Accounting Test 2 - Wrong questions

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Which of the following tools may be used to calculate the volume of sales needed to cover a company's fixed expenses?

Break-even

When a customers order is filled and sold, __is debited and ___ is credited

COGS ----Finished goods

Customer's order is filled and units are sold, the cost of the units is transferred to COGS

COGS ---Finished goods

CM ratio =

Contribution margin / sales

A journal entry to record material cost in the second department would include a ___ to work in process department #2

Debit

Conversion cost

Direct labor + MOH

True or false: the equivalent units of production computed under the weighted-average method does not take into the account the percentage

False

Cost of completed units are transferred to the finished goods inventory account

Finished goods ---Work in process- bottling

When using process costing, which of the following can be added in any department?

Materials, labor and overhead

Unit CM =

P-V Selling price - variable expenses

contribution margin

sales-variable expenses

Sales =

selling price (P) * Quantity sold

Factors which determine whether cost structure with higher variable costs is better than one with high fixed costs include

the attitude of owners toward risk long-run trends in sales year-to-year fluctuations in the level of sales

When unit costs are transferred from Department A to department B, department B will treat the costs as:

transferred in

Variable expenses =

variable expenses per unit (V) *Quantity sold (Q)

The contribution margin income statement allows users to easily judge the impact change in ___ on profit

volume, cost, selling price

A processing department is an organization unit:

where work is performed on a product and labor, overhead and materials are added

Target profit: 204,000 Fixed costs: 305,000 CM: 40 Break-even point in unit sales?

7,625 units (305000/40=7,625)

Number of partially completed goods * percentage completion =

equivalent units

150 units transferred to finished goods, 215 are in ending goods inventory that are 60% complete. What are the equivalent units of production?

279

Target profit: 4,000 per month Selling price: $15 Variable costs: $13.50 Fixed costs: 3,200 Number of bottles to get target profit?

4,800 (4000+3200)/(15-13.5)

Beg WIP inventory: $3650 Materials added: $5000 Conversion costs added: $9250 250 equivalent units of production Cost per equivalent units of material?

$34.60 (3650+5000)/250

Equivalent units of production =

Units transferred to the next department or to finished goods + equivalent units in ending work in process inventory

In process costing, which account does every processing department have?

Work in process

Record materials in the second processing department

Work in process - bottling ----Raw materilas

Cost of partially completed units from the formulated department to the bottling department

Work in process - bottling ---Work in process - Formulating

Labor costs in the formulating department

Work in process - formulating -----Salaries and wages payable

Materials used in the first processing department formulating

Work in process - formulating ----Raw materials

Overhead costs applied in the formulating department

Work in process - formulating ---Manufacturing overhead

contribution margin:

becomes profit after fixed expenses are covered

Cost per equivalent unit are used to value

both units in ending inventory and units transferred to the next department

After reaching the break-even point, a company's net operating income will increase by the ______________ per unit for each additional unit sold

contribution margin

To estimate the effect on profits for a planned increase in sales, multiply the increase in units sold by the unit ________________

contribution margin

To solve for net operating income at any sales volume above the break-even point requires knowledge of the:

contribution margin per unit break-even unit sales projected unit sales

Cost per equivalent unit =

cost of beg. work in process inventory + cost added during the period / equivalent units of production


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