Accounting 2 FINAL!!!!!!!!, Accounting final

The transfer price approach that uses a variety of cost concepts is the

(a. cost price approach) b. negotiated price approach c. market price approach d. standard cost approach

Which of the following describes the behavior of the fixed cost per unit?

(a. decreases with increasing production) b. remains constant with changes in production c. increases with increasing production d. decreases with decreasing production

The two categories of cost comprising conversion costs are

(a. direct labor and factory overhead) b. direct labor and indirect labor c. factory overhead and direct materials d. direct labor and direct materials

All of the following would be reported on the balance sheet as a current asset except

(a. factory overhead) b. materials inventory c. finished goods inventory d. work in process inventory

For which of the following businesses would the job order cost system be appropriate?

(a. hospital) b. oil refinery c. canned soup processor d. lumber mill

Managers of what type of decentralized units have authority and responsibility for revenues, costs, and assets invested in the unit?

(a. investment center) b. production center c. profit center d. cost center

Which of the following are the two main types of cost accounting systems for manufacturing operations?

(a. job order cost and process cost systems) b. process cost and replacement cost systems c. process cost and general accounting systems d. job order and general accounting systems

Under the corporate form of business organization,

(a. ownership rights are easily transferred) b. a stockholder is personally liable for the debts of the corporation c. stockholders wishing to sell their corporate shares must get the approval of other stockholders

The cost system best suited to industries that manufacture a large number of identical units of commodities on a continuous basis is

(a. process) b. job order c. first-in, first-out d. departmental

Which of the following costs is an example of a cost that remains the same in total as the number of units produced changes

(a. salary of a factory supervisor) b. units-of-production depreciation on factory equipment c. direct materials d. direct labor

Period costs are classified as either

(a. selling expenses or administrative expenses) b. selling expenses or production expenses c. administrative expense or production expenses d. general expenses or selling expenses

What is the purpose of the statement of cost of goods manufactured?

(a. to determine the amounts transferred to finished goods) b. to determine the ending work in process inventory c. to determine the ending materials inventory d. all of these

Production and sales estimates for March for the Robin Co. are as follows: Estimated inventory (units), March 1 18,000 Desired inventory (unit), March 31 21,600 Expected sales volume (units): Area M 7,000 Area L 8,000 Area O 9,000 Unit sales price $15 The number of units expected to be manufactured in March is Select one: a. 21,600 b. 27,000 c. 24,000 d. 27,600

. 27,600

Question text If the expected sales volume for the current period is 7,000 units, the desired ending inventory is 400 units, and the beginning inventory is 400 units, the number of units set forth in the production budget, representing total production for the current period, is a. 7,000 b. 7,400 c. 6,700 d. 7,100

. 7000

Costs that vary in total in direct proportion to changes in an activity level are called Select one: a. variable costs b. differential costs c. sunk costs d. fixed costs

a. variable costs

Costs that remain constant in total dollar amount as the level of activity changes are called

a. variable costs b. mixed costs c. product costs (d. fixed costs)

Norris Company declared cash dividends of $60,000 during the year. Cash dividends payable were $20,000 at the beginning of the year and $25,000 at the end of the year. The amount of cash Norris Co. used for payment of dividends during the year was Select one: a. $80,000 b. $105,000 c. $55,000 d. $65,000

c. $55,000

The standard costs and actual costs for direct materials for the manufacture of 2,500 actual units of product are Standard Costs Direct materials 2,500 kilograms @ $8.50 Actual Costs Direct materials 2,600 kilograms @ $8.75 The amount of the direct materials quantity variance is Select one: a. $875 unfavorable variance b. $875 favorable variance c. $850 unfavorable variance d. $850 favorable variance

c. $850 unfavorable variance

Question text Jaxson Corporation has the following data related to direct labor costs for September: actual costs are 10,200 hours at $15.75 per hour and standard costs are 10,800 hours at $15.50 per hour. What is the direct labor time variance? Select one: a. $9,450 unfavorable b. $9,300 unfavorable c. $9,300 favorable d. $9,450 favorable

c. $9,300 favorable

Department M had 2,000 units 40% completed in process at the beginning of June, 12,000 units completed during June, and 1,200 units 25% completed at the end of June. What was the number of equivalent units of production for conversion costs for June if the first-in, first-out method is used to cost inventories? Select one: a. 15,200 units b. 11,200 units c. 11,500 units d. 10,000 units

c. 11,500 units

The balanced scorecard measures Select one: a. only nonfinancial information b. external and internal information c. both financial and nonfinancial information d. only financial information

c. both financial and nonfinancial information

The last item on the statement of cash flows prior to the schedule of noncash investing and financing activities reports Select one: a. net cash flow from financing activities b. net cash flow from investing activities c. cash at the end of the year d. the increase or decrease in cash

c. cash at the end of the year

Which of the following measures would not help managers to control and improve operations? Select one: a. yield trends b. cost trends of a product c. commissions paid per time period d. units produced per time period

c. commissions paid per time period

Leverage implies that a company Select one: a. has a high current ratio b. has a high earnings per share c. contains debt financing d. contains equity financing

c. contains debt financing

On January 1, Gemstone Company obtained a $165,000, 10-year, 7% installment note from Guarantee Bank. The note requires annual payments of $23,492, with the first payment occurring on the last day of the fiscal year. The first payment consists of interest of $11,550 and principal repayment of $11,942. The journal entry to record the payment of the first annual amount due on the note would include a Select one: a. credit to interest payable for $11,550 b. debit to cash for $11,942 c. debit to notes payable for $11,942 d. debit to interest expense for $23,492

c. debit to notes payable for $11,942

Equivalent production units are generally determined for a. direct materials and direct labor costs only b. direct materials only c. direct materials and conversion costs d. conversion costs only

c. direct materials and conversion costs

The following information pertains to Diane Company. Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were on credit. Assets Cash and short-term investments $ 30,000 Accounts receivable (net) 20,000 Inventory 15,000 Property, plant, and equipment 185,000 Total assets $250,000 Liabilities and Stockholders' Equity Current liabilities $ 45,000 Long-term liabilities 70,000 Stockholders' equity—Common 135,000 Total liabilities and stockholders' equity $250,000 Income Statement Sales $ 85,000 Cost of goods sold 45,000 Gross margin $ 40,000 Operating expenses (15,000) Interest expense (5,000) Net income $ 20,000 Number of shares of common stock outstanding 6,000 Market price of common stock $20 Total dividends paid $9,000 Cash provided by operations $30,000 What is the price earnings ratio for Diane Company? Select one: a. 6.0 times b. 2.5 times c. 8.0 times d. 4.0 times

a. 6.0 times

Prime costs are Select one: a. period costs and factory overhead b. direct materials and factory overhead c. direct materials and direct labor d. direct labor and factory overhead

c. direct materials and direct labor

Which of the following is considered an unusual item affecting the prior period's income statement?

a. an extraordinary item b. discontinued operations (c. a change in accounting principles) d. fixed asset impairments

A plant managers salary is Select one: a. an indirect cost b. a direct cost and an indirect cost c. a period cost d. a direct cost

a. an indirect cost

Which of the following would not be used in preparing a cash budget for October?

a. beginning cash balance on October 1 (b. estimated depreciation expense for October) c. budgeted sales and collections for October d. budgeted salaries expense for October

Manley Co. manufactures office furniture. During the most productive month of the year, 4,500 desks were manufactured at a total cost of $86,625. In its slowest month, the company made 1,800 desks at a cost of $49,500. Using the high-low method of cost estimation, total fixed costs are

a. cannot be determined from the data given b. $33,875 (c. $24,750) d. $61,875

Which of the following can be found on the statement of cash flows?

a. changes in retained earnings b. total changes in stockholders' equity c. total assets (d. cash flows from operating activities)

Question text Which of the following costs are not included in finished goods inventory? Select one: a. chief financial officer's salary b. factory overhead c. direct materials d. direct labor

a. chief financial officer's salary

A balance sheet that displays only component percentages is a

a. comparative balance sheet b. condensed balance sheet (c. common-sized balance sheet) d. trend balance sheet

The ratio of sales to invested assets, which is also a factor in the DuPont formula for determining the rate of return on investment, is called

a. cost ratio b. profit margin (c. investment turnover) d. indirect margin

Motorcycle Manufacturers, Inc. projected sales of 78,000 machines for the year. The estimated January 1 inventory is 6,500 units, and the desired December 31 inventory is 6,000 units. What is the budgeted production (in units) for the year? Select one: a. 70,000 b. 77,500 c. 70,500 d. 78,500

b. 77,500

The formula for the rate of return on investment is Select one: a. Income from operations/Sales b. Income from operations/Invested assets c. Sales/Invested assets d. Invested assets/Income from operations

b. Income from operations/Invested assets

On the first day of the fiscal year, Lisbon Co. issued $1,000,000 of 10-year, 7% bonds for $1,050,000, with interest payable semiannually. Orange Inc. purchased the bonds on the issue date for the issue price. If Lisbon uses the straight-line method for amortizing the premium, the journal entry to record the first semiannual interest payment by Lisbon Co. would include a debit to Select one: a. Cash for $70,000 b. Interest Expense for $32,500 c. Premium on Bonds Payable for $5,500 d. Interest Payable for $30,000

b. Interest Expense for $32,500

Which of the following is not true of a corporation? Select one: a. It may enter into binding legal contracts in its own name. b. The acts of its owners bind the corporation. c. It may sue and be sued. d. It may buy, own, and sell property.

b. The acts of its owners bind the corporation.

Question text Which of the following statements is false? Select one: a. Managerial accounting does not need to conform to GAAP. b. There is no overlap between financial and managerial accounting. c. Financial accounting must conform to GAAP. d. Managerial accounting sometimes relies on past information.

b. There is no overlap between financial and managerial accounting.

An extraordinary item can result from Select one: a. a segment of the business being sold b. a transaction or event that is unusual and occurs infrequently c. a change from one accounting method to another acceptable accounting method d. corporate income tax being paid

b. a transaction or event that is unusual and occurs infrequently

An example of a period cost is Select one: a. property taxes on plant facilities b. advertising expense c. depreciation on factory equipment d. indirect materials

b. advertising expense

Which of the following is a measure of a manager's performance working in an investment center? Select one: a. rate of return on investment b. all of these c. divisional income statements d. residual income

b. all of these

The state charter allows a corporation to issue only a certain number of shares of each class of stock. This amount of stock is called Select one: a. treasury stock b. authorized stock c. outstanding stock d. issued stock

b. authorized stock

Which of the following would not be on the statement of cash flows? Select one: a. cash flows from financing activities b. cash flows from contingent activities c. cash flows from investing activities d. cash flows from operating activities

b. cash flows from contingent activities

Which of the following would not be on the statement of cash flows? Select one: a. cash flows from operating activities b. cash flows from contingent activities c. cash flows from financing activities d. cash flows from investing activities

b. cash flows from contingent activities

The journal entry a company records for the payment of interest, interest expense, and amortization of bond discount is Select one: a. debit Interest Expense and Discount on Bonds Payable, credit Cash b. debit Interest Expense, credit Cash and Discount on Bonds Payable c. debit Interest Expense, credit Interest Payable and Discount on Bonds Payable d. debit Interest Expense, credit Cash

b. debit Interest Expense, credit Cash and Discount on Bonds Payable

The Freeman Corporation issues 2,000, 10-year, 8%, $1,000 bonds dated January 1 at 96. The journal entry to record the issuance will show a Select one: a. credit to Discount on Bonds Payable for $80,000 b. debit to Cash of $2,000,000 c. credit to Bonds Payable for $1,920,000 d. debit to Cash for $1,920,000

b. debit to Cash of $2,000,000

As production increases, the fixed cost per unit Select one: a. either increases or decreases, depending on the variable costs b. decreases c. remains the same d. increases

b. decreases

Which of the following is not included in conversion costs? Select one: a. indirect labor b. direct materials c. factory overhead d. direct labor

b. direct materials

Which of the following would not be found in the accounting system of a service provider? Select one: a. deferred revenue account b. finished goods ledger c. cost ledger d. job cost sheets

b. finished goods ledger

Question text Which of the following is not an example of a cost that varies in total as the number of units produced changes? Select one: a. electricity per KWH to operate factory equipment b. insurance premiums on factory building c. ages of assembly worker d. direct materials cost

b. insurance premiums on factory building

The authorized stock of a corporation Select one: a. is indicated in its by-laws b. is indicated in its charter c. must be recorded in a formal accounting entry d. only reflects the initial capital needs of the company

b. is indicated in its charter

Which of the following represents an inflow of cash and therefore would be reported on the statement of cash flows? Select one: a. retirement of bond payable b. issuance of long-term debt c. declaration of stock dividends d. acquisition of treasury stock

b. issuance of long-term debt

The balance in Discount on Bonds Payable that is applicable to bonds due in three years would be reported on the balance sheet in the section entitled Select one: a. investments b. long-term liabilities c. intangible assets d. current assets

b. long-term liabilities

Question text Who are the individuals charged with the responsibility for directing the day-to-day operations of a business? Select one: a. customers b. managers c. investors d. shareholders

b. managers

Which transfer price approach is used when the transfer price is set at the amount sold to outside buyers? Select one: a. variable price b. market price c. cost price d. negotiated price

b. market price

The document authorizing the issuance of materials from the storeroom is a Select one: a. purchase order b. materials requisition c. receiving report d. purchase requisition

b. materials requisition

A process cost system be appropriate for a Select one: a. custom cabinet builder b. natural gas refinery c. catering business d. jet airplane builder

b. natural gas refinery

The excess of issue price over par of common stock is termed a Select one: a. income b. premium c. deficit d. discount

b. premium

Question text Contribution margin is Select one: a. the same as sales revenue b. the excess of sales revenue over variable cost c. profit d. another term for volume in the "cost-volume-profit" analysis

b. the excess of sales revenue over variable cost

The amount of time spent by an employee on an individual job are recorded on Select one: a. employees' earnings records b. time tickets c. pay stubs d. in-and-out cards

b. time tickets

Question text Cost of goods manufactured is equal to Select one: a. total manufacturing costs plus ending work in process inventory less beginning work in process inventory b. total manufacturing costs plus beginning work in process inventory less ending work in process inventory c. cost of goods sold plus beginning work in process inventory less ending work in process inventory d. total manufacturing costs plus ending materials inventory less beginning materials inventory

b. total manufacturing costs plus beginning work in process inventory less ending work in process inventory

Finch Company began its operations on March 31 of the current year. Finch has the following projected costs: April May June Manufacturing costs (1) $156,800 $195,200 $217,600 Insurance expense (2) 1,000 1,000 1,000 Depreciation expense 2,000 2,000 2,000 Property tax expense (3) 500 500 500 (1) Of the manufacturing costs, three-fourths are paid for in the month they are incurred; one-fourth is paid in the following month.(2) Insurance expense is $1,000 a month; however, the insurance is paid four times yearly in the first month of the quarter, (i.e., January, April, July, and October).(3) Property tax is paid once a year in November. The cash payments expected for Finch Company in the month of April are Select one: a. $122,600 b. $121,100 c. $120,600 d. $123,100

c. $120,600

The following data relate to direct labor costs for the current period: Standard costs 36,000 hours at $22.00 Actual costs 35,000 hours at $23.00 What is the direct labor time variance? Select one: a. $35,000 unfavorable b. $23,000 favorable c. $22,000 favorable d. $36,000 unfavorable

c. $22,000 favorable

The following data relate to direct labor costs for the current period: Standard costs 36,000 hours at $22.00 Actual costs 35,000 hours at $23.00 What is the direct labor time variance? Select one: a. $36,000 unfavorable b. $23,000 favorable c. $22,000 favorable d. $35,000 unfavorable

c. $22,000 favorable

A company with 100,000 authorized shares of $4 par common stock issued 50,000 shares at $9. Subsequently, the company declared a 2% stock dividend on a date when the market price was $10 a share. The effect of the declaration and issuance of the stock dividend is to

a. decrease retained earnings, increase common stock, and decrease paid-in capital b. decrease retained earnings, increase common stock, and increase paid-in capital (c. increase retained earnings, decrease common stock, and increase paid-in capital) d. increase retained earnings, decrease common stock, and decrease paid-in capital

Which of the following is an example of a cost that varies in total as the number of units produced changes? Select one: a. direct materials cost b. property taxes on factory buildings c. straight-line depreciation on factory equipment d. salary of a production supervisor

a. direct materials cost

All of the following could be considered a direct material except Select one: a. glue b. steel c. fabric d. lumber

a. glue

Standards that represent levels of operation that can be attained with reasonable effort are called

a. ideal standards b. variable standards c. theoretical standards (d. normal standards)

Which of the following is not a measure that management can use in evaluating and controlling investment center performance?

a. income from operations (b. negotiated price) c. rate of return on investment d. residual income

The particular analytical measures chosen to analyze a company may be influenced by all of the following except

a. industry type (b. product quality or service effectiveness) c. diversity of business operations d. capital structure

A ten-year bond was issued at par for $250,000 cash. This transaction should be shown on a statement of cash flows under

a. investing activities (b. financing activities) c. noncash investing and financing activities d. operating activities

The best measure of managerial efficiency in the use of investments in assets is Select one: a. investment turnover b. inventory turnover c. income from operations d. rate of return on stockholders' equity

a. investment turnover

Question text Which of the following are the two main types of cost accounting systems for manufacturing operations? Select one: a. job order cost and process cost systems b. job order and general accounting systems c. process cost and general accounting systems d. process cost and replacement cost systems

a. job order cost and process cost systems

The tendency of the rate earned on stockholders' equity to vary disproportionately from the rate earned on total assets is Select one: a. leverage b. yield c. solvency d. quick assets

a. leverage

Which of the following would use a process costing system? Select one: a. a lumber mill b. a custom home builder c. a custom furniture manufacturer d. a wedding dress designer

a. lumber mill

Accounting designed to meet the needs of decision makers inside the business is Select one: a. managerial accounting b. financial accounting c. general accounting d. external accounting

a. managerial accounting

Question text If the price paid per unit differs from the standard price per unit for direct materials, the variance is a Select one: a. price variance b. variable variance c. controllable variance d. volume variance

a. price variance

If the wage rate paid per hour differs from the standard wage rate per hour for direct labor, the variance is a a. rate variance b. volume variance c. variable variance d. quantity variance

a. rate variance

If the actual direct labor hours spent producing a commodity differs from the standard hours, the variance is a

a. rate variance b. quantity variance c. price variance (d. time variance)

Most operating decisions of management focus on a narrow range of activity called the Select one: a. relevant range of production b. tactical operating level of production c. strategic level of production d. optimal level of production

a. relevant range of production

If a company borrows money from a bank as an installment note, the interest portion of each annual payment will

a. remain constant over the term of the note (b. equal the interest rate on the note times the carrying amount of the note at the beginning of the period) c. increase over the term of the note d. equal the interest rate on the note times the face amount

Which of the following is not a commonly used approach to setting transfer prices? Select one: a. revenue price approach b. negotiated price approach c. market price approach d. cost price approach

a. revenue price approach

In a common-sized income statement, 100% is the Select one: a. sales b. net income c. gross profit d. net cost of goods sold

a. sales

When the maturities of a bond issue are spread over several dates, the bonds are called

a. serial bonds

The tendency of the rate earned on stockholders' equity to vary disproportionately from the rate earned on total assets is

a. solvency (b. leverage) c. yield d. quick assets

Which of the following is not a reason for a direct materials quantity variance?

a. spoilage of materials b. purchasing of inferior raw materials (c. increased material costs per unit) d. malfunctioning equipment

Which of the following is not one of the four basic financial statements?

a. statement of cash flows b. income statement (c. statement of changes in financial position) d. balance sheet

As production increases, variable costs per unit Select one: a. stay the same b. decrease c. increase d. either increase or decrease, depending on the fixed costs

a. stay the same

Which of the following is not an example of a cost that varies in total as the number of units produced changes? Select one: a. straight-line depreciation on factory equipment b. direct materials cost c. wages of assembly worker d. electricity per KWH to operate factory equipment

a. straight-line depreciation on factory equipment

Another term for factory overhead is

a. supervisory cost (b. factory burden) c. period cost d. surplus

Question text Cash dividends paid on capital stock would be reported in the statement of cash flows in Select one: a. the cash flows from financing activities section b. the cash flows from investing activities section c. the cash flows from operating activities section d. a separate schedule

a. the cash flows from financing activities section

The total manufacturing cost variance is

a. the difference between planned costs and standard costs for units produced b. (the difference between actual costs and standard costs for units produced) c. none of these answers is correct d. the flexible budget variance plus the time variance

Nebraska Inc. issues 3,000 shares of common stock for $45,000. The stock has a stated value of $10 per share. The journal entry to record the stock issuance would include a credit to Common Stock for

a. $15,000 b. $3,000 (c. $30,000) d. $45,000

If the expected sales volume for the current period is 8,000 units, the desired ending inventory is 1,400 units, and the beginning inventory is 1,200 units, the number of units set forth in the production budget, representing total production for the current period, is

a. 10,600 b. 66,000 (c. 8,200) d. 6,800

Tara Company's budget shows the following credit sales for the current year: September, $25,000; October, $36,000; November, $30,000; December, $32,000. Experience has shown that payment for credit sales is received as follows: 15% in the month of sale, 60% in the first month after sale, 20% in the second month after sale, and 5% is uncollectible. How much cash will Tara Company expect to collect in November as a result of current and past credit sales? Select one: a. $19,700 b. $30,000 c. $31,100 d. $28,400

c. $31,100

Baxter Company reported a net loss of $13,000 for the year ended December 31. During the year, accounts receivable decreased by $5,000, merchandise inventory increased by $8,000, accounts payable increased by $10,000, and depreciation expense of $4,000 was recorded. During the year, operating activities Select one: a. used net cash of $2,000 b. used net cash of $8,000 c. provided net cash of $2,000 d. provided net cash of $8,000

a. used net cash of $2,000

The total manufacturing cost variance consists of Select one: a. direct materials cost variance, direct labor rate variance, and factory overhead cost variance b. direct materials cost variance, direct labor cost variance, and variable factory overhead controllable variance c. direct materials cost variance, direct labor cost variance, and factory overhead cost variance d. direct materials price variance, direct labor cost variance, and fixed factory overhead volume variance

c. direct materials cost variance, direct labor cost variance, and factory overhead cost variance

If accounts payable have increased during a period, Select one: a. expenses on an accrual basis are less than expenses on a cash basis b. revenues on an accrual basis are less than revenues on a cash basis c. expenses on an accrual basis are greater than expenses on a cash basis d. expenses on an accrual basis are the same as expenses on a cash basis

c. expenses on an accrual basis are greater than expenses on a cash basis

Question text The three most common cost behavior classifications are Select one: a. variable costs, sunk costs, and opportunity costs b. variable costs, period costs, and differential costs c. fixed costs, variable costs, and mixed costs d. variable costs, product costs, and sunk costs

c. fixed costs, variable costs, and mixed costs

One reason that a common-sized statement is a useful tool in financial analysis is that it enables the user to Select one: a. determine which companies in a single industry are of the same size b. judge the relative potential of two companies of similar size in different industries c. make a better comparison of two companies of different sizes in the same industry d. determine which companies in a single industry are of the same value

c. make a better comparison of two companies of different sizes in the same industry

Standards that represent levels of operation that can be attained with reasonable effort are called Select one: a. variable standards b. theoretical standards c. normal standards d. ideal standards

c. normal standards

Under the corporate form of business organization, Select one: a. stockholders' acts can bind the corporation even though the stockholders have not been appointed as agents of the corporation b. a stockholder is personally liable for the debts of the organization c. ownership rights are easily transferred d. stockholders wishing to sell their corporate shares must get the approval of other stockholders

c. ownership rights are easily transferred

The operating budgets of a company includes the Select one: a. financing budget b. cash budget c. production budget d. capital expenditures budget

c. production budget

In a job order cost accounting system, when goods that have been ordered are received, the receiving department personnel count, inspect the goods, and complete a Select one: a. purchase requisition b. sales invoice c. receiving report d. purchase order

c. receiving report

All of the following are examples of activity bases except Select one: a. quality inspections of products b. raw materials storage c. salaries of supervisors d. number of machine setups

c. salaries of supervisors

Question text The finished goods account is the controlling account for the Select one: a. materials ledger b. work in process ledger c. stock ledger d. cost ledger

c. stock ledger

In a job order cost accounting system, the entry to record the flow of direct materials into production is Select one: a. to debit Materials, and credit Work in Process b. to debit Factory Overhead, and credit Materials c. to debit Work in Process, and credit Materials d. to debit Work in Process, and credit Supplies

c. to debit Work in Process, and credit Materials

Cost of goods manufactured is equal to Select one: a. total manufacturing costs plus ending work in process inventory less beginning work in process inventory b. cost of goods sold plus beginning work in process inventory less ending work in process inventory c. total manufacturing costs plus beginning work in process inventory less ending work in process inventory d. total manufacturing costs plus ending materials inventory less beginning materials inventory

c. total manufacturing costs plus beginning work in process inventory less ending work in process inventory

At the end of the fiscal year, the balance in Factory Overhead is small. The balance would be Select one: a. allocated between Work in Process and Finished Goods b. transferred to Finished Goods c. transferred to Cost of Goods Sold d. transferred to Work in Process

c. transferred to Cost of Goods Sold

Standard costs are used in companies for a variety of reasons. Which of the following is not one of the benefits for using standard costs? Select one: a. used to estimate cost of inventory b. used to plan direct materials, direct labor, and variable factory overhead c. used to indicate where changes in technology and machinery need to be made d. used to control costs

c. used to indicate where changes in technology and machinery need to be made

An analysis in which all the components of an income statement are expressed as a percentage of sales is a Select one: a. horizontal analysis b. solvency analysis c. vertical analysis d. liquidity analysis

c. vertical analysis

The percent of fixed assets to total assets is an example of Select one: a. solvency analysis b. profitability analysis c. vertical analysis d. horizontal analysis

c. vertical analysis

The following data relate to direct labor costs for August: Actual costs: 5,500 hours at $24.00 per hour. Standard costs: 5,000 hours at $23.70 per hour. What is the direct labor rate variance? Select one: a. $1,650 favorable b. $1,500 unfavorable c. $1,500 favorable d. $1,650 unfavorable

d. $1,650 unfavorable

Question text The following data relate to direct labor costs for the current period: Standard costs 7,500 hours at $11.70 Actual costs 6,000 hours at $12.00 What is the direct labor time variance? Select one: a. $18,000 unfavorable b. $17,550 unfavorable c. $18,000 favorable d. $17,550 favorable

d. $17,550 favorable

Manley Co. manufactures office furniture. During the most productive month of the year, 4,500 desks were manufactured at a total cost of $86,625. In its slowest month, the company made 1,800 desks at a cost of $49,500. Using the high-low method of cost estimation, total fixed costs are Select one: a. $61,875 b. $33,875 c. cannot be determined from the data given d. $24,750

d. $24,750

Question text The debits to Work in Process—Assembly Department for May, together with data concerning production, are as follows: May 1, WORK IN PROCESS: MATERIALS COST, 3,000 units $ 8,000 CONVERSION COSTS, 3,000 units 66.7% COMPLETE 6,000 MATERIALS ADDED DURING MAY; 10,000 units 30,000 CONVERSION COSTS DURING MAY 31,000 GOODS FINISHED DURING MAY; 11,500 units 0 MAY 31 WORK IN PROCESS; 1,500 units, 50% COMPLETED 0 All direct materials are placed in process at the beginning of the process and the firstin, firstout method is used to cost inventories. The materials cost per equivalent unit for May is Select one: a. $2.92 b. $3.80 c. $2.31 d. $3.00

d. $3.00

The balance in Discount on Bonds Payable Select one: a. would be added to the related bonds payable to determine the carrying amount of the bonds b. should be reported on the balance sheet as an asset because it has a debit balance c. should be allocated to the remaining periods for the life of the bonds by the straight-line method, if the results obtained by that method materially differ from the results that would be obtained by the effective interest rate method d. would be subtracted from the related bonds payable on the balance sheet

d. would be subtracted from the related bonds payable on the balance sheet

Question text The charter of a corporation provides for the issuance of 100,000 shares of common stock. Assume that 30,000 shares were originally issued and 5,000 were subsequently reacquired. What is the number of shares outstanding? Select one: a. 30,000 b. 70,000 c. 35,000 d. 25,000

d. 25,000

The charter of a corporation provides for the issuance of 100,000 shares of common stock. Assume that 30,000 shares were originally issued and 5,000 were subsequently reacquired. What is the number of shares outstanding? Select one: a. 35,000 b. 30,000 c. 70,000 d. 25,000

d. 25,000

Willow Valley's April sales forecast projects that 7,000 units will sell at a price of $10.50 per unit. The desired ending inventory is 30% higher than the beginning inventory, which were 1,000 units. Budgeted production in April would be Select one: a. 6,300 units b. 8,000 units c. 7,000 units d. 7,300 units

d. 7,300 units

Question text If Dakota Company issues 1,500 shares of $6 par common stock for $75,000, Select one: a. Common Stock will be credited for $75,000 b. Cash will be debited for $66,000 c. Paid-In Capital in Excess of Par will be credited for $9,000 d. Paid-In Capital in Excess of Par will be credited for $66,000

d. Paid-In Capital in Excess of Par will be credited for $66,000

All of the following employees hold line positions in Facebook except Select one: a. vice president of production b. manager of the web design c. vice president of finance d. vice president of sales

vice president of finance

Which of the following is not an example of a cost that varies in total as the number of units produced changes? Select one: a. direct materials cost b. electricity per KWH to operate factory equipment c. wages of assembly worker d. straight-line depreciation on factory equipment

d. straight-line depreciation on factory equipment

Question text Which of the following is not a right possessed by common stockholders of a corporation? Select one: a. the right to share in assets upon liquidation b. the right to sell their stock to anyone they choose c. the right to vote in the election of the board of directors d. the right to receive a minimum amount of dividends

d. the right to receive a minimum amount of dividends

Two divisions of Oregano Company (Divisions TX and OY) have the same profit margins. Division TX's investment turnover is larger than that of Division OY (1.2 to 1.0). Income from operations for Division TX is $55,000, and income from operations for Division OY is $43,000. Division TX has a higher return on investment than Division OY by Select one: a. comparing the profit margins b. using income from operations as a performance measure c. applying a negotiated price measure d. using its assets more efficiently in generating sales

d. using its assets more efficiently in generating sales

Question text Myers Corporation has the following data related to direct materials costs for November: actual costs for 5,000 pounds of material, $4.50; And standard costs for 4,800 pounds of material at $5.10 per pound. What is the direct materials price variance? Select one: a. $2,880 unfavorable b. $2,880 favorable c. $3,000 favorable d. $3,000 unfavorable

$3,000 favorable

Financing activities include

(a. acquiring long-lived assets) b. acquiring investments c. lending money d. issuing debt

Department G had 3,600 units 25% completed at the beginning of the period, 11,000 units were completed during the period; 3,000 units were 20% completed at the end of the period, and the following manufacturing costs debited to the departmental work in process account during the period: Work in process, beginning of period $40,000 Costs added during period: Direct materials (10,400 units at $8) 83,200 Direct labor 63,000 Factory overhead 25,000 All direct materials are placed in process at the beginning of production and the first-in, first-out method of inventory costing is used. What is the total cost of the units started and completed during the period (round unit cost calculations to three decimal places)?

(a. $120,060) b. $211,200 c. $190,275 d. $20,934

As of January 1 of the current year, the Grackle Company had accounts receivables of $50,000. The sales for January, February, and March were as follows: $120,000, $140,000, and $150,000, respectively. Of each month's sales, 20% are for cash. Of the remaining 80% (the credit sales), 60% are collected in the month of sale, with the remaining 40% collected in the following month. What is the total cash collected (both from accounts receivable and for cash sales) in the month of February?

(a. $133,600) b. $62,400 c. $91,200 d. $129,600

The Levi Company issued $200,000 of 12% bonds on January 1 at face value. The bonds pay interest semiannually on January 1 and July 1. The bonds are dated January 1, and mature in five years, on January 1. The total interest expense related to these bonds for the current year ending on December 31 is

(a. $24,000) b. $6,000 c. $18,000 d. $2,000

On January 1, the Elias Corporation issued 10% bonds with a face value of $50,000. The bonds are sold for $46,000. The bonds pay interest semiannually on June 30 and December 31 and the maturity date is December 31, ten years from now. Elias records straight-line amortization of the bond discount. The bond interest expense for the year ended December 31 of the first year is

(a. $5,400) b. $5,000 c. $5,200 d. $5,800

The standard costs and actual costs for direct materials for the manufacture of 2,500 actual units of product are Standard Costs Direct materials 2,500 kilograms @ $8.50 Actual Costs Direct materials 2,600 kilograms @ $8.75 The amount of the direct materials quantity variance is

(a. $850 unfavorable variance) b. $850 favorable variance c. $875 favorable variance d. $875 unfavorable variance

Department K had 3,000 units 45% completed in process at the beginning of the period; 17,000 units completed during the period; and 1,200 units 40% completed at the end of the period. What was the number of equivalent units of production for the period for conversion if the first-in, first-out method is used to cost inventories? Assume the completion percentage applies to both direct materials and conversion cost.

(a. 16,310) b. 15,650 c. 18,350 d. 16,130

The following information pertains to Diane Company. Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were on credit. Assets Cash and short-term investments $ 30,000 Accounts receivable (net) 20,000 Inventory 15,000 Property, plant, and equipment 185,000 Total assets $250,000 Liabilities and Stockholders' Equity Current liabilities $ 45,000 Long-term liabilities 70,000 Stockholders' equity—Common 135,000 Total liabilities and stockholders' equity $250,000 Income Statement Sales $ 85,000 Cost of goods sold 45,000 Gross margin $ 40,000 Operating expenses (15,000) Interest expense (5,000) Net income $ 20,000 Number of shares of common stock outstanding 6,000 Market price of common stock $20 Total dividends paid $9,000 Cash provided by operations $30,000 What is the rate earned on total assets for Diane Company?

Select one: a. 0.10% (b. 10.0%) c. 1.0% d. 8.0%

Given the following costs and activities for Dance Company electrical costs, use the high-low method to calculate Dance's variable electrical costs per machine hour. Costs Machine Hours Aug. $11,700 15,000 Sept. $13,200 17,500 Oct. $11,400 14,500 Select one: a. $0.60 b. $1.20 c. $6.00 d. $2.08

a. $0.60

When the market rate of interest was 12%, Halprin Corporation issued $1,000,000, 11%, 10-year bonds that pay interest annually. The selling price of this bond issue was

a. $1,000,000 b. $321,970 c. $621,524 (d. $943,494)

The budgeted finished goods inventory and cost of goods sold for a manufacturing company for the year are as follows: January 1 finished goods, $765,000; December 31 finished goods, $640,000; and cost of goods sold, $2,560,000. The budgeted costs of goods manufactured is

a. $1,405,000 (b. $2,435,000) c. $2,560,000 d. $3,965,000

The following information pertains to Diane Company. Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were on credit. Use this information to answer the questions that follow. ​ Assets Cash and short-term investments $ 30,000 Accounts receivable (net) 20,000 Inventory 15,000 Property, plant, and equipment 185,000 Total assets $250,000 Liabilities and Stockholders' Equity Current liabilities $ 45,000 Long-term liabilities 70,000 Stockholders' equity—Common 135,000 Total liabilities and stockholders' equity $250,000 Income Statement Sales $ 85,000 Cost of goods sold 45,000 Gross margin $ 40,000 Operating expenses (15,000) Interest expense (5,000) Net income $ 20,000 Number of shares of common stock outstanding 6,000 Market price of common stock $20 Total dividends paid $9,000 Cash provided by operations $30,000 What are the dividends per common share for Diane Company? Select one: a. $1.50 b. $0.67 c. $20.00 d. $3.00

a. $1.50

Given the following cost and activity observations for George Companys utilities, use the high-low method to calculate George's variable utilities costs per machine hour. ​ Cost Machine Hours May $16,500 105,000 June 18,000 120,000 July 16,000 100,000 August 17,500 117,000

a. $100.00 b. $1.00 c. $10.00 (d. $0.10)

A company used $35,000 of direct materials, incurred $73,000 in direct labor cost, and had $114,000 in factory overhead costs during the period. If beginning and ending work in process inventories were $28,000 and $32,000, respectively, the cost of goods manufactured was

a. $226,000 (b. $218,000) c. $190,000 d. $222,000

Question text Reynolds Manufacturers Inc. has estimated total factory overhead costs of $95,000 and expected direct labor hours of 9,500 for the current fiscal year. If job number 117 incurred 2,300 direct labor hours, Work in Process will be debited and Factory Overhead will be credited for Select one: a. $23,000 b. $2,300 c. $21,850 d. $95,000

a. $23,000

A company manufactured 50,000 units of a product at a cost of $450,000. It sold 45,000 units at $15 each. The gross profit is Select one: a. $270,000 b. $600,000 c. $240,000 d. $750,000

a. $270,000

Fashion Jeans, Inc. sells two lines of jeans; Simple Life and Fancy Life. Simple Life sells for $85, and Fancy Life sells for $100. The company sells all of its jeans on credit and estimates that 60% is collected in the month of the sale, 35% is collected in the following month, and the rest is considered to be uncollectible. The estimated sales for Simple are: January, 20,000 jeans; February, 27,500 jeans; and March, 25,000 jeans. The estimated sales for Fancy are: January, 18,000 jeans; February, 19,000; and March, 20,500 jeans. What are the expected cash receipts for the month of March? Select one: a. $3,988,125 b. $2,505,000 c. $4,175,000 d. $2,125,000

a. $3,988,125

The Cavy Company estimates that the factory overhead for the following year will be $1,250,000. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 40,000 hours. The machine hours for the month of April for all of the jobs was 4,780. If the actual factory overhead totaled $141,800, determine the over- or under applied amount for the month.

a. $35,220 over applied (b. $7,575 over applied) c. $35,220 under applied d. $7,575 underapplied

Bonds Payable has a balance of $1,000,000 and Discount on Bonds Payable has a balance of $15,500. If the issuing corporation redeems the bonds at 98.5, what is the amount of gain or loss on redemption? Select one: a. $500 loss b. c. $15,500 gain c. b. $15,500 loss d. d. $500 gain

a. $500 loss

Net income for the year was $45,500. Accounts receivable increased $5,500, and account payable increased by $11,200. Under the indirect method, the cash flow from operations is Select one: a. $51,200 b. $45,500 c. $62,200 d. $28,800

a. $51,200

What is the total stockholders' equity based on the following account balances? Common Stock $375,000 Paid-In Capital in Excess of Par 90,000 Retained Earnings 190,000 Treasury Stock 15,000

a. $565,000 b. $670,000 (c. $640,000) d. $655,000

Texas Inc. has 10,000 shares of 6%, $125 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31. What is the annual dividend on the preferred stock? Select one: a. $75,000 in total b. $10,000 in total c. $0.75 per share d. $75 per share

a. $75,000 in total

Question text The following information pertains to Diane Company. Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were on credit. Use this information to answer the questions that follow. Assets Cash and short-term investments $ 30,000 Accounts receivable (net) 20,000 Inventory 15,000 Property, plant, and equipment 185,000 Total assets $250,000 Liabilities and Stockholders' Equity Current liabilities $ 45,000 Long-term liabilities 70,000 Stockholders' equity—Common 135,000 Total liabilities and stockholders' equity $250,000 Income Statement Sales $ 85,000 Cost of goods sold 45,000 Gross margin $ 40,000 Operating expenses (15,000) Interest expense (5,000) Net income $ 20,000 Number of shares of common stock outstanding 6,000 Market price of common stock $20 Total dividends paid $9,000 Cash provided by operations $30,000 What is the rate earned on total assets for Diane Company? Select one: a. 10.0% b. 1.0% c. 8.0% d. 0.10%

a. 10.0%

Heedy Company is trying to decide how many units of merchandise to produce each month. The company policy is to have 20% of the next month's sales in inventory at the end of each month. Projected sales for August, September, and October are 30,000 units, 20,000 units, and 40,000 units, respectively. How many units must be produced in September?

a. 18,000 (b. 24,000) c. 22,000 d. 28,000

Production and sales estimates for March for the Robin Co. are as follows: Estimated inventory (units), March 1 18,000 Desired inventory (unit), March 31 21,600 Expected sales volume (units): Area M 7,000 Area L 8,000 Area O 9,000 Unit sales price $15 The number of units expected to be manufactured in March is Select one: a. 27,600 b. 27,000 c. 21,600 d. 24,000

a. 27,600

Department A had 5,000 units in work in process that were 60% completed as to labor and overhead at the beginning of the period; 34,000 units of direct materials were added during the period; 31,000 units were completed during the period; and 2,000 units were 80% completed as to labor and overhead at the end of the period. All materials are added at the beginning of the process. The first-in, first-out method is used to cost inventories. The number of equivalent units of production for conversion costs for the period was Select one: a. 29,600 b. 32,400 c. 34,000 d. 32,400

a. 29,600

If Dakota Company issues 1,500 shares of $6 par common stock for $75,000,

a. Cash will be debited for $60,000 b. Paid-In Capital in Excess of Par will be credited for $9,000 c. Common stock will be credited for $75,000 (d. Paid-In Capital in Excess of Par will be credited for $66,000)

Which of the following is not an advantage of issuing bonds instead of common stock? Select one: a. Earnings per share on common stock may be lower. b. Income to common shareholders may increase. c. Stockholder control is not affected. d. Tax savings result.

a. Earnings per share on common stock may be lower.

The controlling account for the cost ledger is Select one: a. Finished Goods b. Cost of Goods Sold c. Work in Process d. Materials

a. Finished Goods

Numbers of times interest charges are earned is computed as Select one: a. Income Before Income Taxes plus Interest Expense divided by Interest Expense b. Income Before Income Taxes less Interest Expense divided by Interest Expense c. Income Before Income Taxes divided by Interest Expense d. Income Before Income Taxes plus Interest Expense divided by Interest Revenue

a. Income Before Income Taxes plus Interest Expense divided by Interest Expense

Which of the following is not a characteristic of a job order costing system

a. It provides a separate record for the cost of each quantity of product that passes through the factory. b. It uses only one work in process account. c. It accumulates a cost for each department within the factory. d. It is best suited for industries that manufacture custom goods.

Which of the following expressions is termed the profit margin factor as used in determining the rate of return on investment?

a. Sales/Invested assets (b. Income from operations/Sales) c. Invested assets/Sales d. Sales/Income from operations

Basil Corporation issues for cash $1,000,000 of 8%, 10-year bonds, interest payable annually, at a time when the market rate of interest is 7%. The straight-line method is adopted for the amortization of bond discount or premium. Which of the following statements is true?

a. The amount of annual interest paid to bondholders increases over the 10-year life of the bonds. b. The amount of annual interest expense decreases as the bonds approach maturity. c. The carrying amount increases from its amount at issuance date to $1,000,000 at maturity. (d. The carrying amount decreases from its amount at issuance date to $1,000,000 at maturity.)

A company sells goods for $150,000 that cost $54,000 to manufacture. Which statement is true? Select one: a. The company will decrease finished goods by $54,000. b. The company will recognize $96,000 gross profit on the balance sheet. c. The company will increase finished goods by $54,000. d. The company will recognize sales on the balance sheet of $150,000.

a. The company will decrease finished goods by $54,000.

A company sells goods for $150,000 that cost $54,000 to manufacture. Which statement is true?

a. The company will recognize $96,000 gross profit on the balance sheet. b. The company will recognize sales on the balance sheet of $150,000. (c. The company will decrease finished goods by $54,000.) d. The company will increase finished goods by $54,000.

Question text Which of the following is not a reason standard costs are separated into two components? Select one: a. Variances bring attention to discrepancies in the budget and require managers to revise budgets closer b. If a negative variance is overshadowed by a favorable variance, managers may overlook potential corrections. c. Identifying variances determines which manager must find a solution to major discrepancies. d. The price and quantity variances need to be identified separately to correct the actual major differences.

a. Variances bring attention to discrepancies in the budget and require managers to revise budgets closer

Miller and Sons' static budget for 10,000 units of production includes $50,000 for direct materials, $44,000 for direct labor, variable utilities of $5,000, and supervisor salaries of $24,000. A flexible budget for 12,000 units of production would show Select one: a. direct materials of $60,000, direct labor of $52,800, utilities of $6,000, and supervisor salaries of $24,000 b. total variable costs of $148,000 c. the same cost structure in total d. direct materials of $60,000, direct labor of $52,800, utilities of $6,000, and supervisor salaries of $29,000

a. direct materials of $60,000, direct labor of $52,800, utilities of $6,000, and supervisor salaries of $24,000

The par value per share of common stock represents the Select one: a. dollar amount assigned to each share b. amount of dividends per share to be received each year c. minimum selling price of the stock established by the articles of incorporation d. minimum amount the stockholder will receive when the corporation is liquidated

a. dollar amount assigned to each share

Which of the following is a product cost? Select one: a. drill bits for a drill press used in the plant assembly area b. salary of a sales manager c. salary of the company receptionist d. advertising for a particular product

a. drill bits for a drill press used in the plant assembly area

The balanced scorecard measures four areas of financial and nonfinancial performance of a business. Identify one of the following that is not included as a performance measurement. Select one: a. employees b. innovation and learning c. internal process d. financial

a. employees

Costs other than direct materials cost and direct labor cost incurred in the manufacturing process are classified as Select one: a. factory overhead cost b. miscellaneous expense c. period cost d. product costs

a. factory overhead cost

The order of presentation of activities on the statement of cash flows is

a. financing, investing, and operating b. operating, financing, and investing c. financing, operating, and investing (d. operating, investing, and financing)

In a process cost system, the amount of work in process inventory is valued by

a. finding the sum of all open job costs (b. allocating departmental costs between completed and partially completed units) c. multiplying units in ending inventory by the direct materials cost per unit d. finding the sum of all completed jobs

Costs that remain constant in total dollar amount as the level of activity changes are called Select one: a. fixed costs b. product costs c. variable costs d. mixed costs

a. fixed costs

Given the following cost and activity observations for Smithson Companys utilities, use the high-low method to calculate Smithson's fixed costs per month. Do not round your intermediate calculations. ​ Cost Machine Hours January $52,200 20,000 February 75,000 29,000 March 57,000 22,000 April 64,000 24,500 Select one: a. $2,530 b. $1,533 c. $50,600 d. $22,800

b. $1,533

Question text If $2,000,000 of 10% bonds are issued at 97, the amount of cash received from the sale is Select one: a. $2,000,000 b. $1,940,000 c. $2,060,000 d. $2,100,000

b. $1,940,000

If budgeted beginning inventory is $8,000, budgeted ending inventory is $9,400, and budgeted cost of goods sold is $10,260, budgeted production should be Select one: a. $11,550 b. $11,660 c. $9,600 d. $1,400

b. $11,660

When Job 117 was completed, direct materials totaled $4,400; direct labor, $5,600; and factory overhead, $2,400. A total of 1,000 units were produced at a per-unit cost of Select one: a. $124 b. $12.40 c. $12,400 d. $1,240

b. $12.40

Department A had 1,000 units in Work in Process that were 60% completed at the beginning of the period at a cost of $7,000. During the period, 4,000 units of direct materials were added at a cost of $8,200, and 4,500 units were completed. At the end of the period, 500 units were 40% completed. All materials are added at the beginning of the process. Direct labor was $28,700 and factory overhead was $4,510. In the manufacture of 8,000 units of a product, direct materials cost incurred was $154,600, direct labor cost incurred was $84,000, and applied factory overhead was $45,500. What is the total conversion cost? Select one: a. $284,100 b. $129,500 c. $154,600 d. $238,600

b. $129,500

Question text In the manufacture of 8,000 units of a product, direct materials cost incurred was $154,600, direct labor cost incurred was $84,000, and applied factory overhead was $45,500. What is the total conversion cost? Select one: a. $284,100 b. $129,500 c. $154,600 d. $238,600

b. $129,500

Income tax was $175,000 for the year. Income tax payable was $30,000 and $40,000 at the beginning and end of the year, respectively. Cash payments for income tax reported on the statement of cash flows using the direct method is Select one: a. $215,000 b. $165,000 c. $205,000 d. $175,000

b. $165,000

The following data relate to direct labor costs for the current period: Standard costs 9,000 hours at $5.50 Actual costs 8,500 hours at $5.75 What is the direct labor rate variance? Select one: a. $2,250 unfavorable b. $2,125 unfavorable c. $2,250 favorable d. $2,125 favorable

b. $2,125 unfavorable

For February, sales revenue is $700,000; sales commissions are 5% of sales; the sales manager's salary is $96,000; advertising expenses are $90,000; shipping expenses total 2% of sales; and miscellaneous selling expenses are $2,500 plus 1/2 of 1% of sales. Total selling expenses for the month of February are Select one: a. $161,000 b. $241,000 c. $235,000 d. $237,000

b. $241,000

Department G had 3,600 units 25% completed at the beginning of the period, 11,000 units were completed during the period; 3,000 units were 20% completed at the end of the period, and the following manufacturing costs debited to the departmental work in process account during the period: Work in process, beginning of period $40,000 Costs added during period: Direct materials (10,400 units at $8) 83,200 Direct labor 63,000 Factory overhead 25,000 All direct materials are placed in process at the beginning of production and the first-in, first-out method of inventory costing is used. What is the total cost of the departmental work in process inventory at the end of the period ? Select one: a. $16,163 b. $28,935 c. $35,670 d. $21,432

b. $28,935

Land costing $71,000 was sold for $50,000 cash. The loss on the sale was reported on the income statement as other expense. On the statement of cash flows, what amount should be reported as an investing activity from the sale of land? Select one: a. $71,000 b. $50,000 c. $21,000 d. $121,000

b. $50,000

A company's history indicates that 20% of its sales are for cash and the rest are on credit. Collections on credit sales are 20% in the month of the sale, 50% in the next month, 25% the following month, and 5% is uncollectible. Projected sales for December, January, and February are $60,000, $85,000, and $95,000, respectively. The February expected cash receipts from all current and prior credit sales is Select one: a. $90,250 b. $61,200 c. $66,400 d. $57,000

b. $61,200

Next year's sales forecast shows that 20,000 units of Product A and 22,000 units of Product B are going to be sold for prices of $10 and $12 per unit, respectively. The desired ending inventory of Product A is 20% higher than its beginning inventory of 2,000 units. The beginning inventory of Product B is 2,500 units. The desired ending inventory of B is 3,000 units. Budgeted production of Product B for the year would be Select one: a. 24,500 b. 22,500 c. 23,200 d. 26,500

b. 22,500

Marshall Corporation had $220,000 in invested assets, sales of $242,000, income from operations of $66,000, and a desired minimum rate of return of 3%. The rate of return on investment for Marshall is Select one: a. 9.1% b. 30% c. 27.3% d. 3.0%

b. 30%

The profit margin for Division C is 6% and the investment turnover is 1.2. What is the rate of return on investment for Division B? Select one: a. 6.7% b. 20% c. 7.2% d. 7.3%

c. 7.2%

Which of the following conditions normally would not indicate that standard costs should be revised? Select one: a. The engineering department has revised product specifications in responding to customer suggestions. b. The company has signed a new union contract that increases the factory wages on average by $3.50 an hour. c. Actual costs differed from standard costs for the preceding week. d. The average price of raw materials increased from $4.68 per pound to $4.82 per pound.

c. Actual costs differed from standard costs for the preceding week.

The liability for a dividend is recorded on which of the following dates? Select one: a. The Last Day of the Fiscal Year b. The Date of Payment c. The Date of Declaration d. The Date of Record

c. The Date of Declaration

Question text A corporation issues for cash $1,000,000 of 10%, 20-year bonds, interest payable annually, at a time when the market rate of interest is 12%. The straight-line method is adopted for the amortization of bond discount or premium. Which of the following statements is true? Select one: a. The amount of the annual interest expense gradually decreases over the life of the bonds. b. The bonds will be issued at a premium. c. The amount of unamortized discount decreases from its balance at issuance date to a zero balance at maturity. d. The amount of the annual interest expense is computed at 10% of the bond carrying amount at the beginning of the year.

c. The amount of unamortized discount decreases from its balance at issuance date to a zero balance at maturity.

Which of the following statements is false? Select one: a. Managerial accounting sometimes relies on past information. b. Managerial accounting does not need to conform to GAAP. c. There is no overlap between financial and managerial accounting. d. Financial accounting must conform to GAAP.

c. There is no overlap between financial and managerial accounting.

Question text Which of the following should be deducted from net income in calculating net cash flow from operating activities using the indirect method? Select one: a. a decrease in inventory b. a decrease in accounts receivable c. a decrease in accounts payable d. preferred dividends declared and paid

c. a decrease in accounts payable

A loss due to a discontinued operation should be reported on the income statement Select one: a. above income from continuing operations b. as an operating expense c. below income from continuing operations d. without related tax effect

c. below income from continuing operations

Question text Those most responsible for the major policy decisions of a corporation are the Select one: a. management b. employees c. board of directors d. stockholders

c. board of directors

Question text Bonds Payable has a balance of $1,000,000 and Discount on Bonds Payable has a balance of $15,500. If the issuing corporation redeems the bonds at 98.5, what is the amount of gain or loss on redemption? Select one: a. $500 gain b. $15,500 loss c. $15,500 gain d. $500 loss

d. $500 loss

Question text Accounts receivable from sales transactions were $51,000 at the beginning of the year and $64,000 at the end of the year. Net income reported on the income statement for the year was $105,000. Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows prepared by the indirect method is Select one: a. $105,000 b. $169,000 c. $118,000 d. $92,000

d. $92,000

Department M had 2,000 units 40% completed in process at the beginning of June, 12,000 units completed during June, and 1,200 units 25% completed at the end of June. What was the number of equivalent units of production for conversion costs for June if the first-in, first-out method is used to cost inventories? Select one: a. 11,500 units b. 15,200 units c. 10,000 units d. 11,200 units

d. 11,200 units

Department B had 3,000 units in Work in Process that was 25% completed at the beginning of the period at a cost of $12,500. 13,700 units of direct materials were added during the period at a cost of $28,700. 15,000 units were completed during the period, and 1,700 units were 95% completed at the end of the period. All materials are added at the beginning of the process. Direct labor was $32,450 and factory overhead was $18,710. The number of equivalent units of production for the period for materials, if the first-in, first-out method is used to cost inventories was Select one: a. 1,700 b. 12,000 c. 16,700 d. 13,700

d. 13,700

Department B had 3,000 units in Work in Process that was 25% completed at the beginning of the period at a cost of $12,500. 13,700 units of direct materials were added during the period at a cost of $28,700. 15,000 units were completed during the period, and 1,700 units were 95% completed at the end of the period. All materials are added at the beginning of the process. Direct labor was $32,450 and factory overhead was $18,710. The number of equivalent units of production for the period for materials, if the first-in, first-out method is used to cost inventories was Select one: a. 12,000 b. 1,700 c. 16,700 d. 13,700

d. 13,700

Question text The four steps necessary to complete a cost of production report in a process cost system are The correct ordering of the steps is 1. allocate costs to transferred and partially completed units 2. determine the units to be assigned costs 3. determine the cost per equivalent unit 4. calculate equivalent units of production

d. 2, 4, 3, 1

A corporation issues for cash $1,000,000 of 10%, 20-year bonds, interest payable annually, at a time when the market rate of interest is 12%. The straight-line method is adopted for the amortization of bond discount or premium. Which of the following statements is true? Select one: a. The amount of the annual interest expense gradually decreases over the life of the bonds. b. The amount of the annual interest expense is computed at 10% of the bond carrying amount at the beginning of the year. c. The bonds will be issued at a premium. d. The amount of unamortized discount decreases from its balance at issuance date to a zero balance at maturity.

d. The amount of unamortized discount decreases from its balance at issuance date to a zero balance at maturity.

A difference in quantity of materials used on two comparable jobs may be caused by Select one: a. inadequately trained employees b. poor quality materials c. employee carelessness d. all of these

d. all of these

a. divisional income statements b. rate of return on investment c. residual income d. all of these

d. all of these

Question text Product costs Select one: a. appear only on the income statement b. are expensed as costs are incurred for direct labor, direct material, and factory overhead c. appear only on the balance sheet d. appear on both the income statement and balance sheet

d. appear on both the income statement and balance sheet

The systematic examination of the relationships among selling prices, volume of sales and production, costs, and profits is termed Select one: a. budgetary analysis b. contribution margin analysis c. gross profit analysis d. cost-volume-profit analysis

d. cost-volume-profit analysis

The journal entry a company records for the payment of interest, interest expense, and amortization of bond premium is Select one: a. debit Interest Expense, credit Cash and Premium on Bonds Payable b. debit Interest Expense, credit Interest Payable and Premium on Bonds Payable c. debit Interest Expense, credit Cash d. debit Interest Expense and Premium on Bonds Payable, credit Cash

d. debit Interest Expense and Premium on Bonds Payable, credit Cash

On January 1, Vermont Corporation had 40,000 shares of $10 par value common stock issued and outstanding. All 40,000 shares had been issued in a prior period at $20.00 per share. On February 1, Vermont purchased 3,750 shares of treasury stock for $24 per share and later sold the treasury shares for $21 per share on March 1. The journal entry to record the purchase of the treasury shares on February 1, would include a Select one: a. debit to a loss account for $112,500 b. credit to a gain account for $112,500 c. credit to Treasury Stock for $90,000 d. debit to Treasury Stock for $90,000

d. debit to Treasury Stock for $90,000

On the statement of cash flows prepared by the indirect method, a $50,000 gain on the sale of investments would be Select one: a. deducted from dividends declared in converting the dividends declared to the cash flows from financing activities related to dividends b. added to net income in converting the net income reported on the income statement to cash flows from operating activities c. added to dividends declared in converting the dividends declared to the cash flows from financing activities related to dividends d. deducted from net income in converting the net income reported on the income statement to cash flows from operating activities

d. deducted from net income in converting the net income reported on the income statement to cash flows from operating activities

Question text Which of the following would not be used in preparing a cash budget for October? Select one: a. budgeted salaries expense for October b. budgeted sales and collections for October c. beginning cash balance on October 1 d. estimated depreciation expense for October

d. estimated depreciation expense for October

Question text Which of the following is not included in the computation of the quick ratio? Select one: a. marketable securities b. cash c. accounts receivable d. inventory

d. inventory

What additional information is needed to calculate the rate of return on investment if income from operations is known? Select one: a. direct expenses b. sales c. residual income d. invested assets

d. invested assets

Question text Managers of what type of decentralized units have authority and responsibility for revenues, costs, and assets invested in the unit? Select one: a. cost center b. profit center c. production center d. investment center

d. investment center

Which of the following is not a measure that management can use in evaluating and controlling investment center performance? Select one: a. income from operations b. residual income c. rate of return on investment d. negotiated price

d. negotiated price

The numerator of the rate earned on common stockholders' equity ratio is Select one: a. net income b. income before income tax c. operating income minus interest expense d. net income minus preferred dividends

d. net income minus preferred dividends

Question text Horizontal analysis is a technique for evaluating financial statement data Select one: a. for one period of time b. as it may appear in the future c. on a certain date d. over a period of time

d. over a period of time

Under the corporate form of business organization, Select one: a. stockholders wishing to sell their corporate shares must get the approval of other stockholders b. a stockholder is personally liable for the debts of the organization c. stockholders' acts can bind the corporation even though the stockholders have not been appointed as agents of the corporation d. ownership rights are easily transferred

d. ownership rights are easily transferred

The ratio of income from operations to sales, which is also a factor in the DuPont formula for determining the rate of return on investment, is called Select one: a. indirect expenses b. investment turnover c. cost d. profit margin

d. profit margin

Which of the following is not one of the four basic financial statements? Select one: a. income statement b. balance sheet c. statement of cash flows d. statement of changes in financial position

d. statement of changes in financial position