ACC 2302 Final Exam Practice

Nuthatch Corporation began its operations on September 1 of the current year. Budgeted cells for the first three months of business September, October and November— are $260,000, $375,000, and $400,000, respectively, the company expects to sell 30% of its merchandise for cash. Of sales on account, 80% are expected to be collected in the month of the sale and 20% in the month following the sale. The cash collections expected in October from accounts receivable are estimated to be

223,600

Reynolds manufacturers incorporation has estimated total factory overhead of $95,000 an expected direct labor hours of 9500 for the current fiscal year if Job 117 in person, 2300 direct labor hours work in process will be debited and factory overhead will be credited for

23,000

Below is a table for the present value of $1 at Compound interest. Year 6% 10% 12% 1 0.943 0.909 0.893 2 0.890 0.826 0.797 3 0.840 0.751 0.712 4 0.792 0.683 0.636 5 0.747 0.621 0.567 Below is a table for the present value of an annuity of $1 at compound interest. Year 6% 10% 12% 1 0.943 0.909 2. 1.833 1.736 2.487 0.893 1.690 2.402 3 2.673 4 3.465 3.170 3.037 5 4.212 3.791 3.605 Using the tables above, what would be the present value of $25,000 (rounded to the nearest dollar) to be received 4 years from today, assuming an earnings rate of 10%?

23,500

Which of the following suggested that management efforts not directly related to increasing profits are similar to "stealing" from a company's shareholders?

Milton Friedman

The relative distribution of sales among the various products sold by a business is the

sales mix

A strategy map plays an important role for a company, using the balanced scorecard approach to a performance measurement system. Which of the following is not a function of the strategy map?

shows casual relationships between only the financial and internal processes perspectives of the balanced scorecard

The graph of a variable cost, when plotted against its related activity base, appears as a

straight line

which if the following would most likely use a job order costing system

swimming pool installer

All of the following journal entry recording direct labor for the period is a summary of the

time tickets

Adams Company is a manufacturing company that has worked on several production jobs during the first quarter of the year. Below is a list of all the jobs for the quarter: Balance Job No. 356 $ 450 Job No. 357 1,235 Job No. 358 378 Job No. 359 689 Job No. 360 456 Jobs 356, 357, 358, and 359 were completed. Jobs 356 and 357 were sold at a profit of $500 on each job. What is the ending balance of Finished Goods for Adams Company at the end of the first quarter?

1134

The standard costs and actual costs for factory overhead for the manufacture of 2,500 units of actual production are as follows: Standard Costs: Fixed overhead (bases on 10,000 hrs) 3 hrs. per unit @ $0.80 per hr. Variable overhead 3 hrs. per unit @ $2.00 per hr. Actual Costs: Total variable cost $18,000 Total fixed cost $ 8,000 The fixed factory overhead volume variance is

$2,000 unfavorable

A manufacturing company applies factory overhead based on direct labor hours at the beginning of the year it estimated that factory overhead cost would be $360,000 and direct labor hours would be 30,000 actual manufacturing overhead cost incurred were $377200 and the actual direct labor's were 36,000 what is the predetermined overhead rate per direct labor hour

credit to factory overhead for $432,000.

another term for factory overhead is

factory burden

which of the following is not a use of the cost of production report?

to project production

Zeke company sells 25,000 units at $21 per unit. Variable costs are $10 per unit, and fixed costs are &75,000. The contribution margin ratio and the unit contribution margin respectively are

CM ration is 52% and unit CM is $11 per unit

Which of the following methods for evaluating capital investments proposals reduces the expected future net cash flows originating from the proposals to their present values and compute net present value

net present value

The total manufacturing cost variance is.

none of the above

In evaluating the profit center manager the operating income should be compared

over time to a budget

when a manager seeks to achieve personal department objectives that may work to the detriment of the overall firm, the manager is experiencing

goal conflict

Which of the following expressions is termed the profit margin factor as used in the DuPont formula for determining the return on investment (roi)?

income from operations/ sales

The management of Dakota Corporation is considering the purchase of a new machine costing $420,000. The company's desired rate of return is 10%. The present value factors for $1 at compound interest of 10% for 1 through 5 years are 0.909, 0.826, 0.751, 0.683, and 0.621, respectively. In addition to the foregoing information, use the following data in determining the acceptability of this investment: Year Income from Operations Net Cash Flow 1 $100,000 $180,000 2 40,000 120,000 3 20,000 100,000 4 10,000 90,000 5 10,000 90,000 The present value index for this investment is

1.08

The management of California Corporation is considering the purchase of a new machine costing $400,000. The company's desired rate of return is 10%. The present value factors for $1 at compound interest of 10% for 1 through 5 years are 0.909, 0.826, 0.751, 0.683, and 0.621, respectively. In addition to the foregoing information, use the following data in determining the acceptability of this investment: Year Income from Operations Net Cash Flow 1 $100,000 $180,000 2 40,000 120,000 3 20,000 100,000 4 10,000 90,000 5 10,000 90,000 The present value index for this investment is

1.14

Forde Co has an operating leverage of 4. Sales are expected to increase by 12% next year. Operating income is

increase by 48%

The debits to Work in Process—Assembly Department for May, together with data concerning production, are as follows: May 1, work in process: Materials cost, 3,000 units $ 8,000 Conversion costs, 3,000 units, 66.7% completed 6,000 Materials added during May, 10,000 units 30,000 Conversion costs during May 31,000 Goods finished during May, 11,500 units 0 May 31 work in process, 1,500 units, 50% completed 0 All direct materials are placed in process at the beginning of the process and the first-in, first-out method is used to cost inventories. The materials cost per equivalent unit for May is

3.00

A Manufacturing company applies factory overhead based on direct labor hours . At the beginning of the year an estimate at the factory overhead cost would be $360,000 and the direct labor hours would be 30,000. Actual factory overhead costs incurred worth 377,200, an actual direct labor is worth 36,000. What is the amount of overapplied or underapplied manufacturing overhead at the end of the year?

54,800 overapplied

in order to be useful to managers, managerial accounting reports should posses all of the following characteristics except

be prepared in accordance with generally accepted accounting principles

In a profit center, the manager has responsibility and authority for making decisions that affect.

both revenues and costs and, thus, profits

period costs are classified as either

selling expenses or administrative expenses

When using the variable cost method of applying the cost plus approach to producing pricing, which of the following is included in the markup

total selling and administrative expenses plus desired profit

Which of the following is not true, when determining the selling price for a product

variable costing

A business operated at 100% of capacity during its first month and incurred the following costs: Production costs (5,000 units): Direct materials $70,000 Direct labor 20,000 Variable factory overhead 10,000 Fixed factory overhead 2,000 $102,000 Operating expenses: Variable operating expenses $17,000 Fixed operating expenses 1,000 18,000 If 1,000 units remain unsold at the end of the month and sales total $150,000 for the month, the amount of operating income reported on the absorption costing income statement would be

50,400

The following data relate to direct labor costs for August: actual costs for 5,500 hours at $24.00 per hour and standard costs for 5,000 hours at $23.70 per hour. The direct labor rate variance

1650 unfavorable

Kayden company fixed cost are $46,800. The unit selling price is $42, and the unit variable cost or $24. The break-even sales units is.

2,600

For February, sales revenue is $700,000, sales commissions are 5% of sales, the sales manager salary is $96,000, advertising expenses are $90,000, shipping expenses, total 2% of sales, and miscellaneous selling expenses are $2500 plus 1/2 of one percent of sales. Total selling expenses for the month of February are

231,000

Production and sales estimates for March for the Robin Co. are as follows: Estimated inventory (units), March 1 18,000 Desired inventory (unit), March 31 21,600 Expected sales volume (units): Area M 7,000 Area L 8,000 Area O 9,000 Unit sales price $15 The number of units expected to be manufactured in March is

27,600

Widgeon Co. manufactures three products: Bales, Tales, and Wales. The selling prices are $55, $78, and $32, respectively. The variable costs for each product are $20, $50, and $15, respectively. Each product must go through the same processing in a machine that is limited to 2,000 hours per month. Bales take 5 hours to process; Tales, 7 hours; and Wales 1 hour. Which product has the highest contribution margin per machine hour?

Bales

In a job order cost accounting system, the journal entry to record the flow of direct marketable into production consists of a

Debit Work in Process, credit Materials

the budgeting process does not involve which of the following activities

Increase of sales by increasing marketing efforts

A report prepared periodically by a processing department, summarizing (1) the units for which the department is accountable and the disposition of those units and (2) the costs incurred by the department and the allocation of these costs between completed and incomplete production, is termed a

cost of production report

The portion of whole units that were completed with respect to either materials or conversion costs within a given accounting period is the definition of

equivalent units

Selected accounts with some amounts omitted are as follows Work in Process Aug. 275,000 31 Aug. 1 Balance Goods finished 1,030,000 31 Direct materials 31 Direct labor 450,000 31 Factory overhead Factory Overhead Aug. 1 -31 Costs incurred Aug. 145,0001 Balance 15,000 31 Applied If the balance of Work in Process on August 31 is $220,000, what was the amount debited to Work in Process for factory overhead in August, assuming a factory overhead rate of 30% of direct labor costs?

135,000

Panamint Systems Corporation is estimating activity costs associated with producing disk drives, tapes drives, and wire drives. The indirect labor can be traced to four separate activity pools. The budgeted activity cost and activity base data by product are provided below. Activity Cost Activity Base Procurement $ 370,000 Number of purchase orders Scheduling 250,000 Number of production orders Materials handling 500,000 Number of moves Product development 730,000 Number of engineering changes Production 1,500,000 Machine hours ​ Number of Purchase Orders Number of Production Orders ​ Number of Moves ​ Number of Engineering Changes ​ Machine Hours ​ Number of Units Disk drives 4,000 300 1,400 10 2,000 2,000 Tape drives 4,000 150 800 10 8,000 4,000 Wire drives 12,000 800 4,000 25 10,000 2,500 Determine the activity rate for procurement per purchase order.

232.69

ABC Corporation has three support departments with the following costs and cost drivers: Support Department Cost Cost Driver Graphics Production $200,000 number of copies made Accounting 500,000 number of invoices processed Personnel 400,000 number of employees ABC has three operating divisions, Micro, Macro, and Super. Their revenue, cost, and activity information are as follows: Micro Macro Super Revenues $700,000 $850,000 $650,000 Direct operating expenses 50,000 70,000 100,000 Number of copies made 20,000 30,000 50,000 Number of invoices processed 700 800 500 Number of employees 130 145 125 The support department cost that will be allocated to the Super Division is

350,000

A business operated at 100% of capacity during its first month and incurred the following costs: Production costs (20,000 units): Direct materials $180,000 Direct labor 240,000 Variable factory overhead 280,000 Fixed factory overhead 100,000 $800,000 Operating expenses: Variable operating expenses $130,000 Fixed operating expenses 50,000 180,000 If 1,500 units remain unsold at the end of the month, what is the amount of inventory that would be reported on the variable costing balance sheet?

52,500

A business operated at 100% of capacity during its first month and incurred the following costs: Production costs (10,000 units): Direct materials $ 80,000 Direct labor 120,000 Variable factory overhead 140,000 Fixed factory overhead 40,000 $380,000 Operating expenses: Variable operating expenses $ 65,000 Fixed operating expenses 25,000 90,000 If 600 units remain unsold at the end of the month, what is the amount of inventory that would be reported on the absorption costing balance sheet?

56,000

If the expected sales volume for the current period is 9,000 units, the desired ending inventory is 200 units, and the beginning inventory is 300 units, the number of units set forth in the production budget, representing total production for the current period, is

8,900

which of the following systems provides for a separate record of the cost of each particular quantity of product that passes through the factory

job order cost system

Waterfield Company is looking for a way to help its executive managers assess how its three divisions are meeting the company's goals and objectives for financial performance. Which of the following metrics might be used for this purpose?

the amount of time employees spend in training and the number of training sessions provided