ACG 2071 - FINAL

the actual cost of direct labor per hour is $16.00 and the standard cost of direct labor per hour is $15.50. the direct labor hours allowed per finished unit is 0.5 hour. During the current period, 5,500 units of finished goods were produced using 3,000 direct labor hours. How much is the direct labor rate variance?

$1,500 unfavorable

which of the following budgets is the comprehensive planning document for the entire organization>

master budget

in which of the following company types would the manager combine cost of goods sold, inventory, and purchases into one budget?

merchandising

which of the following examples may lead directly to a favorable fixed overhead volume variance?

producing more units than anticipated

Budget committees include all of the following people except

shareholder

a(n) _________ is a carefully predetermined cost that is usually expressed on a per unit basis.

standard cost

A manager wants to know which investment decision will affect the bottom line of the financial statements according to the generally accepted accounting principles. Which capital budgeting method would he choose

Accounting rate of return method

Another name for the minimum desired rate of return is

All of the above

All else being equal, a company would choose to invest in a capital asset if which of the following is true?

If the expected accounting rate of return is greater than the required rate of return

Which of the capital budgeting methods is the best

No single method is the best

Scrub Daddy Is preparing its cash collections budget. Budgeted sales are $150,000 in July, $175,000 in August, and $200,000 in September. Fifty percent of sales are cash sales; the remainder is on account. Sales on account are expected to be collected 30% in the month of sale, 60% in the month following the month of sale, and 10% in the second month following the month of sale. How much are anticipated cash collections during the month of September?

$190,000

Reynolds enterprises prepared the following purchases budget: all purchases are paid for as follows: 30% in the month of purchase, 45% in the following month, and 25% two months after purchase. what are the cash disbursements in October to account for the September purchases at Reynolds enterprises?

$20,610

Fast company is preparing its cash budget for the upcoming month. The beginning cash balance for the month is expected to be $14,000. Budgeted cash receipts are $84,000, while budgeted cash disbursements are $72,000. Fast company wants to have an ending cash balance of $40,000. The excess (deficiency) of cash available over disbursements for the month would be

$26,000

one level of a company's flexible budget was prepared for production of 8,000 units. Total costs were $38,000 and included direct materials, direct labor, and variable overhead at $1.50, $2.50, and $0.50 per unit respectively. What is the total cost of production of 8,500 units?

$40,250

pruvit corporation company budgeted 600 pounds of direct materials costing $28.00 per pound to make 7,000 units of product. The company actually used 630 pounds of direct materials costing $30.00 per pound to make the 7,000 units. What is the direct materials quantity variance?

$840 unfavorable

Green company has budgeted sales of 23,000 units for June and 25,000 units for July. Green's policy is to maintain its finished goods inventory at 25% of the following month's sales. Accordingly, at the end of May, Green had 5,750 units on hand. How many units must it produce in June in order to support the sales goal and maintain its policy regarding finished goods inventory?

23,500 units

Peak products is considering investing in two alternative projects: What is the payback period for project 1?

4.00 years

Globe enterprises purchased a new machine with a total cost of $30,450 and a useful life of six years. The machine will produce net cash inflows of $7250 over its useful life and has a residual value of $2125. What is the payback. For the new machine

4.20 years

Alright industries is considering two alternative investment proposals with the following data : How long is the payback period for Proposal X?

6.80 years

Twinkies bakery bakes fresh pies that are very popular with the local residents. For July, twinkies bakery budgeted 750 direct labor hours to produce 500 pies. In July, twinkies bakery actually produced 520 pies and actually used 800 direct labor hours. The standard hours allowed during July may have been closest to

780

Krappy company has collected the following data for one of its products: what is the total actual cost of the direct materials used?

97,800

"Financial budget" is best described by which of the following?

A budget that projects cash inflows, cash outflows , and the end of period budgeted balance sheet

Which of the following is a characteristic of a capital asset ?

Both A and B are correct

The process of choosing among different alternative investments due to limited resources is referred to as

Capital rationing

Which of the following items would be considered a capital asset?

Construction of a new store building

How does depreciation affect the calculation of projects payback period?

Depreciation does not affect the payback calculation

A company would consider all of the following in computing the IRR of an Investment except

Depreciation expense on the assets of the project

The time value of money is explained by which of the following

Invest that money earns income overtime

GE expects to sell 5,000 batteries in January and 9,000 in February for $3 each. What will be the total sales revenue reflected in the sales budget for those months?

January $15,000; February $27,000

Which of the following areas does not make significant use of time value of money concepts

Marketing research

The net present value method assumes that the cash flows from a project are immediately reinvested at the

Required rate of return

how is the variable manufacturing overhead efficiency variance calculated?

The difference between the standard hours allowed and the actual hours used multiplied b the standard overhead rate

Which term describes the situation in which a manager intentionally over budgets expenses or under budgets revenue

budgetary slack

Which of the following is an example of a financial budget?

budgeted balance sheet

which of the following compnenets is a part of the financial budget

budgeted balance sheet

which of the following is NOT an advantage of using standard costs and variances?

change in behavior of managers to obtain desired variances

All of the following budgets are prepared by service companies except

cost of goods, sold, inventory and purchases

a manager considers all of the following when he or she prepares the cash budget except

depreciation expense

which variance is directly impacted if the employees who build the product go on strike and temporary workers who are slower and not as skilled are hired?

direct labor efficiency variance

a company uses sugar in producing its product. If the price of sugar doubles, which variance is directly impacted?

direct materials quantity variance

when deciding whether or not to adopt standard costs and perform variance analysis, management should do which of the following?

examine the costs and benefits of a standard costing system

a rolling budget is a budget that

is continuously updated, so that the next 12 months of operations are always budgeted

a cost benchmark is valid only if the standards are

kept up to date

a manager purchased better quality materials for a slightly higher cost than anticipated. however, as a result, there was less spoilage than normal. what is the effect on the price and quantity variances respectively?

unfavorable, favorable

standards should be reviewed and adjusted at least

yearly