WGU UFC 1 Managerial Accounting Pre-assessment

Réussis tes devoirs et examens dès maintenant avec Quizwiz!

A company provides the following data for its process costing system: Equivalent units for materials: 10,000 Material costs for units in beginning inventory: $20,000 Material costs for units started during the period: $80,000 Conversion costs for units in beginning inventory: $30,000 Conversion costs for units started during period: $80,000 What is the cost per equivalent unit for materials if the weighted average cost method is used? a) $3. b) $8. c) $10. d) $11.

$10.

A company has the following costs associated with a job: Direct materials: $400 Direct labor: $450 Work in process: $950 Revenue from job: $1,450 What is the amount of overhead applied to this job? a) $100. b) $500. c) $600. d) $1,000.

$100.

A merchandise company reported the following results for the year: Number of units sold: 1,000 Selling price per unit: $400 Variable manufacturing costs per unit: $120 Variable selling costs per unit: $90 Total fixed selling costs: $10,000 Variable administrative cost per unit: $50 Fixed administrative costs: $30,000 What is the contribution margin? a) $100,000. b) $140,000. c) $280,000. d) $400,000.

$140,000.

A company manufactures bird feeders, which they normally sell for $30 each. The company compiles the following information relating to the production of the bird feeders: Plant capacity: 280,000 feeders Current production level: 200,000 feeders Direct materials: $9/unit Hourly labor: $6/unit Variable overhead: $3/unit Fixed overhead: $400,000 The company receives a request from a large buyer to purchase 12,000 feeders at a reduced price. What is the minimum price per unit that the company should charge for this order? a) $9. b) $15. c) $18. d) $20.

$18.

A company planned to use 1 yard of plastic per unit budgeted at $81 a yard. However, the plastic actually cost $80 per yard. The company made 4,200 units. Total yards used for production were 3,960. What is the material quantity variance? a) $19,200 favorable. b) $19,200 unfavorable. c) $19,440 favorable. d) $19,440 unfavorable.

$19,440 favorable.

Last year, a company spent $25 per unit to make widgets. This year, however, the cost has increased to $40 per unit. The company has recently learned it can buy widgets for $38 per unit. Which differential cost should be considered for this make-or-buy decision? a) $2 per unit. b) $13 per unit. c) $15 per unit. d) $25 per unit.

$2 per unit.

The following information relates to a company's production activities for the month of October: Estimated cost of direct labor: $18,500 Estimated cost of manufacturing overhead: $22,000 Estimated direct labor hours: 900 Actual cost of direct labor: $19,000 Actual cost of manufacturing overhead: $24,000 Actual direct labor hours: 920 Using direct labor hours as the allocation base, what is the predetermined overhead rate? a) $20.56 per direct labor hour. b) $20.65 per direct labor hour. c) $24.44 per direct labor hour. d) $26.09 per direct labor hour.

$24.44 per direct labor hour.

A company has the following budgeted sales: July: $200,000 August: $300,000 September: $250,000 20% of the sales are for cash, and 80% are on credit. 25% of the credit sales are collected in the month of sale, and 75% are collected the next month. What are the total expected cash receipts during September? a) $250,000. b) $262,500. c) $275,000. d) $280,000.

$280,000.

The accountant of a local retailer prepared the following income statement for this month: Sales revenue $600,000 Cost of goods sold $250,000 Gross margin $350,000 Less operating expenses Selling expense $73,000 Administrative expense $65,000 $138,000 Net operating income $212,000 The retailer sells its coats for $150 each Selling expenses consist of a commission of $5 per coat plus fixed costs. Each coat costs $62.50 from the distributor. Administrative expenses consist of a variable component equal to 5% of sales plus fixed costs. In order to increase net operating income in the coming year, management is considering increasing advertising expenses. What would be the total contribution margin reported on this retailer's contribution format income statement? a) $212,000. b) $300,000. c) $350,000. d) $550,000.

$300,000.

A company's planned activity level is 200,000 direct labor hours. At this level of activity, the company budgeted the following manufacturing overhead costs: Variable Indirect materials: $174,000 Indirect labor: $180,000 Factory supplies: $46,000 Fixed Depreciation: $65,000 Taxes: $12,000 Supervision: $55,000 The company had 90,000 direct labor hours. What is the total manufacturing overhead cost using a flexible budget? a) $312,000. b) $332,000. c) $400,000. d) $532,000.

$312,000.

A static budget, based upon production of 10,000 units, showed an estimated direct labor budget of $30,000 and depreciation budget of $20,000. Direct labor costs are fully variable. The actual direct labor and depreciation costs were $28,000 and $19,000 for 8,000 units. Which total amount should be shown in the flexible budget for direct labor and depreciation costs? a) $40,000. b) $43,000. c) $44,000. d) $50,000.

$44,000.

A company provides the following data for material costs: Standard cost per unit: 3 pounds at $2 per unit Actual cost per unit: 2.5 pounds at $3 per unit During the month, 5,000 pounds of raw materials were purchased. What is the direct material price variance? a) $5,000 favorable. b) $15,000 favorable. c) $5,000 unfavorable. d) $10,000 unfavorable.

$5,000 unfavorable.

A company uses an activity-based costing system composed of three processes: tooling, processing, and resources. The company has the following firm-wide totals from its costing system: Tooling driver quantity: 25 setups Tooling costs per pool: $500,000 Processing driver quantity: 20,000 direct labor hours Processing costs per pool: $2,000,000 Resources driver quantity: 40,000 sq. ft. Resources costs per pool: $800,000 Product D uses 3 setups, 3,000 direct labor hours, and 8,000 square feet. What is the total overhead cost that should be assigned to product D? a) $160,000. b) $300,000. c) $360,000. d) $520,000.

$520,000.

A company reports the following annual information for a product: Sales price: $48 per unit Variable costs: $15 per unit Fixed costs: $150,000 Units produced and sold: 30,000 units If the sales price is increased to $50 per unit and nothing else changes, how much will net income increase? a) $60,000. b) $900,000. c) $1,050,000. d) $1,500,000.

$60,000.

The following amounts were reported by a company before adjusting its over-applied manufacturing overhead of $48,000: Cost of goods sold: $730,000 Applied overhead: $368,000 Actual overhead: $320,000 What is the company's adjusted cost of goods sold? a) $682,000. b) $778,000. c) $1,050,000. d) $1,098,000.

$682,000.

A company's budgeted costs for 60,000 units are as follows: Fixed manufacturing costs: $30,000 Variable manufacturing costs: $15.00/unit The company produced 50,000 units. How much is the budgeted total manufacturing cost? a) $775,000. b) $750,000. c) $780,000. d) $930,000.

$780,000.

It costs a company $6 of variable costs to produce one flag, which normally sells for $20. A customer offers to purchase 30,000 flags at $10 each. The company would incur special shipping costs of $1 per flag if the order were accepted. The company has sufficient unused capacity to produce the 30,000 flags The company is currently profitable. If the special order is accepted, what will be the increase in net income? a) $30,000. b) $90,000. c) $120,000. d) $300,000.

$90,000.

The manufacturing operations of a company had the following balances for the year: Beginning raw materials: $84,000 Beginning work in process: $45,000 Beginning finished goods: $28,000 Ending raw materials: $91,000 Ending work in process: $59,000 Ending finished goods: $23,000 The company transferred $918,000 of completed goods out of work in process during the year. The overhead is under-applied by $3,000. What is the adjusted cost of goods sold for the year? a) $946,000. b) $926,000. c) $923,000. d) $920,000.

$926,000.

Cost of goods manufactured equals $87,000 for the year. Finished goods inventory is $10,000 at the beginning of the year and $4,000 at the end of the year. Beginning and ending work in process are $4,000 and $5,000, respectively. How much is cost of goods sold for the year? a) $83,000. b) $87,000. c) $93,000. d) $97,000.

$93,000.

A company sells a product for $18 per unit. The variable cost is $6 per unit. The company has fixed costs of $42,000. How many units must it sell in order to break even? a) 1,750. b) 2,334. c) 3,500. d) 7,000.

3,500.

A company reports the following annual information for a product: Sales price: $48 per unit Variable costs: $15 per unit Fixed costs: $150,000 Units produced and sold: 30,000 If fixed costs decreased to $120,000, what is the break-even point in units? (Round up to the nearest whole unit.) a) 2,500 units. b) 3,125 units. c) 3,637 units. d) 4,546 units.

3,637 units.

A large social media firm is considering how to use "big data" collected about its users. Which current trend in managerial accounting will inform how this firm makes decisions about this? a) Accounting ethics standards. b) Balanced scorecard. c) Total quality management. d) Enterprise resource planning.

Accounting ethics standards.

Which budget uses the results calculated in the direct labor budget? a) Manufacturing overhead budget. b) Production budget. c) Sales budget. d) Cash budget.

Cash budget.

A company notices that it has significant unused capacity and a rapidly rising fixed overhead volume variance. Which action should management take? a) Outsource production to other companies. b) Consolidate production facilities. c) Invest in more efficient production equipment. d) Increase the amount of direct labor used in production.

Consolidate production facilities.

A large international energy company has determined that it can achieve significantly lower costs by reducing expenditures on safety and emissions control. Which trend in managerial accounting will help inform this company's decision? a) Lean manufacturing. b) Activity-based costing. c) Value chain analysis. d) Corporate social responsibility.

Corporate social responsibility.

A business using the balanced scorecard technique has chosen to increase their emphasis on learning and growth. Where should they invest their funding? a) Increasing employee compensation. b) Improving sales personnel's customer relationships. c) Increasing the units produced per work hour. d) Creating management training programs.

Creating management training programs.

A budget committee for a merchandising firm has just completed its sales budget. The committee knows its budgeted beginning and ending inventory. Which additional item form the sales budget is needed to prepare the merchandise purchases budget? a) Sales price. b) Expected sales. c) Cash disbursements. d) Production efficiency.

Expected Sales.

Management wants to assess how many units must be sold to earn a profit. The most useful analysis will separate costs into which categories? a) Fixed and variable. b) Direct and indirect. c) Product and period. d) Controllable and not controllable.

Fixed and variable.

Where on a flexible budget would a user look for depreciation expenses? a) Fixed costs. b) Variable costs. c) Cost of goods sold. d) Contribution margin.

Fixed costs.

Which budget is designed to evaluate changes in revenue and costs? a) Static budget. b) Flexible budget. c) Production budget. d) Selling expense budget.

Flexible budget.

A company produces a product that currently costs $8 in variable costs and $2 in fixed costs. It sells the product for $14. If processed further, the company will spend an additional $6 in variable costs and $2 in fixed costs. Each unit would then be sold for $24. Why would the company choose to process further? a) Incremental revenue will be $24/unit. b) Incremental profit will be $2/unit. c) Incremental fixed cost will be $4/unit. d) Incremental net income will be $6/unit.

Incremental profit will be $2/unit.

What is the emphasis of activity-based costing systems? a) Individual activities. b) Continuous production. c) Raw materials purchases. d) Department indirect cost rates.

Individual activities.

Why is the sales budget important? a) It drives multiple calculations in other budgets. b) It forecasts industry performance. c) It demonstrates how fast the company collects its receivables. d) It tells external analysts the company's future results.

It drives multiple calculations in other budgets.

Which Feature of managerial accounting improves a company's ability to plan and control operations? a) It requires strict adherence to GAAP. b) It allows comparability across businesses. c) It provides earnings per share. d) It generates detailed information on product cost.

It generates detailed information on product cost.

Why does direct labor cost affect the make-or-buy decision? a) It is an overhead cost. b) It is an opportunity cost. c) It is a mixed cost. d) It is a variable cost.

It is a variable cost.

How can a reliable budgeting system be identified? a) It facilitates the make-or-buy decision. b) It provides for effective planning and control. c) It provides data on earnings and savings trends. d) It provides information on historical borrowing and spending.

It provides for effective planning and control.

Which inventory technique emphasizes lower inventory balances? a) Just-in-time manufacturing. b) Activity-based costing. c) Balanced scorecard. d) Lean manufacturing.

Just-in-time manufacturing.

A company is considering whether to eliminate a segment and has compiled the following information: Total Segment Proposed (existing) (drop) (remaining) Sales ($210/unit) $26.50 $13,125 $13,125 Variable costs $10,500 $6,300 $4,200 Contribution margin $15,750 $6,825 $8,925 Fixed costs $11,100 $2,250 $8,850 Net Income $4,650 $4,575 $75 Should the company eliminate or keep the segment? a) Keep the segment since the segment's total avoidable expenses are $4,500. b) Eliminate the segment since unavoidable expenses are $2,250 of fixed costs. c) Eliminate the segment since the contribution margin of the segment is $1,725 less than total allocated expenses. d) Keep the segment since eliminating it will result in a $4,575 reduction in net income compared to the existing business.

Keep the segment since eliminating it will result in a $4,575 reduction in net income compared to the existing business.

A company has inventory that cost $50,000. Its scrap value is $65,000. The inventory could be sold for $150,000 if manufactured further at an additional cost of $80,000. What should this company do? a) Sell the inventory for $65,000 scrap value. b) Reclassify the inventory as a $80,000 bad debt expense. c) Hold the inventory at its $50,000 cost. d) Manufacture further and sell it for $150,000.

Manufacture further and sell it for $150,000.

The following is a list of budgets in the master budget: Balance sheet Cash Direct material Direct labor Ending inventory Income statement Manufacturing overhead Production Sales General & administrative expense Which type of budget includes depreciation on factory equipment? a) Sales budget. b) Direct labor budget. c) Manufacturing overhead budget. d) Production budget.

Manufacturing overhead budget.

An automobile manufacturer evaluates its performance using the balanced scorecard approach. Which metric appropriately measures company performance from the internal process perspective? a) Number of warranty repairs. b) Brand value in their products. c) Stock price. d) Credit rating.

Number of warranty repairs.

What are the relevant costs in the managerial decision-making process? a) Sunk costs. b) Historical costs. c) Opportunity costs. d) Depreciation costs.

Opportunity costs.

A manufacturing company budgeted for $1,240,000 in manufacturing overhead and expected 400,000 direct labor hours. Actual overhead was $1,200,000, and actual direct labor hours were 390,000. Was manufacturing overhead over - or under-applied and by how much? a) Over-applied by $9,000. b) Under-applied by $9,000. c) Over-applied by $40,000. d) Under-applied by $40,000.

Over-applied by $9,000.

A small hair salon is evaluating its performance using the balanced scorecard method. Which metric will appropriately measure the performance of the company from the customer perspective? a) Percentage of appointments that are kept. b) Revenue per stylist. c) Continuing education hours per employee. d) Percentage of growth in sales.

Percentage of appointments that are kept.

The budget committee of a manufacturer has just completed its sales budget. Which budget should be prepared next? a) Cash budget. b) Production budget. c) Selling expense budget. d) Merchandise purchase budget.

Production budget.

Which budget is the basis for all other budgets created in the budgeting process? a) Cash budget. b) Sales budget. c) Production budget. d) Inventory purchases budget.

Sales budget.

A company manufactures snowboards. The company has an unfavorable direct materials price variance that is rising considerably faster than its competitors. Which action should management take? a) Improve plant labor efficiency. b) Review the standard quantity. c) Source new suppliers. d) Reduce material wastes.

Source new suppliers.

Paradigm Toys Flexible Budget Performance Report: Budget Actual Difference Production in units 18,000 18,000 DIRECT LABOR Direct labor hours: 18,000 18,200 200 (U) Direct labor costs: $360,000 $354,900 $5,100 (F) DIRECT MATERIALS Quantity: 9,000 9,300 300 (U) Dollars: $360,000 $375,000 $15,000 (U) VARIABLE COSTS Indirect materials: 720,000 700,000 20,000 (F) Indirect labor: 324,000 288,000 36,000 (F) Utilities: 198,000 176,000 22,000 (F) Total variable costs: 1,242,000 1,164,000 78,000 (F) FIXED COSTS Depreciation: 300,000 300,000 0 Property taxes: 50,000 50,000 0 Supervision: 120,000 120,000 0 Total fixed costs: 470,000 470,000 0 Total costs: 1,712,000 1,634,000 78,000 (F) What is an explanation for the change in direct materials costs? a) The company used lower quality direct materials. b) The company's indirect labor changed. c) The company's production process was more efficient. d) The company used fewer utilities.

The company used lower quality direct materials.

Paradigm Toys Flexible Budget Performance Report: Budget Actual Difference Production in units 18,000 18,000 DIRECT LABOR Direct labor hours: 18,000 18,200 200 (U) Direct labor costs: $360,000 $354,900 $5,100 (F) DIRECT MATERIALS Quantity: 9,000 9,300 300 (U) Dollars: $360,000 $375,000 $15,000 (U) VARIABLE COSTS Indirect materials: 720,000 700,000 20,000 (F) Indirect labor: 324,000 288,000 36,000 (F) Utilities: 198,000 176,000 22,000 (F) Total variable costs: 1,242,000 1,164,000 78,000 (F) FIXED COSTS Depreciation: 300,000 300,000 0 Property taxes: 50,000 50,000 0 Supervision: 120,000 120,000 0 Total fixed costs: 470,000 470,000 0 Total costs: 1,712,000 1,634,000 78,000 (F) What is an explanation for the change in direct labor costs? a) The company produced fewer units than budgeted. b) The company used less direct labor in production. c) The company's supervision expense was unchanged. d) The company used workers with less experience.

The company used workers with less experience.

Jaunty Coffee Company Flexible Budget Performance Report Budget Actual Difference Production in units 32,000 32,000 DIRECT LABOR Direct labor hours: 12,000 11,500 500 F Direct labor costs: $180,000 $168,000 $12,000 F DIRECT MATERIALS Quantity: 24,000 23,200 800 F Dollars: $360,000 $358,000 $2,000 F VARIABLE COSTS Indirect materials: 180,000 215,000 35,000 U Indirect labor: 119,000 109,000 10,000 F Utilities: 147,000 151,000 4,000 U Total variable costs: 446,000 475,000 29,000 U FIXED COSTS Depreciation: 80,000 80,000 0 Property taxes: 10,000 10,000 0 Supervision: 160,000 160,000 0 Total fixed costs: 250,000 250,000 0 Total costs: 1,236,000 1,251,000 15,000 What is an explanation for the company's direct labor variance? a) The company's workers were more productive. b) The company's direct materials were of lower quality. c) The company overused indirect labor. d) The company's utility bill was higher.

The company's workers were more productive.

A company is deciding whether equipment currently in use should be replaced by new equipment. Which information is relevant to this decision? a) The cost of the new equipment. b) The salvage value of the new equipment. c) The net book value of the new equipment. d) The annual depreciation of the new equipment.

The cost of the new equipment.

Which statement describes period costs? a) They flow directly to the balance sheet as expenses. b) They pertain to costs necessary to manufacture the product. c) They flow directly to the current income statement as expenses. d) They include direct materials, direct labor, and manufacturing overhead costs.

They flow directly to the current income statement as expenses.

A company is concerned about the working conditions in their suppliers' factories in the developing world. Which current trend in managerial accounting would support the consideration of working conditions of employees? a) Lean manufacturing. b) Sarbanes-Oxley. c) Triple bottom line. d) Just-in-time inventory.

Triple bottom line.

Which common activity cost pool is driven by number of units produced? a) Units assembled. b) Orders processed. c) Customers served. d) Employees engaged.

Units assembled.

A company has the capacity to produce 20,000 units of its product per year. It is currently only producing 13,000 units per year, with a sell price of $70 per unit. A customer has placed a special order for 6,500 units at $62 per unit. The incremental cost of accepting the special order is $382,000. Should the company accept the special order? a) No, because the incremental contribution margin would be $32,000. b) No, because the incremental contribution margin would be $53,000. c) Yes, because the incremental contribution margin would be $21,000. d) Yes, because the incremental contribution margin would be $73,000.

Yes, because the incremental contribution margin would be $21,000.


Ensembles d'études connexes

Chapter 51 Biol 2130 Population Ecology

View Set

Unit 2 Test: Selected and Short Response (Online) Copy 1

View Set

Unit 12 - Zakupy i usługi - Zwroty (Język angielski. Repetytorium dla szkoły podstawowej - część 2)

View Set

Ch 8 APEC 1101H Donald Liu UMN Fall 2015

View Set

Chapter 18: Foam Fire Fighting, Liquid Fires, Gas Fires

View Set