Quiz 1

Lancelot Manufacturing is a small textile manufacturer using machine-hours to allocate manufacturing overhead costs to the various jobs contracted during the year. The following estimates are provided for the coming year for the company and for the Case High School band jacket job. Company Case High School Job Direct materials $53,000 $2,100 Direct labor $15,000 $500 Total Manufacturing overhead costs $40,000 Total Machine-hours 80,000 mh For Lancelot Manufacturing, what is the plantwide manufacturing overhead rate

$0.50

Smith Office Equipment Company's budgeted manufacturing overhead is $4,200,000. Overhead is allocated on the basis of direct labor hours. The budgeted direct labor hours for the period are 40,000. What is the plantwide overhead rate?

$105.00

Lancelot Manufacturing is a small textile manufacturer using machine-hours as the single indirect-cost rate to allocate manufacturing overhead costs to the various jobs contracted during the year. The following estimates are provided for the coming year for the company and for the Case High School band jacket job. Company Case High School Job Direct materials $67,000 $2,400 Direct labor $32,000 $800 Manufacturing overhead costs $55,000 Machine-hours 100,000 mh 800 mh What are the total manufacturing costs of this job?

$3,640

Camarillo Corporation uses a job cost system and has two production departments, A and B. Budgeted manufacturing costs for the year are: Department A Department B Direct materials $650,000 $150,000 Direct manufacturing labor $100,000 $900,000 Manufacturing overhead $400,000 $450,000 The actual material and labor costs charged to Job #100 were as follows: Total Direct materials: $20,000 Direct labor: Department A $9,000 Department B $11,000 $20,000 Camarillo applies manufacturing overhead costs to jobs on the basis of direct manufacturing labor cost using departmental overhead rates determined at the beginning of the year. Manufacturing overhead costs allocated to Department A total:

$36,000

Camarillo Corporation uses a job cost system and has two production departments, A and B. Budgeted manufacturing costs for the year are: Department A Department B Direct materials $650,000 $150,000 Direct manufacturing labor $100,000 $900,000 Manufacturing overhead $400,000 $450,000 The actual material and labor costs charged to Job #100 were as follows: Total Direct materials: $20,000 Direct labor: Department A $9,000 Department B $11,000 $20,000 Camarillo applies manufacturing overhead costs to jobs on the basis of direct manufacturing labor cost using departmental rates determined at the beginning of the year. Manufacturing overhead costs allocated to Job #100 total:

$41,500

Camarillo Corporation uses a job cost system and has two production departments, A and B. Budgeted manufacturing costs for the year are: Department A Department B Direct materials $650,000 $150,000 Direct manufacturing labor $100,000 $900,000 Manufacturing overhead $400,000 $450,000 The actual material and labor costs charged to Job #100 were as follows: Total Direct materials: $20,000 Direct labor: Department A $9,000 Department B $11,000 $20,000 Camarillo applies manufacturing overhead costs to jobs on the basis of direct manufacturing labor cost using plantwide overhead rates determined at the beginning of the year. Manufacturing overhead costs allocated to Job #100 total:

$57,000

X-Industries manufactures 3-D printers. For each unit, $3,100 of direct material is used and there is $2,500 of direct manufacturing labor at $25 per hour. Manufacturing overhead is applied at $30 per direct manufacturing labor hour. Calculate the profit earned on 45 units if each unit sells for $10,000.

$63,000

Apple Valley Corporation uses a job cost system and has two production departments, A and B. Budgeted manufacturing costs for the year are: Department A Department B Direct materials $800,000 $120,000 Direct manufacturing labor $200,000 $200,000 Manufacturing overhead $400,000 $500,000 The actual material and labor costs charged to Job #432 were as follows: Total Direct materials: $21,000 Direct labor: Department A $11,000 Department B $7,000 $18,000 Apple Valley applies manufacturing overhead costs to jobs on the basis of direct manufacturing labor cost using plantwide overhead rates determined at the beginning of the year. The total manufacturing costs for job #432 is:

$79,500

For 2020, Franklin Manufacturing uses machine-hours as the only overhead cost-allocation base. The estimated manufacturing overhead costs are $220,000 and estimated machine hours are 25,000. The actual manufacturing overhead costs are $360,000 and actual machine hours are 40,000. Using job costing, the 2020 plantwide manufacturing overhead rate is: (Round the final answer to the nearest cent.)

$8.80 per machine-hour

Simi Valley Corporation uses a job cost system and has two production departments, A and B. Budgeted manufacturing costs for the year are: Department A Department B Direct materials $750,000 $100,000 Direct manufacturing labor $500,000 $500,000 Manufacturing overhead $1,000,000 $800,000 The actual material and labor costs charged to Job #300 were as follows: Total Direct materials: $24,000 Direct labor: Department A $7,000 Department B $9,000 $16,000 Simi Valley applies manufacturing overhead costs to jobs on the basis of direct manufacturing labor cost using departmental rates determined at the beginning of the year. For Department B, the departmental manufacturing overhead (allocation) rate is:

160.0%

Apple Valley Corporation uses a job cost system and has two production departments, A and B. Budgeted manufacturing costs for the year are: Department A Department B Direct materials $800,000 $120,000 Direct manufacturing labor $200,000 $200,000 Manufacturing overhead $400,000 $500,000 The actual material and labor costs charged to Job #432 were as follows: Total Direct materials: $21,000 Direct labor: Department A $11,000 Department B $7,000 $18,000 Apple Valley applies manufacturing overhead costs to jobs on the basis of direct manufacturing labor cost using departmental overhead rates determined at the beginning of the year. For Department A, the departmental overhead (manufacturing overhead allocation) rate is:

200.0%

Apple Valley Corporation uses a job cost system and has two production departments, A and B. Budgeted manufacturing costs for the year are: Department A Department B Direct materials $800,000 $120,000 Direct manufacturing labor $200,000 $200,000 Manufacturing overhead $400,000 $500,000 The actual material and labor costs charged to Job #432 were as follows: Total Direct materials: $21,000 Direct labor: Department A $11,000 Department B $7,000 $18,000 Apple Valley applies manufacturing overhead costs to jobs on the basis of direct manufacturing labor cost using departmental rates determined at the beginning of the year. The plantwide manufacturing overhead allocation rate is:

225.0%

Apple Valley Corporation uses a job cost system and has two production departments, A and B. Budgeted manufacturing costs for the year are: Department A Department B Direct materials $800,000 $120,000 Direct manufacturing labor $200,000 $200,000 Manufacturing overhead $400,000 $500,000 The actual material and labor costs charged to Job #432 were as follows: Total Direct materials: $21,000 Direct labor: Department A $11,000 Department B $7,000 $18,000 Apple Valley applies manufacturing overhead costs to jobs on the basis of direct manufacturing labor cost using departmental overhead rates determined at the beginning of the year. For Department B, the departmental overhead allocation rate is:

250.0%

Camarillo Corporation uses a job cost system and has two production departments, A and B. Budgeted manufacturing costs for the year are: Department A Department B Direct materials $650,000 $150,000 Direct manufacturing labor $100,000 $900,000 Manufacturing overhead $400,000 $450,000 The actual material and labor costs charged to Job #100 were as follows: Total Direct materials: $20,000 Direct labor: Department A $9,000 Department B $11,000 $20,000 Camarillo applies manufacturing overhead costs to jobs on the basis of direct manufacturing labor cost using plantwide overhead rates determined at the beginning of the year. The plantwide overhead rate is:

85%

Which of the following differentiates job costing from process costing?

Process costing is used when each unit of output is identical, and job costing deals with unique products not produced in batches.

Job Costing

Used by businesses to price unique products for different jobs.

Tally Corp. sells softwares during the recruiting seasons. During the current year, 14,000 software packages were sold resulting in $460,000 of sales revenue, $110,000 of variable costs, and $50,000 of fixed costs. Contribution margin per software is ________. a. $25.00 b. $7.86 c. $32.86 d. $29.29

a. $25.00 Contribution = Revenue - Variable costs

Garth Corporation sells a single product. If the selling price per unit and the variable expense per unit both increase by 10% and fixed expenses do not change, then: a. A b. B c. C d. D

a. A

Which of the following account does NOT belong to Income statement? a. Cash b. Revenue c. Cost of goods sold d. Salary expense

a. CASH

Which of the following is NOT a major certificate in accountacy? a. CFS (Certified Fund Specialist) b. CIA (Certified Internal Auditor) c. CMA (Certified Management Accountant) d. CPA (Certified Public Accountant)

a. CFS (Certified Fund Specialist)

Who is inventor (father) of 'modern' accounting systems? a. Luca Pacioli b. Ancient Chinese c. Ancient Egyptian d. Leonardo Davinci

a. Luca Pacioli

Current assets are those assets that can be converted into cash within: a. One year or the operating cycle, whichever is longer. b. Management's discretion. c. One year or the operating cycle, whichever is shorter. d. One year and never longer.

a. One year or the operating cycle, whichever is longer.

Which of the followings is NOT considered as objectives of Cost Management/Managerial Accounting? a. Significantly increase assets b. Provide information for decisions to support business strategies c. Systematically reduce costs d. Improve quality product and service

a. Significantly increase assets

Comparative financial statements compare the company's current statements with: a. Those of prior periods. b. Those of the company's principal competitor. c. Those of other companies in the same industry. d. The budgeted level of performance for the period.

a. Those of prior periods.

The term classified financial statements refers: a. To financial statements in which items with certain characteristics are placed together in a group in an effort to develop useful subtotals. b. To financial statements prepared for use by management, but not for distribution outside of the organization. c. Only to the financial statements of defense contractors working on secret projects. d. To the financial statements of all companies working on government projects.

a. To financial statements in which items with certain characteristics are placed together in a group in an effort to develop useful subtotals.

The break-even point in units is computed by dividing fixed costs by the a. contribution margin per unit. b. unit selling price. c. contribution margin ratio. d. total contribution margin

a. contribution margin per unit.

Managers use cost-volume-profit (CVP) analysis to ________. a. to study the behavior of and relationship among the elements such as total revenues, total costs, and income b. analyse a firm's profitability and help to decide wealth distribution among its stakeholders c. estimate the risks associated with a given job d. forecast the cost of capital for a given period of time

a. to study the behavior of and relationship among the elements such as total revenues, total costs, and income

Contribution margin is the amount remaining after: a. variable expenses have been deducted from sales revenue. b. fixed expenses have been deducted from sales revenue. c. cost of goods sold has been deducted from sales revenues. d. fixed expenses have been deducted from variable expenses.

a. variable expenses have been deducted from sales revenue.

Job-costing is likely to be used by

advertising agencies

Which of the following companies will use a process costing system?

an oil refining company

Sparkle Jewelry sells 600 units resulting in $75,000 of sales revenue, $32,000 of variable costs, and $26,000 of fixed costs. Breakeven point in units is ________. (Round to the nearest whole unit.) a. 447 units b. 363 units c. 684 units d. 810 units

b. 363 units

The following costs were incurred in August: Direct materials... $20,000; Direct Labor...$18,000; Manufacturing overhead...$21,000; Selling expenses...$16,000; Administrative expenses...$21,000 Conversion costs during the month totaled: a. 37,000 b. 39,000 c. 38,000 d. 96,000

b. 39,000 Coversion cost = Manufacturing overhead + Direct Labor

Which one of the following is not an assumption of CVP analysis? a. The behavior of costs and revenues are linear within the relevant range. b. All costs are variable costs. c. All units produced are sold. d. Sales mix remains constant.

b. All costs are variable costs.

Which of the followings is NOT a specialized field of accounting? a. Auditing & attestation b. Corporate Finance c. Financial accounting & reporting d. Management accounting & control

b. Corporate Finance

Which of the following is not a measure of short-term liquidity? Incorrect answer: a. Current ratio. b. Debt ratio. c. Working capital. d. Quick ratio.

b. Debt ratio.

The current ratio will be _______________ the quick ratio. a. Less than. b. Greater than or equal to. c. Always different than. d. The same as.

b. Greater than or equal to.

Which of the following account does NOT belong to Liability? a. Pension obligations b. Interest expenses c. Bonds payable d. Salaries payable

b. Interest expenses

Which of the following is true about the assumptions underlying basic CVP analysis? a. Selling price varies with demand and supply of the product. b. Only selling price, variable cost per unit, and total fixed costs are known and constant. c. Only selling price and variable cost per unit are known and constant. d. Selling price, variable cost per unit, fixed cost per unit, and total fixed costs are known and constant.

b. Only selling price, variable cost per unit, and total fixed costs are known and constant.

Which is the true statement? a. In a Contribution Margin income statement, costs and expenses are classified only by function. b. The Contribution Margin income statement shows contribution margin instead of gross profit. c. In a traditional income statement, costs and expenses are classified as either variable or fixed. d. The Contribution Margin income statement is prepared for both internal and external use.

b. The Contribution Margin income statement shows contribution margin instead of gross profit.

The measurement that best reflects investors' expectations about future earnings is: a. Earnings per share. b. The price/earnings ratio. c. Return on equity. d. Return on assets.

b. The price/earnings ratio.

The debt ratio indicates the percentage of: a. Revenue consumed by interest expense. b. Total assets financed by creditors. c. Total assets financed by long-term mortgages. d. Total liabilities classified as current.

b. Total assets financed by creditors.

Cost management and Managerial Accounting: a. is required by regulatory bodies such as the SEC. b. has its primary emphasis on the future and concerns about relevancy and usefulness c. Should follow US GAAP (Generally Accepted Accounting Principles) d. focuses on the organization as a whole, rather than on the organization's segments.

b. has its primary emphasis on the future and concerns about relevancy and usefulness

The breakeven point is the activity level where ________. a. Revenues equal fixed costs. b. revenues equal the sum of variable and fixed costs c. revenues equal variable costs d. contribution margin equals total costs

b. revenues equal the sum of variable and fixed costs

The formula for the plantwide overhead cost rate is:

budgeted annual manufacturing overhead costs divided by budgeted annual quantity of cost-allocation base

Shim's syllabus says "Purchasing your textbook is considered as an ( 1 ) but not an (2). Choose correct words belong to each parenthesis ! a. (1) Potential Income (2) Expense b. (1) Revenue Expenditure (2) Capital Expenditure c. (1) Investment (2) Expense d (1) Asset (2)Liability

c. (1) Investment (2) Expense

Slickware sells porcelain cups. The breakeven point is 5,000 units. The variable cost per unit is $18 and the fixed costs are $20,000. What is the contribution margin at 5,000 units? a. 110,000 b. 40,000 c. 20,000 d. 90,000

c. 20,000

The following costs were incurred in August: Direct materials... $20,000; Direct Labor...$18,000; Manufacturing overhead...$21,000; Selling expenses...$16,000; Administrative expenses...$21,000 Prime costs during the month totaled: a. 37,000 b. 39,000 c. 38,000 d. 96,000

c. 38,000 Prime cost = Direct Material + Direct Labor

What is the breakeven point in units, assuming a product's selling price is $300, fixed costs are $18,000, unit variable costs are $20, and operating income is $6,000? a. 60 units b. 86 units c. 65 units d. 22 units

c. 65 units Unit Contribution Margin = Selling Price - Variable Cost B.E. Units = Fixed Costs / Unit Contribution Margin

Which of the following does NOT belong to Stockholder's equity? a. Retained earnings b. Treasury stock c. Account payable d. Common stock

c. Account payable

Which of the following accounting equation is correct? a. Assets = Liabilities - Stockholder's Equity b. Stockholder's Equity = Assets + Liabilities c. Assets = Liabilities + Stockholder's Equity d. Liabilities = Stockholder's Equity + Assets

c. Assets = Liabilities + Stockholder's Equity

The measures most often used in evaluating solvency--the current ratio, quick ratio, and amount of working capital are developed from amounts appearing in the: a. Statement of retained earnings. b. Statement of cash flows. c. Balance sheet. d. Income statement.

c. Balance sheet.

Which one of the followings is the main body of organization setting accounting standards (GAAP) in the U.S.? a. PCAOB (Public Company Accounting Oversight Board) b. Cost Accounting Standard Board (CASB) c. Financial Accounting Standard Board (FASB) d. International Accounting Standard Board (IASB)

c. Financial Accounting Standard Board (FASB)

Which of the followings does NOT belong to 3 major forms of business organizations? a. Corporation b. Partnership c. LLC (Limited Liability Corporation) d. Sole proprietorship

c. LLC (Limited Liability Corporation)

Which of the followings is NOT one of 10 Rules of success according to Elon Musk? a. Work like Hell b. Attract Great People c. Love what you're doing d. Overcome critics

c. Love what you're doing

All of the following ratios are considered measures of profitability except: a. Return on assets b. Earnings per share c. Price earnings ratio d. Gross profit rate

c. Price earnings ratio

Balance sheet is also known as; a. Statement of Cashflow b. Results of operations c. Statement of financial positions d. Profit and loss statement

c. Statement of financial positions

Which of the following is true of cost-volume-profit analysis? a. The theory assumes that units manufactured equal units sold. b. The theory assumes that all costs are variable. c. The theory assumes that units manufactured equal units sold. d. The theory states that total variable costs remain the same over a relevant range.

c. The theory assumes that units manufactured equal units sold.

Within the relevant range, the difference between variable costs and fixed costs is: a. variable costs per unit fluctuate and fixed costs per unit remain constant. b. both total variable costs and total fixed costs are constant. c. variable costs per unit are constant and fixed costs per unit fluctuate. d. both total variable costs and total fixed costs fluctuate

c. variable costs per unit are constant and fixed costs per unit fluctuate.

Bell Company sells several products. Information of average revenue and costs is as follows: Selling price per unit $33.00 Variable costs per unit: Direct material $6.00 Direct manufacturing labor $1.50 Manufacturing overhead $0.30 Selling costs $2.25 Annual fixed costs $113,000 The company sells 10,000 units. The contribution margin per unit is ________. a. $11.65 b. $25.50 c. $25.20 d. $22.95

d. $22.95

Fixed costs equal $16,000, unit contribution margin equals $35, and the number of units sold equal 1,300. Operating income is ________. a. $16,000 b. $45,500 c. $61,500 d. $29,500

d. $29,500 Operating Income = (Units Sold x C.M.) - Fixed Costs

The following costs were incurred in August: Direct materials... $20,000; Direct Labor...$18,000; Manufacturing overhead...$21,000; Selling expenses...$16,000; Administrative expenses...$21,000 Conversion costs during the month totaled: a. $96,000 b. $59,000 c. $38,000 d. $39,000

d. $39,000

Family Furniture sells a table for $950. Its fixed costs are $2,500, while its variable costs are $500 per table. It currently plans to sell 180 tables this month. What is the budgeted operating income for the month assuming that Family Furniture sells 180 tables? a. $168,500 b. $171,000 c. $81,000 d. $78,500

d. $78,500

Sparkle Jewelry sells 800 units resulting in $85,000 of sales revenue, $32,000 of variable costs, and $26,000 of fixed costs. The number of units that must be sold to achieve $41,000 of operating income is ________. a. 909 units b. 619 units c. 393 units d. 1,012 units

d. 1,012 units

Firebird Ltd. sells packaged birdseed for $6.00 per package. Variable product costs are $3.00 per package. Fixed costs are $12,000 per period. How many packages must Firebird sell to earn a target operating income of $7,900? a. 4,000 packages b. 2,633 packages c. 3,317 packages d. 6,633 packages

d. 6,633 packages

Which the following does NOT belong to Big-4 Accounting firm in 2022? a. EY b. PwC c. Deloitte d. BDO

d. BDO

Quick assets include a. Cash, marketable securities and inventories b. Cash, inventories and receivables c. Market securities, receivables and inventories. d. Cash, marketable securities and receivables

d. Cash, marketable securities and receivables

The debt ratio is used primarily as a measure of: a. Short-term liquidity. b. Profitability. c. ROA d. Creditors' long-term risk.

d. Creditors' long-term risk.

Which of the following is a measure of long-term credit risk? a. Current ratio. b. Gross profit ratio c. Price/Earning ratio d. Debt ratio.

d. Debt ratio.

Which of the following activities does NOT belong to Statement of Cashflow? a. Cash flow from investing activities b. Cash flow from operating activities c. Cash flow from financing activities d. Discounted Cash flow Activities

d. Discounted Cash flow Activities

Accounting is known as; a. Financial statement b. Debits and credits c. Monkey Business d. Language of business

d. Language of business

Which of the following account does NOT belong to Assets? a. Equipment b. Inventory c. Account receivables d. Note Payable

d. Note Payable

Which of the following does NOT belong to Balance sheet? a. Stockholder's equities b. Assets c. Liabilities d. Profit or Loss

d. Profit or Loss

On common size income statements, each component in the income statement is represented as a percentage of: a. Total assets b. Net income c. Profit d. Sales

d. Sales

Which of the following does NOT belong to a primary financial statement? a. Balance sheet b. Income Statement c. Statement of cashflow d. Statement of Bank Reconciliation

d. Statement of Bank Reconciliation

Which of the following is NOT known as income statement? a. Statement of operations b. Profit and loss statement c. Results of operations d. Statement retained earnings

d. Statement retained earnings

Which one of the following is Shim's Favorite Quote? a. Love what you're doing b. Stay hungry, Stay foolish! c. The More the Better d. Without a Big Dream No need to do Hard-work, Without Hard-work, No need to Dream

d. Without a Big Dream No need to do Hard-work, Without Hard-work, No need to Dream

Which of the following is NOT a strategy to survive and succeed Shim's Class? a. Practice, Practice & Practice b. Show Up On time c. Listen & Participate d. Work Like Hell

d. Work Like Hell

The cost of fire insurance for a manufacturing plant is generally considered to be a: a. direct cost. b. variable cost. c. period cost. d. product cost.

d. product cost.

Contribution margin equals ________. a. revenues minus fixed costs b. revenues minus period costs c. revenues minus product costs d. revenues minus variable costs

d. revenues minus variable costs

The breakeven point decreases if ________. Incorrect answer: a. the variable cost per unit increases b. the selling price per unit decreases c. the contribution margin per unit decreases d. the total fixed costs decrease

d. the total fixed costs decrease

Which of the following products would be "costed" using a job costing system?

the restoration of 15 various antique Ford Motor cars