Accounting 2116 Tests

Lakukan tugas rumah & ujian kamu dengan baik sekarang menggunakan Quizwiz!

George Company has a relevant range of​ 150,000 units to​ 400,000 units. The company has total fixed costs of $530,000. Total fixed and variable costs are $612,500 at a production level of 175,000 units. The variable cost per unit at 350,000 units is

$0.47

On a whim you purchased a scratch−off lottery ticket at the gas station. It must have been your lucky day because you won $1,000,000. Being logical and rational you decide to invest the money at 5​% for 14 years until you are ready to start a family. At the end of 14 years, how much will your investment be​ worth?

$1,980,000

Harvey Automobiles uses a standard part in the manufacture of several of its trucks. The cost of producing 60,000 parts is $130,000​, which includes fixed costs of $80,000 and variable costs of $50,000. By outsourcing the​ part, the company can avoid​ 30% of the fixed costs. If Harvey Automobiles buys the​ part, what is the most Harvey Automobiles can spend per unit so that operating income equals the operating income from making the​ part? (Round the final answer to the nearest​ cent.)

$1.23

Custom Creations Furniture Company manufactures furniture at its​ Akron, Ohio, factory. Some of its costs from the past year​ include: Depreciation on sales office $ 9,400 Depreciation on factory equipment 16,600 Factory supervisor salary 50,200 Sales commissions 23,400 Lubricants used in factory equipment 3,700 Insurance costs for factory 21,900 Wages paid to maintenance workers 115,700 Fabric used to upholster furniture 10,100 Freight−in (on raw​ materials) 3,400 Costs of delivery to customers 9,500 Wages paid to assembly−line workers 115,600 Lumber used to build product 82,500 Utilities in factory 54,000 Utilities in sales office 26,700 Direct labor costs for Custom Creations Furniture Company totaled

$115,600

Here are selected data for Whatchamacallit​ Company: Cost of goods manufactured $320,100 Work in process​ inventory, beginning $110,000 Work in process​ inventory, ending $104,300 Direct materials used $73,700 Manufacturing overhead is allocated at 70​% of direct labor cost. What was the amount of direct labor​ costs? (Round your answer to the nearest​ cent.)

$141,588.24

Schrute Farm Sales buys portable generators for $480 and sells them for $730. He pays a sales commission of 5% of sales revenue to his sales staff. Mr. Schrute pays $4,000 a month rent for his​ store, and also pays $2,100 a month to his staff in addition to the commissions. Mr. Schrute sold 700 generators in June. If Mr. Schrute prepares a contribution margin income statement for the month of​ June, what would be his contribution​ margin?

$149,450

The following information for the past year for the Blaine Corporation has been​ provided: Fixed​ costs: Manufacturing $135,000 Marketing 16,000 Administrative 17,000 Variable​ costs: Manufacturing $113,000 Marketing 27,000 Administrative 43,000 During the​ year, the company produced and sold 90,000 units of product at a selling price of $18.85 per unit. There was no beginning inventory of product at the beginning of the year.

$16.82

The following data relate to Denmark Corporation for last​ year: Operating income $240,000 Net increase in all current assets except cash $46,000 Net decrease in current liabilities $25,000 Cash dividends paid on common stock $34,000 Gain on sale of investments $10,000 Depreciation expense $8,000 What is the net cash provided by operating activities for last year on the statement of cash flows for Denmark​ Corporation?

$167,000

For Dubinsky​ Company, experience has shown that payment for the credit sales is received as​ follows: 30​% in the month of​ sale, 55​% in the first month after​ sale, 10​% in the second month after​ sale, and 5​% uncollectible. Dubinsky Company has budgeted the following credit sales during the last four months of the​ year: September, $15,000​; ​October, $20,000​; November $25,000​; December, $33,000. How much cash can Dubinsky Company expect to collect in November as a result of credit​ sales?

$20,000

Sweet Southern Tea provided the following expense information for​ May: Assembly−line ​workers' wages $72,700 Caps for tea bottles 3,700 Reconfiguring the assembly line 125,800 Customer support hotline 10,000 Delivery expenses 20,500 Depreciation on factory equipment 75,800 Plastic bottles to package tea 52,300 Salaries of salespeople 63,400 Salaries of research scientists 70,900 Customer toll−free order line 6,500

$204,500

Distribution Corporation collects 30​% of a​ month's sales in the month of​ sale, 60​% in the month following​ sale, and 10​% in the second month following sale. Budgeted sales for the upcoming four months​ are: April budgeted sales $60,000 May budgeted sales $120,000 June budgeted sales $290,000 July budgeted sales $170,000 The amount of cash that will be collected in July is budgeted to be

$237,000

Hewitt Company expects cash sales for July of $19,000​, and a 19​% monthly increase during August and September. Credit sales of $15,000 in July should be followed by 34​% increases during August and September. What are budgeted cash sales and budgeted credit sales for September​ respectively? (Round final answers to the nearest​ dollar.)

$26,906 and $26,934

​Moe's Pizza Shop sells a large pizza for $11.75. Unit variable expenses totaled $6.00. The breakeven sales in units is 5,000 and budgeted sales in units is 7,500. What is the margin of safety in​ dollars?

$29,375

Belle Auto Detailing reported the following results for the past​ week: Actual number of cars detailed 100 Actual direct labor hours used 350 Actual total direct labor cost $6,800 Budgeted number of cars to be detailed 330 Standard direct labor cost per hour $16.23 Standard direct labor per car 1.5 What is​ Belle's direct labor efficiency​ variance?

$3,246 unfavorable

Morgan Company uses a job costing system. Morgan Company estimated manufacturing overhead costs for the year at $330,400​, based on 60,100 estimated direct labor hours. Actual direct labor hours for the year totaled 75,600. Actual manufacturing overhead for the year was $385,100. By how much was manufacturing overhead overallocated or underallocated for the​ year? (Round intermediary calculations to the nearest​ cent.)

$30,700 overallocated

Vintage Fun reproduces old−fashioned style roller skates and skateboards. The annual production and sales of roller skates is 1,000 ​units, while 1,760 skateboards are produced and sold. The company has traditionally used direct labor hours to allocate its overhead to products. Roller skates require 4.5 direct labor hours per​ unit, while skateboards require 3.25 direct labor hours per unit. The total estimated overhead for the period is $114,500. The company is looking at the possibility of changing to an activity−based costing system for its products. If the company used an activity−based costing​ system, it would have the following three activity cost​ pools: Expected activity Activity cost pool Estimated overhead cost Roller skates Skateboards Total Setup costs $6,750 385 240 625 Engineering costs $16,500 460 640 1,100 Maintenance costs $91,250 2,675 2,218 4,893 The overhead cost per skateboard using an activity−based costing system would be closest to​ (Round all answers to two decimal​ places.)

$30.43

Doggie Pals produces 90,000 dog collars each month that give off a fresh scent to keep your dog smelling clean between baths. Total manufacturing costs are $200,000. Of this​ amount, $120,000 are variable costs. What are the total production costs when 175,000 collars are​ produced? (Assume both production levels are in the same relevant range. Round intermediate calculations to the nearest cent and the final answer to the nearest​ dollar.)

$312,750

Bob Burgers allocates manufacturing overhead to jobs based on direct labor hours. The company has the following estimated costs for the upcoming​ year: Direct materials used $50,800 Direct labor costs $70,000 Wages of factory janitors $39,700 Sales supervisor salary $51,900 Utilities for factory $16,300 Rent on factory building $13,000 Advertising expense $5,830 The company estimates that 1,950 direct labor hours will be worked in the upcoming​ year, while 1,800 machine hours will be used during the year. The predetermined manufacturing overhead rate per direct labor hour will be​ (Round your answer to the nearest​ cent.)

$35.38.

Hyper Color Company manufactures widgets. The following data is related to sales and production of the widgets for last year. Selling price per unit $120 Variable manufacturing costs per unit $65 Variable selling and administrative expenses per unit $8 Fixed manufacturing overhead​ (in total) $31,000 Fixed selling and administrative expenses​ (in total) $5,000 Units produced during the year 1,900 Units sold during year 1,400 Using absorption​ costing, what is operating income for last​ year? (Round any intermediary calculations to the nearest whole​ dollar.)

$38,400

The manager at Rainbow International prepares a Cost of Quality report to report the following​ expenses: Inspection of raw material costs $6,900 Warranty costs warranty claims $200,000 Cost to dispose of rejected products $18,000 Train hourly manufacturing personnel $50,000 Recall of batch​ #2894 $190,000 Production losses due to machine malfunctions $30,000 Cost of defective products found at inspection audit $68,000 Inspecting products when halfway through the production process $23,000 What is the total cost of quality in the external failure cost​ category?

$390,000

The Southside Corporation budgeted 4,900 pounds of direct materials to make 2,200 units of product. The company actually used 5,200 pounds of direct materials to make the 2,200 units. The direct materials quantity variance is $1,300 unfavorable. What is the Standard Price​ (SP) per pound of direct​ materials?

$4.33

The balance sheet for Bostick Corporation​ follows: Ending balance Beginning balance ​Assets: Current​ assets: Cash and cash equivalents $52,900 ​$44,600 Accounts receivable $19,100 ​$22,300 Inventory $48,800 ​$53,000 Total current assets $120,800 ​$119,900 ​Property, plant, and equipment ​$287,800 ​$275,300 Less accumulated depreciation $108,950 ​$101,550 Net​ property, plant, and equipment $178,850 ​$173,750 Total assets $299,650 ​$293,650 Liabilities and​ stockholders' equity: Current​ liabilities: Accounts payable ​$26,030 ​$29,580 Wages payable ​$41,600 ​$47,100 Other accounts payable $42,100 ​$35,400 Notes payable ​$24,200 ​$25,200 Total current liabilities $133,930 ​$137,280 Long−term debt ​$73,500 ​$79,500 Deferred income taxes $19,600 ​$17,000 Total liabilities $227,030 ​$96,500 ​Stockholders' equity: Common stock $47,850 ​$45,000 Retained earnings $24,770 ​$14,870 Total​ stockholders' equity $72,620 ​$59,870 Total liabilities and​ stockholders' equity $299,650 ​$293,650 Operating income during the period was $15,450​, while cash dividends paid were $5,550. The total sources of cash at Bostick Corporation during the year was

$42,400

Coyne Corporation is evaluating a capital investment opportunity. This project would require an initial investment of $41,000 to purchase equipment. The equipment will have a residual value at the end of its life of $3,000. The useful life of the equipment is 5 years. The new project is expected to generate additional net cash inflows of $23,000 per year for each of the five years.​ Coyne's required rate of return is 10​%. The net present value of this project is closest​ to:

$48,056

Smithson Corporation had the following selected balance sheet changes for the past​ year: Assets and contra−assets ​Increase/(Decrease) Cash ​$47,000 Accounts receivable $11,000 Inventory $15,000 Prepaid expenses ​$ ​(7,200​) Accumulated depreciation $11,000 Liabilities ​Increase/(Decrease) Accounts payable $22,000 Wages payable ​$ ​(15,000​) Taxes payable $9,000 The​ company's operating income during the year was $40,000. What is the net cash provided by operating activities during last year on the statement of cash flows for Smithson Corporation​ (using the indirect​ method)?

$48,200

Oliver Enterprises has collected the following data for one of its​ products: Direct materials standard ​(5 pounds per unit​ @ $0.48​/lb.) $2.40 per finished good Actual direct materials purchased 35,000 pounds Actual Direct Materials Used​ (AQU) 34,000 pounds Actual Price​ (AP) paid per pound $0.64 How much is the direct materials price​ variance?

$5,600 unfavorable

A​ company's inventory account increased $27,700 and its accounts payable account decreased $23,050 during the year. The accounts payable relates only to the acquisition of inventory. Sales were $793,500 and cost of goods sold was $535,700. What was the amount of payments to suppliers of​ inventory?

$586,450

Coltrane Music manufactures musical instrument for sale to students and professionals. The information for one of​ Coltrane's most popular​ products, professional​ saxophones, follows: Product Saxophone Standard direct labor hours per saxophone 1.5 Standard direct labor rate per hour $27.00 Actual number of saxophones manufactured 500 Actual direct labor hours worked 1,400 Actual total direct labor cost $31,500 What is the labor rate variance for​ saxophones?

$6,300 favorable

The Heartlake Corporation manufactures and sells toy gyroscopes. The following data is related to sales and production of the toy gyroscopes for last year. Selling price per unit $8.30 Variable manufacturing costs per unit $1.85 Variable selling and administrative expenses per unit $4.95 Fixed manufacturing overhead​ (in total) $79,000 Fixed selling and administrative expenses​ (in total) $82,000 Units produced during the year 530,000 Units sold during year 150,000 Using variable​ costing, what is the operating income for last​ year?

$64,000

The following is selected financial data from Turtle Bay Manufacturing for the most recent year. Ending raw materials inventory $22,000 Ending work in process inventory $44,300 Ending finished goods inventory $53,200 Amount of underallocated manufacturing overhead $6,100 Cost of goods sold for year $85,700 Cost of raw materials purchased during year $46,300 Cost of direct materials requisitioned during year $44,100 Cost of indirect materials requisitioned during year $8,000 Cost of goods completed during year $120,800 Manufacturing overhead allocated $60,100 Manufacturing overhead​ % of direct labor cost 130​% What is the actual manufacturing​ overhead?

$66,200

Posh Pillows manufactures two​ products, pillows and​ cushions, from a joint process. Pillows are allocated $7,400 of the total joint costs of $30,000. There are 2,600 pillows produced and 2,600 cushions produced each year. Pillows can be sold at the split−off point for $11 per​ unit, or they can be processed further into a deluxe pillow for additional processing costs of $8,000 and sold for $17 for each deluxe pillow. If the pillows are processed further and made into deluxe​ pillows, the effect on operating income would be

$7,600 net increase in operating income.

The actual cost of direct materials is $12.00 per pound. The standard cost per pound is $9.50. During the current​ period, 7,600 pounds of direct materials were used in production and 18,000 pounds were purchased. The standard quantity of direct materials for actual units produced is 16,100 pounds. How much is the direct materials quantity​ variance?

$80,750 favorable

Oliver Enterprises has collected the following data for one of its​ products: Direct materials standard ​(7 pounds per unit​ @ $0.58​/lb.) $4.06 per finished good Direct materials flexible budget variance−unfavorable $14,000 Actual Direct Materials Used​ (AQU) 30,000 pounds Actual finished goods produced 28,000 units How much is the direct materials quantity​ variance?

$96,280 favorable

​Matthew's Fish Fry has a monthly target operating income of $6,600. Variable expenses are 80​% of sales and monthly fixed expenses are $1,000. What is​ Matthew's operating leverage factor at the target level of operating​ income?

1.15

Kalanja​ Designs, which produces​ earrings, is developing direct material standards. Each earring requires 0.31 kilograms of a special metal. The allowance for waste is 0.4 kilograms per​ earring, while the allowance for rejects is 0.7 kilograms per earring. What is the standard quantity of metal per​ earring?

1.41 kg

Reece Corporation is considering the purchase of a machine that would cost $15,141 and would have a useful life of 5 years. The machine would generate $4,200 of net annual cash inflows per year for each of the 5 years of its life. The internal rate of return on the machine would be closest​ to:

12%

Perry Corporation produces and sells a single product. Data for that product​ are: Sales price per unit $255 Variable cost per unit $180 Fixed expenses for the month $600,000 Currently selling 11,000 units Upper management is considering using a biodegradable packaging which costs $8 more per unit but it produces less waste in the long run. Management plans to increase advertising by $6,000 in the first month to advertise this new feature to their packaging. They believe that environmentally friendly people will switch to their product resulting in an increase in sales of 5,500 units per month. How many units would the company have to sell to maintain current operating income if these changes are​ implemented? Round up to the nearest whole unit.

12,403 units

Larry Company makes and sells 2 models of​ dishwashers, Model ABC and Model XYZ. For every 2 Model ABC​ sold, 3 Model XYZ are sold. Larry Company incurs $1,170,000 in fixed costs per month. The following information is also​ provided: Model ABC Model XYZ Sales per unit $470 $700 Variable Cost per unit ​$250 ​$300 CM per unit $220 $400 How many units of Model XYZ would the company need to sell at its breakeven​ point? (Round intermediary calculations to two decimal places and the final answer to the nearest​ unit.)

2,140 units

Victoria Corporation manufactures quality vases. Budgeted sales and production data for the vases are as​ follows: Month 1 budgeted unit sales 1,800 Month 2 budgeted unit sales 2,900 Month 3 budgeted unit sales 3,100 Month 1 budgeted unit production 2,400 Month 2 budgeted unit production 2,600 Month 3 budgeted unit production 3,400 Raw material required for each finished unit​ (in pounds) 1 Each vase requires one pound of clay in its manufacture. Victoria Corporation has a policy that the inventory of clay at the end of each month needs to be equal to 30​% of the production needs for the following month. At the beginning of​ January, 720 pounds of clay were in inventory. How many pounds of clay would Victoria Corporation need to purchase in February​ (Month 2)?

2,840

Daisy Company manufactures dog collars. The following selected data relates to Daisy​ Company's budgeted sales and inventory levels of the dog collars for the upcoming​ quarter: October expected unit sales 2,200 November expected unit sales 3,000 December expected unit sales 2,000 October desired ending unit finished goods inventory 850 November desired ending unit finished goods inventory 770 December desired ending unit finished goods inventory 590 How many dog collars should Daisy Company produce in​ November?

2,920

Sunnyside Corporation is evaluating a capital investment project which would require an initial investment of $220,000 to purchase new machinery. The annual revenues and expenses generated specifically by this project each year during the​ project's nine year life would​ be: Sales $200,000 Variable expenses $44,000 Contribution margin $156,000 Fixed​ expenses: Salaries expense $28,000 Rent expense $24,000 Depreciation expense $20,000 Total fixed expenses $72,000 Operating income $84,000 The residual value of the machinery at the end of the nine years would be $19,000. The payback period of this potential project in years would be closest to

2.1

Jolly Company produces hula hoops. Jolly Company has the following sales projections for the upcoming​ year: First quarter budgeted hula hoop sales in units 22,100 Second quarter budgeted hula hoop sales in units 25,000 Third quarter budgeted hula hoop sales in units 17,000 Fourth quarter budgeted hula hoop sales in units 34,000 Jolly Company wants to have 20​% of the next​ quarter's sales in units on hand at the end of each quarter. Inventory at the beginning of the year was 3,800 hula hoops. How many hula hoops should Jolly Company produce during the first​ quarter?

23,300

The Porch Cushion Company manufactures foam cushions. The number of cushions to be produced in the upcoming three months​ follows: Number of foam cushions to be produced in July 13,000 Number of foam cushions to be produced in August 10,000 Number of foam cushions to be produced in September 9,000 Each cushion requires 3 pounds of the foam used as stuffing. The company has a policy that the ending inventory of foam each month must be equal to 30​% of the following​ month's expected production needs. How many pounds of foam does The Porch Cushion Company need to purchase in​ August?

29,100

Terrific Toys Company manufactures and sells​ children's skateboards. Each skateboard requires four bearings. For​ September, Terrific Toys Company has budgeted skateboard sales of 550 skateboards, while 650 skateboards are scheduled to be produced. Terrific Toys Company will begin September with 220 bearings in its beginning​ inventory, and estimates ending inventory for September to be 620 bearings. How many bearings should Terrific Toys Company purchase in​ September?

3,000

Buzz Appliances manufactures two​ products: Food Processors and Espresso Machines. The following data are​ available: Food Processors Espresso Makers Sales price $175.00 $245.00 Variable costs $50.00 $160.00 The company can manufacture either two food processors per machine hour or three espresso machines per machine hour. The​ company's production capacity is 1,200 machine hours per month. The company has demand of 3,300 espresso machines. How many espresso machines and food processors should they produce based on demand and available machine​ hours?

3,300 espresso machines and 200 food processors

Siesta Manufacturing has asked you to evaluate a capital investment project. The project will require an initial investment of $32,000. The life of the investment is 5 years with a residual value of $8,000. If the project produces net annual cash inflows of $15,000​, what is the accounting rate of​ return?

31.88%

Given breakeven sales in units of 36,000 and a unit contribution margin of $5​, how many units must be sold to reach a target operating income of $8,500​?

37,700

Forty Winks Corporation manufactures night stands. The production budget shows that Forty Winks Corporation plans to produce 1,900 night stands in March and 1,300 night stands in April. Each night stand requires 0.75 direct labor hours in its production. Forty Winks Corporation has a direct labor rate of $18.00 per direct labor hour. What is the total combined direct labor cost that Forty Winks Corporation should budget in March and​ April?

43,200

Buzz Appliances manufactures two​ products: Food Processors and Espresso Machines. The following data are​ available: Food Processors Espresso Makers Sales price $125 $255 Variable costs $70 $150 The company can manufacture either two food processors per machine hour or three espresso machines per machine hour. The​ company's production capacity is 1,700 machine hours per month. To maximize​ profits, what product and how many units should the company produce in a month​ (assuming unlimited demand for both​ products)?

5,100 Espresso Machines and 0 Food Processors

The following information pertains to the Flying Fig​ Corporation: Total Units for information given 5,000 Fixed Cost per Unit $200 Selling Price per Unit $400 Variable Costs per Unit $225 Target Operating Income $250,000 What is the breakeven in​ units? (Round your final calculation to the nearest​ unit.)

5,714 units

Redwood Corporation is considering two alternative investment proposals with the following​ data: Proposal X Proposal Y Investment $860,000 $477,000 Useful life 10 years 10 years Estimated annual net cash inflows for 10 years $140,000 $64,000 Residual value $40,000 ​$− Depreciation method Straight−line Straight−line Required rate of return 19​% 5​% What is the accounting rate of return for Proposal​ X?

6.74%

Gabe Industries sells two​ products, Basic models and Deluxe models. Basic models sell for $39 per unit with variable costs of $30 per unit. Deluxe models sell for $48 per unit with variable costs of $15 per unit. Total fixed costs for the company are $910.80. Gabe Industries typically sells four Basic models for every Deluxe model. What is the breakeven point in total​ units?

66 units

A manufacturer is considering whether to invest in a robotic system that costs $486,000​, has a $36,000 residual​ value, and should lead to cost savings of $160,000 per year for its five​-year life. In calculating the accounting rate of return​ (ARR), which of the following numbers should be used in the ARR equation's numerator as average annual operating income?

70,000

Medoc Company provides the following information about its single product. Targeted operating income $56,680 Selling price per unit $6.40 Variable cost per unit $4.85 Total fixed cost $64,635 How many units must be sold to earn the targeted operating​ income? (Round the final answer up to the nearest​ unit.)

78,268

The following information for the past year for the Blaine Corporation has been​ provided: Fixed​ costs: Manufacturing $115,000 Marketing 19,000 Administrative 23,000 Variable​ costs: Manufacturing $120,000 Marketing 24,000 Administrative 45,000 During the​ year, the company produced and sold 80,000 units of product at a selling price of $13.56 per unit. There was no beginning inventory of product at the beginning of the year.

82.6%

Schrute Farm Sales buys portable generators for $480 and sells them for $770. He pays a sales commission of 5% of sales revenue to his sales staff. Mr. Schrute pays $7,000 a month rent for his​ store, and also pays $2,000 a month to his staff in addition to the commissions. Mr. Schrute sold 300 generators in June. If Mr. Schrute prepares a traditional income statement for the month of​ June, what would be his gross​ profit?

87,000

Medallion Star Corporation prepares its statement of cash flows using the indirect method. Which of the following items would be deducted from net income when calculating the net cash from​ operations?

A gain on sale of​ property, plant, and equipment

A company uses the indirect method to prepare the statement of cash flows. How can amortization be presented on the statement of cash​ flows?

Amortization expense can be added to net income in the operating activities section on the statement of cash flows.

Which of the following is most likely not to use process​ costing?

Ashley Custom Furnishings

Senseman Company has three potential projects from which to choose. Selected information on each of the three projects​ follows: Project A Project B Project C Investment required $44,000 $54,100 $53,500 Net present value of project $49,100 $72,800 $71,200 Using the profitability​ index, rank the projects from most profitable to least profitable.

B,C,A

Machine set−up would most likely be classified as a​ ________ cost.

Batch-level

Which method of capital budgeting is best used for longer term capital​ investments? A. Net Present Value B. Internal Rate of Return C. None of these methods D. Both A​ & B

D. Both A​ & B

Richland Enterprises has budgeted the following amounts for its next fiscal​ year: Total fixed expenses $49,000 Selling price per unit $75 Variable expenses per unit $35 If Richland Enterprises can reduce fixed expenses by​ $5,280, how will breakeven sales in units be​ affected?

Decrease by 132 units

How does depreciation affect the calculation of a​ project's payback​ period?

Depreciation does not affect the payback calculation.

The unemployment rate is high in the city in which a company has a factory. The company finds that they are able to pay new employees a lower wage per hour than when the unemployment rate was lower a year ago. Which of the following variances may be directly​ impacted?

Direct labor rate variance

Which of the following statements is false about financial​ accounting?

Financial accounting provides sufficient information for managers to effectively plan and control operations.

Westfall Watches has two product​ lines: Luxury watches and Sporty watches. Income statement data for the most recent year​ follow: Total Luxury Sporty Sales revenue $520,000 $390,000 ​$130,000 Variable expenses 375,000 255,000 ​120,000 Contribution margin 145,000 135,000 ​10,000 Fixed expenses 77,000 38,500 38,500 Operating income​ (loss) $68,000 $96,500 ​$(28,500​) Assuming the Sporty line is​ discontinued, total fixed costs remain​ unchanged, and the space formerly used to produce the Sporty line is used to increase the production of Luxury watches by​ 250%, how will operating income be​ affected?

Increase $192,500

Boots Plus has two product​ lines: Hiking boots and Fashion boots. Income statement data for the most recent year​ follow: Total Hiking Fashion Sales revenue $530,000 $390,000 ​$140,000 Variable expenses 355,000 235,000 ​120,000 Contribution margin 175,000 155,000 ​20,000 Fixed expenses 81,000 40,500 40,500 Operating income​ (loss) $94,000 $114,500 $(20,500) Assuming the Fashion line is​ discontinued, total fixed costs remain​ unchanged, and the space formerly used to produce the line is rented for $26,000 per​ year, how will operating income be​ affected?

Increase $6,000

Widget Inc. manufactures widgets. The company has the capacity to produce​ 100,000 widgets per​ year, but it currently produces and sells​ 75,000 widgets per year. The following information relates to current​ production: Sales price per unit $45 Variable costs per​ unit: Manufacturing $23 Marketing and administrative $10 Total fixed​ costs: Manufacturing $80,000 Marketing and administrative $22,000 If a special sales order is accepted for 5,700 widgets at a price of $42 per​ unit, fixed costs remain​ unchanged, and no variable marketing and administrative costs will be incurred for this​ order, how would operating income be​ affected? (NOTE: Assume regular sales are not affected by the special​ order.)

Increase by $108,300

Widget Inc. manufactures widgets. The company has the capacity to produce​ 100,000 widgets per​ year, but it currently produces and sells​ 75,000 widgets per year. The following information relates to current​ production: Sale price per unit $43 Variable costs per​ unit: Manufacturing $26 Marketing and administrative $4 Total fixed​ costs: Manufacturing $78,000 Marketing and administrative $21,000 If a special sales order is accepted for 3,000 widgets at a price of $33 per​ unit, fixed costs increase by $5,000​, and variable marketing and administrative costs for that order are $3 per​ unit, how would operating income be​ affected? (NOTE: Assume regular sales are not affected by the special​ order.)

Increase by $7,000

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

Invested money earns income over time.

Oliver Inc. currently has a contribution margin of $32 on its only product. Oliver Inc. is considering spending $8,400 more on advertising this year to generate an increase in sales of 6,000 units. How will this change affect its operating​ income?

It will increase operating income by $183,600.

The philosophy that centers on production as needed is known as

JIT

A favorable direct materials price variance and an unfavorable direct materials quantity variance might indicate which of the​ following?

Less​ expensive, inferior materials requiring more than the standard amount were used in production.

Which of the following statements is true regarding managerial accounting​ information?

Managerial accounting information emphasizes relevance.

On March​ 31, the purchasing manager at Reynold Plastics purchased a greater quantity of raw materials than budgeted and paid the standard price for the raw materials. Which variance is directly impacted by the March 31​ purchase?

Neither of the variances will be directly impacted

The beginning and ending balances of long−term debt are $64,000 and $39,200​, respectively, and, cash payments for long−term debt during the year were $36,100. How much new long−term debt was issued during the​ year?

New long−term debt issued during the year was $11,300.

A favorable direct materials quantity variance indicates which of the​ following?

The Actual Quantity​ (AQ) of direct materials used was less than the standard quantity for actual output.

The journal entry to assign $2,400 of direct labor and $410 of indirect labor involves a debit to

The Work−in−Process Inventory account for $2,400 and a debit to the Manufacturing Overhead account for $410​; and a credit to the Wages Payable account for $2,810.

If a company uses the indirect method to prepare the statement of cash​ flows, how will the adjustment to reflect the amount of cash paid for interest be presented on the statement of cash​ flows?

The adjustment will be for the increase or decrease in interest payable during the period and will adjust net income in the operating activities section in the statement of cash flows.

A company reported beginning plant​ assets, net of​ depreciation, of $734,550​; and, an ending amount of $658,000. Depreciation expense of $50,400 and a loss on the sale of equipment of $5,700 were reported on the income statement. The company acquired $218,800 of plant assets during the year. How much will be reported as cash received from the sale of equipment in the investing activities section of the statement of cash​ flows?

The cash received upon the sale of the equipment was $239,250.

A company uses the indirect method to prepare the statement of cash flows. It presents the following data on its financial​ statements: End of this year End of prior year Accounts receivable ​$115,000 ​$100,000 Cost of goods sold ​560,000 Sales revenue ​830,000 Accounts​ payable* ​75,000 ​67,000 Inventory 90,000 106,000 Salary payable ​13,000 ​10,000 Salary expense ​49,000 ​45,000 ​*Relates solely to the acquisition of inventory What will appear in the operating activities section related to​ inventory?

The decrease of $16,000 will be added to net income.

A company uses the indirect method to prepare the statement of cash flows. It presents the following data on its financial​ statements: End of this year End of prior year Accounts receivable ​$115,000 ​$100,000 Cost of goods sold ​560,000 Sales revenue ​830,000 Accounts​ payable* ​75,000 ​67,000 Inventory ​86,000 ​105,000 Salary payable 16,000 12,000 Salary expense ​49,000 ​45,000 ​*Relates solely to the acquisition of inventory What will appear in the operating activities section related to salary​ payable?

The increase of $4,000 will be added to net income.

A company uses the indirect method to prepare the statement of cash flows. It presents the following data on its financial​ statements: End of this year End of prior year Accounts receivable $165,000 $97,000 Cost of goods sold ​550,000 Sales revenue ​820,000 Accounts​ payable* ​80,000 ​70,000 Inventory ​90,000 ​100,000 Salary payable ​15,000 ​10,000 Salary expense ​50,000 ​44,000 ​*Relates solely to the acquisition of inventory What will appear in the operating activities section related to accounts​ receivable?

The increase of $68,000 will be subtracted from net income.

A company uses the indirect method to prepare the statement of cash flows. It sold a piece of equipment at a loss of $8,600. The equipment was purchased several years ago for $70,500 and had accumulated depreciation of $56,900. What is reported under the operating activities section on the statement of cash​ flows?

The loss of $8,600 is added to net income.

All else being​ equal, when using the payback period method to compare the capital investment between several​ options, a company would choose to invest in the capital asset if which of the following is true​?

The payback period is the shortest of all of the options.

Which of the following is an acceptable basis for the preparation of the statement of cash​ flows?

The sum of cash and cash equivalents

The payback method can be used when the net cash inflows from a capital investment are unequal.

True

Wood Sculptor Company had the following labor−related transactions at their plant last​ month: ​Woodworkers' wages $120,200 Staining tank​ workers' wages $40,100 Maintenance personnel wages $10,900 What is the journal entry to record the incurrence of direct​ labor?

WIP Inventory 160,300 Wages Payable 160,300

Managers may intentionally build slack into the budget

because all of the above are true.

Preparing financial statements in accordance with GAAP is an example of

competence.

The cost of indirect labor used in the factory is recorded as a

debit to Manufacturing Overhead account.

The fixed expenses of​ Greg's Snowboards are $840,000. The selling price for one snowboard is $200. The variable cost per unit is $74. If the company sells 8,600 snowboards, its operating income is a

gain of $243,600.

​ 60,000 units 90,000 units Cost A $75,000 $75,000 Cost B $120,000 $180,000 Cost C $65,000 $80,000 Total Costs $260,000 $335,000 Cost C is a​ _______________ cost.

mixed cost

When manufacturing​ products, direct labor and direct materials are classified as

product costs and expensed when the goods are sold.

Net income reported under absorption costing will exceed net income reported under variable costing for a given period if

production exceeds sales for that period.

What two variances make up the direct labor​ variance?

rate variance and efficiency variance.

In a company that uses the direct method to prepare the statement of cash​ flows, the amount of cash it pays in interest expense is computed as

the change in interest payable plus interest expense.

Board​ Games, Inc. makes board games. The following data pertains to the last six​ months: Direct Labor Hours Manufacturing Overhead Month 1 45,000 $295,000 Month 2 63,000 $313,000 Month 3 57,000 $323,000 Month 4 52,000 $247,250 Month 5 34,000 $178,200 Month 6 24,000 $160,500 Based on this​ data, what is the linear cost​ equation? (Round intermediary calculations to the nearest​ cent.)

y​ = $3.91X+$66,670

​Greenscape, Inc. sells lawn decor to consumers in the marketplace. The managerial accountant reported the following financial information that reflects the 20XX​ data: Beginning merchandise inventory on January​ 1: $233,100 Ending merchandise inventory on December​ 31: $135,100 ​Purchases: $952,900 Selling and administrative​ expenses: $175,600 Sales revenue for the​ year: $2,263,000 Cost of goods​ sold: $1,050,900 Salary and wage​ expenses: $250,700 Rent and utility​ expenses: $75,700 Compute the operating income.

​$710,100

A job costing system can be used by which types of​ companies?

​Service, manufacturing, and merchandising businesses


Set pelajaran terkait

Biology 1 final exam Study guide

View Set

Sociology - Vocabulary & Study Questions Ch.1-6

View Set

Chapter 27: Pulmonary Embolism & Acute Respiratory Distress Syndrome (Davis Edge Questions)

View Set

CH 36: ANTIHISTAMINES, DECONGESTANTS, ANTITUSSIVES, & EXPECTORANTS

View Set