Accounting Exam 3
Spend less than you make.
According to our in-class discussion, what is the secret to financial security? Spend less than you make. Invest in gold. Use credit cards to purchase groceries in order to accumulate airline miles. Refinance your house, pull out your equity, and invest it in the stock market. Start your own business.
what things a company should not do.
According to the Packet reading, which one of the following completes the following statement? - "A good mission statement is specific enough to identify what types of activities a company should focus on as well as _____________________." what things a company should not do. which costs should remain variable and which should be fixed. what performance evaluation system should be used with top managers. what things a company can plan as growth opportunities. what processes a company should use to accomplish those activities.
Economic value added
According to the Packet, which ONE of the following is NOT one of the three new areas of performance measurement that are supplementing traditional financial measures in the Balanced Scorecard? Internal processes Customers Economic value added Learning and growth
Do not be slothful because of the easiness of the way.
According to the in-class discussion, what is Alma's advice on finances? Waste not, want not. The laborer is worthy of his hire. Make unto yourself friends of the mammon of unrighteousness. Do not be slothful because of the easiness of the way. Ye cannot serve God and mammon. The love of money is the root of all evil
A simple belief that you can't spend more than you make
According to the in-class discussion, what is the most valuable asset that a new wife or husband can bring to marriage? A simple belief that you should not be slothful because of the easiness of the way A simple belief that people shouldn't take risks that they can't afford A simple belief in the ability to budget both fixed costs and variable costs A simple belief in a hope for the future A simple belief that you can't spend more than you make
$14 per unit
Brendan Company reported the following data. Price per unit = $20 Fixed cost = $6,000 Breakeven number of units = 1,000 units Given these data, compute the VARIABLE COST PER UNIT. $12 per unit $14 per unit $18 per unit $10 per unit $16 per unit
The after-tax profit from the Wild Horse business is $760 LESS than your friend's total opportunity cost (opportunity cost of the $300,000 invested money plus opportunity cost of the alternate job making $7,000 per month after tax).
Consider the Wild Horse Wedding Announcements example that we did together in class. Assume that your friend can get a job and make $7,000 per month after taxes instead of $5,000 per month as assumed in class. Also assume that the selling price for each of the 40 monthly orders is $860. Which ONE of the following statements is TRUE? The after-tax profit from the Wild Horse business is $5,400 MORE than your friend's total opportunity cost (opportunity cost of the $300,000 invested money plus opportunity cost of the alternate job making $7,000 per month after tax). The after-tax profit from the Wild Horse business is $5,400 LESS than your friend's total opportunity cost (opportunity cost of the $300,000 invested money plus opportunity cost of the alternate job making $7,000 per month after tax). The after-tax profit from the Wild Horse business is $760 LESS than your friend's total opportunity cost (opportunity cost of the $300,000 invested money plus opportunity cost of the alternate job making $7,000 per month after tax). The after-tax profit from the Wild Horse business is $67 MORE than your friend's total opportunity cost (opportunity cost of the $300,000 invested money plus opportunity cost of the alternate job making $7,000 per month after tax).
Return on the owner's savings and the value of the owner/operator's time
Consider the Wild Horse Wedding Announcements example that we did together in class. Which two OPPORTUNITY COSTS are important to consider in setting the price of the wedding announcements? Return on the owner's savings and the cost of raw materials Bookkeeping costs and income taxes Bookkeeping costs and the value of the owner/operator's time Return on the owner's savings and the value of the owner/operator's time Equipment depreciation and return on the owner's savings. Income taxes and the cost of raw materials
33%
Consider the simple income tax system that we discussed at the very beginning of class (0% rate for the first $50 of income; 50% rate for all income above $50). - What is the AVERAGE tax rate if income is $150? 25% 50% 20% 40% 33%
CREDIT to Manufacturing Overhead for $17,000
For the year, Jay Bug Company had actual manufacturing overhead of $117,000 and applied manufacturing overhead of $100,000. Which ONE of the following should be included in the journal entry necessary to close the manufacturing overhead account? CREDIT to Manufacturing Overhead for $17,000 CREDIT to Cost of Goods Sold for $17,000 DEBIT to Manufacturing Overhead for $100,000 DEBIT to Cost of Goods Sold for $100,000 CREDIT to Work-in-Process Inventory for $100,000
500 units
Hayley Company reported the following data. Price per unit = $10 Variable cost per unit = $7 Fixed cost = $1,500 Given these data, compute the BREAKEVEN number of UNITS. 150 units 612 units 214 units 500 units 88 units
Some unprofitable orders are accepted.
If Boeing allocates overhead based on direct labor hours, which ONE of the following mistakes will Boeing make? Generic aircraft are sold at a price that is too low. Highly customized aircraft are sold at a price that is too high. Some unprofitable orders are accepted. Customers do NOT order enough design changes.
Amount paid to production laborers
In Practice Problem #1, (21a)what is represented by the $172,000 debit to Work-in-Process Inventory? Completed products transferred to the finished goods warehouse Amount paid for factory electricity Amount paid to production laborers Raw materials used Raw materials purchased
Cost of goods sold
In Practice Problem #1, (21a)what is represented by the $673,000 credit to Finished Goods Inventory? Manufacturing overhead applied Cost of goods sold Raw materials purchased Raw materials used Amount paid to production laborers
DEBIT to Cost of Goods Sold for $1,500
In Practice Problem #2,(21a) assume that the number of direct labor hours worked was 19,000 hours instead of 18,000 hours. Which ONE of the following would be included in the journal entry necessary to close the Manufacturing Overhead account at the end of the year? DEBIT to Cost of Goods Sold for $1,500 CREDIT to Cost of Goods Sold for $1,500 DEBIT to Manufacturing Overhead for $4,000 DEBIT to Cost of Goods Sold for $4,000 DEBIT to Manufacturing Overhead for $1,500
Variable cost per unit
In a graph used for breakeven analysis, what is represented by the SLOPE of the TOTAL COST LINE? Variable cost per unit Total revenue Fixed cost per unit Price per unit Total fixed cost
Price per unit
In a graph used for breakeven analysis, what is represented by the SLOPE of the TOTAL REVENUE LINE? Price per unit Total revenue Total fixed cost Fixed cost per unit Variable cost per unit
Total fixed cost
In a graph used for breakeven analysis, what is represented by the y-INTERCEPT of the TOTAL COST LINE? Total fixed cost Total revenue Price per unit Fixed cost per unit Variable cost per unit
Subtraction for IRA contributions
In the Ramona and Kay example, why is their Adjusted Gross Income (AGI) only $83,000 when their total income is $91,000? Subtraction for dividends Subtraction for IRA contributions Subtraction for the earned income tax credit Subtraction for home mortgage interest Subtraction for charitable contributions
DEBIT to Manufacturing Overhead for $1,000
Indirect materials costing $1,000 were transferred from the materials warehouse to be used in production. Which ONE of the following should be included in the journal entry necessary to record this transaction? DEBIT to Raw Materials Inventory for $1,000 DEBIT to Cost of Goods Sold for $1,000 CREDIT to Cost of Goods Sold for $1,000 DEBIT to Manufacturing Overhead for $1,000 CREDIT to Manufacturing Overhead for $1,000
$260,000
It is January 1 of Year 2. Purchases for Yosef Company for January, February, and March are forecasted to be as follows: January, $200,000; February $400,000; March, $500,000. 40% of purchases are for cash. Of the credit purchases, 30% are paid during the month of the purchase, 50% in the month following the purchase, and 20% in the second month following the purchase. TOTAL purchases for November and December of Year 1 were $200,000 and $400,000, respectively. What is the forecasted amount of total CASH PAYMENTS FOR PURCHASES in January? Note: This is the sum of immediate payments from cash purchases, same-month cash payments of credit purchases, and cash payments for credit purchases made in prior months. $260,000 $270,000 $250,000 $290,000 $280,000
$434,000
It is January 1 of Year 2. Purchases for Yosef Company for January, February, and March are forecasted to be as follows: January, $200,000; February $400,000; March, $500,000. 40% of purchases are for cash. Of the credit purchases, 30% are paid during the month of the purchase, 50% in the month following the purchase, and 20% in the second month following the purchases. TOTAL purchases for November and December of Year 1 were $200,000 and $400,000, respectively. What is the forecasted amount of total CASH PAYMENTS FOR PURCHASES in March? Note: This is the sum of immediate payments from cash purchases, same-month cash payments of credit purchases, and cash payments for credit purchases made in prior months. $460,000 $348,000 $434,000 $374,000 $472,000
$248,000
It is January 1 of Year 2. Sales for Harry Company for January, February, and March are forecasted to be as follows: January, $200,000; February $400,000; March, $500,000. 20% of sales are for cash. Of the credit sales, 10% are collected during the month of sale, 30% in the following month, and 60% in the second following month. TOTAL sales for November and December of Year 1 were $200,000 and $400,000, respectively. What is the forecasted amount of total CASH COLLECTIONS FROM SALES in January? Note: This is the sum of immediate collections from cash sales, same-month cash collections of credit sales, and cash collections from credit sales made in prior months. $236,000 $272,000 $248,000 $266,000 $254,000
$260,000
It is January 1 of Year 2. Sales for Harry Company for January, February, and March are forecasted to be as follows: January, $200,000; February $400,000; March, $500,000. ALL sales are credit sales. Of these credit sales, 10% are collected during the month of sale, 30% in the following month, and 60% in the second following month. TOTAL sales for November and December of Year 1 were $200,000 and $400,000, respectively. What is the forecasted amount of total CASH COLLECTIONS FROM SALES in January? $254,000 $236,000 $272,000 $248,000 $260,000
$290,000
It is January 1 of Year 2. Sales for Harry Company for January, February, and March are forecasted to be as follows: January, $200,000; February $400,000; March, $500,000. ALL sales are credit sales. Of these credit sales, 10% are collected during the month of sale, 30% in the following month, and 60% in the second following month. TOTAL sales for November and December of Year 1 were $200,000 and $400,000, respectively. What is the forecasted amount of total CASH COLLECTIONS FROM SALES in March? $290,000 $280,000 $310,000 $300,000 $270,000
Logan Company net income will INCREASE by $1,600 if Logan stops making the parts itself and instead buys them from another toy company.
Logan Company manufactures several toy products. Logan presently manufactures and assembles all the parts for its toy truck product. Another toy company has offered to sell the parts to Logan for $2.00 per truck. Logan is considering this offer. If Logan buys the truck parts instead of making them, the space used in producing the parts could be used for a new toy monster, which is scheduled to begin production next year. If Logan continues to produce the parts for the toy truck, then Logan will have to lease manufacturing space from another company in an adjacent building in order to produce the parts for the new toy monster. The rent that Logan would have to pay would be $8,000 per year. Cost information related to the production of the toy truck parts is as follows. Direct materials $1.10Direct labor 0.30Variable manufacturing overhead 0.20Fixed manufacturing overhead 0.20 Total manufacturing costs $1.80 The marketing department has estimated that sales for the toy truck will be approximately 16,000 units per year for the next three years. The fixed manufacturing overhead is indirect and will still be incurred regardless of which decision is made. By how much will overall Logan Company's net income change if Logan decides to stop making the parts itself and instead BUY the parts from another toy company? Logan Company net income will DECREASE by $6,400 if Logan stops making the parts itself and instead buys them from another toy company. Logan Company net income will INCREASE by $1,600 if Logan stops making the parts itself and instead buys them from another toy company. Logan Company net income will INCREASE by $3,200 if Logan stops making the parts itself and instead buys them from another toy company. Logan Company net income will DECREASE by $3,200 if Logan stops making the parts itself and instead buys them from another toy company. Logan Company net income will DECREASE by $1,600 if Logan stops making the parts itself and instead buys them from another toy company. Logan Company net income will INCREASE by $6,400 if Logan stops making the parts itself and instead buys them from another toy company.
$7,345
Look at Practice Problem #3. The following details relate to Job 244. Dept. A Dept. B Machine-hours. . . . . . . . . . . . . . . . . . . 200 50 Direct labor-hours. . . . . . . . . . . . . . . . 60 140 Direct materials cost. . . . . . . . . . . . . . . $1,000 $2,000 Direct labor cost. . . . . . . . . . . . . . . . . . $600 $900 What is the total manufacturing cost of Job 244? $6,340 $4,545 $2,800 $7,345 $4,500
Belarus
Microsoft has located its regional operating centers in locations with low income tax rates. Which ONE of the following is NOT one of those locations in which Microsoft has located a regional operating center? Singapore Belarus Puerto Rico Ireland
Midwest Company net income will DECREASE by $500,000 if the order is accepted.
Midwest Company manufactures lamps. Shop Smart, a large retail merchandiser, wants to buy 200,000 lamps from Midwest Company for $12 each. The lamp would carry Shop Smart's name and would be sold in its stores. Midwest Company normally sells 420,000 lamps a year at $16 each; its production capacity is a total of 450,000 units a year. Cost information for the lamps is as follows: Production costs: Variable production costs $6 per unit Fixed manufacturing overhead:($2,100,000 / 420,000 units) $5 per unit Selling and administrative expenses: Fixed ($840,000 / 420,000 units) $2 per unit Shop Smart has indicated that the company is not interested in signing a contract for less than 200,000 lamps. Total fixed costs will not change regardless of whether the Shop Smart order is accepted. By how much will overall Midwest Company's net income change if the Shop Smart order is accepted? Midwest Company net income will DECREASE by $500,000 if the order is accepted. Midwest Company net income will DECREASE by $200,000 if the order is accepted. Midwest Company net income will INCREASE by $1,200,000 if the order is accepted. Midwest Company net income will DECREASE by $1,200,000 if the order is accepted. Midwest Company net income will INCREASE by $500,000 if the order is accepted. Midwest Company net income will INCREASE by $200,000 if the order is accepted.
19,000 pounds
On September 30 of Year 1, JayBob Company had raw materials inventory of 5,000 pounds. Starting in October, JayBob intends to have an inventory policy of maintaining ending raw materials inventory at the end of every month equal to the next TWO months' production needs. For example, ending inventory at the end of October should be equal to forecasted raw materials needs for November production plus forecasted raw materials needs for December production. Four pounds of raw materials are needed in the production of one finished unit. Forecasted PRODUCTION for the months October, Year 1 through December, Year 1 is as follows. October 4,300 units November 1,000 units December 700 units What is the amount of budgeted RAW MATERIALS PURCHASES for October? 17,000 pounds 17,200 pounds 24,000 pounds 19,000 pounds 21,200 pounds
4,300 units
On September 30 of Year 1, Julian Company had finished goods inventory of 1,000 units. Starting in October, Julian intends to have an inventory policy of maintaining ending inventory at the end of every month equal to the next month's sales. For example, ending inventory at the end of October should be equal to forecasted sales in November. Forecasted sales for the months October, Year 1 through January, Year 2 are as follows. October 2,300 units November 3,000 units December 1,000 units January 700 units What is the amount of budgeted PRODUCTION for October? 3,000 units 3,300 units 5,300 units 4,300 units 2,000 units
700 units
On September 30 of Year 1, Lily Company had finished goods inventory of 1,000 units. Starting in October, Lily intends to have an inventory policy of maintaining ending inventory at the end of every month equal to the next TWO months' sales. For example, ending inventory at the end of October should be equal to forecasted sales in November plus forecasted sales in December. Forecasted sales for the months October, Year 1 through January, Year 2 are as follows. October 2,300 units November 3,000 units December 1,000 units January 700 units What is the amount of budgeted PRODUCTION for November? 1,700 units 700 units 4,700 units 3,300 units 2,000 units 3,000 units
This measure is inconsistent with the new Mission Statement.
One of the new performance measures proposed in the optometrist's office example is as follows: "Average gross revenue per customer visit (including both the fee for the visit and the billing price for the eyeglasses or contacts ordered)." In class we discussed potential problems that might be caused by this performance measure. Which ONE of the following is one the problems we discussed in class? Contribution margin should be used instead of gross revenue. Financial measures are not part of the Balanced Scorecard framework. The fee for the visit and the billing price for the eyeglasses (or contacts) should be measured separately. This measure is inconsistent with the new Mission Statement. No gross revenue amounts should be recorded until the customer receives the eyeglasses.
Company net income will INCREASE by $7,500 if the order is accepted.
Quick-Rite Company manufactures and sells computers. The following cost information for the manufacture of one computer has been compiled. Direct materials $48 Direct labor 64 Variable manufacturing overhead 48 *Fixed manufacturing overhead 32 Total cost per unit $192*The $32 amount reflects the amount of indirect cost allocated to each unit. However, as indicated, the total of these indirect costs is fixed.Quick-Rite has received a special order from a customer for 500 computers at a price of $175 per unit. By how much will overall company net income change if Quick-Rite ACCEPTS this order? [Note: Quick-Rite is the SELLER.] Company net income will DECREASE by $8,500 if the order is accepted. Company net income will INCREASE by $8,500 if the order is accepted. Company net income will INCREASE by $7,500 if the order is accepted. Company net income will DECREASE by $7,500 if the order is accepted.
$600
Ramona Company reported the following data. Price per unit = $10 Variable cost per unit = $7 Fixed cost = $1,500 Number of units sold = 700 units Given these data, compute NET INCOME. $5,500 $600 $800 $1,200 $3,400
81.0%
Refer to United States federal budget. As of the end of fiscal year 2021, it is forecast that the debt held by the public will be $18.912 trillion. What is this amount as a percentage of GDP? 89.3% 112.4% 58.5% 81.0% 46.2%
$5.613 trillion
Refer to United States federal budget. What is the total forecasted budget deficit for the years 2021 through 2030? $11.983 trillion $18.993 trillion $5.613 trillion $7.789 trillion $2.312 trillion
66.1%
Refer to the Chinese airline data that we looked at in class. (23b) Assume that the average number of seats per flight for China Eastern is 180 instead of the 163 that we used in class. Given this assumption, what is China Eastern's breakeven passenger load factor? 90.6% 73.2% 68.2% 66.1% 98.9%
67.4%
Refer to the McDonald's data that we used in class (23b) In class we assumed that some of McDonald's payroll and benefits cost was variable ($3,247 million) and some was fixed ($874 million). Now assume that the payroll and benefits cost is ALL FIXED. What is McDonald's contribution margin ratio given this assumption? Note: All other assumptions that we made in class are unchanged. 69.7% 48.2% 74.8% 53.9% 67.4%
64
Refer to the McDonald's data that we used in class; (23b) go back to the original data that we used in class. Now, assume that the average sale per customer visit is $4.00 instead of the $3.28 that we used in class. What is McDonald'sbreakeven number of customers per store per hour given this assumption? Note: All other assumptions that we made in class are unchanged. 31 75 64 69
Spending less money than you make is essential to your financial security.
Refer to the family finances information at www.providentliving.lds.org. What is the very first sentence in the section labeled "Avoid Debt"? Spending less money than you make is essential to your financial security. Plan what you will give as Church donations. Teach the principles of hard work. Determine how to reduce what you spend for nonessentials. Gradually build a financial reserve.
Keep a record of your expenditures.
Refer to the family finances information at www.providentliving.lds.org. What is the very first sentence in the section labeled "Use a Budget"? Avoid debt, with the exception of buying a modest home or paying for education or other vital needs. Successful family finances begin with the payment of an honest tithe and the giving of a generous fast offering. All too often a family's spending is governed more by their yearning than by their earning. Keep a record of your expenditures. There is nothing that will cause greater tensions in life than grinding debt.
$25 per hour
Sophie Company has decided that direct labor hours is a good basis on which to apply overhead to production. Budgeted manufacturing overhead for the coming year is $500,000. Budgeted direct materials purchases is $400,000. Budgeted direct labor cost is $720,000. Budgeted direct labor hours for the coming year is 20,000 hours. What is Sophie Company's PREDETERMINED OVERHEAD RATE? $20 per hour $36 per hour $61 per hour $25 per hour $56 per hour
Company net income will DECREASE by $3,000 if the product line is discontinued.
Sophie Company is considering closing one of its product lines. Current data on the product line are as follows. Sales revenue $27,000 Variable costs 19,000 Direct avoidable fixed costs* 5,000 Indirect allocated fixed costs** 7,000 Net Income (Loss) on the product line ($4,000)*The direct avoidable fixed costs will be eliminated if the product line is closed.**The indirect allocated fixed costs will remain the same whether the product line is continued or closed.Assume that Sophie decides to discontinue this product line. By how much will overall company net income change? Company net income will INCREASE by $4,000 if the product line is discontinued. Company net income will DECREASE by $3,000 if the product line is discontinued. Company net income will INCREASE by $3,000 if the product line is discontinued. Company net income will DECREASE by $4,000 if the product line is discontinued.
$320
Speedy Print Shop is considering whether it should take a job to print 5,000 copies of an announcement. The costs associated with this special order have been identified as follows. Paper cost: 5,000 sheets at $0.01 each. Labor cost: The job will take 5 hours. This job must be done on a rush basis after regular business hours; the special labor rate will be $24 per hour. Printing plate cost: The cost to make a plate to print the announcements is $100. Printing press usage: Speedy has determined that maintenance costs and depreciation associated with the usage of the printing press is $10 per hour. If the printing press is not used, it does not need any maintenance and it does not depreciate. Building depreciation: Speedy normally allocates $5 of building depreciation for each direct labor hour worked on a job. However, the building depreciates strictly with the passing of time; printing one more job does not cause any extra building depreciation. Manager's salary: The manager makes $20 per hour, on average. However, the manager is on a salary and does not get paid extra for working extra hours. What is the minimum amount that Speedy Print Shop should charge for this job? $320 $295 $245 $170 $220
31,667 units
The following data are for Jay Robert Company. Breakeven sales revenue $250,000 Selling price per unit $10 Contribution margin ratio 75% Calculate the number of units that must be sold to generate net income of $50,000. 120,000 units 31,667 units 18,333 units 95,000 units 40,000 units
35,714 units
The following data are for Julian Mark Company. Total sales revenue $250,000 Number of units sold 50,000 units Fixed costs $100,000 Net income $40,000 Calculate the breakeven point in number of units. 24,678 units 45,455 units 35,714 units 39,286 units 28,000 units
$117,647
The following data are for Kylie Ramona Company. Variable cost ratio 15% Fixed costs $100,000 Calculate the breakeven sales revenue. $115,000 $15,000 $117,647 $85,000 $123,986
51,429 units
The following data are for Lily Kay Company. Total sales revenue $250,000 Number of units sold 50,000 units Contribution margin per unit $3.50 Fixed costs $100,000 Calculate the number of units that must be sold to generate net income of $80,000. 13,333 units 5,714 units 51,429 units 22,857 units 120,000 units
$27.90
The following data are for Sophie Wynne Company. Variable cost per unit $12.50 Fixed costs $500,000 Calculate the selling price per unit that must be charged in order to generate a profit of $270,000 with a sales volume of 50,000 units. $27.90 $15.40 $23.30 $24.90 $17.90
CREDIT to Manufacturing Overhead for $75,000
Todd Company applied manufacturing overhead of $75,000 during the year. Which ONE of the following should be included in the summary journal entry necessary to record this application of manufacturing overhead? DEBIT to Cost of Goods Sold for $75,000 DEBIT to Manufacturing Overhead for $75,000 CREDIT to Cost of Goods Sold for $75,000 CREDIT to Manufacturing Overhead for $75,000 CREDIT to Work-in-Process Inventory for $75,000
When products are specialized
Under which ONE of the following circumstances is cost an important input into determining selling price? When products are specialized When costs are fixed When work-in-process inventory levels are low When direct materials cost is high When direct labor cost is high
$155,500
Using the numbers given in Practice Problem #2,(21a) what is the amount of adjusted Cost of Goods Sold, after considering the necessary adjustment for over- or under-applied manufacturing overhead? $172,300 $227,500 $161,300 $155,500 $144,500
$18,279
Using the tax rates and tax brackets for 2018 (which are the ones used in the Ramona and Kay example), compute the total tax for a married couple filing jointly with combined taxable income of $120,000. Note: Ignore any child tax credits. $18,279 $30,000 $8,197 $11,875 $47,500
$36,579
Using the tax rates and tax brackets for 2018 (which are the ones used in the Ramona and Kay example), compute the total tax for a married couple filing jointly with combined taxable income of $200,000. Note: Ignore any child tax credits. $18,475 $36,579 $56,000 $20,398 $26,672
A report from your bank stating how much interest you earned during the year
What is a 1099-INT? A report from your bank stating how much interest you earned during the year A report filed with your personal tax return that explains the amounts you claimed as charitable contributions for the year A report from the Internal Revenue Service (IRS) requesting further details about some of the numbers in your filed tax return A report sent to the Treasury Department stating the balances you had in foreign banks at the end of the year
A cost that includes both a fixed portion and a variable portion
What is a MIXED COST? A cost that includes both a fixed portion and a variable portion A cost that includes both a relevant range and an irrelevant range A cost that includes both overhead costs and direct materials costs A cost that includes both a financial portion and a managerial portio
A program in which UAW members were paid even when not working in an automobile assembly plant
What is the Jobs Banks? The insurance company hired by the UAW to provide medical care and life insurance to union members A program in which UAW members were paid even when not working in an automobile assembly plant The largest commercial bank in Detroit (in 1984) The credit union of the United Auto Workers (UAW) The General Motors office responsible for economic analysis of all outsourcing contracts
The range of volume over which the variable cost per unit is expected to remain the same.
What is the RELEVANT RANGE? The range of volume over which the variable cost per unit is expected to increase. The range of volume over which the variable cost per unit is expected to remain the same. The range of volume over which the fixed cost per unit is expected to remain the same. The range of volume over which the selling price per unit is expected to increase.
Overhead costs should be assigned to those products or customers that cause those costs
What is the essential idea behind "Activity-Based Costing"? Overhead costs should be assigned based on relative selling prices. Overhead costs should not be assigned to individual products or customers. Overhead costs should be assigned strictly based on the number of direct labor hours used. Overhead costs should be assigned to those products or customers that cause those costs.
Driver Turnover
What measure does Swift Transportation use to monitor its relationship with its drivers? Revenue per mile Average miles per unit per day Percent of Fuel Used from Company Docks Miles per gallon Driver Turnover
Days from Pickup to Cash
What measure does Swift Transportation use to monitor the performance of its billing and accounts receivable clerks? Revenue per Mile Average miles per unit per day Operating ratio Days from Pickup to Cash Accretion to Earnings
Service-sensitive customers in short-to-medium haul traffic lanes.
What portion of the shipping market has Swift Transportation decided to target? Price-sensitive customers in medium-to-long haul traffic lanes. Service-sensitive customers in long haul traffic lanes. Price-sensitive customers in short-to-medium haul traffic lanes. Service-sensitive customers in short-to-medium haul traffic lanes. Service-sensitive customers in medium-to-long haul traffic lanes.
They evaluated the teams based on number of meters drilled.
What was the mistake made by the organizers of the Soviet oil drilling competition? They failed to integrate both managers and workers on the same teams. They set the bonus thresholds too low. They evaluated the teams based on number of meters drilled. They compared Soviet performance measures to Western European performance measures. They used engineer's estimate for the percentage of completion.
Wages of secretarial staff in administration building
Which ONE of the following is MOST LIKELY to be a PERIOD cost? Factory maintenance worker wages Direct labor Wages of secretarial staff in administration building Direct materials
Use of derivative-type financial instruments
Which ONE of the following is NOT currently part of Swift Transportation's efforts to control fuel costs? Use of derivative-type financial instruments Purchase of fuel in bulk Maintaining a fuel efficient fleet Fuel surcharges
Single filing jointly
Which ONE of the following is NOT one of the four basic filing status choices used in the United States? Single filing jointly Married filing separately Married filing jointly Single Head of household
CEO and other executive salaries
Which ONE of the following is NOT one of the three general categories of product costs? CEO and other executive salaries Manufacturing overhead Direct materials Direct labor
Enhance railroad terminal interface
Which ONE of the following is NOT part of Swift Transportation's stated growth strategy? Strengthen core carrier relationships Enhance railroad terminal interface Exploit private fleet outsourcing Pursue strategic acquisitions
Local managers have the best information on specific products, services, and customers.
Which ONE of the following is a BENEFIT of participative budgeting? Local managers have a full understanding of the strategic direction of the company. Local managers are interested only in the benefit of the company as a whole, not in their own special interests. Local managers are easily able to inflate reported results in order to meet budget targets. Local managers have the best information on specific products, services, and customers.
Developing long-term goals
Which ONE of the following is an example of a Quadrant II activity? Saving the life of a drowning person Watching television Going to the tanning salon Developing long-term goals Learning the rules of "World of Warcraft"
A system in which manufacturing costs are accumulated by separate product orders or batches
Which ONE of the following is the BEST description of JOB ORDER COSTING? A system in which period costs are systematically allocated to weekly budget reports A system in which manufacturing costs are accumulated by separate product orders or batches A system commonly used in the home construction industry in order to generate market-wide selling price information A system commonly used in the oil exploration industry in order to generate world-wide oil and natural gas information
Sales, production, direct materials
Which ONE of the following is the CORRECT sequence of budgets in a manufacturing business? Cash flow, sales, production, direct materials Sales, direct materials, production Cash flow, production, sales, direct materials Sales, production, direct materials Cash flow, direct materials, sales, production
Exclusion of pension contributions and earnings
Which ONE of the following is the largest LOOPHOLE (called an "Income Tax Expenditure" by the Treasury Department) in the United States Income Tax Code? Deductibility of mortgage interest on owner-occupied homes Exclusion of pension contributions and earnings Exclusion of employer contributions for medical insurance premiums and medical care Exclusion from taxation of 85% of income from corporations Deductibility of charitable contributions
Future costs that vary among decision alternatives
Which ONE of the following is the most CORRECT description of "DIFFERENTIAL COST"? Past costs that are different from budgeted amounts Predicted costs based on future input factors Future costs that are common among all decision alternatives Future costs that vary among decision alternatives
Foregone revenues
Which ONE of the following is the most CORRECT description of "OPPORTUNITY COST"? Foregone revenues Fixed costs only Variable costs only Budgeted costs Direct labor plus direct materials
Past costs
Which ONE of the following is the most CORRECT description of "SUNK COST"? Differential costs Period costs Budgeted costs Fixed costs Past costs
First, purchase raw materials; then transfer raw materials to production; then add direct labor and manufacturing overhead costs; then transfer the cost of completed goods to finished goods inventory; finally, sell goods and transfer cost to cost of goods sold
Which ONE of the following is the most common sequence of the FLOW of costs through a job order cost system? First, purchase raw materials; then sell goods and transfer cost to cost of goods sold; then transfer the cost of completed goods to finished goods inventory; then transfer raw materials to production; finally, add direct labor and manufacturing overhead costs First, add direct labor and manufacturing overhead costs; then transfer the cost of completed goods to finished goods inventory; then purchase raw materials; then transfer raw materials to production; finally, sell goods and transfer cost to cost of goods sold First, purchase raw materials; then transfer raw materials to production; then add direct labor and manufacturing overhead costs; then transfer the cost of completed goods to finished goods inventory; finally, sell goods and transfer cost to cost of goods sold First, transfer the cost of completed goods to finished goods inventory; then purchase raw materials; then transfer raw materials to production; then sell goods and transfer cost to cost of goods sold; finally, add direct labor and manufacturing overhead costs
Includes budget and forecast data
Which ONE of the following statements describes MANAGERIAL accounting BETTER than it describes financial accounting? Has standardized information requirements Includes budget and forecast data Is disseminated to the public Is subject to an independent external audit
Capital budgeting is the planning for the acquisition of property, plant, and equipment.
Which ONE of the following statements is TRUE regarding operational budgeting or capital budgeting? Operational budgeting is the planning for the acquisition of property, plant, and equipment. Capital budgeting is the planning for the acquisition of property, plant, and equipment. Capital budgeting is the planning for how to obtain the financing for both short-term and long-term projects. Operational budgeting is the planning for how to obtain the financing for both short-term and long-term projects.
A fixed cost is fixed in total and decreases per unit as the number of units increases.
Which ONE of the following statements is TRUE? A fixed cost is fixed in total and decreases per unit as the number of units increases. A variable cost is fixed in total and decreases per unit as the number of units increases. A variable cost is variable in total and decreases per unit as the number of units increases. A variable cost is variable in total and increases per unit as the number of units increases.
Shift income from one time period to another.
Which basic tax planning strategy is illustrated with a 401(k) plan? Shift income from one time period to another. Change the character of the income (or the rate at which income will be taxed). Consolidate the filing of all income. Shift income from one pocket to another.
Supply-side economics
Which economic theory is illustrated with the Laffer Curve? Ricardian economics Mercantile economics Keynesian economics Supply-side economics Macroeconomics
Because you get what you measure
Why must you be careful about what you measure? Do NOT click this choice. Do NOT click this choice. Do NOT click this choice. Because you get what you measure Do NOT click this choice. Do NOT click this choice.
$150,000
Wynne Company has a predetermined overhead rate of $15 per direct labor hour. The following data are for the current year Actual number of units sold = 2,000 units Actual number of direct labor hours worked = 10,000 hours Actual amount of manufacturing overhead = $145,000 What is the amount of manufacturing overhead APPLIED for the year? $30,000 $145,000 $295,000 $150,000 $130,000
4,000 units
Yvonne Company reported the following data. Price per unit = $20 Fixed cost = $6,000 Variable cost per unit = $11 How many units must Yvonne Company sell in order to reach a TARGET PROFIT OF $30,000? 6,000 units 3,000 units 7,000 units 5,000 units 4,000 units
February, $19,000 borrowing; March, $7,000 borrowing; April, $26,000 repayment
ayley Company has the following forecasted cash receipts and cash payments for the first four months of the year. January February March April Budgeted cash collections 75,000 60,000 75,000 146,000 Total budgeted cash payments 97,000 107,000 82,000 90,000 On January 1, Hayley Company had a cash balance of $60,000. Hayley has a policy of maintaining a cash balance of at least $10,000 at the end of each month. Which one of the following represents the sequence of cash borrowings and repayments in February, March, and April? Note: Ignore any interest on loans, and assume that Hayley repays loans as quickly as possible. February, $47,000 borrowing; March, $7,000 borrowing; April, $26,000 repayment February, $19,000 borrowing; March, $7,000 borrowing; April, $26,000 repayment February, $9,000 borrowing; March, $7,000 borrowing; April, $16,000 repayment February, $37,000 borrowing; March, $11,000 repayment; April, $26,000 repayment February, $47,000 borrowing; March, $21,000 repayment; April, $26,000 repayment
