Exam 2 accounting

8. For the month of May, Latter Company has beginning finished goods inventory of $50,000, ending finished goods inventory of $35,000, and cost of goods manufactured of $125,000. What is the cost of goods sold for May?

$140,000

18. If sales are $1,000,000, variable costs are $400,000, and fixed costs are $420,000, what is the contribution margin ratio?

60%

11. Which of the following costs would be included as part of the factory overhead costs of a microcomputer manufacturer?

Depreciation of testing equipment

12. Which of the following is not considered a cost of manufacturing a product?

Sales salaries

1. What type of analysis is indicated by the following? Amount Percent Current assets $100,000 20% Property, plant, and equipment 400,000 80% Total assets $5000,000 100%

Vertical analysis

21. A tight budget may create which of the following situations?

discouragement

16. Job cost sheets accumulate all of the following costs except for which one?

indirect materials

22. Which of the following is the first step in the budget process?

plan

10. Which of the following is not considered a cost of manufacturing a product?

salaries of the administrative assistants

2. What is the ability of a business to pay its debts as they come due called?

solvency

25. Dixon Company expects $650,000 of credit sales in March and $800,000 of credit sales in April. Dixon historically collects 70% of its sales in the month of sale and 30% in the following month. How much cash does Dixon expect to collect in April?

$755,000

13. Which of the following is not one of the four basic functions of the management process?

Operating

19. Assume fixed costs are $700,000, the unit selling price is $75, and the unit variable costs are $25, what is the break-even sales in units?

14,000

3. If the sales account balance on the income statement is $200,000, and total cost of goods sold is $150,000, using vertical analysis determine the percentage for gross profit.

25%

24. The total estimated sales for the coming year is 250,000 units. The estimated inventory at the beginning of the year is 22,500 units, and the desired inventory at the end of the year is 30,000 units. What should be the total production units indicated in the production budget?

257,500 units

9. Which of the following best describes the difference between financial and managerial accounting?

Managerial accounting is not restricted to generally accepted accounting principles, while financial accounting is restricted to GAAP.

15. The journal entry to record the requisition of materials to the factory in job order costing includes a debit to what account?

Work in Process

23. Which of the following most often use static budgets?

administrative departments

14. For which of the following would the job order costing system be appropriate?

antique furniture repair shop