acc exams

• Question 1 2 out of 2 points

How will increases in the following items affect return on investment (ROI)?

Answer

Selected Answer: a.


Which of the following is considered a bottleneck in a product emphasis/constrained resource decision? Answer

Selected Answer: The company’s 12 machines can only operate 18 hours per day


The balanced scorecard emphasizes linkages between the organization’s vision and its operations. Organizational strategies link down to Answer

Selected Answer: Operating plans.


Which of the following are valid reasons for eliminating a product line? 1. The product line's contribution margin is negative. 2. The product line's traceable fixed costs plus its allocated common corporate costs are less than its

contribution margin. Answer

Selected Answer: a. Only I


Employee involvement is important in an effective performance measurement system because it Answer

Selected Answer:

d. increases the employee's commitment to the organization and its objectives.


One of the results in using balanced scorecards is a shift from a focus on financial

results to a focus on Answer

Selected Answer: a. increasing customer satisfaction.


A description of an organization's values, definition of its responsibilities to stakeholders, and identification of its major strategies is called its Answer

Selected Answer: c. mission statement.


Which of the following statements is (are) true regarding performance measures? (A) In general, subjective performance measures are better than objective performance measures. (B) In general, the use of multiple performance measures is better than the use of single performance measures. Answer

Selected Answer: c. Only B is true.


A strategy map is Answer

Selected Answer:

d. a cause and effect diagram of the relationships among the balanced scorecard perspectives to show how the achievement of critical success factors in each perspective affect the achievement of goals in other perspectives and the overall financial performance of the firm


Which of the following is considered to be an advantage that nonfinancial information has over financial information? Answer

Selected Answer:

b. Nonfinancial information reflects the company's current and potential competitive advantage, while financial information tends to focus only on a firm's current situation.


Due, in part, to increased global competitiveness and changes in management techniques and processes, what has

changed about the role of the management accountant? Answer

Selected Answer:

b. Rather than being a provider of information, the role of the management accountant has shifted to encompass more of a strategic management perspective.


Which of the following is not a partial productivity measure? Answer

Selected Answer: a. sales value of units completed/total manufacturing costs


The balanced scorecard is an approach that articulates the links between various perspectives; i.e., stakeholder interests and concerns. However, experimental evidence suggests that upper level managers often Answer

Selected Answer:

b. only use the balanced scorecard approach to evaluate the performance of lower management and production employees.


Which of the following balanced scorecard perspectives focuses on quality and process improvement? Answer

Selected Answer: a. Internal


Research has shown that having several levels of management participate in the budgetary process is beneficial to both the company and the employees. However, there are certain behavioral problems encountered in the process, one of which is the use of budgetary slack. From the perspective of corporate management, the use of budgetary slack Answer

Selected Answer: e. increases the effectiveness of the corporate planning process.


Which of the following statements is (are) true regarding managerial decisions? (A) The design and use of management control systems affects how an individual makes and implements decisions.

(B) Rational managers will always make decisions that are in the best interest of the organization employing them. Answer

Selected Answer:

a. Only A is true.


Which of the following organizational policies is most likely to result in undesirable managerial behavior? Answer

Selected Answer:

c. Joe Walk, the chief executive officer of Eagle Rock Brewery, wrote a memorandum to his executives stating, "Operating plans are contracts and they should be met without fail."


Controllable revenue is included in a performance report of a

Answer

Selected Answer: d.


Examples of pressures that can lead to financial fraud do not include Answer

Selected Answer: d. overemphasis on long-term results.


A manager makes a decision that is beneficial for a specific investment center but not for the entire organization. From the organization's perspective, this decision results in Answer

Selected Answer: d. suboptimization.


A strategy map is Answer

Selected Answer:

a cause and effect diagram of the relationships among the balanced scorecard perspectives to show how the achievement of critical success factors affect the achievement of goals of the firm


The controllability concept states that managers should be held responsible for Answer

Selected Answer: all items over which they have decision-making authority.


What type of theory provides an analytic framework for the conflicts that arise between owners and managers?

Answer

Selected Answer: Agency theory


Which of the following is an opportunity cost associated with dropping a business segment? Answer

Selected Answer: The benefit of using excess capacity for something else


Economic value added (EVA) is a concept that is closely related to residual income. In calculating EVA, all of the following would result in an adjustment to increase operating income and/or divisional investment EXCEPT Answer

Selected Answer: d. Write-off of goodwill


REB Service Co. is a computer service center. For the month of May, REB had the following operating statistics: (CMA adapted)

Based on the above information, which one of the following statements is correct? REB has a Answer

Selected Answer: a. Residual income of $(22,000).


Which of the following statements does not represent a limitation of using return on investment (ROI) for measuring and evaluating performance? Answer

Selected Answer: b. ROI cannot be used to compare divisions of different sizes.


Residual income is a better measure for performance evaluation of an investment center manager than return on investment (ROI) because Answer

Selected Answer:

d. desirable investment decisions will not be neglected by high return divisions.


Rayburn Corporation purchased a new machine for $120,000. The machine has an estimated useful life of 10-years with no salvage value and a return on investment (ROI) of 15%. ROI is computed using operating income. The company uses straight-line depreciation. What is the annual cash flow using the gross book value method? Answer

Selected Answer: b. $18,000


Whick of the following should not be used to compute residual income? Answer

Selected Answer: d.

return on investment (ROI).


Which one of the following items would most likely NOT be incorporated into the calculation of a division's investment base when using the residual income approach for performance measurement and evaluation? Answer

Selected Answer: c. Land being held by the division as a site for a new plant.


Level return on investments (ROI) over the life of a long-term project is more likely when ROI is computed using Answer

Selected Answer: d. current costs and gross book values.


The following information was presented for 2008 by Delta Manufacturing Company for an asset purchased at the beginning of 2007.

What is the return on investment (ROI) for 2008 assuming Delta (a) uses the straight-line method for depreciation and (b) average net book values to compute ROI? Answer

Selected Answer: e. 11.76%


The Tingey Company has 500 obsolete microcomputers that are carried in inventory at a total cost of $720,000. If these microcomputers are upgraded at a total cost of $100,000, they can be sold for a total of $160,000. As an alternative, the microcomputers can be sold in their present condition for $50,000. The sunk cost in this situation is: Answer

Selected Answer: d. $720,000.


Wagner Corporation can manufacture 490,000 tennis rackets a year at a variable cost of $15 per racket and fixed costs of $500,000. Wagner budgeted that it can sell 400,000 at $25 each. An additional order of 100,000 was received, but at a discount of 35% from the regular price. If Wagner accepts the special order, income before taxes will Answer

Selected Answer: Increase by $125,000


The balanced scorecard approach has been criticized for not capturing core values related to Answer

Selected Answer: Approaches to the environment


An organization’s required rate of return is 12%. The ROI of Divisions A and B, respectively, is 10% and 15%. Each Division is considering a project that will have a 13% rate of return. If residual income is used to evaluate divisions, which of the following statements is true? Answer

Selected Answer: Division A will reject, and Division B will accept


AXZ is a multi-city not-for-profit organization. Which of the following statements is TRUE? Answer

Selected Answer:

AXZ should establish performance targets after analyzing scorecard data.


The internal business process perspective in a balanced scorecard is often broken down into its value chain components. Those components include all of the following except the Answer

Selected Answer: Post-sales service cycle


Freestone Company is considering renting Machine Y to replace Machine X. It is expected that Y will waste less direct materials than does X. If Y is rented, X will be sold on the open market. For this decision, which of the following factors is (are) relevant?

1. Cost of direct materials used 2. Resale value of Machine X

Answer

Selected Answer: c. Both I and II


Barrus Company makes 30,000 motors to be used in the productions of its power lawn mowers. The manufacturing cost per motor at this level of activity is as follows:

Direct materials. $9.50 Direct labor $8.60 Variable manufacturing overhead $3.75 Fixed manufacturing overhead. $4.35

This motor has recently become available from an outside supplier for $25 per motor. If Barrus decides not to make the motors, none of the fixed manufacturing overhead would be avoidable and there would be no other use for the facilities. If Barrus decides to continue making the motor, how much higher or lower will the company's net operating income be than if the motors are purchased from the outside supplier? Answer

Selected Answer: a. $94,500 higher.


The opportunity cost of making a component part in a factory with no excess capacity is the: Answer

Selected Answer:

b. net benefit foregone from the best alternative use of the capacity required.


Which of the following costs are irrelevant to the make-or-buy decision? Answer

Selected Answer: e. Fixed overhead that will continue if the item is purchased


The Kelsh Company has two divisions--North and South. The divisions have the following revenues and expenses:

North South Sales...................................................................................................... $900,000 $800,000 Variable expenses.................................................................................. 450,000 300,000

Traceable fixed expenses....................................................................... 260,000 210,000 Allocated common corporate expenses................................................. 240,000 190,000 Net operating income (loss)................................................................... $(50,000) $100,000

Management at Kelsh is pondering the elimination of North Division. If North Division were eliminated, its traceable fixed expenses could be avoided. The total common corporate expenses would be unaffected. Given these data, the elimination of North Division would result in an overall company net operating income of: Answer

Selected Answer: a. $(140,000).


The CJP Company produces 10,000 units of item S10 annually at a total cost of $190,000.

The XYZ Company has offered to supply 10,000 units of S10 per year for $18 per unit. If CJP accepts the offer, $4 per unit of the fixed overhead would be saved. In addition, some of CJP's facilities could be rented to a third party for $15,000 per year. At what price would CJP be indifferent to XYZ's offer? Answer

Selected Answer: b. $17.50


Consider the following production and cost data for two products, X and Y:

Product X Product Y

Contribution margin per unit $24 $18 Machine-hours needed per unit. 3 hours 2 hours

The company has 15,000 machine hours available each period, and there is unlimited demand for each product. What is the largest possible total contribution margin that can be realized each period?

Answer



PQK Corporation produces and sells bookends. Its managers are considering whether to outsource the task of cutting the wood for the bookends to DLN Corporation. Which of the following is most likely to be a qualitative factor that managers will consider in making the

decision? Answer

Selected Answer: Whether DLN will outsource the delivery process


Suppose an office building is owned for which long-term leases have been signed, the tenants pay utilities and operating costs, and straight-line depreciation is taken. The rate of return on the book value of this investment can be expected to Answer

Selected Answer: Increase over time


Broxson Company makes four products in a single facility. These products have the following unit product costs:

Products

A B C D

Direct materials. $19.20 $22.70 $12.60 $15.30 Direct labor.. 12.00 15.80 8.00 8.80 Variable manufacturing overhead 4.60 4.40 5.30 3.40 Fixed manufacturing overhead. 14.00 11.20 6.50 7.50 Unit product cost... $49.80 $54.10 $32.40 $35.00

Additional data concerning these products are listed below.

Products

A B C D Grinding minutes per unit.. 3.90 5.70 6.00 3.20 Selling price per unit $61.20 $68.90 $47.00 $49.80 Variable selling cost per unit. $2.20 $2.00 $1.40 $3.20 Monthly demand in units. 2,000 4,000 4,000 1,000

Which product makes the MOST profitable use of the grinding machines? Answer

Selected Answer: d. Product D


In the balanced scorecard, the learning and growth perspective addresses which of the following questions? Answer

Selected Answer:

"To achieve our mission, how will we sustain our ability to improve performance?"


This first table presents the Master Budget that was prepared before the start of the current period for Nordic Company:

Master Budget

Production

37,300 units

Quantity

$/gal,hr Cost

RM-A 93,250 gal

4.50

$ 419,625

Labor 9,325 DL hrs

13.00

121,225

Var. Ovhd. 1,865 M hrs

25.00

46,625

Fixed Ovhd Budget 63,000

Total Cost $ 650,475

Usage Rate RM-A Used in Production 2.50 gal/unit

Direct Labor 0.25 DL hrs/unit Variable Overhead 0.05 M hrs/unit Overhead is applied based on STANDARD machine hours.

This second table presents the Actual Results for the current period for Nordic Company:

Actual Results

Production 41,800 units

Quantity

$/gal,hr Cost

RM-A 111,500 gal

5.75 $ 641,125

Labor 10,100 DL hrs 14.35

144,935

Var. Ovhd. 2,095 M hrs 23.30

48,814

Fixed Ovhd Actual

60,165

Total Cost $ 895,039

After you prepare the Flexible Budget including applied fixed overhead for the current period, determine each of the following variances. FORMAT NOTE: Enter whole dollar amount, NO comma. Add ONE SPACE between the dollar amount and the U/F indicator. (3 pts each, 18 pts total) Material Price Variance [x1] Material Quantity Variance [x2]

Labor Rate Variance [x3] Var. Ovhd. Efficiency Variance [x4] Budget Variance [x5] Volume Variance [x6] Answer

Specified Answer for: x1 139375 U





Specified Answer for: x6 4500 F

Correct Answers for: x1

Evaluation Method Correct Answer Case Sensitivity

Exact Match 139375 U



Exact Match 31500 U



Exact Match 13635 U



Exact Match 125 u



Exact Match 2835 U



Exact Match 7601 F


The Waverly Company has budgeted sales for the year 2008 as follows:

The ending inventory of finished goods for each quarter should equal 25% of the next quarter's budgeted sales in units. The finished goods inventory at the start of the year is 3,000 units. Scheduled production for the second quarter is (in units) Answer

Selected Answer: c. 15,000.

Correct Answer: c. 15,000.


A company is formulating its plans for the coming year, including the preparation of its cash budget. Historically, the company's sales are 30% cash. The remaining sales are on credit with the following collection pattern:

Sales for the first 5 months of the coming year are forecast as follows:

For the month of April, the total cash receipts from sales and collections on account would be (CIA adapted) Answer

Selected Answer: b. $3,781,600

Correct Answer: b. $3,781,600


The Tobler Company had budgeted production for the year 2008 as follows:

Four pounds of raw materials are required for each unit produced. Raw materials on hand at the start of the year total 4,000 lbs. The raw materials inventory at the end of each quarter should equal 10% of the next quarter's production needs in materials. Budgeted purchases of raw materials in the third quarter would be (in lbs.) Answer

Selected Answer: a. 63,200.

Correct Answer: a. 63,200.


In developing a master budget for a manufacturing company, which one of the following items should be done first? Answer

Selected Answer: c. development of a sales budget.

Correct Answer: c. development of a sales budget.


When the sales volume (units) is highly seasonal, it is very important that certain budgets in the master budget are coordinated. The two most important budgets that must be coordinated are Answer

Selected Answer: d. sales and production.

Correct Answer: d. sales and production.


From the perspective of corporate management, the use of budgetary slack Answer

Selected Answer: d. increases the likelihood of inefficient resource allocation.

Correct Answer: d. increases the likelihood of inefficient resource allocation.


The Jack Company is preparing its cash budget for the month of June. The following information is available concerning its inventories:

What are the estimated cash disbursements for inventories in June? Answer

Selected Answer: c. $335,250.

Correct Answer: c. $335,250.


Long-range planning as a management function is more important Answer

Selected Answer: a. at top management levels.

Correct Answer: a. at top management levels.


A company has the following 2008 budget data:

What are 2007 total budgeted production costs? (CIA adapted) Answer

Selected Answer: f. $3,040,000

Correct Answer: g. $2,180,000

Response Feedback: 70,000 + 30,000 40,000 = 60,000[60,000 (10 + 20 + 5)]

+ $80,000 = $2,180,000


A continuous (rolling) budget Answer

Selected Answer: b.

drops the current month or quarter and adds a future month or quarter as the current month or quarter is completed.

Correct Answer: b.

drops the current month or quarter and adds a future month or quarter as the current month or quarter is completed.


Pro forma financial statements are part of the budgeting process. Normally, the last pro forma statement prepared is the Answer

Selected Answer: c. statement of cash flows.

Correct Answer: c. statement of cash flows.


Sensitivity analysis can best be used in the budgeting process to Answer

Selected Answer: b. answer "what-if" questions regarding key projections.

Correct Answer: b. answer "what-if" questions regarding key projections.


In analyzing company operations, the controller of the Jason Corporation found a $250,000 favorable flexible budget revenue variance. The variance was calculated by comparing the actual results with the flexible budget. This variance can be wholly explained by Answer

Selected Answer: d. changes in unit selling prices.

Correct Answer: d. changes in unit selling prices.


If materials are carried in the direct materials inventory account at standard cost, then it is reasonable to assume that the Answer

Selected Answer: d. price variance is recognized when materials are purchased.

Correct Answer: d. price variance is recognized when materials are purchased.


Which department is customarily held responsible for an unfavorable materials quantity variance? Answer

Selected Answer: c. Production.

Correct Answer: c. Production.


Which one of the following variances is of least significance from a behavioral

control perspective? Answer

Selected Answer: c.

Fixed factory overhead volume variance resulting from management's decision midway through the fiscal year to reduce its budgeted output by 20%.

Correct Answer: c.

Fixed factory overhead volume variance resulting from management's decision midway through the fiscal year to reduce its budgeted output by 20%.


Which of the following statements regarding variances is (are) false? (A) In general and holding all other things constant, an unfavorable variance decreases operating profits. (B) A favorable variance is not always good, and an unfavorable variance is not always bad. Answer

Selected Answer: d. Neither A nor B is false.

Correct Answer: d. Neither A nor B is false.


A favorable materials price variance coupled with an unfavorable materials usage variance would most likely result from Answer

Selected Answer: d. The purchase of lower-than-standard-quality materials.

Correct Answer: d. The purchase of lower-than-standard-quality materials.


A debit balance in the labor-efficiency variance account indicates that Answer

Selected Answer: a. actual hours exceed standard hours.

Correct Answer: a. actual hours exceed standard hours.


What is the production volume variance? Answer

Selected Answer: e. $300F

Correct Answer: h. $400U

Response Feedback: $4,000 ($4 900) = $400 unfavorable


Which of the following is the most probable reason a company would experience an unfavorable labor rate variance and a favorable labor efficiency variance? Answer

Selected Answer: b.

The mix of workers assigned to the particular job was heavily weighted towards the use of new relatively low paid unskilled workers.

Correct Answer: d.

The mix of workers assigned to the particular job was heavily weighted towards the use of higher paid experienced individuals.


When using a flexible budget, what will happen to variable costs on a per-unit basis as production increases within the relevant range? Answer

Selected Answer: d.

Remain unchanged.

Correct Answer: d. Remain unchanged.


Arrow Industries employs a standard cost system in which direct materials inventory is carried at standard cost. Arrow has established the following standards for the prime costs of one unit of product.

During November, Arrow purchased 160,000 pounds of direct materials at a total cost of $304,000. The total factory wages for November were $42,000, 90% of which were for direct labor. Arrow manufactured 19,000 units of product during November using 142,500 pounds of direct materials and 5,000 direct labor hours. What is the dollar amount of the direct labor price (rate) variance for November? Answer

Selected Answer: a. $2,200

Correct Answer: a. $2,200


Which of the following statements is (are) true? (A) If variances are prorated at the end of the accounting period, an unfavorable direct materials price variance will, when prorated, increase the value of the Finished Goods Inventory. (B) Insignificant variances are not generally prorated at the end of the accounting period and are closed to the Cost of Goods Sold. Answer

Selected Answer: c. Both A and B are true.

Correct Answer: c. Both A and B are true.


Which of the following sales variances is further analyzed into the market size and industry volume variances? Answer

Selected Answer: e. Activity

Correct Answer: c. Price


How should an insignificant material price variance be treated at the end of the year? Answer

Selected Answer: d. Debited or credited directly to cost of goods manufactured

Correct Answer: a. Debited or credited directly to cost of goods sold


The sales mix variance would be Answer

Selected Answer: b.

favorable when a company sells relatively more of the products that have contribution margins higher than average.

Correct Answer: b.

favorable when a company sells relatively more of the products that have contribution margins higher than average.


In a standard cost system, overhead is applied to production on a basis of Answer

Selected Answer: d.

the standard hours allowed to complete the output of the period.

Correct Answer: d. the standard hours allowed to complete the output of the period.


One feature of a standard cost system is that it Answer

Selected Answer: c.

simplifies the record keeping process by allowing amounts to be carried at standard cost rather than actual cost in the accounting records.

Correct Answer: c.

simplifies the record keeping process by allowing amounts to be carried at standard cost rather than actual cost in the accounting records.


The budget for a given cost during a given period was $80,000. The actual cost for the period was $72,000. Considering these facts, the plant manager has done a better-than-expected job in controlling the cost if (CPA adapted) Answer

Selected Answer: d.

the cost is variable and actual production equals budgeted production.

Correct Answer: d.

the cost is variable and actual production equals budgeted production.


Actual and budgeted information about the sales of a product are presented below for June: (CIA adapted)

The sales price variance for June was Answer

Selected Answer: d. $ 8,000 favorable.

Correct Answer: d. $ 8,000 favorable.


Which of the following is not an acceptable treatment of factory overhead variances at an interim reporting date? (CPA adapted) Answer

Selected Answer: a.

Carry forward the total to be offset by opposite balances in later periods.

Correct Answer: d.

Apportion the total only among work-in-process and finished goods inventories on hand at the end of the interim reporting period.


Standard costs should be based on Answer

Selected Answer: c. reasonably attainable levels of efficiency.

Correct Answer: c. reasonably attainable levels of efficiency.


A machine distributor sells two models, basic and deluxe. The following information relates to its 2006 master budget.

Actual sales for 2006 were 7,000 basic models and 2,800 deluxe models. The actual sales prices were the same as the budgeted sales prices for both models. Is the sales activity variance for the basic model favorable or unfavorable? Answer

Selected Answer: a. favorable.

Correct Answer: b. unfavorable.


A machine distributor sells two models, basic and deluxe. The following information relates to its 2006 master budget.

Actual sales for 2006 were 7,000 basic models and 2,800 deluxe models. The actual sales prices were the same as the budgeted sales prices for both models. Is the sales mix variance for the basic model favorable or unfavorable? Answer

Selected Answer: b. unfavorable.

Correct Answer: b. unfavorable.


An decrease in the discount rate: Answer

Selected Answer: c. will increase present values of future cash flows.

Correct Answer: c. will increase present values of future cash flows.


Which of the following is considered to be a disinvestment cash flow? Answer

Selected Answer: d. Salvage

Correct Answer: d.

Salvage


The Phenom Corporation has a pre-tax annual cash inflow from operations from its investment in a capital asset of $100,000 for six years. The corporation's income tax rate is 30%. Calculate the total after-tax cash inflow from operations for those six years. Answer

Selected Answer: c. $420,000

Correct Answer: c. $420,000


A manager is evaluating net present value of a proposed equipment purchase. Initial investment is $90,000 with estimated salvage value of $10,000 after 5 years. Marginal tax rate is 30% and cost of capital is 10%. Assuming straight-line method is used, what is the amount of the depreciation tax shield for year 2? Answer


Correct Answer: f. $4,800


Investment A requires an initial net investment of $500,000. The required rate of return is 8% for a ten-year annuity. What are the dollar amount (rounded) of annual net cash inflows if the net present value equals 0? Answer

Selected Answer: b. 74,515

Correct Answer: b. 74,515


Which of the following analytical techniques (I, II, III) consider the time value of money?

1. Accounting rate of return 2. Payback period 3. Net present value

Answer

Selected Answer: c. III only

Correct Answer: c. III only


Redd Inc. purchased a new Flagner Machine for $80,000, which is expected to generate about $20,000 of total net after-tax cash flows for each of the next 15 years with no salvage value. What is the approximate internal rate of return for this investment? Answer

Selected Answer: d. 26.7%

Correct Answer: c. 24.0%


Net present values DECREASE as Answer

Selected Answer: b. Cash receipts are collected sooner

Correct Answer: c. Costs increase


Six years ago, Gorley Company (a not-for-profit job training organization) purchased a parsing machine for $60,000. The current book value of the machine is $12,000. The machine is now considered to be obsolete and worthless. However, it can be retrofitted at a cost of $8,500, in which case it can be expected to generate net cash flows of $4,000 a year for the next FIVE years and sold for $1,000 salvage value. The prevailing market interest rate is 4% and the company's cost of capital is 6%. What is the (rounded) net present value of retrofitting the machine? RESPONSE NOTE: (1) Type the dollar amount of your answer (to the nearest whole dollar). (2) BRIEFLY describe the procedure you used to determine that dollar amount for the net present value of retrofitting the machine. Answer

Selected Answer:

[None Given]

Correct Answer:

(1) $9,097 (2) Initial cost-$8,500; annual net cash flows-$4,000; Salvage value-$1,000; discount rate-6%

Response Feedback:

[None Given]


PROBLEM 1 (18 points) The following data for QRS Company’s manufacturing operations are available.

• Prime costs totaled $369,000. • Period costs totaled $2,222,000. • Raw material purchases totaled $333,000 • Sales for the year totaled $4,500,000. • Total cost of goods manufactured was $999,000. • Inventory records show these values: • ...............................Beginning Ending • Raw materials………… $33,000 $39,000 • Work-in-process……… 55,000 41,000 • Finished Goods……….. 66,000 88,000

TYPE ANSWERS AS WHOLE DOLLAR AMOUNTS, NO DOLLAR SIGN, NO COMMA, NO EXTRA SPACES (Example: 999 thousand dollars would be typed as 999000). Questions should be answered in the sequence presented-- a first, b seccond, c third, and so on.

11. What is the dollar amount of Cost of Goods Sold? [x1] (3 pts) 12. What is the dollar amount of raw materials used in production? [x2] (3 pts) 13. What is the dollar amount of total current manufacturing costs charged into Work-In-

Process? [x3] (3 pts) 14. What is the dollar amount of direct labor costs? [x4] (2 pts) 15. What is the dollar amount of conversion costs? [x5] (2 pts) 16. What is the total dollar amount of inventory reported on the year-end balance

sheet? [x6] (3 pts) 17. What is the total dollar amount of gross profit reported on the year-end income

statement? [x7] (2 pts) 18. What is the total dollar amount of net income reported on the year-end income

statement? [x8] (2 pts) Answer

Specified Answer for: x1 977000










Exact Match 977000



Exact Match 327000



Exact Match 985000



Exact Match 42000



Exact Match 658000



Exact Match 168000



Exact Match 3523000



Exact Match 1301000

Response Feedback:

In (d), direct labor = Prime costs (given) minus Materials Used (from b) In e, total Conversion costs = Total current manufacturing costs (from c) minus Materials Used (from b) In (f), total inventory reported on the balance sheet at the end of the period is the total of the three ending inventory amounts. In (g), Sales (given) minus CGS (from a) equals Gross Margin (Gross Profit) In (h), Gross Profit (from g) minus period costs (given) equals net operating income

• Question 2

2 out of 8 points

Nadal, Inc. uses a job-order costing system with operations in two departments: Assembly and Packaging.

• Direct labor hours provide the basis for applying overhead costs in Assembly. • Machine hours provide the basis for applying overhead costs in Packaging.

Information for the 2012 Budget Assembly Packag00ing Budgeted annual direct labor cost $600,000 $1,400,000 Budgeted annual overhead cost $1,200,000 $1,000,000 Budgeted annual machine hours 60,000 hrs 50,000 hrs Budgeted annual direct labor hours 20,000 hrs 40,000 hrs Information about Job # 10SNE1 Assembly Packaging Materials requisitioned $8,400 $3,100 Direct labor hours 400 hrs 300hrs Machine hours 800 hrs 500hrs What is the total cost for Job #10SNE1? (8 pts) [x1] FORMAT NOTE: Type your answer as a WHOLE DOLLAR amount with NO dollar sign, NO comma, NO cents. Answer

Selected Answer: 46500 Correct Answer:


Exact Match 68000


(16 pts) The following information pertains to Lap Co.'s Palo Division for the month of April. All materials are added at the beginning of the process and so all inventories are 100% complete with respect to materials.

Number of Units Material Cost Conversion Cost

Beginning Work-in-Process (70% complete) 20,000 $22,000 $ 70,000

Started in April $40,000 $160,000

Units Finished and Transferred 45,000

Ending Work-in-Process (40% complete) 15,000

FORMAT NOTE:

• For questions that ask for "equivalent units" type answer as WHOLE UNITS with NO comma.

• For questions that ask for "cost per unit" type answer to THREE DECIMAL PLACES (nearest tenth of a cent).

• For questions that ask for "total dollar amount" type answer as WHOLE DOLLARS with NO dollar sign, NO comma, and NO cents. (a) What is the number of equivalent units of product available with respect to

3. materials? (2pts) [x1] WHOLE UNITS 4. conversion? (2pts) [x2] WHOLE UNITS

(b) What is the average total cost per equivalent unit available? (2pts) [x3] THREE DECIMAL PLACES (c) What is the number of equivalent units of new product produced during the month with respect to

5. materials? (2pts) [x4] WHOLE UNITS 6. conversion? (2pts) [x5] WHOLE UNITS

(d) Using the FIFO method

1. Determine the dollar value of ending inventory (2pts) [x6] WHOLE DOLLAR 2. Determine the dollar value of goods transferred (2pts) [x7] WHOLE DOLLAR 3. Determine the total cost per unit transferred (2pts) [x8] THREE DECIMAL PLACES Answer



Specified Answer for: x3 5,543








Exact Match 60000



Exact Match 51000



Exact Match 5.543

Exact Match 5.54



Exact Match 40000



Exact Match 37000



Exact Match 40946

Exact Match 40944

Exact Match 40945



Exact Match 251054

Exact Match 251055

Exact Match 251056



Exact Match 5.579

Exact Match 5.58


Squiggles Company has two service departments and two producing departments. Maintenance Department costs are allocated based on maintenance hours and Administration costs are allocated based on number of employees.

Overhead Maintenance # of Costs Hours Employees Maintenance $100,000 500 10 Administration $200,000 300 5

Production A $300,000 600 30 Production B $500,000 600 25 Total Overhead

$1,100,000

The company allocates overhead costs using the step method with Maintenance Department costs first. What is the total dollar amount of overhead costs associated with Production Dept. A after allocations have been made? (6 pts) [x1] FORMAT NOTE: Type your answer as a whole dollar amount with NO dollar sign, NO comma, and NO cents. Answer

Selected Answer: 461000 Correct Answer:


Exact Match 460000


O’Leary Company has two products: Little and Big. The company uses activity-based costing and has prepared the following analysis showing the estimated total cost and expected activity for each of its three activity cost pools:

Expected Activity

Activity Cost Pool Estimated Overhead Cost

Little Product Big Product

Activity A $420,000 1,500 labor hours 5,000 labor hours

Activity B $180,000 6 set-ups 4 set-ups

• The annual production and sales level of Little Product is 13,600 units. • The annual production and sales level of Big Product is 4,400 units.

(a) What is the activity rate for Activity A? (4 pts) [x1] FORMAT NOTE: Round your answer to TWO decimal places (to the nearest cent) with NO dollar sign.

(b) What is the total overhead cost per unit of Big Product under activity-based costing? (6 pts) [x2] FORMAT NOTE: Round your answer to the nearest WHOLE DOLLAR with NO dollar sign, NO comma, and NO cents.

Answer





Exact Match 64.62



Exact Match 89.79


Cost pools are: Answer

Selected Answer: b.

costs that are relevant to decision-making but irrelevant to financial reporting.

Correct Answer: c.

costs that are accumulated before being allocated to cost objects on some common basis.


The journal entry to record requisitions of material for new jobs started during the period is Answer

Selected Answer:

e.

Correct Answer:

e.


Engineering design changes is an example of a Answer

Selected Answer: D. Product-related activity

Correct Answer: D. Product-related activity

• Question 9

0 out of 2 points

Given the following information, what is the amount of unapplied overhead if overhead is applied based on machine hours? Budgeted Overhead Costs $600,000 Actual Overhead Costs $580,000 Budgeted Machine Hours 20,000 mh Actual Machine Hours 19,000 mh Answer

Selected Answer: C. $20,000 overapplied

Correct Answer: B. $10,000 underapplied


If cost of goods manufactured is greater than cost of goods sold, which of the following is TRUE? Answer

Selected Answer: C.

Finished goods beginning inventory is greater than finished goods ending inventory.

Correct Answer: B.

Finished goods beginning inventory is less than finished goods ending inventory.


An error was made in computing the percentage-of-completion for ending Work-in-Process Inventory resulting in the assignment of a lower percentage of completion to each component of the inventory than actually was the case. There was no beginning Inventory. What is the effect of this error on cost assigned to (1) cost of goods completed and transferred for the period and (2) the cost per equivalent unit? Cost of Goods..............Cost per Completed................Equivalent Unit

Answer

Selected Answer: A. Overstated ........... Overstated

Correct Answer: A. Overstated ........... Overstated


When volume or level of activity decreases, which of the following is TRUE?: Answer

Selected Answer: A. Unit fixed cost increases.

Correct Answer: A. Unit fixed cost increases.


The Super Supply Company manufactures cleaning spray for public schools. During 2008, the company spent $600,000 on prime costs and $800,000 on conversion costs. Overhead is applied at a rate of 150% of direct labor costs. How much did the company spend on manufacturing overhead during 2008? Answer

Selected Answer: d. $480,000

Correct Answer: d. $480,000


An increase in the by-products sales value will

Answer

Selected Answer: E.

Have no effect on the gross margin reported by the main products

Correct Answer: C. Increase the gross margin reported by the main products


If a company multiplies its predetermined overhead rate by the actual activity level of its allocation base, it is using Answer

Selected Answer: e. normal costing.

Correct Answer: e.

normal costing.


When a manufacturing company has a highly automated manufacturing plant producing many different products, what is probably the most appropriate basis of applying overhead costs to work-in-process? Answer

Selected Answer: c. Machine hours.

Correct Answer: c. Machine hours.


ABC can be used to determine the costs of quality and to help refine quality strategies. Quality activities are commonly classified as Answer

Selected Answer: B. Prevention, appraisal, production, or post-sales

Correct Answer: B. Prevention, appraisal, production, or post-sales


If two service departments service the same number of departments, which service department's costs are allocated first when using the step method? Answer

Selected Answer: a.

The service department that provides the most service to other service departments.

Correct Answer: a.

The service department that provides the most service to other service departments.


Allocated joint costs are only useful for Answer

Selected Answer: a. determining inventory cost for accounting purposes.

Correct Answer: a. determining inventory cost for accounting purposes.


Service department costs are Answer

Selected Answer: d.

eventually applied by the user departments to the units produced.

Correct Answer: d. eventually applied by the user departments to the units produced.


The Freed Company produces three products, X, Y, and Z from a single raw material input. Product Y can be sold at the splitoff point for total revenues of $50,000 or it can be processed further at a total cost of $19,000 and then sold for $68,000. Product Y Answer

Selected Answer: a.

should be sold at the splitoff point, rather than processed further.

Correct Answer: a. should be sold at the splitoff point, rather than processed further.


If by-products are to be processed further, they should be carried in the books at Answer

Selected Answer: d. expected sales price minus separable processing costs.

Correct Answer: d. expected sales price minus separable processing costs.


Use the following information for the FGH Manufacturing Company's material costs

If FGH sold 20,000 units during the current period and used weighted-average costing, would its net income be higher or lower than if it used FIFO? Would its ending Work-in-Process Inventory be higher or lower if FGH used weighted-average instead of FIFO?

Answer

Selected Answer: a.

Correct Answer: a.


Generally, individual department rates for applying overhead, rather than a single plantwide rate, are appropriate if Answer

Selected Answer: a.

The manufactured products differ with regard to the resources consumed from the individual departments in the plant.

Correct Answer: a.

The manufactured products differ with regard to the resources consumed from the individual departments in the plant.


In computing the current period's manufacturing cost per equivalent unit, the FIFO method of process costing considers: Answer

Selected Answer: c. only current period costs

Correct Answer: c. only current period costs


The Finishing Department had 5,000 incomplete units in its beginning Work-in-Process Inventory which were 100% complete as to materials and 30% complete as to conversion costs. 15,000 units were received from the previous department. The ending Work-in-Process Inventory consisted of 2,000 units which were 50% complete as to materials and 30% complete as to conversion costs. The Finishing Department uses first-in, first-out (FIFO) process costing. The How many units were started and completed during the period? Answer

Selected Answer: a. 13,000

Correct Answer: a. 13,000


Before prorating the manufacturing overhead costs at the end of 2008, the Cost of Goods Sold and Finished Goods Inventory had applied overhead costs of $57,500 and $20,000 in them, respectively. There was no work in process at the beginning or end of 2008. During the year, manufacturing overhead costs of $74,000 were actually incurred. The balance in the Applied Manufacturing Overhead was $77,500 at the end of 2008. If the under- or overapplied overhead is prorated between Cost of Goods Sold and the inventory accounts, how much will be the Cost of Goods Sold after the proration? Answer


Correct Answer: b. $54,903


If by-products are to be processed further, they should be carried in the books at Answer

Selected Answer: c. expected sales price minus separable processing costs.

Correct Answer: c. expected sales price minus separable processing costs.

• Question 29

2 out of 2 points

Service department costs are Answer

Selected Answer: a.

eventually applied by the user departments to the units produced.

Correct Answer: a. eventually applied by the user departments to the units produced.


The Moody Company produced three joint products at a joint cost of $100,000. Two of these products were processed further. Production and sales were:

If the estimated net realizable value method is used and product Q is accounted for as a main product, how much of the joint costs would be allocated to product R? Answer




Allocated joint costs are only useful for Answer

Selected Answer: b. determining inventory cost for accounting purposes.

Correct Answer: b. determining inventory cost for accounting purposes.


These two regression reports analyze the relationships between total warehousing overhead

cost and either tons of product moved or labor hours. Regression Statistics

R-Sq. 0.814 Adj. R-Sq. 0.797 Std. Error 30.627 Observations 12

Coefficients Std. Eror t Stat P-value Intercept 106323.323 20115.32 5.286 0.038 Tons of product 0.789 0.787 1.001 0.593

Regression Statistics R-Sq. 0.625 Adj. R-Sq. 0.603 Std. Error 36.353 Observations 12

Coefficients Std. Eror t Stat P-value Intercept 19876.543 3211.511 6.189 0.024 Labor hours 4.239 1.567 2.705 0.092

(a) Which of those two cost drivers is the better predictor? TYPE Tons OR Hours. [x1] (b) Why? TYPE A BRIEF REASON. [x2] (c) Assume 30,000 labor hours are expected for next month. What is the predicted amount of warehousing overhead cost? TYPE YOUR ANSWER TO THE NEAREST WHOLE NUMBER (e.g., 9999). DO NOT INCLUDE COMMAS OR SYMBOLS. [x3] Answer

Specified Answer for: x1 Tons

Specified Answer for: x2 Adj. R-Sq is higher




Exact Match Tons



Exact Match R-squared



Exact Match 147047


XYZ Company's sales are $750,000 with operating profits of $130,000. If the contribution margin ratio is 40%, what did the fixed costs amount to? Answer

Selected Answer: d. $170,000.

Correct Answer: d. $170,000.

Answer Feedback: 40% of 750,000 - Fixed costs = $130,000


After-tax operating profits are equal to: Answer

Selected Answer: a. before-tax operating profits multiplied by (1 - tax rate).

Correct Answer: a. before-tax operating profits multiplied by (1 - tax rate).


At the break-even point the contribution margin equals total: Answer

Selected Answer: a. Fixed costs

Correct Answer: a. Fixed costs

Answer Feedback: Total Contribution margin - Fixed costs = -0- (breakeven)


For the month ended October 31st, there are no finished goods or work in process inventories at the beginning of the month for the Fleetfoot Company.

Net sales $8,400 Product costs: Variable 4,270 Fixed 2,660 Selling and Administrative costs: Variable 1,680 Fixed 1,540

Units manufactured 210 Units sold 180

What is the value of ending inventory under absorption costing?

Answer

Selected Answer: $990

Correct Answer: $990


A cost driver is defined as: Answer

Selected Answer: b.

a factor that causes an increase or decrease in the total cost of a cost object.

Correct Answer: b.

a factor that causes an increase or decrease in the total cost of a cost object.


A disadvantage of the high-low method of cost analysis is that it Answer

Selected Answer: b.

uses two extreme data points, which may not be representative of normal conditions.

Correct Answer: b.

uses two extreme data points, which may not be representative of normal conditions.


Christi Manufacturing provided the following information for last month. • Sales $10,000 • Variable costs 3,000 • Fixed costs 5,000 • Operating income $2,000

If sales double next month, what is the projected operating income?

Answer



Answer Feedback: Sales double, Variable costs double, fixed cost is constant


Shipping costs at Fisheries Inc. are a mixed cost with variable and fixed cost components. Records indicate the company shipped 6,000 tons of halibut for $8,000 in March and 10,000 tons for $11,200 in April. Assuming that this activity is within the relevant range, the expected shipping cost for shipping 7,800 tons would be: Answer



Answer Feedback: Use high-low method


Garth Company sells a single product. If the selling price per unit and the variable expense per unit both increase by 10% and fixed expenses do not change, what is the effect on (1) Unit Contribution Margin (UCM) and (2) Contribution Margin Ratio (CMR)? Answer

Selected Answer: e. UCM increases; CMR does not change

Correct Answer: e. UCM increases; CMR does not change


For a company that makes and sells one product, which of the following changes (A, B, C) will cause the breakeven point to decrease? Answer

Selected Answer: d. Both A and B

Correct Answer: d. Both A and B

Answer Feedback: F / (p-v) = Breakeven


Operating leverage for ACDC Company is 3.5 for current sales of $100,000 and current net income of $20,000. Which of the following statements (I, II, III) is/are TRUE?

I. Current contribution margin is $70,000. II. If sales increase by 2%, net income will increase by 7%. III. If sales increase by $10,000, net income will be $27,000.

Answer

Selected Answer: g. I, II, and III are true.

Correct Answer: g. I, II, and III are true.


Assuming a constant mix of 3 units of Small for every 1 unit of Large. • Small Large Total • Sales $20 $30 • Variable cost per unit 14 18 • Total fixed costs $48,000

What are the breakeven quantities?

Answer

Selected Answer: c. 4,800 units of Small and 1,600 units of Large.

Correct Answer: c. 4,800 units of Small and 1,600 units of Large.


In describing the cost equation, Y = a + bX, "X" is: Answer

Selected Answer: c. the level of activity.

Correct Answer: c. the level of activity.


Which of the following is sn example of cognitive bias? Answer

Selected Answer: c.

The decision maker may exercise an error in judgment or processing information

Correct Answer: c.

The decision maker may exercise an error in judgment or processing information


The fixed manufacturing overhead rate will be the lowest when the denominator level used is Answer

Selected Answer: Theoretical capacity

Correct Answer: Theoretical capacity


The capacity level which assumes continuous, uninterrupted production 365 days per year is called Answer

Selected Answer: Theoretical capacity

Correct Answer: Theoretical capacity


Which costing method matches costs and revenues in accordance with generally accepted accounting principles? Answer

Selected Answer: Absorption costing

Correct Answer: Absorption costing


In throughput costing, direct labor and variable overhead are treated as Answer

Selected Answer: Period costs

Correct Answer:

Period costs


Which of the following is the best definition of a qualitative factor? Answer

Selected Answer: C. Factors that are not valued in monetary terms

Correct Answer: C. Factors that are not valued in monetary terms


In the “Levers of Control” framework, which of the following is an example of a boundary system? Answer

Selected Answer: A. Code of ethics

Correct Answer: A. Code of ethics


Edison Company has 5,000 obsolete desk lamps that are carried in inventory at a manufacturing cost of $45,000. If the lamps are reworked for $20,000, they could be sold for $37,000. Alternatively, the lamps could be sold for $9,000 for scrap. In a decision model analyzing these alternatives, the sunk cost would be: Answer

Selected Answer: A. $45,000

Correct Answer: A. $45,000


Consider the following production and cost data for two products, L and C:

Product L Product C Contribution margin per

unit.............................. $120 $112 Machine minutes needed per

unit...................... 10 minutes 8 minutes A total of 60,000 machine minutes are available each period and there is unlimited demand for each product. What is the largest possible total contribution margin that

can be realized each period? Answer

Selected Answer: $840,000

Correct Answer: $840,000


The cost for a salesperson that is paid a flat salary of $2,000 per month plus a 3% commission on all sales is an example of what type of cost? Answer

Selected Answer: C. Mixed cost

Correct Answer: C. Mixed cost


In an outsourcing decision, fixed costs are Answer

Selected Answer: A. Relevant if they can be avoided through outsourcing

Correct Answer: A. Relevant if they can be avoided through outsourcing


Which of the following statements regarding organizational vision is FALSE? Answer

Selected Answer: B. Organizational vision means the same as core competencies

Correct Answer: B. Organizational vision means the same as core competencies


Which of the following is an element of an operating plan?

Answer

Selected Answer: C. Budgeting employee costs

Correct Answer: C. Budgeting employee costs


Analyzing the strengths and weaknesses of different alternatives includes all of the following except Answer

Selected Answer: A. Drawing a conclusion about which alternative is best overall

Correct Answer: A. Drawing a conclusion about which alternative is best overall


Which of the following statements (A, B, C) is/are TRUE? Answer

Selected Answer: B. Sunk costs are never relevant for decision making

Correct Answer: B. Sunk costs are never relevant for decision making


Break-even analysis assumes that: Answer

Selected Answer: C. Unit variable cost is constant

Correct Answer: C. Unit variable cost is constant


PROBLEM 1 (20 pts) A manufacturer of large stainless steel buckets has supplied the following data:

• Selling price per bucket $100 • Material cost per bucket 12 • Direct labor cost per bucket 8 • Variable manufacturing cost per bucket 15 • Variable selling and administrative cost per bucket 5

• Total fixed manufacturing costs $125,000 • Total fixed selling and administrative cost $ 85,000 • Tax rate is 40%

(a) What is contribution margin ratio? [x1] (4 pts) TYPE YOUR ANSWER TO ONE DECIMAL PLACE, THE NEAREST TENTH OF A PERCENT (e.g., 99.9 or 12.3) DO NOT INCLUDE COMMAS OR SYMBOLS. (b) What is the quantity of product that needs to be produced and sold in order to earn a pre-tax profit of $140,000? [x2] (4 pts) TYPE YOUR ANSWER TO THE NEAREST WHOLE NUMBER (e.g., 99999). DO NOT INCLUDE COMMAS OR SYMBOLS. (c) What is the dollar amount of sales at the break-even point? [x3] (4 pts) TYPE YOUR ANSWER TO THE NEAREST WHOLE NUMBER (e.g., 99 thousand would be typed as 99000). DO NOT INCLUDE COMMAS OR SYMBOLS. (d) Assume the company produces 6,000 units and sells 5,000 units (with no beginning inventory), using Variable Costing to prepare the income statement, what is the dollar amount of the appropriate margin subtotal? [x4] (2 pts) TYPE YOUR ANSWER TO THE NEAREST WHOLE NUMBER (e.g., 99999). DO NOT INCLUDE COMMAS OR SYMBOLS. (e) Assume the company produces 6,000 units and sells 5,000 units (with no beginning inventory), using Variable Costing to prepare the income statement, what is the dollar amount of net operating income? [x5] (2 pts) TYPE YOUR ANSWER TO THE NEAREST WHOLE NUMBER (e.g., 99999). DO NOT INCLUDE COMMAS OR SYMBOLS. (f) Assume the company produces 6,000 units and sells 5,000 units (with no beginning inventory), using Absorption Costing to prepare the income statement, what is the dollar amount of the appropriate margin subtotal? [x6] (2 pts) TYPE YOUR ANSWER TO THE NEAREST WHOLE NUMBER (e.g., 99999). DO NOT INCLUDE COMMAS OR SYMBOLS. (g) Assume the company produces 6,000 units and sells 5,000 units (with no beginning inventory), using Absorption Costing to prepare the income statement, what is the dollar amount of net operating income? [x7] (2 pts) TYPE YOUR ANSWER TO THE NEAREST WHOLE NUMBER (e.g., 99999). DO NOT INCLUDE COMMAS OR SYMBOLS. Answer

Specified Answer for: x1 0.6







ABSORPTION COSTING VARIABLE COSTING

Sales 500,000 Sales 500,000 CGS 279,167 Variable 200,000 Gross Mgn 220,833 CM 300,000

Period Cost 110,000 Fixed 210,000

Net Op Inc 110,833 Net Op

Inc 90,000



Exact Match 60.0



Exact Match 5833



Exact Match 350000



Exact Match 300000



Exact Match 90000



Exact Match 220833



Exact Match 110833

Response Feedback:

Sales price minus *ALL* unit VARIABLE costs equals unit Contribution Margin (Variable costs include direct materials, direct labor, variable manufacturing, variable period costs, ALL variable costs) ABSORPTION COSTING VARIABLE COSTING

Sales 500,000 Sales 500,000

CGS 279,167 Variable 200,000

Gross Mgn 220,833 CM 300,000

Period Cost 110,000 Fixed 210,000

Net Op Inc

110,833 Net Op Inc 90,000


PROBLEM 3 (12 pts) Your boss needs you to estimate cafeteria costs for next week. Past data follows:

Week Meals served Cafeteria costs 1 3,500 $26,840 2 3,800 $28,200 3 4,100 $29,160 4 3,300 $25,930 5 2,900 $24,000

(a) Using the high-low method, what is the estimated variable cost per meal? [x1] (4 pts) TYPE ANSWER TO THREE DECIMAL PLACES, NO DOLLAR SIGN, NO COMMA (e.g., 99.999 or 1.234 or 10.000)

(b) What is the estimated total fixed cost? [x2] (4 pts) TYPE ANSWER AS WHOLE DOLLAR AMOUNT, NO DOLLAR SIGN, NO COMMA (e.g., 999 thousand dollars would be typed as 999000) (c) You expect to serve 3,700 meals next week. What is your estimate for total cafeteria costs next week? [x3] (4 pts) TYPE ANSWER AS ROUNDED WHOLE DOLLAR AMOUNT, NO DOLLAR SIGN, NO COMMA (e.g., $49,999.99 would be typed as 50000) Answer

Specified Answer for: x1 4.300





Exact Match 4.300



Exact Match 11530



Exact Match 27440


Bates Corp. has the following information for its single product (sold for $8 per unit) for last period:

Units sold 300,000 Variable costs $900,000 Fixed costs $600,000

Based on a market study, Bates estimates that it could increase the unit selling price by 15% and increase the unit sales volume by 10% if an additional $60,000 was spent on advertising. Based on the analysis, what would Bates' operating income be from selling the candy if the decision is made to advertise? TYPE YOUR ANSWER TO THE NEAREST WHOLE NUMBER (e.g., 9999). DO NOT INCLUDE COMMAS OR SYMBOLS. [x1] Answer




Exact Match 1386000


When production quantity is greater than sales quantity, net operating income reported by variable costing will be __________ net operating income reported by absorption costing. Answer

Selected Answer: less than

Correct Answer: less than


Booker Company, in its first year of operations, produces a product that sells for $49 per unit. The following manufacturing costs were incurred during the year to produce 600,000 units (50,000 units per month):

• Direct materials.............$6,600,000 • Direct labor...................$2,400,000 (@ $20/direct labor hour)

Manufacturing overhead costs incurred for each of the first twelve months of operations were analyzed using linear regression. The following results provide the basis for overhead costs estimates for the product:

• REGRESSION REPORT • Dependent variable---Manufacturing overhead costs • Independent variable--Direct labor hours • Computed values: • Intercept...............................................$250,000

• Coefficient of independent variable............$7.000 • Coefficient of correlation ..........................0.921 • R-squared...............................................0.848

Next month, management expects to produce 60,000 units. What is the estimated dollar amount of expected TOTAL MANUFACTURING OVERHEAD COST for next month?

Answer

Selected Answer: e. $ 334,000

Correct Answer: e. $ 334,000


At an activity level of 20,000 units produced, fixed costs total $30,000 and variable costs total $68,000. Assuming that this activity is within the relevant range, if 25,000 units are produced, Answer

Selected Answer: a. fixed cost per unit is expected to equal $1.20.

Correct Answer: a. fixed cost per unit is expected to equal $1.20.

Answer Feedback: $30,000/25,000 units = $1.20/unit

acc exams

Documents

answer selected answer

firm question

day question

points employee involvement

objective performance

overall financial performance

nonfinancial information

following statements