MANAGERIAL ACCOUNTING

Tom Simpson wishes to purchase a new combine. The cost is $180,000. How much money must be put in a savings account that compounds at 6% to have $180,000 in 5 years? (Round to the nearest dollar). .7473

$134,514

If the breakeven is 5000 units and fixed costs are $40,000 and the selling price is $10, what is the variable cost per unit?

$2

Investing $11,689 at an 12 percent rate compounded annually for five years yields: 1.7623

$20,600

Ellis Jackson deposits $5000 in a savings account that compounds at 12% annually. How much will he have in 15 years? (Round to the nearest dollar). 5.4736

$27,368

Essex company sells two products - A and B. Product A sales are two times that of product B. The contribution per unit for A is $4 and B is $1. What is the weighted average contribution margin per unit?

$3

The standard for direct materials for product A is 6 ft.² at $10 per square foot. If a firm produces 100 units of product A and uses 600 ft.² at $11 per square foot, the materials price variance is

$600 unfavorable

The standard for direct materials for product A is 6 ft.² at $10 per square foot. If a firm produces 100 units of product A and uses 600 ft.² at $11 per square foot, the materials quantity variance is

0

If the standard for direct materials is 5 ft.² at $10 per square foot for each unit produced, what is the direct materials usage variance if 100 units are produced and 510 ft.² are used?

100 unfavorable

Which costing approach is in accordance with generally accepted accounting principles?

Absorption costing

The point where sales revenue is equal to costs is known as

Breakeven

T or F A cash receipts budget is necessary to develop the cost of good sold budget

False

T or F Absorption costing clearly separated fixed costs from variable costs.

False

T or F Contribution margin and contribution per unit are the same

False

T or F Direct materials are a conversion cost

False

T or F Direct materials purchases are period costs

False

T or F If an investment's net present value is zero, then it's IRR must also be zero.

False

T or F Job order costing requires the use of equivalent units

False

T or F Producing cans of evaporated milk would lend itself to a job order costing system

False

T or F Standards may be viewed by labor as too loose

False

T or F The cost of goods sold are a part of the manufacturing cost budget

False

T or F Unless an addition to working capital is permanent, it should not be considered among the cash flows of a capital budget.

False

T or F Variable costing and absorption costing are two costing methods accepted as GAAP

False

T or F: A fixed cost changes in total over increasing amounts of units produced

False

The professional affiliation for the management accountant is the:

IMA

Which of the following is a direct cost? -Sandpaper -Oil for the production machine -Labor

Labor

What is the major advantage of using the present value index (PVI) instead of NPV or IRR for comparison of alternative investments?

PVI accounts for the relative size of the initial investment

The overhead variance between the actual production and the anticipated production is

The overhead volume variance

Which of the following would have a flexible budget? -Building maintenance -The legal department -The production department -The treasurers department

The production department

Which of the following is a managerial accounting generally accepted accounting principle?

There is no generally accounting principles. for managerial accontants

T or F A budget is an integral part of the planning process

True

T or F A variable cost changes in total over increasing of units produced

True

T or F Absorption costing is preferred for external reporting purposes

True

T or F Because investments are evaluated in terms of cash flows, capital budgeting does not necessarily demonstrate the effect that an investment will have on a firm's income statement

True

T or F Decreasing cost per unit indicated an element of fixed cost is present

True

T or F Sales administrative costs are period costs

True

T or F Since a firm must outlay cash to acquire assets, their return should be evaluated with the same terms (cash)

True

T or F The labor rate variance calculation involves actual direct labor hours used in production.

True

T or F Time and motion studies are acceptable information for developing labor efficiency variances.

True

T or F To calculate the controllable overhead variance actual overhead costs are needed.

True

Costs that change in total with increased production are __________.

Variable costs

In projecting cash receipts, a critical element needed is:

accounts receivable

The budgeted balance sheet is also done:

after the budgeted income statement

The budgeted balance sheet is done:

after the cash receipts budget

The cash disbursements budget is done:

after the cash receipts budget

Which of the following is an example of a fixed costs? -Direct material -Direct labor -Auditor's salary

auditor's salary

What will be found in an absorption costing statement?

contribution margin

Overhead may be assigned using:

direct labor and direct materials

Conversion costs are

direct labor and overhead

Prime costs are

direct materials and direct labor

If the firm spends less on an item than is budgeted, the variance is: favorable or unfavorable

favorable

Which of the following will be found on an absorption costing income statement but not on a variable costing income statement?

gross margin and cost of goods sold

The capital expenditures budget is a part of the:

master budget

Which of the following is not an inventoriable item? -direct materials -direct labor -overhead -None

none

If the hurdle rate used to discount a stream of cash flows is raised, the IRR of the cash stream will

not change

The difference between the actual overhead cost and the flexible budget level of overhead for actual production is called

overhead volume variance.

In the schedule of cost of goods manufactured, work in process ending inventory is:

subtracted from total manufacturing costs

John Guy is saving for a new boat. He needs $60,000. How much money should he put in a savings account that compounds at 8% to have $60,000? (Round to the nearest dollar).

unable to determine from data given

If anticipated overhead is $100,000 and anticipated production is 100,000 units and the overhead application rate is based on direct labor hours, the overhead application rate per direct labor hour is????

unable to tell from data given

The standard for direct labor for product C is three hours at $25 per hour. If the direct labor efficiency variance is $1500 unfavorable, how many units were produced? -200 -300 -400 -unable to tell from data given

unable to tell from data given

If a firm spends more on an item than is budgeted, the variance is:

unfavorable