ACCT 2210 Exam 2

Avril Company makes collections on sales according to the following schedule: 30% in the month of sale 60% in the month following sale 10% uncollectible The following sales are expected: Expected Sales January$100,000 February$120,000 March$110,000 Cash collections/receipts in March should be budgeted to be:

$105,000

Moore Corporation has two divisions: The West Division and the East Division. The corporation's net operating income is $88,800. The West Division's divisional segment margin is $39,500 and the East Division's divisional segment margin is $166,900. What is the amount of the common fixed expense not traceable to the individual divisions?

$117,600

Tracie Corporation manufactures and sells women's shirts. Selected data from Tracie's master budget for next quarter are shown below: July August September Budgeted sales (in units) 7,000 9,000 11,000 Budgeted production (in units) 8,000 10,500 13,000 Each unit requires 0.8 hours of direct labor, and the average hourly cost of Tracie's direct labor is $18. What is the budgeted cost of Tracie Corporation's direct labor in September?

$187,200

Cadavieco Detailing's cost formula for its materials and supplies is $1,990 per month plus $8 per vehicle. For the month of November, the company planned for activity of 92 vehicles, but the actual level of activity was 52 vehicles. The actual materials and supplies for the month was $2,440. The materials and supplies in the planning budget for November would be closest to:

$2,726

Schuepfer Inc. bases its selling and administrative expense budget on budgeted unit sales. The sales budget shows 1,300 units are planned to be sold in March. The variable selling and administrative expense is $4.20 per unit. The budgeted fixed selling and administrative expense is $19,240 per month, which includes depreciation of $3,380 per month. The remainder of the fixed selling and administrative expense represents current cash flows. The cash disbursements for selling and administrative expenses on the March selling and administrative expense budget should be

$21,320

Catano Corporation pays for 40% of its raw materials purchases in the month of purchase and 60% in the following month. If the budgeted cost of raw materials purchases in July is $256,550 and in August is $278,050, then in August the total budgeted cash disbursements for raw materials purchases is closest to:

$265,150

Cadavieco Detailing's cost formula for its materials and supplies is $1,990 per month plus $8 per vehicle. For the month of November, the company planned for activity of 92 vehicles when it prepared its planning budget, but the actual level of activity was 52 vehicles. The actual materials and supplies for the month was $2,440. For materials and supplies, the variance between the flexible budget and actual resultsfor November would be:

$34; unfavorable

The manufacturing overhead budget at Franklyn Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 4,400 direct labor-hours will be required in January. The variable overhead rate is $1.30 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $60,280 per month, which includes depreciation of $17,160. All other fixed manufacturing overhead costs represent current cash flows. The January cash disbursements for manufacturing overhead on the manufacturing overhead budget should be:

$48,840

DMB Enterprises sells softball gloves for $75 each. The variable cost to manufacture the gloves is $25 per unit. How much will operating income be for DMB if it sells one more unit than the number of break-even units?

$50

David company produces a single product has provided the following data concerning its most recent month of operations: Selling Price $15 Variable Costs Per Unit Manufacturing Costs $6 SG&A $1 Fixed Costs Manufacturing Overhead $6,000 SG&A $5,000 Units in beginning inventory 0 Units Produced 2,000 Sales during the month 1,800 What is the unit product cost for the month under variable costing?

$6

Stanley Company had the following information for the most recent year: Sales (17,000 units) $357,000 Variable expenses $238,000 Fixed expenses $68,000 Given this data, the unit contribution margin was:

$7

David company produces a single product has provided the following data concerning its most recent month of operations:Selling Price $15 Variable Costs Per Unit Manufacturing Costs $6 SG&A $1 Fixed Costs Manufacturing Overhead $6,000 SG&A $5,000 Units in beginning inventory 0 Units Produced 2,000 Sales during the month 1,800 What is the unit product cost for the month under absorption costing?

$9

SLB Co. has the following information available: Monthly sales 2,000 units Selling Price $100/unit Variable Expenses $60/unit Fixed Expenses $50,000 SLB's break even in units is?

1,250

Sartain Corporation is in the process of preparing its annual budget. The following beginning and ending inventory levels are planned for the year: Beginning InventoryEnding InventoryFinished goods (units)20,00070,000Raw material (grams)50,00040,000 Assume that the company plans to sell 670,000 units during the year. If each unit of finished goods requires 2 grams of raw material, how much of the raw material should the company purchase during the year?

1,430,000 grams

A product sells for $10 per unit and has variable expenses of $7 per unit. Fixed expenses total $45,000 per month. How many units of the product must be sold each month to yield a monthly profit of $15,000?

20,000 units

Douglas Company plans to sell 24,000 units during July and 30,000 units during August. Past experience has shown that end-of-month inventory should equal 20% of the next month's unit sales. The beginning finished goods inventory as of July 1st is 2,000 units. Based on these data, how many units should Douglas budget to produce during the month of July?

28,000

A product sells for $20 per unit and has a contribution margin ratio of 40 percent. Fixed expenses total $240,000 annually. How many units of the product must be sold to yield a profit of $60,000?

37,500 units

Fixed manufacturing overhead is included in product costs under: Absorption Costing Variable Costing a. Yes Yes b. No No c. No Yes d. Yes No

D

Data concerning Cantillo Corporation's single product appear below: Per Unit Percent of Sales Selling Price $200 100% Variable Expenses 60 30% Contribution Margin $140 70% Fixed expenses are $105,000 per month. The company is currently selling 1,000 units per month. Management is considering using a new component that would increase the per unit variable expenses by $44. Since the new component would increase the features of the company's product, the marketing manager predicts that monthly sales would increase by 400 units. What would be the overall effect on the company's monthly net operating income (i.e. profit) of this change?

Decrease of $5,600

Data concerning Brandon Corporation's single product appear below: Per Unit Percent of Sales Selling Price $160 100% Variable Expenses 80 50% Contribution Margin $ 80 50% The company is currently selling 6,000 units per month. Fixed expenses are $424,000 per month. The marketing manager projects that a $7,000 increase in the monthly advertising fixed expenses would result in a 100-unit increase in monthly sales. What would be the overall effect on the company's monthly net operating income (i.e. profit) of this change?

Increase of $1,000

Would budgeted fixed costs be different in a flexible budget vs. a static/planning budget?

No

Which of the following represents a normal sequence in which budgets are prepared?

Sales, Production, Direct Materials

To help assess how well a manager has controlled costs, actual costs should be compared to what the costs should have been for the actual level of activity (i.e., a flexible budget).

True

If the number of units produced exceeds the number of units sold, then net operating income (i.e. profit) under absorption costing will:

be greater than net operating income under variable costing.

A fixed cost that normally would not be assigned to a particular product on a segmented income statement and therefore classified as a common cost is:

the salary of the corporation's chief executive officer (i.e. CEO).