MGT 4300 - ACCT 2060 Questions

64. Lakeshore Manufacturing provided the following information for the month ended March 31: Sales Revenue $30,000 Beginning Finished Goods Inventory 17,000 Ending Finished Goods Inventory 11,500 Cost of Goods Manufactured 12,600 Compute gross profit. A) $11,900 B) $17,400 C) $22,900 D) $5900

A) $11,900

65. Fire Cat, Inc. selected cost data for the year are shown below: Cost of Goods Manufactured $145,500 Work-in-Process Inventory, Jan. 1 19,500 Work-in-Process Inventory, Dec. 31 22,000 Direct Materials Used 18,600 What is the total of manufacturing costs incurred by Fire Cat, Inc. during the year? A) $148,000 B) $143,000 C) $22,900 D) $38,100

A) $148,000

2. Venus Corp. sold goods, with a selling price of $17,221, for cash. The state sales tax rate is 8%. What amount is credited to the Sales Revenue account? (Round calculations to the nearest dollar.) A) $17,221 B) $18,599 C) $1,378 D) $15,843

A) $17,221

62. Artisan Inspiration, Inc. is a merchandiser of stone ornaments. The company sold 8000 units during the year. The company has provided the following information: Sales Revenue $593,000 Purchases (excluding Freight In) 304,000 Selling and Administrative Expenses 68,000 Freight In 14,000 Beginning Merchandise Inventory 46,000 Ending Merchandise Inventory 42,000 What is the operating income for the year? (Round your answer to the nearest whole dollar.) A) $203,000 B) $322,000 C) $271,000 D) $525,000

A) $203,000

89. Avia Company sells a product for $150 per unit. Variable costs are $70 per unit, and fixed costs are $1,200 per month. The company expects to sell 640 units in September. The unit contribution margin is ________. A) $80 per unit B) $70 per unit C) $220 per unit D) $150 per unit

A) $80 per unit

39. Allstate Moving Company reported the following amounts on its balance sheet as of December 31, 2019 and December 31, 2018: 2019 2018 Cash and Receivables $75,000 $145,000 Merchandise Inventory 175,000 250,000 Property, Plant and Equipment, net 820,000 710,000 Total Assets $1,070,000 $1,105,000 Total Liabilities $455,000 $405,000 For the vertical analysis, what is the percentage of current assets as of December 31, 2019? (Round your answer to two decimal places.) A) 23.36% B) 35.75% C) 55.63% D) 30.49%

A) 23.36%

95. Hughes Company manufactures harmonicas which it sells for $31 each. Variable costs for each unit are $18 and total fixed costs are $3,925. How many units must be sold to earn income of $5,500? A) 725 B) 423 C) 304 D) 524

A) 725

74. In a job order costing system, a credit to Finished Goods Inventory will be accompanied by a debit to ________. A) Cost of Goods Sold B) Work-in-Process Inventory C) Sales Revenue D) Accounts Receivable

A) Cost of Goods Sold

25. Which of the following is true of dividends? A) Dividends are a distribution of cash, stock, or other property to stockholders. B) Dividends increase assets and decrease total stockholders' equity of a corporation. C) Dividend payments decrease paid-in capital. D) Dividend payments increase stockholders' equity.

A) Dividends are a distribution of cash, stock, or other property to stockholders.

7. It is mandatory for both the employer and employee to pay ________. A) FICA B) SUTA C) employee income tax D) federal unemployment tax

A) FICA

69. Which of the following is a reason why a job order costing system is appropriate for a custom furniture manufacturer? A) The cost incurred for each job will differ as per the order specifications. B) The direct costs incurred for each job are the same, only indirect costs vary. C) The raw materials used have already been accounted for using process costing. D) Custom furniture manufacturers produce large quantities of similar products.

A) The cost incurred for each job will differ as per the order specifications.

6. Regarding net pay, which of the following statements is incorrect? A) The net pay amount is not important for accounting purposes. B) The amount of compensation that the employee actually takes home is net pay. C) The employer either writes a paycheck to each employee for his or her net pay or directly deposits the employee's net pay into the employee's bank account. D) Net pay equals gross pay minus all deductions.

A) The net pay amount is not important for accounting purposes.

75. Companies that manufacture identical items through a series of uniform production steps use ________ to determine the cost per unit produced. A) a process costing system B) a job order costing system C) both of the above systems D) neither of the above systems

A) a process costing system

1. Amounts owed for products or services purchased on account are called ________ . A) accounts payable B) unearned revenue C) accrued expense D) warranty payable

A) accounts payable

50. Which of the following is an example of a period cost for a manufacturing company? A) advertising expense B) depreciation on factory equipment C) indirect materials D) property taxes for the factory

A) advertising expense

19. Outstanding stock represents shares of stock that ________. A) are held by the stockholders B) give the owners certain advantages C) have been authorized by state law D) have been issued but may or may not be held by stockholders

A) are held by the stockholders

32. Colorado Company uses the indirect method to prepare the statement of cash flows. Refer to the following section of the comparative balance sheet: Colorado Company Comparative Balance Sheet December 31, 2019 and 2018 2019 2018 Increase/(Decrease) Accounts Payable. $4,000 $6,000 $(2,000) Accrued Liabilities 2,000 1,000 1,000 Long-term Notes Payable 84,000 90,000 (6,000) Total Liabilities $90,000 $97,000 $(7,000) How will the change in Accrued Liabilities be shown on the statement of cash flows? A) as an addition to Net Income B) as a deduction from Net Income C) as a deduction from operating cash flows D) as an addition to investing cash flows

A) as an addition to Net Income

37. Which of the following best describes horizontal analysis? A) comparing financial statement line items from year to year for the same company B) expressing each financial statement amount as a percentage of a budgeted amount C) comparing a company's financial statements with other companies D) calculating key ratios to evaluate performance

A) comparing financial statement line items from year to year for the same company

59. Which of the following represents the combined sum of direct labor costs and manufacturing overhead costs? A) conversion costs B) period costs C) prime costs D) fixed costs

A) conversion costs

26. On the ________, cash dividends become a liability of a corporation. A) declaration date B) date of record C) last day of the fiscal year D) payment date

A) declaration date

83. The costs most easily traced to each product manufactured are ________. A) direct materials and direct labor B) direct materials and indirect materials C) direct labor and manufacturing overhead D) indirect materials and indirect labor

A) direct materials and direct labor

8. The matching principle requires businesses to report Warranty Expense ________. A) in the same period that the company records the revenue related to that warranty B) in the period prior to which the company records the revenue related to that warranty C) in the period after the related revenue is recorded D) in the long-term assets section of the balance sheet

A) in the same period that the company records the revenue related to that warranty

88. The fixed costs per unit will ________. A) increase as production decreases B) decrease as production decreases C) remain the same as production levels change D) increase as production increases

A) increase as production decreases

96. When the sales price per unit decreases, the breakeven point ________. A) increases B) decreases C) remains the same D) decreases proportionately

A) increases

52. ) Which of the following will be included in manufacturing overhead costs? A) indirect labor and indirect materials used B) salaries of salesmen C) direct materials and direct labor D) delivery costs to ship goods to customers

A) indirect labor and indirect materials used

86. The activity-based costing system improves the allocation of ________. A) indirect manufacturing costs B) direct labor C) direct materials D) sales commissions

A) indirect manufacturing costs

20. The retained earnings of a corporation is ________. A) internally generated equity that is earned by profitable operations that is not distributed to stockholders B) externally generated equity that is contributed by shareholders C) externally generated equity that is acquired from banks and other creditors D) internally generated equity that is received from employee stock purchases

A) internally generated equity that is earned by profitable operations that is not distributed to stockholders

90. Contribution margin ratio is the ratio of contribution margin to ________. A) net sales revenue B) cost of goods sold C) total variable costs D) total fixed costs

A) net sales revenue

49. Which of the following will most likely be considered an indirect material cost for a bakery? A) spices B) flour C) milk D) eggs

A) spices

36) Which of the following sections from the statement of cash flows includes the cash paid for the purchase of Treasury Stock? A) the financing activities section B) the operating activities section C) the investing activities section D) the non-cash investing and financing section

A) the financing activities section

57. Which of the following would be considered a direct labor cost for a manufacturing company? A) wages of the assembly line staff B) wages of the factory janitors C) wages of the factory manager D) salaries of the internal auditors

A) wages of the assembly line staff

4. Fleetwood, Inc. signed a three-year note payable for $59,000 at 7% annual interest. What is the interest expense for 2019 if the note was signed on August 1, 2019? (Do not round any intermediate calculations, and round your final answer to the nearest dollar.) A) $2,065 B) $1,721 C) $12,390 D) $4,130

B) $1,721

77. Singh Enterprises manufactures picture frames. Its production operations are divided into two departments — Assembly and Finishing. The company uses a process costing system. Singh incurred the following costs during the year to produce 6000 picture frames: Assembly $9,700 Finishing $2,250 If Singh can only sell 5,100 picture frames during the year, what will be the cost per unit of the picture frames produced? (Round your answer to the nearest cent.) A) $2.34 B) $1.99 C) $1.62 D) $1.90

B) $1.99

66. A corporation used $34,000 of direct materials. It incurred $74,000 in direct labor costs and $112,500 in manufacturing overhead costs during the period. What is the cost of goods manufactured if the beginning and ending Work-in-Process Inventories were $27,500 and $20,500, respectively? A) $248,000 B) $227,500 C) $213,500 D) $220,500

B) $227,500

94. Zander Company has fixed costs of $14,000. The company's contribution margin ratio is 46%. What is the breakeven point in sales dollars? (Round your answer to the nearest dollar.) A) $70,000 B) $30,435 C) $6,440 D) $2,800

B) $30,435

22) Milton, Inc. had the following transactions in 2019, its first year of operations: • Issued 8,000 shares of common stock. Stock has par value of $0.01 per share and was issued at $40.00 per share. • Earned net income of $200,000. • Paid dividends of $8.00 per share. At the end of 2019, what is total stockholders' equity? A) $320,000 B) $456,000 C) $136,000 D) $584,000

B) $456,000

10) On March 1, 2018, Mandy Services issued a 3% long-term notes payable for $15,000. It is payable over a 3-year term in $5000 principal installments on March 1 of each year, beginning March 1, 2019. Each yearly installment will include both principal repayment of $5000 and interest payment for the preceding one-year period. What is the amount of total cash payment that Mandy will make on March 1, 2019? A) $5,000 B) $5,450 C) $15,000 D) $5,225

B) $5,450

67. Given the following information, determine the cost of goods manufactured. Direct Labor Incurred $62,000 Manufacturing Overhead Incurred 177,000 Direct Materials Used 151,000 Finished Goods Inventory, Jan. 1 197,000 Finished Goods Inventory, Dec. 31 99,000 Work-in-Process Inventory, Jan. 1 221,000 Work-in-Process Inventory, Dec. 31 108,000 A) $390,000 B) $503,000 C) $282,000 D) $188,000

B) $503,000

56. The following information was obtained from Durand, Inc.: Advertising Costs $11,600 Indirect Labor 8,000 CEO's Salary 470,000 Direct Labor 53,000 Indirect Materials Used 8,000 Direct Materials Used 390,000 Factory Utilities 840 Factory Janitorial Costs 1,000 Manufacturing Equip. Depr. 1,700 Delivery Vehicle Depr. 2,110 Admin. Wages and Salaries 22,300 How much were Durand's period costs? A) $462,540 B) $506,010 C) $13,710 D) $503,900

B) $506,010

40. The financial statements of Carrier Office Furniture Company include the following items: 2019 2018 Cash $42,500 $42,000 Short-term Investments 28,000 19,000 Net Accounts Receivable 102,000 98,000 Merchandise Inventory 166,000 148,000 Total Assets 527,000 547,000 Total Current Liabilities 273,000 285,000 Long-term Note Payable 64,000 60,000 What is working capital for 2019? A) $190,000 B) $65,500 C) $37,500 D) $100,500

B) $65,500

92. Clay Earth Company sells ceramic pottery at a wholesale price of $5 per unit. The variable cost of manufacture is $2.50 per unit. The fixed costs are $6,200 per month. It sold 5,700 units during this month. Calculate Clay Earth's operating income (loss) for this month. A) $22,300 B) $8,050 C) ($8,050) D) ($6,200)

B) $8,050

42. Elephant, Inc.'s cost of goods sold for the year is $2,000,000, and the average merchandise inventory for the year is $129,000. Calculate the inventory turnover ratio of the company. (Round your answer to two decimal places.) A) 6.45 times B) 15.50 times C) 7.75 times D) 9.36 times

B) 15.50 times

78. If 34,000 units are 80% complete with respect to direct materials, then the equivalent units of production for direct materials are ________. The weighted-average method is used. A) 34,000 units B) 27,200 units C) 6800 units D) 40,800 units

B) 27,200 units

44.A company reports total assets of $910,000 and stockholders' equity of $530,000. Calculate the debt ratio. (Round your answer to two decimal places.) A) 36.81% B) 41.76% C) 58.24% D) 71.7%

B) 41.76%

46. Walton, Inc. provides the following data: 2019 2018 Cash $44,000 $25,000 Accounts Receivable, Net 101,000 62,000 Merchandise Inventory 78,000 50,000 Property, Plant, and Equipment, Net 182,000 120,000 Total Assets $405,000 $257,000 Additional information for the year ending December 31, 2019: Net Credit Sales $550,000 Cost of Goods Sold (150,000) Interest Expense (24,000) Net Income 184,000 Calculate the rate of return on total assets for 2019. (Round your answer to two decimal places.) A) 45.43% B) 62.84% C) 71.60% D) 51.36%

B) 62.84%

55. Which of the following correctly describes the accounting for advertising costs? A) Advertising costs are product costs and are expensed as incurred. B) Advertising costs are period costs and are expensed as incurred. C) Advertising costs are product costs and are expensed when the manufactured product is sold. D) Advertising costs are period costs and are expensed when the manufactured product is sold.

B) Advertising costs are period costs and are expensed as incurred.

14. State Street Beverage Company issues $805,000 of 9%, 10-year bonds on March 31, 2017. The bonds pay interest on March 31 and September 30. Which of the following statements is true? A) If the market rate of interest is 10%, the bonds will issue at a premium. B) If the market rate of interest is 10%, the bonds will issue at a discount. C) If the market rate of interest is 10%, the bonds will issue at par. D) If the market rate of interest is 10%, the bonds will issue above par.

B) If the market rate of interest is 10%, the bonds will issue at a discount.

28) Which of the following describes the financing activities section of the statement of cash flows? A) It includes increases and decreases in long-term assets. B) It includes cash inflows and outflows related to long-term liabilities and equity. C) It includes interest and dividend income and cash payments for interest expense. D) It reports on activities that create revenue or expenses for the entity's business.

B) It includes cash inflows and outflows related to long-term liabilities and equity.

15. Which of the following statements is true if a bond's stated interest rate is the same as the market rate? A) The bond will be issued at a premium. B) The bond will be issued at par. C) The bond will be issued at a discount. D) The bond will be issued for an amount lower than the maturity value.

B) The bond will be issued at par.

18. Which of the following is true of a corporation? A) A corporation cannot be privately held. B) The earnings of a corporation may be subject to double taxation. C) A corporation has a limited life. D) The stockholders of a corporation have unlimited liability for the corporation's debt.

B) The earnings of a corporation may be subject to double taxation.

53. Goods that have been started in the manufacturing process but are not yet complete are included in the ________. A) Finished Goods Inventory account B) Work-in-Process Inventory account C) Raw Materials Inventory account D) Cost of Goods Sold account

B) Work-in-Process Inventory account

68. Which one of the following companies is most likely to use job order costing? A) a gold refinery B) a law firm C) a surfboard manufacturer D) a soft drink company

B) a law firm

30) The activities that are included in the operating activities section of the statement of cash flows are ________. A) activities that involve stockholders' equity B) activities that create revenue or expenses C) activities that increase or decrease long-term assets D) activities that pertain to construction of new facilities

B) activities that create revenue or expenses

23. When a stockholder contributes land to a corporation in exchange for stock, ________. A) liabilities and stockholders' equity are increased B) assets and stockholders' equity are increased C) one asset is increased and another asset is decreased D) assets and liabilities are increased

B) assets and stockholders' equity are increased

48. Managerial accounting includes the planning function. Which of the following items would be part of the planning function of a business's managerial accounting? A) comparing actual to expected results B) choosing goals and deciding how to achieve them C) monitoring operations to keep the company on track D) monitoring and evaluating the results of operations

B) choosing goals and deciding how to achieve them

100. When the total fixed costs decrease, the breakeven point ________. A) increases B) decreases C) remains the same D) increases proportionately

B) decreases

60. The Work-in-Process Inventory account includes the ________. A) goods that are ready to be sold B) goods that are partially completed C) goods that have been sold in the market D) goods that are returned by customers

B) goods that are partially completed

51. For a manufacturing company, which of the following is a period cost? A) direct materials used B) office rent C) wages expense of factory workers D) indirect materials used

B) office rent

13. Which of the following concepts represent the time value of money? A) the concept that money becomes obsolete over time B) the concept that money earns interest over time C) the concept that money loses its purchasing power over time D) the concept that money can be converted into other currencies over time

B) the concept that money earns interest over time

35. Which of the following sections of the statement of cash flows includes the issuance of stock and the payment of cash dividends? A) the investing activities section B) the financing activities section C) the operating activities section D) the non-cash investing and financing section

B) the financing activities section

11. On January 1, 2018, Benbrook Company purchased equipment and signed a six-year mortgage note for $160,000 at 15%. The note will be paid in equal annual installments of $42,278, beginning January 1, 2019. Calculate the balance of Mortgage Payable after the payment of the first installment. (Round your answer to the nearest whole number.) A) $24,000 B) $117,722 C) $141,722 D) $120,702

C) $141,722

12. If bonds with a face value of $209,000 are issued at 93, the amount of cash proceeds is ________. A) $208,907 B) $209,000 C) $194,370 D) $179,740

C) $194,370

43. National, Inc. provides the following data: 2019 2018 Cash $45,000 $25,000 Accounts Receivable, Net 138,000 62,000 Merchandise Inventory 70,000 50,000 Property, Plant, and Equipment, Net. 200,000. 120,000 Total Assets $453,000 $257,000 For the year ending December 31, 2019: Net Credit Sales $250,000 Cost of Goods Sold (110,000) Gross Profit $140,000 Calculate the accounts receivable turnover ratio for 2019. (Round your answer to two decimal places.) A) 5.00 times B) 3.28 times C) 2.50 times D) 1.81 times

C) 2.50 times

9. On March 1, 2018, Everson Services issued a 4% long-term notes payable for $16,000. It is payable over a 4-year term in $4000 annual principal payments on March 1 of each year plus interest, beginning March 1, 2019. Each yearly installment will include both principal repayment of $4000 and interest payment for the preceding one-year period. On March 1, 2019, ________. The accounting period ends on December 31. A) Everson must accrue $4,000 of Interest Expense B) Everson must accrue the next note payment of $4,000 as the current portion of principal payment C) Everson must pay $640 of interest to the note holder D) Everson will receive $4,000 as an installment payment

C) Everson must pay $640 of interest to the note holder

27. Which of the following describes the operating activities section of the statement of cash flows? A) It reports cash receipts and cash payments that increase or decrease long-term assets. B) It includes cash inflows and outflows related to long-term liabilities and equity. C) It reports on activities that create revenue or expenses for the entity's business. D) It reports on how cash flows affect the total assets and total liabilities.

C) It reports on activities that create revenue or expenses for the entity's business.

3. In regards to corporate income tax, which of the following statements is incorrect? A) Federal income taxes are calculated on a corporate tax return. B) Income Tax Expense is recorded when the federal income tax is incurred. C) When the corporation makes payment for federal income taxes, the account Income Tax Payable is credited. D) The amount of income taxes that the corporation owes but has not yet paid is classified as a current liability.

C) When the corporation makes payment for federal income taxes, the account Income Tax Payable is credited.

76) Which of the following businesses is most likely to use a process costing system? A) an accounting firm B) a law firm C) a soda manufacturer D) a construction company

C) a soda manufacturer

73. The predetermined overhead rate is calculated ________. A) after actual overhead costs have been determined B) at the end of the accounting period C) before the accounting period begins D) after indirect materials and labor have been used in production

C) before the accounting period begins

41. Which of the following items is a measure of a company's ability to collect receivables? A) inventory turnover ratio B) current ratio C) days' sales in receivables D) account receivable balance

C) days' sales in receivables

87. Which of the following is a variable cost? A) property taxes B) salary of plant manager C) direct materials cost D) straight-line depreciation expense

C) direct materials cost

38. MacMan, Inc. reported the following data: 2019 2018 Amount Percentage Revenues $6,370 $4,940 $1,430 28.95% Cost of goods sold 3,450 2,200 1,250 56.82% Gross profit 2,920 2,740 180 6.57% Operating expenses: Sales and marketing expense 710 630 80 12.7% General & admin. expenses 410 425 (15) (3.53%) R & D expense 480 490 (10) (2.04%) Other expense 440 710 (270) (38.03)% Total operating expenses 2,040 2,255 (215) (9.53)% Income before income tax 880 485 395 81.44% Income tax expense 260 240 $20 8.33% Net income (loss) $620 $245 $375 153.06% The horizontal analysis shows that cost of goods sold has ________. (Round your answer to two decimal places.) A) increased by 28.95% B) decreased by 28.95% C) increased by 56.82% D) decreased by 56.82%

C) increased by 56.82%

34. Atlanta Company sold equipment for cash. The income statement shows a gain on the sale of $1,020. The net book value of the asset was $3,710. Which of the following statements describes the cash effect of the transaction? A) negative cash flow of $4,730 for financing activities B) negative cash flow of $2,690 for operating activities C) positive cash flow of $4,730 from investing activities D) positive cash flow of $2,690 from investing activities

C) positive cash flow of $4,730 from investing activities

70. Which of the following would most likely be accounted for using a job order costing system? A) the production of potato chips B) the production of sports energy drinks C) the creation of wedding photography portraits D) the refining of gasoline

C) the creation of wedding photography portraits

33. Which of the following sections of the statement of cash flows include purchases and sales of long-term assets? A) the financing activities section B) the operating activities section C) the investing activities section D) the non-cash investing and financing section

C) the investing activities section

31) Which of the following sections of the statement of cash flows include activities that create revenue and expenses of the business? A) the investing activities section B) the financing activities section C) the operating activities section D) the non-cash investing and financing section

C) the operating activities section

72. Venus Manufacturing uses a predetermined overhead allocation rate based on direct labor cost. At the beginning of the year, it estimated the manufacturing overhead rate to be 30% of the direct labor cost. In the month of June, Venus completed Job 13C and its details are as follows: Direct materials cost $6820 Direct labor cost $26,000 Direct labor hours 31 hours Units of product produced 200 What is the total cost incurred for Job 13C? A) $34,866 B) $33,800 C) $14,620 D) $40,620

D) $40,620

71. Aaron, Inc. estimates direct labor costs and manufacturing overhead costs for the coming year to be $760,000 and $520,000, respectively. Aaron allocates overhead costs based on machine hours. The estimated total labor hours and machine hours for the coming year are 16,000 hours and 8000 hours, respectively. What is the predetermined overhead allocation rate? (Round your answer to the nearest cent.) A) $95.00 per machine hour B) $32.50 per labor hour C) $1.46 per labor hour D) $65.00 per machine hour

D) $65.00 per machine hour

81. The Assembly Department of Interface, Inc., manufacturer of computers, had 4,500 units of beginning inventory in September, and 8,000 units were transferred to it from the Production Department. The Assembly Department completed 4,000 units during the month and transferred them to the Packaging Department. The weighted-average method is used. Calculate the total number of units to account for by the Assembly Department. A) 3,500 units B) 8,000 units C) 4,500 units D) 12,500 units

D) 12,500 units

45. Pizza, Inc. provides the following data: 2019 2018 Assets Current Assets: Cash and Cash Equivalents $30,000 $25,000 Accounts Receivable, Net 37,000 62,000 Merchandise Inventory 59,000 50,000 Total Current Assets $126,000 137,000 Property, Plant, and Equipment, Net $124,000 120,000 Total Assets $250,000 $257,000 For the year ending December 31, 2019: Net Credit Sales $510,000 Cost of Goods Sold (160,000) Gross Profit $350,000 Calculate the asset turnover ratio for 2019. There are no cash sales. (Round your answer to two decimal places.) A) 4.05 times B) 1.01 times C) 0.64 times D) 2.01 times

D) 2.01 times

82. A furniture corporation manufactures two models of furniture—Standard and Deluxe. The total estimated manufacturing overhead costs are $64,200. The following estimates are available: Standard Deluxe Direct materials cost per unit $250 $290 Direct labor cost per unit $125 $140 Number of units 240 600 The company uses direct labor costs as the base to allocate manufacturing overhead. Calculate the predetermined overhead rate. (Round your answer to two decimal places.) A) 27.44% B) 29.23% C) 191.07% D) 56.32%

D) 56.32%

63. Which of the following formulas represent cost of goods sold for a merchandising business? A) Beginning Merchandise Inventory - Ending Merchandise Inventory = Cost of Goods Sold B) Purchases and Freight In + Ending Merchandise Inventory = Cost of Goods Sold C) Ending Merchandise Inventory + Purchases and Freight In - Beginning Merchandise Inventory = Cost of Goods Sold D) Beginning Merchandise Inventory + Purchases and Freight In - Ending Merchandise Inventory = Cost of Goods Sold

D) Beginning Merchandise Inventory + Purchases and Freight In - Ending Merchandise Inventory = Cost of Goods Sold

61. Goods that are produced by a manufacturing company and are ready to sell are recorded in the _______ account. A) Raw Materials Inventory B) Work-in-Process Inventory C) Manufacturing Overhead D) Finished Goods Inventory

D) Finished Goods Inventory

98. Which of the following statements is true if the variable cost per unit increases while the sales price per unit and total fixed costs remain constant? A) The breakeven point decreases. B) The contribution margin increases. C) The breakeven point remains the same. D) The breakeven point increases.

D) The breakeven point increases.

91. Which of the following is NOT an assumption of cost-volume-profit (CVP) analysis? A) The only factor that affects total costs is a change in volume, which increases or decreases total variable and mixed costs. B) The price per unit does not change as volume changes. C) Total fixed costs do not change. D) The price per unit changes as volume changes.

D) The price per unit changes as volume changes.

97. Which of the following will lower the breakeven point? A) a decrease in the sales price per unit B) an increase in total fixed costs C) an increase in the variable cost per unit D) an increase in the sales price per unit

D) an increase in the sales price per unit

79. The direct labor costs and manufacturing overhead costs required to produce finished goods from raw materials are called ________. A) transferred in costs B) cost of sales C) finished goods costs D) conversion costs

D) conversion costs

17. The Golden Company issues $539,000 of 7%, 10-year bonds at 104 on March 31, 2019. The bonds pay interest on March 31 and September 30. Assume that the company uses the straight-line method for amortization. The journal entry to record the issuance includes a ________. A) debit to Cash for $539,000 B) credit to Bonds Payable for $560,560 C) debit to Premium on Bonds Payable for $21,560 D) debit to Cash for $560,560

D) debit to Cash for $560,560

24. Treasury stock ________. A) decreases the number of shares issued B) increases the number of shares issued C) increases the number of shares outstanding D) decreases the number of shares outstanding

D) decreases the number of shares outstanding

54. Which of the following is a product cost? A) sales commissions B) CEO's salary C) delivery van depreciation D) depreciation on production equipment

D) depreciation on production equipment

47. The profit margin ratio ________. A) focuses on the liquidity of the business B) is computed by dividing net sales by net income C) shows how much gross profit a business earns on every $1.00 of sales D) is often compared to the industry average

D) is often compared to the industry average

85. Which of the following is the most appropriate cost driver for allocating the cost of warranty services? A) number of employees B) number of materials purchased C) number of machine hours D) number of service calls

D) number of service calls

29) Which of the following is the typical order of the sections on a statement of cash flows? A) operating, financing, investing B) financing, investing, operating C) investing, operating, financing D) operating, investing, financing

D) operating, investing, financing

99. When the total fixed costs increase, the contribution margin per unit ________. A) increases B) decreases C) increases proportionately D) remains the same

D) remains the same

58. Which of the following would be considered a period cost for a manufacturing company? A) indirect materials B) factory utilities C) direct labor D) sales salaries

D) sales salaries

21) Preferred stock is stock ________. A) that sells for a high price B) that is distributed to employees as annual bonuses C) that is distributed by corporations to avoid liquidation D) that gives its owners certain advantages over common stockholders

D) that gives its owners certain advantages over common stockholders

80. The beginning inventory costs and the product costs of the current period are combined to determine the average cost of equivalent units of production under the ________. A) equivalent units method B) conversion costs method C) first-in, first-out method D) weighted-average method

D) weighted-average method