Which of the following common components of culture is the one that "gives away" or tells us so much more about a group's culture than any of the others? Question options: group identity symbols values language norms
debited to Work in Process.
A favorable material usage variance is:
provides production data to calculate unit cost.
A standard cost sheet:
transfer price
A(n) _____ is the price charged for a component by the selling division to the buying division of the same company.
revenue growth
Adopting a new pricing strategy is an example of the _____ objective of the financial perspective of the Balanced Scorecard management system.
$44 Transfer price = Full cost + (Full cost × 10%) = (Direct material + Direct labor + Variable overhead + Fixed overhead) + (10% × Full cost) = ($26 + $7 + $3 + $4) + [10% × ($26 + $7 + $3 + $4)] = $40 + (10% × $40) = $40 + $4 = $44
AquaShine Inc. has a number of divisions, including the Beige Division, a producer of fabric, and the Purple Division, a fabric painting division. The cost per yard of the cloth manufactured by Beige Division of the AquaShine Inc. is as follows: Direct material$26 Direct labor$7 Variable overhead$3 Fixed overhead$4 Calculate the transfer price if the company allows transfer pricing at cost plus 10%.
$33 Transfer price = Full cost + (Full cost × 10%) = (Direct material + Direct labor + Variable overhead + Fixed overhead) + (10% × Full cost) = ($16 + $7 + $3 + $4) + [10% × ($16 + $7 + $3 + $4)] = $30 + (10% × $30) = $30 + $3 = $33
AquaShine Inc. has a number of divisions, including the Beige Division, a producer of fabric, and the Purple Division, a fabric painting division. The cost per yard of the cloth manufactured by Beige Division of the AquaShine Inc. is as follows:Direct material$16 Direct labor$7 Variable overhead$3 Fixed overhead$4 Calculate the transfer price if the company allows transfer pricing at cost plus 10%.
$70F Usage (efficiency) variance is the difference between the actual and standard quantity of inputs multiplied by the standard unit price of the input.
Arsenic Corp. manufactures coffee. The actual quantity of input used for the month of November was 450 kilograms of coffee beans, and the standard quantity of input allowed was 460 kilograms of coffee beans. The standard price per kilogram of coffee beans was $7. Determine the material usage variance of the month of November.
$2,925 Unfavorable
Boysenberry Inc. manufactures specialized equipment to be used in motor bikes. The actual variable overhead for the month of January was $13,325. The standard hours allowed for production were 1,300 hours, and the standard variable overhead rate was $8 per hour. Determine the total variable overhead variance of Boysenberry for the month of January.
Theoretical velocity is 6 units per hour, and actual velocity is 5 units per hour. Theoretical velocity = Maximum units produced in a quarter / Productive hours in a quarter = 282,000 units per quarter / 47,000 hours per quarter = 6 units per hourActual velocity = Actual units produced in a quarter / Productive hours in a quarter = 235,000 units per quarter / 47,000 hours per quarter = 5 units per hour
Consider the following information for the manufacturing cell of Stripes Company: Maximum units produced in a quarter 282,000 units Actual units produced in a quarter 235,000 units Productive hours in a quarter 47,000 hours Compute the theoretical velocity and the actual velocity in units per hour.
a.Theoretical velocity is 6 units per hour, and actual velocity is 7 units per hour. b.Theoretical velocity is 7 units per hour, and actual velocity is 5 units per hour. c.Theoretical velocity is 6 units per hour, and actual velocity is 5 units per hour. d.Theoretical velocity is 7 units per hour, and actual velocity is 6 units per hour.
Consider the following information for the manufacturing cell of Stripes Company: Maximum units produced in a quarter 322,000 units Actual units produced in a quarter 276,000 units Productive hours in a quarter 46,000 hours Compute the theoretical velocity and the actual velocity in units per hour.
36% ROI = Margin × Turnover = 0.20 × 1.80 = 0.36, or 36.00%
Following is the financial information of Aquazire Enterprises for the last financial year: Margin20% Turnover1.80 Sales$502,000 Average operating assets$355,000 Calculate its return on investment (ROI).
$14,500
Following is the financial information of Azure Company for the last financial year: Operating Income$90,000 Less: income taxes @35% $31,500 Net Income$58,500 Total capital employed$400,000 Actual cost of capital 11% Minimum expected rate of return 12% Calculate economic value added (EVA) of Azure.
6% Residual Income = Operating Income - (Minimum Rate of Return × Average Operating Assets) = $2,560,000 - (10% × $16,000,000) = $960,000Residual Return = Residual Income / Operating Assets = $960,000 / $16,000,000 = 6%
Following is the financial information of Omega Investor Inc. for the last fiscal year: Average operating assets$16,000,000 Operating income$2,560,000 Minimum required rate of return 10% Calculate the residual return of Omega Investor Inc.
Margin ratio is 6%; turnover ratio is 3
Following is the financial information of Optimum Solvers Inc. for the last financial year: Operating Income136,800 Sales$2,280,000 Average Operating Assets$760,000
Variable Overhead Spending Variance = Actual Variable Overhead - (Actual Hours × Standard Variable Overhead Rate)
Identify the equation that is used to compute variable overhead spending variance.
Material Price Variance = (Actual Price per Unit - Standard Price per Unit) × Actual Quantity of Input Used
Identify the equation used to determine material price variance
Debit Materials and Material Price Variance, Credit Accounts Payable
Identify the journal entry passed to record the purchase of materials when an unfavorable material price variance exists.
currently achievable standards.
In the process of setting production standards, it is better for a company to aim for:
the difference between actual and standard input multiplied by standard price.
Material usage variance is:
1,317 hours The actual direct labor hours worked are computed as follows:<br />Variable Overhead Spending Variance = Actual Variable Overhead - (Actual Hours Worked × Standard Variable Overhead Rate)<br />$465 = $7,050 - (Actual Hours Worked × $5 per hour) <br />Actual Hours Worked (AH) = ($7,050 - $465) / 5 = 1,317 hours
Moccasin Company manufactures a special spare part. Moccasin had an unfavorable variable overhead spending variance of $465 for the month of August. The actual variable overhead incurred for the month of August was $7,050, and the standard variable overhead rate was $5 per hour. Determine the actual direct labor hours worked in the month of August.
assigns overhead to products using budgeted costs.
Normal costing:
the difference between the actual and standard unit price of an input multiplied by the number of inputs used
Price (rate) variance is:
Market price
Teakwood Log Division is the selling division and Tables Division is the buying division of Top Shine Furniture Enterprises. Teakwood logs can be sold to outside buyers at $2,000 per log. Which of the following is the best transfer price for both the divisions of the company?
customer
The _____ perspective of the Balanced Scorecard management system defines and selects the market segments in which the company chooses to compete.
based on the amount of materials used in production.
The materials usage variance should be calculated:
Decentralization
The practice of delegating decision-making authority to the lower levels of management in a company is called _____.
the production department.
The responsibility for deviations from planned usage of inputs tends to be located in:
production manager.
The responsibility for the variable overhead spending variance should be assigned to a:
Debit Cost of Goods Sold, 690<br />Credit Material Price Variance, 40<br />Credit Material Usage Variance, 215<br />Credit Labor Rate Variance, 100<br />Credit Labor Efficiency Variance, 335
Theta Company has the following variances at the end of February: Material Price Variance$40 UnfavorableMaterial Usage Variance$215 UnfavorableLabor Rate Variance$100 UnfavorableLabor Efficiency Variance$335 Unfavorable Which of the following is the journal entry to be passed by Theta Company at the end of the month of February to close the variances?
Debit Cost of Goods Sold, 680<br />Credit Material Price Variance, 50<br />Credit Material Usage Variance, 215<br />Credit Labor Rate Variance, 90<br />Credit Labor Efficiency Variance, 325
Theta Company has the following variances at the end of February: Material Price Variance$50 UnfavorableMaterial Usage Variance$215 UnfavorableLabor Rate Variance$90 UnfavorableLabor Efficiency Variance$325 Unfavorable Which of the following is the journal entry to be passed by Theta Company at the end of the month of February to close the variances?
Accrued Payroll
Which of the following account balances increases when there is an unfavorable labor efficiency variance?
Increase customer profitability
Which of the following core measures is a financial measure of the customer perspective of the Balanced Scorecard management system?
Standard Quantity of Materials Allowed = Unit Quantity Standard × Actual Output
Which of the following equations is used to determine standard quantity of material allowed?
Total Materials Variance = (Actual Price per Unit × Actual Quantity) - (Standard Price × Standard Quantity)
Which of the following equations is used to determine the total materials variance?
Economic value added (EVA) lays emphasis on after-tax operating profit and the actual cost of capital, whereas residual income uses minimum expected rate of return.
Which of the following is a difference between economic value added (EVA) and residual income?
Ease of gathering and using local information
Which of the following is a reason for a firm to decentralize?
Profits of both the selling and buying divisions
Which of the following is affected by the price charged for goods transferred between two divisions of a company that are both treated as responsibility centers?
It encourages managers to accept any project that earns a return that is above the minimum rate.
Which of the following is an advantage of residual income?
It encourages managers to focus on operating asset efficiency.
Which of the following is an advantage of the return on investment (ROI) measure?
In a decentralized firm, top management evaluates local managers' capabilities based on the decisions taken.
Which of the following is true of decentralization?
An unfavorable labor rate variance is credited to Accrued Payroll.
Which of the following is true of labor variances?
If residual income is less than zero, then the division is earning less than the minimum required rate of return.
Which of the following is true of residual income?
It establishes long- and short-term financial performance objectives.
Which of the following is true of the financial perspective of the Balanced Scorecard management system?
It is the difference between actual and applied variable overheads.
Which of the following is true of total variable overhead variance?
Usage Variance = (Actual Quantity - Standard Quantity) × Standard Price per Unit
Which of the following is used to calculate material efficiency variance?
The long-run survival of the organization
Which of the following should be focused on by the central management in a decentralized company?
The company has a higher return on investment than its hurdle rate.
Which of the following statements is true if a company has positive residual income?
Operating income refers to earnings before interest and taxes.
Which of the following statements is true of operating income?
It is the maximum transfer price that would leave the buying division no worse off if an input were purchased from an internal division than if the same goods were purchased externally.
Which of the following statements is true of the ceiling of the bargaining range of the transfer price?
It is the ratio of sales to average operating assets.
Which of the following statements is true of turnover?
The fixed overhead spending variance
Which of the following variances is the difference between actual fixed overhead and budgeted fixed overhead?
Hurdle Rate
_____ indicates the minimum return on investment (ROI) necessary to accept an investment.
