $ 1.5+$1.2+$.9+$.4 =$4 Contribution margin = $10-$4 = $6

The income statement for Elite Manufacturing Company for the current year is as follows: ​ Sales (15,000 units) $180,000 Variable expenses 100,000 Contribution margin $ 80,000 Fixed expenses 60,000 Operating income $ 20,000 ​ ​ What is the contribution margin per unit? (Note: Round answer to two decimal places.)

Contribution margin per unit = Contribution margin/Number of units sold = $80000/15000 = $5.3333 = $5.33

John Wilson, a sole proprietor, has the following projected figures for next year: ​ Selling price per unit $ 200.00 Contribution margin per unit 50.00 Total fixed costs 700,000 ​ What is the contribution margin ratio? (Note: Round answer to three decimal places.)

Contribution margin ratio=Contribution margin/Sales =(50/200) 0.250.

Learner Company sells its product for $100. It has a variable cost ratio of 70% and total fixed costs of $9,000. What is the break-even point in sales dollars for Learner Company?

Contribution per unit = Sale - Variable cost= $100 - 100*70% =$30 per unit Break even units = Fixed cost / Contribution per unit= $9,000 / $30 = 300 units Break-even point in sales dollars = 300 units x $100 = $30,000

In July, Noel & Vang Company purchased materials costing $23,100 and incurred direct labor cost of $19,800. Manufacturing overhead totaled $35,200 for the month. Information on inventories was as follows: July 1 July 31 Materials $6,820 $7,810 Work in process. 770 1,320 Finished goods. 3,630 2,970 What was the cost of goods sold for July?

Cost of goods manufactured 76,560 +finished goods in july 3,630 - finished goods july 31 2,970 = 77,200

Unique Company provided the following budgeted data for July: ​ Direct materials $60,000 Direct labor $35,000 Overhead $100,000 Beginning finished goods $20,000 Ending finished goods $36,000 Production in units 15,000 ​ What is the budgeted cost of goods sold?

Cost of goods manufactured=Direct materials+Direct labor+OVerhead =(60000+35000+100,000)=$195000 Hence COGS=Cost of goods manufactured+Beginning finished goods-Ending finished goods =(195000+20000-36000) which is equal to =$179000(D).

Which of the following transactions would increase the balance of the inventory account for a company using the perpetual inventory system

Costs of incoming freight charges on merchandise inventor

On December 2, Coley Corp. acquired 1,000 shares of its $2 par value common stock for $27 each.On December 20, Coley Corp. resold 400 shares for $15 each. Which of the following is correct regarding the journal entry for the resold shares?

Credit Treasury Stock $10,800. The journal entry for the resold shares would be: Cash (400 × $15)=6,000Additional Paid-in Capital4,800Treasury Stock (400 ×$27)=10,800 credit

A company resells 400 shares of its own common stock for $20 per share. The company had acquired these shares two months before for $15 per share. The resale of this stock would be recorded with a:

Credit to Additional Paid-In Capital for $2,000

On which date would a company record a debit to Dividends and a credit to Dividends Payable?

Date of Declaration

On which date would a company record a debit to Dividends and a credit to Dividends Payable?

Date of declaration

(2020S Third exam) In December 2020, Quebecor Printing received magazine subscriptions for 2021 from customers, who paid $1,000 in cash. What would be the appropriate journal entry for this event in December 2020?

Debit Cash, $10,000; credit Deferred Revenue, $10,000.

Bear Essentials borrowed $50,000 from Stacks Bank and signed a promissory note. What entry should Bear Essentials record?

Debit Cash, $50,000; Credit Notes Payable, $50,000.

In December 2020, Quebecor Printing received magazine subscriptions for 2021 from customers, who paid $500 in cash. What would be the appropriate journal entry for this event in December 2020?

Debit Cash, $500; credit Deferred Revenue, $500.

In January, 2021, Summit Department Store sells a gift card for $50 and receives cash. In February, 2021, the customer comes back and spends $20 of the gift card to purchase a water bottle. What would be the appropriate journal entry for the customer's purchase of the water bottle in February?

Debit Deferred Revenue, $20; credit Sales Revenue, $20.

On December 1, 2021, Old World Deli signed a $300,000, 5%, six-month note payable with the amount borrowed plus accrued interest due six months later on June 1, 2022. Old World Deli should record which of the following adjusting entries at December 31, 2021?

Debit Interest Expense and credit Interest Payable, $1,250. ($300,000 × 5%) × 1/12] = $1,250.

Treasury Stock

Decreases stockholders' equity

Treasury Stock:

Decreases stockholders' equity.

The sale of gift cards by a company is a direct example of:

Deferred revenues.

The correct order of six-step outline of a decision-making model is

Define the problem, Identify alternatives, Identify the costs and benefits associated with each alternative, Estimate the relevant costs and benefits for each alternative, Assess qualitative factors, and Make the decision

Which of the following would be included as an adjustment to net income in the operating activities section of a statement of cash flows using the indirect method

Depreciation expense

Which of the following is an example of the management activity referred to as planning?

Developing a strategy for disposing of hazardous waste

Last year, Fabre Company produced 20,000 units and sold 18,000 units at a price of $12. Costs for last year were as follows: Direct materials $25,000 Direct labor 35,000 Variable factory overhead 12,000 Fixed factory overhead 37,000 Variable selling expense 9,000 Fixed selling expense 7,500 Fixed administrative expense 15,500 ​ Assuming that beginning inventory was zero, what is the value of ending inventory under variable costing?

Direct Material + Direct Labor + Variable Factory overhead 25,000+35,000+12,000 = 72,000 Product ocst / Units Prodcued * clsoding inveotry in Units Clsing inventory = 20,000-18,000 = 2,000 =72,000 / 20,000 * 2,000 = 7,200 (Answer)

Excellent Inc. had a per-unit conversion cost of $3.00 during April and incurred direct materials cost of $112,000, direct labor costs of $84,000, and manufacturing overhead costs of $50,400 during the month. How many units did it manufacture during the month?

Direct labor cost 84,000 + Manufacturing overhead 50,400 = 134,400/ cost of 3.00 = 44,800

Workshape Company budgeted 250,000 units of production for June, 260,000 units for July, and 320,000 units for August. Each unit requires 0.30 direct labor hours. How many direct labor hours are budgeted for August?

Direct labor hours budgeted for August=320,000units*0.3direct labor hour/unit

Which of the following are fairly easy to trace to individual jobs?

Direct materials and direct labor

Synergy Inc. produces plastic grocery bags. Synergy has developed a static budget for the month of July based on 10,000 direct labor hours. During the quarter, the actual activity was 12,000 direct labor hours. Data for July are summarized as follows: ​ ​ Static budget(10,000 hours) Actual costs(12,000 hours) Direct materials cost $ 86,000 $108,000 Power 30,000 37,000 Salary of plant supervisor 7,000 7,000 Total $123,000 $152,000 ​ ​ What is the flexible budget amount for July?

Direct materials cost=$86,000/10,000*12,000=$103,200 Power=$30,000/10,000*12,000=$36,000 Salary of plant manager=$7,000 total=$146,200.

Information from the records of Garcia & Gordon Corp. for December of the current year is as follows: Sales $1,353,000 Selling and administrative expenses 2,310,00 Direct materials used 290,400 Direct labor 330,000 Factory overhead 445,500 Inventories Dec. 1 Dec. 31 Direct materials $39,600 $46,200 Work in process 82,500 92,400 Finished goods 75,900 62,700 ​The prime cost are

Direct materials used 290,400 + Direct labor cost 333,000 = 620,400

If management can estimate the amount of loss that will occur due to litigation against the company, and the likelihood of the loss is probable, a contingent liability should be

Disclosed and reported as a liability.

(2020s Third exam) Discount-Mart issues $10 million in bonds on January 1, 2021. The bonds have a ten-year term and pay interest semiannually on June 30 and December 31 each year. Below is a partial bond amortization schedule for the bonds: What is the name of the account that the company will record for $45,639 at 06/30/2021?

Discount on bonds payable

The board of directors of Capstone Inc. declared a $0.60 per share cash dividend on its $1 par common stock. On the date of declaration, there were 50,000 shares authorized, 20,000 shares issued, and 5,000 shares held as treasury stock.Assuming the dividends were declared on June 1, what is the entry on June 30 to record the payment of cash dividends?

Dividends Payable [(20,000 - 5,000) × $.60]9,000Cash9,000 credit

The board of directors of Capstone Inc. declared a $0.60 per share cash dividend on its $1 par common stock. On the date of declaration, there were 50,000 shares authorized, 20,000 shares issued, and 5,000 shares held as treasury stock.What is the entry when the dividends are declared?

Dividends [(20,000 - 5,000) × $0.60]9,000Dividends Payable9,000 credit

Which of the following is true of economic value added (EVA)?

Economic value added is calculated by deducting the dollar cost of capital employed from after-tax operating income.

A bond issue with a face amount of $500,000 bears interest at the rate of 10%. The current market rate of interest is also 10%. These bonds will sell at a price that is:

Equal to $500,000.

Hyacinth Company is designing an all-in-one grill and cooler aimed at sports fans. The company believes that the product can be sold for $250. Hyacinth requires a 20% profit on new products. What is the target cost of the all-in-one grill and cooler?

Expected selling price of the product = $250Less: Expected targeted or expected profit on the product = 20% i.e ($250 X 20%) = $50Target cost of the product = $200

Which of the following areas is not emphasized by the Certified Management Accountant (CMA) examination?

External auditing and business law

Which inventory method or cost flow assumption most closely resembles the actual physical flow of goods

FIFO

Which of the following inventory accounts consists of items for which the manufacturing process is complete

Finished goods

Fixed overhead is $2,000 per month; it is applied to production based on normal activity of 1,000 units. During the month, 3,000 units were produced. Zeklen started the month with 200 units in beginning inventory, with unit product cost equal to this month's unit product cost. A total of 1,200 units were sold during the month at a price of $10. Selling and administrative expense for the month, all fixed, totaled $2,400. What is the unit product cost under absorption costing? Variable costs per unit: ​ Direct materials $6.00 Direct labor 2.00 Variable overhead 1.00 Variable selling expenses 0.60 ​

Fixed overhead 2000/ 1,000 units =2 variable selling expense goes away then add 6+2 +1 +2 = 11

Ring Company designs and builds jewelry. During June it had applied overhead of $120,000. Overhead is applied at the rate of 75% of direct labor cost. Direct labor wages average $20 per hour. How many direct labor hours did Ring Company have for the month of June?

Given applied Overhead=$120,000 Overhead ia applied at the rate of 75% on direct Labor cost Therefore, Direct Labor cost =$120,000/75% =$160,000 Direct Labor wages average =$20 Therefore Direct Labor hours =$160,000/$20 =8,000 Direct labor hours

Glascro Company manufactures skis. The management accountant wants to calculate the fixed and variable costs associated with the leasing of machinery. Data for the past four months were collected as follows: ​ Month Lease cost Machine hours April $15,000 800 May 10,000 600 June 12,000 770 July 16,000 1,000 ​ Using the high-low method, calculate the variable rate for the lease cost.

Highest cost 16,000 - lowest cost 10,000 / highest machine hours 1000 - lowest machine hours 600 6000/ 400 = 15$

Which of the following sources of quantitative standards should be used with caution because it can perpetuate inefficiencies?

Historical experience

Which of the following is true about ideal standards?

Ideal standards demand maximum efficiency and no slack is allowed.

Stars Manufacturing Company produces Products A1, B2, C3, and D4 through a joint process. The joint costs amount to $200,000. If Processed Further Units Sales Value Additional. Sales tProduced. at Split-O. Costs. Value A1 3,000. $10,000 $2,500 $15,000 B2 5,000 30,000 3,000 35,000 C3 4,000 20,000 4,000 25,000 D4 6,000 40,000 6,000 45,000 If Product B2 is processed further, profits will

If Star manufacturing company further process Product B2 then in that case situation will be as under: Addition or Increment in Sales value of product B2 due to further processing (A) = Sales value after further processing - Sales value at split off point= $35,000 - $30,000= $5,000 Addition or Increment in Cost of product B2 due to further processing (B) = Additional cost which will be incurred if the product is further processed.= $3,000 (given in the question) Increment in profit due to further processing of product B2 = (A) - (B)= $5,000 - $3,000= $2,000Option 'D' is the correct answer

The manager of Stock Division projects the following for next year: Sales $185,000 Operating income $60,000 Operating assets $375,000 The manager can invest in an additional project that would require $40,000 investment in additional assets and would generate $6,000 of additional income. The company's minimum rate of return is 14%. Which of the following statements is true?

If the manager invests in the additional project, residual income of the division will increase.

If a company issues 1,000 shares of $1 par value common stock for $20 per share, what would be the effect on the accounting equation?

Increase assets and increase stockholders' equity. The journal entry would be: Cash20,000Common Stock1,000 CREDIT Additional Paid-in Capital19,000 CREDIT

Which of the following items would be added back to net income in the operating activities section of a statement of cash flows (using the indirect method)?

Increase in the balance in accounts payable

When treasury stock is sold for more than the company originally paid to purchase the shares, the difference:

Increases stockholders' equity.

Which of the following is not an advantage of ROI?

It encourages managers of departments with high ROIs to invest in average ROI projects

Which of the following is true regarding Allowance for Uncollectible Account

It is subtracted from the balance of accounts receivable in the balance sheet

Which of the following is not true about job-order costing?

It is used in firms that produce homogeneous products.

Which of the following is true of decentralization?

It is usually achieved by creating units called divisions.

Which of the following is true of myopic behavior?

It occurs when a manager takes actions that improve budgetary performance in the short run but bring long-run harm to the firm.

Which of the following results from decentralization?

It results in the usage of a firm's resources to maximize firm value by the lower-level managers.

During a period of rising prices, which inventory cost flow assumption would result in the highest cost of goods sold , and thereby the lowest net incom

LIFO

For a bond issue that sells for less than the bond face amount, the stated interest rate is:

Less than the market rate.

Deferred Revenues is a(n):

Liability account.

Which of the following is true of a decentralized company?

Local managers in a decentralized company can make better decisions using local information.

In July, Noel & Vang Company purchased materials costing $23,100 and incurred direct labor cost of $19,800. Manufacturing overhead totaled $35,200 for the month. Information on inventories was as follows: ​ ​ ​ July 1. July 31 Materials $6,820. $7,810 Work in process 770. 1,320 Finished goods 3,630. 2,970 ​ ​ What was the cost of goods manufactured for July?

Materials inv july 1st 6820+ purchased materials 23,100 - July 31st 7810 = 22110 22110+ direct labor 19,800+ manufacturing overhead 35,200 =77,110 +work in process july 1st 770 - wip july 31st 1320 = 76,560

Which of the following definitions describes a term bond?

Matures on a single date.

A bond issue with a face amount of $500,000 bears interest at the rate of 7%. The current market rate of interest is 6%. These bonds will sell at a price that is:

More than $500,000

The following information pertains to the three divisions of Yang Company: ​ Division A Division B Division C Sales ? ? $1,345,000 Net operating income $48,000 $18,000 $82,000 Average operating assets $420,000 ? ? Return on investment ? 15% 20% Margin 0.2 0.015 ? Turnover 2.1 ? ? Target ROI 17% 14% 8% What are the sales for Division B?

Net operating income/ margin 18,000/ 0.015 = 1,200,000

The following information pertains to the three divisions of Yang Company: ​ Division A Division B Division C Sales ? ? $1,345,000 Net operating income $48,000 $18,000 $82,000 Average operating assets $420,000 ? ? Return on investment ? 15% 20% Margin 0.2 0.015 ? Turnover 2.1 ? ? Target ROI 17% 14% 8% What are the average operating assets for Division B?

Net operating income/ return on investment 18,000/0.15 = 120,000

Which of the following is true about the aging method

Older accounts are less likely to be collected

Omega Enterprises budgeted the following sales in units: ​ January 40,000 February 30,000 March 50,000 Omega's policy is to have 30% of the following month's sales in inventory. On January 1, inventory equaled 8,000 units. February production in units is:

Opening inv 30,000 * .30 = 9000 50,000*.30 = 15,000 30,000+15,000 = 45,000 45,000-9,000 = 36,000

Which level of profitability is considered profit from normal operations

Operating income

2020s Third exam) The board of directors of Capstone Inc. declared a $0.60 per share cash dividend on its $1 par common stock. On the date of declaration, there were 50,000 shares authorized, 20,000 shares issued, and 5,000 shares held as treasury stock.What is the entry when the dividends are paid? A.Dividends9,000 Dividends Payable 9,000B.Dividends9,000 Cash 9,000C.Dividends12,000 Dividends Payable 12,000D.Dividends Payable9,000 Cash 9,000

Option D

Issued stock refers to the number of shares:

Outstanding plus treasury shares.

The correct order from the smallest number of shares to the largest number of shares is:

Outstanding, issued, and authorized.

Last year, Stevita Inc. shipped 3,000,000 kilograms of goods to customers at a cost of $2,400,000. If an individual customer orders 20,000 kilograms and produces $400,000 of revenue (total revenue is $40 million), the amount of shipping cost assigned to the customer using activity-based costing would be

Overhead Rate= $2,400,000 / 3,000,000 = $0.80 per kilogram Applied Overhead= $0.80 * 20,000 Kg = $16,000

Which of the following cash transactions would be included in the financing activities section of a statement of cash flows?

Payment of dividends

Which of the following cost would be expensed

Performing a tune up on a delivery truck

Consider the following two activities: (1) performing warranty work, cost: $60,000. The warranty cost of the most efficient competitor is $10,000. (2) Purchasing components, cost: $100,000 (5,000 purchase orders). A study reveals that the most efficient level would use 2,500 purchase orders and entail a cost of $55,000.What is the total nonvalue-added cost?

Performing warranty cost 60,000 100,000 - 55,000 = 45,000 60,000 + 45,000 = 105,000

If a company places cash receipts from the day in a safe or bank deposit box, this would be an example of

Physical control

John has applied overhead of $80,000 and actual overhead of $70,600 for the month of November. He applies overhead based on direct labor hours, and that amounts to 10,000 hours for the month of November. The overhead for the year was estimated to be $1,120,000. How many direct labor hours were estimated for the year?

Predetermined overhead rate = $80,000 / 10,000 = $8 per direct labor hour Direct labor hours = $1,120,000 / $8 per direct labor hour = 140,000 140,000 direct labor hours were estimated for the year.

Which of the following is a primary advantage of owning preferred stock?

Preference over common stockholders in the distribution of assets in the event of dissolution.

Which of the following is true of profit maximization

Profit maximization should be achieved through legal and ethical means.

Convertible bonds:

Provide potential benefits to both the issuer and the investor.

Abbott Company is considering purchasing a new machine to replace a machine purchased one year ago that is not achieving the expected results. The following information is available: Expected maintenance costs of new machine $12,000 per year Purchase price of existing machine $150,000 Expected cost savings of new machine $20,000 per year Expected maintenance costs of existing machine $8,000 per year Resale value of existing machine $35,000 Which of these items is irrelevant?

Purchase cost of existing machine

A company requires 220 pounds of plastic to meet the production needs of a product. It currently has 25 pounds of plastic inventory. The desired ending inventory of plastic is 70 pounds. How many pounds of plastic should be budgeted for purchasing during the coming period

Purchases = desired ending inventory + required for production - beginning inventory = 70+220-25 = 265 pounds

Which of the following cash transactions would be included in the investing activities section of a statement of cash flows?

Purchasing a building

Division A had ROI of 15% last year. The manager of Division A is considering an additional investment for the coming year. What step will the manager likely choose to take?

Reject the investment if it returns less than 15% ROI.

The current portion of long-term debt should be

Reported as a current liability in the balance sheet.

Cost of goods sold

Reported in the income statement

Planet Company had operating income of $12,000, average operating assets of $125,000, and sales of $45,000. What is Planet's return on investment (ROI)? (Note: Round answer to two decimal places.)

Return on investments = operating income/ average operating assets = 9.60% 12,000/ 125,000

Which of the following cash transactions would affect the amount of investing cash flows reported in the statement of cash flows?

Sale of equipment

When using vertical analysis, we express income statement items as a percentage of

Sales

Assume the following information: Variable cost ratio 80% Total fixed costs $60,000 What volume of sales dollars is needed to break even?

Sales - Variable cost = Contribution 100 % - 80% = 20% Breakeven sales in dollars = Fixed cost / Contribution ratio = $60000 / 0.20 = $300000

Planet Company sells a product for $16 per unit, variable cost is $12 per unit, and the total fixed cost is $6,000. What is the break-even point in units?

Selling Price = $16Variable Cost per unit = $12Total Fixed Cost = $6,000 Contribution Margin per unit = Selling Price - Variable Cost per unitContribution Margin per unit = $16 - $12Contribution Margin per unit = $4.00 Break-even Point in units = Total Fixed Cost / Contribution Margin per unitBreak-even Point in units = $6,000 / $4.00Break-even Point in units = 1,500

Last year, Buckner & Jones Company incurred the following costs: Direct materials $42,000Direct labor 63,000Manufacturing overhead 94,500. Selling expenses 25,200Administrative expenses 23,100 Buckner & Jones produced and sold 2,060 units at a sales price of $131.25 each. Assume that beginning and ending inventories of materials, work in process, and finished goods were zero.The total period expense was:

Selling expenses 25,200 + Administrative expenses 23,100 = 48300

A $500,000 bond issue sold for $490,000. Therefore, the bonds:

Sold at a discount because the market interest rate was higher than the stated rate.

Which of the following definitions describes a secured bond?

Supported by specific assets pledged as collateral by the issuer.

Authorized common stock refers to the total number of shares:

That can be issued.

The Kraig Corporation manufactures custom-made purses. The following actual data pertains to Job XY5: Direct materials placed into production $4,000 Direct labor hours worked 50 hours Direct labor rate per hour $15 Machine hours worked 100 hours ​ Plantwide overhead is applied using a plant-wide rate based on direct labor hours. Plantwide overhead was estimated at $60,000 for the year and the direct labor hours were estimated to be 15,000. What is overhead cost assigned to Job XY5?

The Overhead Cost Assigned = Budgeted Overhead / Direct Labor Hours * Number of Units = $ 60,000 / 15,000 Labor Hours * 50 Units = $ 200 Hence the correct answer is C. $ 200

The current portion of long-term debt is:

The amount that will be paid within one year of the balance sheet date.

The par value of common stock represents:

The legal capital per share of stock assigned when the corporation was first established.

Which of the following decisions is related to the amount of input that should be used per unit of output?

The quantity decision

Interviews and surveys are used to identify

activities

A costing system that first assigns costs to activities and then to products is

activity-based costing.

Economic Value Added is residual income with the cost of capital equal to the firm's

actual cost of capital.

The standard cost system differs from the actual cost system in the assignment of

all of the manufacturing inputs.

The standards of ethical conduct for managerial accountants include:

competence, confidentiality, integrity, and credibility.

Total contribution margin divided by total sales is the

contribution margin ratio

A responsibility center in which a manager is responsible only for costs is a(n)

cost center.

A _____ is a causal factor that measures the output of the activity that causes costs to change.

cost driver

Starfun Toys, Inc.Cost of Materials Number of toys produced Total cost of materials 60,000 $18,000 120,000 36,000 150,000 45,000 ​ What is the materials cost per unit of output?

cost of materials 18,000/ produced 60,000 =0.30

The _________ is a variable cost for Sam's restaurant business.

cost of raw materials

Which of the following is true of revenue centers?

These are responsibility centers wherein managers are responsible for price and quantity sold.

Which of the following is considered a solvency ratio

Times interest earned ratio

Which of the following is not an objective of managerial accounting?

To produce information for external users, including investors, creditors, customers, suppliers, and government agencies

Which of the following computations would be used to compute Net Revenu

Total Revenue- sale discounts-sales allowances

When using vertical analysis, we express balance sheet items as a percentage of

Total assets

The Engine Division provides engines for the Tractor Division of a company. The standard unit costs for the Engine Division are: Direct materials $ 650 Direct labor 1,250 Variable overhead 400 Fixed overhead 200 Market price per unit 2,800 What is the transfer price based on full cost plus a markup of 35%?

Transfer price based on full cost plus a markup of 35% = Full cost* + (Full cost* × Markup percentage) = $2,500 + ($2,500 × 35%) = $2,500 + $875 = $3,375 *Full cost = (Direct materials + Direct labor + Variable overhead + Fixed overhead) = ($650 + $1,250 + $400 + $200) = $2,500

Taylor Company produces two products, X and Y, which account for 70% and 30%, respectively, of total sales dollars. Contribution margin ratios are 60% for X and 30% for Y respectively. Total fixed costs are $140,000. What is Taylor's break-even point in sales dollars? (Note: Round answer to the nearest dollar.)

Weighted contribution margin=(0.7*0.6)+(0.3*0.3_) =0.51. Hence breakeven point=FC/weighted contribution margin =$140,000/0.51 =$274,510(Approx)(A).

Last week, Davis worked for 50 hours and produced 250 business card boxes. What is the cycle time for producing one business card box?

[(Productive hours in one week) × (60 minutes per hour)] / Actual units produced in a week = [(50 hours) × (60 minutes per hour)] / 250 business card boxes = 12 minutes 12 minutes

Company A issues 20,000 shares of $5 par common stock at $12.50 per share. The entry to record the issuance would include which of the following?

credit to Additional Paid-in Capital of $150,00 20,000x12.50=250,000 20,000x5=100,000 250,000-100,000= 150,000

Alpha Division had the following information: Average operating asset base in Alpha Division $500,000 Operating income in Alpha Division $60,000 Cost of capital 14% Target return on investment (ROI) 16% Margin for Alpha Division 21% If the asset base is decreased by $120,000, with no other changes, what will Alpha Division's return on investment be? (Note: Round answer to two decimal places.)

current average assets = 500,000 decrease in asset base will make average operating asset 500,000- 120,000 = 380,000 opertating income / new operating asset base 60,000/ 380,000 = 15.79

The Balanced Scorecard perspective that defines the customer and market segments in which the business unit will compete is the ____ perspective.

customer

The decision-making approach that allows managers at lower levels to make and implement key decisions pertaining to their areas of responsibility is

decentralization.

If the selling price per unit increases, the break-even point in units will

decrease.

If variable costs per unit decrease, sales volume at the break-even point will

decrease.

A list of activities accompanied by information that describes each activity is an activity ____.

dictionary

Cost of advertising is an example of a _____.

discretionary fixed cost

Standard cost systems can enhance operational control through the use of

efficiency variances which indicate the need for corrective action.

The following data for 6 months was collected from a factory. ​ ​ Electricity Machine Month cost hours June $45,000 4,540 July 23,000 3,380 August 32,000 3,870 September 43,000 4,345 October 22,000 3,200 November 46,200 4,680 ​ Select the correct set of high and low months.​

find highest cost November 46,200, then lowest October 22,000

The inventory cost computed under absorption costing is ____ the inventory cost computed using variable costing.

greater than

The sources of quantitative standards include

historical experience, engineering studies, and input from operating personnel.

The Balanced Scorecard perspective that describes the economic consequences of actions taken in the other three perspectives is the ____ perspective.

financial

The manager of a division is displeased with the ROI of the division. One step that would increase ROI (holding everything else constant) is

increasing sales.

The Balanced Scorecard perspective that describes the internal processes needed to provide value for customers and owners is the ____ perspective.

internal business process

A responsibility center in which a manager is responsible for revenues, cost, and investment is a(n)

investment center.

JetSky Airways has three divisions, the Western Division, the Eastern Division, and the Northern Division. The manager of the Western Division had wanted to purchase replacement airplanes for the division. However, he decided against it because, although revenues would increase and the new planes would be less expensive to operate, the initial cost of the planes was quite large. The Western Division is most probably accounted for as a(n)

investment center.

The level of the transfer price can affect the overall company because

it may impact on the taxes paid by the multinational company.

The Balanced Scorecard perspective that defines the capabilities than an organization needs to create long-term growth and improvement is the ____ perspective.

learning and growth

Which of the following is an advantage of leasing an asset over purchasing an asset on the installment basis?

leasing reduces the upfront cash needed to use an asset.

If there is a competitive outside market for the transferred product, then the best transfer price is the

market price.

A responsibility center in which a manager is responsible for both revenues and costs is a(n)

profit center.

A segment of Mega Inc., manufactures and sells blankets. The various models of blankets are produced in a single factory using stable technology. They are sold by the sales department, also located in the factory. The segment is most probably accounted for as a(n)

profit center.

Standard cost systems are adopted

to improve planning and control, and to facilitate product costing.

The primary objective of managerial accounting is:

to provide management with financial and nonfinancial information useful in planning, controlling, and decision making.

The _____ limits the cost relationship to the range of operations that the firm normally expects to occur.

relevant range

Per-unit variable costs

remain constant within the relevant range

Bronzit Company estimated the following at the beginning of the year: ​ Assembly Department Testing Department Total Overhead $700,000 $100,000 $800,000 Direct Labor Hours 150,500 40,500 191,000 Machine Hours 37,000 72,000 109,000 ​ ​ Bronzit uses departmental overhead rates. In the assembly department, direct labor hours are used to apply overhead. Machine hours are used to apply overhead in the testing department. Actual data for the month of May is as follows: ​ ​ Assembly Department Testing Department Total Overhead $50,000 $11,000 $61,000 Direct Labor Hours 20,000 2,500 22,500 Machine Hours 3,500 14,000 17,500 ​ If Bronzit uses a plant wide overhead rate based on direct labor hours, instead of departmental rates, what is the predetermined overhead rate ?

total overhead 800,000/ total direct labors 191,000 = 4.19

The break-even point is when

total revenue equals total cost.

A price charged for a component by the selling division to the buying division of the same company is called a(n)

transfer price.

Division A produces a component and wants to sell it to Division B. The transfer price is

revenue to Division 'A' and a cost to Division B

The following information pertains to the three divisions of Yang Company: ​ Division A Division B Division C Sales ? ? $1,345,000 Net operating income $48,000 $18,000 $82,000 Average operating assets $420,000 ? ? Return on investment ? 15% 20% Margin 0.2 0.015 ? Turnover 2.1 ? ? Target ROI 17% 14% 8% What is the turnover for Division C?

sales / Average operating assets 1,345,000/ 410,000 = 3.28

The first step in creating the master budget is the creation of the

sales budget.

Which of the following would not be an example of a value-added activity?

storage of finished products

Future costs that differ across alternatives are

sunk cost

Using Economic Value Added (EVA) to calculate residual income, the cost of capital employed is

the actual percentage cost of capital multiplied by the total capital employed.

Price standards are based on

the amount that should be paid for the total quantity of input to be used

The minimum return on investment (ROI) required to accept an investment is:

the hurdle rate.

The difference between operating income and the minimum dollar return required on a company's operating assets is:

the residual income.

The following information pertains to the three divisions of Yang Company: ​ Division A Division B Division C Sales ? ? $1,345,000 Net operating income $48,000 $18,000 $82,000 Average operating assets $420,000 ? ? Return on investment ? 15% 20% Margin 0.2 0.015 ? Turnover 2.1 ? ? Target ROI 17% 14% 8% What are the average operating assets for Division C?

net Operting income for specific letter/ average operating asset = .20 82,000/ .20 = 410,000

In an actual cost system, it is difficult to determine the _____ per unit

overhead cost

Trust Company applies overhead based on direct labor hours. At the beginning of the year, Trust estimates overhead to be $700,000, machine hours to be 200,000, and direct labor hours to be 35,000. During February, Trust has 5,000 direct labor hours and 10,000 machine hours. What is the amount of overhead applied for February?

$100,000 700,000/35,000 = 20 5000DL * 20 = 100,000

Net incomeDividendsBalance in retained EarningsYear 1 ($1,000)$0?Year 2 3,0000?Year 3 4,000 1,000?Year 4 10,000 4,000? What is the balance in retained earnings of Year 4?

$11,000

Strikers, Inc. sells soccer goals to customers over the Internet. History has shown that 2% of Strikers' goals will need repair under the warranty program. For the year, Strikers has sold 4,000 goals and 45 have been repaired. If the estimated cost to repair a goal is $200, what would be the warranty expense for the year?

$16,000. [(4,000 goals × 2%) × $200] = $16,000.

During January, 7,000 direct labor hours were worked at a standard cost of $20 per hour. If the direct labor rate variance for January was $17,500 favorable, the actual cost per direct labor hour must be

$17.50

During the year, Octagon produced 8,000 units, used 24,000 direct labor hours, and incurred variable overhead of $120,000. Budgeted variable overhead for the year was $90,000. The hours allowed per unit are 2. The standard variable overhead rate is $3.00 per direct labor hour. The variable overhead spending variance is:

$48,000 U

Tomkin Library System issues $5 million in bonds on January 1, 2021 that pay interest semi-annually on June 30 and December 31. A portion of the bond amortization schedule appears below:

$5,000,000.

Union Apparel has sales including sales taxes for the month of $551,200. If the sales tax rate is 6%, what are Union Apparel's sales for the month?

$520,000. $551,200/1.06 = $520,000.

(2020S Third exam) A bond issue with a face amount of $500,000 bears interest at the rate of 7%. The current market rate of interest is 6%. Which of the following could be the possible issue price:

$577,269

Camp Elim obtains a $125,000, 6%, five-year loan for a new camp bus on January 1, 2021. What amount will be recorded for interest expense for the first month's payment on January 31, 2021?

$625 $125,000 × 6% × 1/12 = $625

Strikers, Inc. sells soccer goals to customers over the Internet. History has shown that 2% of Strikers' goals will need repair under the warranty program. For the year, Strikers has sold 4,000 goals and 45 have been repaired. If the estimated cost to repair a goal is $200, what would be the warranty liability at the end of the year?

$7,000. Hide Feedback (4,000 goals × 2%) × $200 = $16,000; $16,000 − (45 × $200) = $7,000

If the margin of 0.30 stayed the same and the turnover ratio of 5.0 increased by 10%, the ROI would

0.30 X 5 = 1.50 5.0 X 110% = 5.5 0.30 X 5.5 = 1.65 1.65 - 1.50 = .15 0.15 X 100/1.50 = 10%

Connolly Company produces two types of lamps, classic and fancy, with unit contribution margins of $13 and $21, respectively. Each lamp must spend time on a special machine. The firm owns four machines that together provide 18,000 hours of machine time per year. The classic lamp requires 0.20 hours of machine time, the fancy lamp requires 0.50 hours of machine time. ​ What is the total contribution margin of the optimal mix of classic and fancy lamps?

1,170,000

When a company issues 25,000 shares of $1 par value common stock for $10 per share, the journal entry for this issuance would include:

A credit to Additional Paid-in Capital for $225,000. Hide Feedback The journal entry would be:Cash250,000Common Stock25,000 CREDIT Additional Paid-in Capital225,000 CREDIT

The effect of a sales allowance will result in which of the following

A decrease to net income

Which of the following is true of a static budget?

A static budget represents certain goals that a firm wants to achieve.

Which of the following bonds always matures on a single date?

A term bond

Which of the following statements is true?

Absorption costing income exceeds variable costing income when units produced are greater than units sold.

Which of the following generally is recorded at the time a company provides services to customers on account?

Account receivable

The moving activity of Alpha Inc. has an expected cost of $200,000. Expected direct labor hours are 50,000, and the expected number of moves is 90,000. What is the best activity rate for moving? (Note: Round answer to two decimal places.)

Activity rate for moving =expected cost/Expected no of moves =$200000/90000 =$2.22 per mover

Witness Manufacturing produces two types of cameras: 35mm and digital. The cameras are produced using one continuous process. Four activities have been identified: machining, setups, receiving, and packing. Resource drivers have been used to assign costs to each activity. The overhead activities, their costs, and the other related data are as follows: Product Machine Hours Setups Receiving Orders. Packing Orders 35mm 12,000 200 300 500 Digital 12,000 450 1,200 2,500 Costs $70,000 $50,000 $10,000 $30,000 Using an activity rate for receiving based on receiving orders, assign receiving costs to the 35mm cameras.

Activity rate: $10,000 / 1,500 = $6.67 per receiving order Overhead assignment: $6.67 × 300 = $2,001 picture on phone

____ can help a company become more competitive by providing more accurate cost data.

Activity-based costing

Which of the following is used to calculate the fixed overhead spending variance?

Actual Fixed Overhead - Budgeted Fixed Overhead

Which of the following is the assignment process used with normal costing?

Actual direct material and direct labor costs are assigned to products, but overhead costs are assigned using predetermined rates.

If a company issues 1,000 shares of $1 par value common stock for $20 per share, which of the following accounts would be credited?

Additional Paid-in Capital The journal entry would be: Cash20,000Common Stock1,000 CREDIT Additional Paid-in Capital19,000 CREDIT

Manganese Company makes frames. A customer wants to place a special order for 750 frames in green with the company logo painted on the frame, to be priced at $60 each. Normally, Manganese would charge $100 per frame for this type of order. Manganese figures that wood and glass will cost $20 per frame, variable overhead (machining, electricity) is $5 per frame, direct labor is $10 per frame, and one setup will be required at $1,500 per setup. The set-up charge costs are 100% labor. Currently, the workers needed to set up for and make the frames are working at Manganese. Their wages will be paid whether or not the special order is accepted. Manganese's policy is to avoid layoffs to the extent possible. If Manganese accepts the special order, by how much will operating income increase or decrease?

Answer C. $26,250 increase Total order 750 * 60 = 45000 Total cost = 20 + 5 = 25 * 750 = 18750 Operating income = Total revenue - direct cost - indirect cost = 45000 - 18750 = 26250

Given the information below, which bond(s) will be issued at a discount? Bond 1Bond 2Bond 3Bond 4Stated Rate of Return5%7%12%10% Market Rate of Return7%8%12%9%

Bonds 1 and 2.

Given the information below, which bond(s) will be issued at a premium? Bond 1Bond 2Bond 3Bond 4Stated Rate of Return5%10%7%10%Market Rate of Return7%8%7%9%

Bonds 2 and 4

Which of the following is true of budgetary slack?

Budgetary slack occurs when a manager deliberately underestimates revenues or overestimates costs in order to make budgeted expectations more easily achievable in the future.

Which of the following is true of budgeting?

Budgeting forces management to plan for the future.

Which of the following is a use of budgets for control?

Budgets set a standard against which results can be compared.

Which of the following would NOT be considered a cash equivalent or cash

Certificate of deposit that measures one year from now

The par value of shares issued is normally recorded in the:

Common Stock account.

Which of the following is the most likely to have voting rights?

Common Stock.

Everyone in the company has an impact on the operations and effectiveness of internal control, but who must take final responsibility?

Internal controls

Outstanding common stock refers to the total number of shares:

Issued less treasury stock.

Which of the following is a disadvantage of a focus on return on investment?

It can produce a narrow focus on divisional profitability at the expense of profitability for the overall firm.

Fixed cost per unit is $10 when 12,000 units are produced and $3 when 40,000 units are produced. What is the total fixed cost when nothing is produced?

per unit 10$ * units 12,000 = 120,000 3* 40,000 =120,000

The detailed formulation of action to achieve a particular end is the management activity called

planning.

A testable strategy is defined as a

set of linked objectives aimed at an overall goal

Pericloud Company had utilities cost of $50,000 at an output level of 10,000 units. The utilities cost was a mixed cost, and the fixed portion was $14,000. What would the estimate of total utilities cost be at an output level of 20,000 units?

utilities cost of 50,000 - fixed proportion 14,000 =36,000/10,000 units =3.6$ per unit (output level of units 20,000 * 3.6) + 14,000 72,000 + 14,000 =86,000

Which of the following is never included in product cost?

variable selling expense

The number of units of output that can be produced in a given period of time is called

velocity