Quiz Ch 14 and 15 ACC

Which of the following must be true in order for materials to be classified as direct materials?

They must be an integral part of the finished product and a significant portion of the total product cost.

A balance sheet shows cash, $75,000; marketable securities, $115,000; receivables, $150,000; and inventories, $222,500. Current liabilities are $225,000. The current ratio is 2.5.

True

Factory overhead includes all manufacturing costs other than direct materials and direct labor.

True

The excess of current assets over current liabilities is referred to as working capital.

True

The plant manager's salary in a manufacturing business would be considered an indirect cost.

True

Percentage analyses, ratios, turnovers, and other measures of financial position and operating results are:

Useful analytic measures

Jensen Company reports the following: Direct materials used $345,000 Direct labor incurred 250,000 Factory overhead incurred 400,000 Operating expenses 175,000

$175,000

Keeton Company had the following data: Cost of materials used $60,000 Direct labor costs 58,000 Factory overhead 33,000 Work in process inventory, beginning 29,000 Work in process inventory, ending 18,000 Finished goods inventory, beginning 32,000 Finished goods inventory, ending 18,000

$176,000

Sienna Company has the following information for January: Cost of materials used in production $20,000 Direct labor 15,000 Factory overhead 24,000 Work in process inventory, January 1 2,900 Work in process inventory, January 31 3,500

$58,400

Based on the following data for the current year, what is the days' sales in receivables? Sales on account during year $584,000 Cost of goods sold during year 300,000 Accounts receivable, beginning of year 45,000 Accounts receivable, end of year 35,000 Inventory, beginning of year 90,000 Inventory, end of year 110,000

14.6

Based on the following data, what is the accounts receivable turnover? Sales on account during year $700,000 Cost of goods sold during year 270,000 Accounts receivable, beginning of year 45,000 Accounts receivable, end of year 35,000 Inventory, beginning of year 90,000 Inventory, end of year 110,000

17.5

Based on the following data for the current year, what is the inventory turnover? Sales on account during year $700,000 Cost of goods sold during year 270,000 Accounts receivable, beginning of year 45,000 Accounts receivable, end of year 35,000 Inventory, beginning of year 90,000 Inventory, end of year 110,000

2.7

Richards Corporation had net income of $250,000 and paid dividends to common stockholders of $50,000. It had 50,000 shares of common stock outstanding during the entire year. Richards Corporation's common stock is selling for $35 per share. The price-earnings ratio is:

7

A company reports the following: Sales $720,000 Average accounts receivable (net) 45,000 Determine (a) the accounts receivable turnover and (b) the days' sales in receivables. When required, round your answers to one decimal place. Assume a 365-day year.

Accounts Receivable Turnover 16 Days' Sales in Receivables 22.8 Days

Which of the following accounts will be found on the income statement?

Cost of Goods Sold

The following items are reported on a company's balance sheet: Cash $230,000 Marketable securities 50,000 Accounts receivable 200,000 Inventory 240,000 Accounts payable 300,000

Current Ratio 2.4 Quick Ratio 1.6

The following items are reported on a company's balance sheet: Cash $400,000 Marketable securities 50,000 Accounts receivable 150,000 Inventory 200,000 Accounts payable 250,000

Current Ratio 3.2 Quick Ratio 2.4

Which of the following is an example of a factory overhead cost?

Factory heating and lighting cost

Period costs can be found on both the balance sheet and the income statement.

False

Which of the following is a product versus a period cost?

Salespersons' commissions