ACC201 Financial Accounting
University of Phoenix
ACC201C Chapter 16 Quiz Score 90%
1.value:
10.00 points
Addams Corporation paid cash dividends totaling $75,000 during its most
recent fiscal year. How should this information be reported on Addam's
statement of cash flows?
In financing activities as a source of funds.
In financing activities as a use of funds.
In investing activities as a use of funds.
In investing activities as a source of funds.
In operating activities as a source of funds.
Question-2
Northington, Inc. is preparing the company's statement of cash flows for
the fiscal year just ended. Using the following information, determine the
amount of cash flows from operating activities using the indirect method:
|
Net income |
$182,000 |
|
Gain on the sale of equipment |
12,300 |
|
Proceeds from the sale of equipment |
92,300 |
|
Depreciation expense—equipment |
50,000 |
|
Payment of bonds at maturity |
100,000 |
|
Purchase of land |
200,000 |
|
Issuance of common stock |
300,000 |
|
Increase in merchandise inventory |
35,400 |
|
Decrease in accounts receivable |
28,800 |
|
Increase in accounts payable |
23,700 |
|
Payment of cash dividends |
32,000 |
$189,400.
$332,200.
$236,800.
$261,400.
$186,800.
Hint: Net Income +Depreciation expense (equipment)-Gain on sale of
equipment-INC in merchandise Inventory+DEC in accounts receivable+INC in
accounts payable
= 182000+50000-12300-35400+28800+23700
Question-3
Business activities that generate or use cash are classified as
operating, investing, or financing activities on the statement of cash flows.
True
False
Question-4
Conversion of preferred stock to common stock is disclosed in the
financing section of the statement of cash flows.
True
False
Question-5
The statement of cash flows is:
A financial statement that reports the cash inflows and cash outflows
for an accounting period, and that classifies those cash flows as operating
activities, investing activities, or financing activities.
A financial statement that lists the types and amounts of assets,
liabilities, and equity of a business on a specific date.
A financial statement that lists the types and amounts of the revenues
and expenses of a business for an accounting period.
A financial statement that presents information about changes in equity
during a period.
Another name for the statement of financial position.
Question-6
Both the direct and indirect methods yield the identical net cash flow
amount provided or used by operating activities.
True
False
Question-7
The gain or loss from retirement of debt is reported under cash flows
from operating activities on the statement of cash flows using the direct
method.
True
False
Question-8
A purchase of land in exchange for a long-term note payable is reported
in the investing section of the statement of cash flows.
True
False
Question-9
Jamison Company reports depreciation expense of $35,000 for Year 2.
Also, equipment costing $140,000 was sold for a $5,000 gain in Year 2. The
following selected information is available for Jamison Company from its
comparative balance sheet. Compute the cash received from the sale of the
equipment.
|
At December 31 |
Year 2 |
Year 1 |
|
Equipment |
$610,000 |
$750,000 |
|
Accumulated Depreciation-Equipment |
428,000 |
500,000 |
$23,000.
$40,000.
$67,000.
$35,000.
$38,000.
Question-10
The appropriate section in the statement of cash flows for reporting the
purchase of equipment for cash is:
Financing activities.
Schedule of noncash investing or financing activity.
Investing activities.
Operating activities.
This is not reported on the statement of cash flows.
Question-11
Use the following information to calculate cash received from dividends:
|
Dividends revenue |
$63,500 |
|
Dividends receivable, January 1 |
3,600 |
|
Dividends receivable, December 31 |
3,100 |
$63,000.
$60,400.
$63,500.
$64,000.
$67,100.
Question-12
When analyzing the changes on a spreadsheet used to prepare a statement
of cash flows, the cash flows from financing activities generally affect:
Noncurrent liability and equity accounts.
Noncurrent assets.
Net income, current assets, and current liabilities.
Equity accounts only.
Both noncurrent assets and noncurrent liabilities.
Question-13
A spreadsheet can help organize the information needed to prepare a
statement of cash flows.
True
False
Question-14
In preparing a company's statement of cash flows for the most recent
year using the indirect method, the following information is available:
|
Net income for the year was |
$52,000 |
|
Accounts payable increased by |
$18,000 |
|
Accounts receivable decreased by |
$25,000 |
|
Inventories increased by |
$5,000 |
|
Depreciation expense was |
$30,000 |
Net cash provided by operating activities was:
$80,000.
$60,000.
$130,000.
$70,000.
$120,000.
Question-15
The first line item in the operating activities section of a spreadsheet
for a statement of cash flows prepared using the indirect method is:
Net income.
Cash received from customers.
Adjustments to net income.
Cash.
Increase (decrease) in accounts receivable.
Question-16
Of the following, which one affects cash during a period?
Writing off an uncollectible account receivable.
The declaration of a cash dividend.
The declaration of a stock dividend.
The payment of interest expense accrued in a previous accounting period.
An adjusting entry recognizing the expiration of prepaid insurance.
Question-17
The cash flow on total assets ratio is calculated by:
Dividing average total assets by total cash flows.
Dividing total cash flows by average total assets.
Dividing cash flows from operations by average total assets.
Dividing average total assets by cash flows from investing activities.
Total cash flows divided by average total assets times 365.
Question-18
Managers only use the cash flow statement to evaluate the net cash
increase or decrease, and do not pay much attention to the details of cash
flows from operating activities, cash flows from investing activities, and cash
flows from financing activities.
True
False
Question-19
If a company borrows money from a bank, the interest paid on this loan
should be reported on the statement of cash flows as a(n):
This is not reported in the statement of cash flows.
Financing activity.
Operating activity.
Noncash investing and financing activity.
Investing activity.
Question-20
Which of the following transactions or events should be reported as a
source of cash from operating activities when using the direct method?
Cash collections from customers.
Cash received from the sale of a building.
Depreciation expense.
Cash received from the sale of treasury stock.
Credit sales.
ACC201C Chapter 17 Quiz Score 95%
Question-1
Financial statement analysis
lessens the need for expert judgment.
True
False
Question-2
The comparison of a company's
financial condition and performance to a base amount is known as:
Horizontal ratios.
Investment analysis.
Financial reporting.
Risk analysis.
Vertical analysis.
Question-3
How long a company holds
inventory before selling it can be measured by dividing cost of goods sold by
the average inventory balance to determine the:
Price earnings ratio.
Accounts receivable turnover.
Inventory turnover.
Current ratio.
Days' sales uncollected.
Question-4
The building blocks of financial
statement analysis include (1) liquidity, (2) salability, (3) solvency, and (4)
profitability.
True
False
Question-5
The market price of Horokhiv
Corporation's common stock at the start of 2014 was $47.50 and it declared and
paid cash dividends of $3.28 per share. The Dividend yield ratio is:
14.5%.
7.4%.
6.5%.
144.8%.
6.9%.
Question-6
Measures taken from a selected
competitor or a group of competitors are often excellent standards of
comparison for analysis.
True
False
Question-7
The percent change of a
comparative financial statement item is computed by subtracting the analysis
period amount from the base period amount, dividing the result by the base
period amount and multiplying that result by 100.
True
False
Question-8
Selected current year company
information follows:
Net income $15,953
Net sales 712,855
Total liabilities, beginning-year 83,932
Total liabilities, end-of-year 103,201
Total stockholders' equity,
beginning-year 198,935
Total stockholders' equity, end-of-year 121,851
The total asset turnover is:
6.28 times
3.64 times
2.81 times
2.24 times
4.67 times
Question-9
Dividing Accounts receivable, net
by Net sales and multiplying the result by 365 is the:
Average accounts receivable
ratio.
Accounts receivable turnover
ratio.
Current ratio.
Days' sales uncollected.
Profit margin.
Question-10
Refer to the following selected
financial information from Dodge Company. Compute the company's acid-test
ratio.
Cash $42,250
Short-term investments 60,000
Accounts receivable, net 79,500
Merchandise inventory 115,000
Prepaid expenses 9,700
Accounts payable 111,400
2.75.
1.63.
0.92.
2.66.
1.12.
Question-11
Horizontal analysis is used to
reveal changes in the relative importance of each financial statement item.
True
False
Question-12
Net income divided by average
total assets is:
Total asset turnover.
Profit margin.
Return on total assets.
Days' income in assets.
Current ratio.
Question-13
The return on total assets ratio
is a profitability measure.
True
False
Question-14
A high level of expected risk
suggests a low price-earnings (PE) ratio.
True
False
Question-15
The base amount for a common-size
balance sheet is usually total assets.
True
False
Question-16
The ability to meet short-term
obligations and to efficiently generate revenues is called:
Creditworthiness.
Liquidity and efficiency.
Profitability.
Solvency.
Market prospects.
Question-17
Financial statements with data
for two or more successive accounting periods placed in columns side by side,
sometimes with changes shown in both dollar amounts and percentages, are
referred to as:
Serial statements.
Successive statements.
Controlling statements.
Period-to-period statements.
Comparative statements.
Question-18
Rajan Company's most recent
balance sheet reported total assets of $1.9 million, total liabilities of $0.8
million, and total equity of $1.1 million. Its Debt to equity ratio is:
0.58
1.00
0.73
0.42
1.38
Question-19
The measurement of key relations
among financial statement items is known as:
Ratio analysis.
Financial reporting.
Horizontal analysis.
Investment analysis.
Risk analysis.
Question-20
The return on total assets can be
calculated as profit margin times total asset turnover.
True
False
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ACC201C
Chapter 18 Quiz - Score 90%
Question-1
Comet
Company accumulated the following account information for the year:
|
Beginning
raw materials inventory |
$6,000 |
|
Indirect
materials cost |
2,000 |
|
Indirect
labor cost |
5,000 |
|
Maintenance
of factory equipment |
2,800 |
|
Direct
labor cost |
7,000 |
Using the above information, total factory overhead costs would be:
$13,000.
$15,800.
$9,800.
$16,800.
$7,800.
Question-2
Using the information
below, compute the raw materials inventory turnover:
|
Raw Materials
Used |
$121,600 |
|
Beginning
Raw Materials Inventory |
$18,000 |
|
Ending
Raw Materials Inventory |
$20,200 |
6.76.
60.6.
6.37.
54.0.
6.02.
Question-3
Current information for
the Healey Company follows:
|
Beginning
raw materials inventory |
$15,200 |
|
Raw material
purchases |
60,000 |
|
Ending
raw materials inventory |
16,600 |
|
Beginning
work in process inventory |
22,400 |
|
Ending
work in process inventory |
28,000 |
|
Direct
labor |
42,800 |
|
Total
factory overhead |
30,000 |
All raw materials used were traceable to specific units of product. Healey
Company's Cost of Goods Manufactured for the year is:
$128,600.
$139,000.
$125,800.
$131,400.
$137,000.
Question-4
Indirect materials are
accounted for as factory overhead because they are not clearly identified with
specific product units.
True
False
Question-5
A classification of costs
that determines whether a cost is expensed to the income statement or
capitalized to inventory is:
Service versus manufacturing.
Direct versus indirect.
Financial versus managerial.
Fixed versus variable.
Product versus period.
Question-6
Direct costs are incurred
for the benefit of more than one cost object.
True
False
Question-7
Costs that flow directly
to the income statement as expenses are called:
Balance sheet costs.
Period costs.
General costs.
Product costs.
Capitalized costs.
Question-8
Which of the following
items appears only in a manufacturing company's financial statements?
Cost of goods sold.
Goods available for sale.
Cost of goods manufactured.
Gross profit.
Net income.
Question-9
The
following information is available for the year ended December 31:
|
Beginning
raw materials inventory |
$11,000 |
|
Raw
materials purchases |
86,000 |
|
Ending
raw materials inventory |
10,400 |
|
Manufacturing
supplies expense |
900 |
The amount of raw materials used in production for the year is:
$85,700.
$86,600.
$85,400.
$87,500.
$86,900.
Question-10
The series of activities
that add value to a company's products or services is called a value chain.
True
False
Question-11
The main goal of the lean
business model is the elimination of waste while satisfying the customer and
providing a positive return to the company.
True
False
Question-12
Total quality management
and just-in-time manufacturing focus on quality improvement as well as on time
customer deliveries.
True
False
Question-13
Product costs:
Are expensed on the income statement when incurred.
Are expenditures identified more with a time period
rather than with units of product.
Are expenditures necessary and integral to finished
products.
Are moved to the income statement for any unsold
inventory at the end of the year.
Include selling and administrative expenses.
Question-14
Last year, Flash Company
sold 15,000 units of its only product. If sales decreased by 17% in the current
year, how will total variable cost and total fixed cost be affected?
|
|
Total
Variable Cost |
Total
Fixed Cost |
|
A) |
Remains
constant |
Remains
constant |
|
B) |
Increases |
Decreases |
|
C) |
Decreases |
Remains
constant |
|
D) |
Remains
constant |
Decreases |
|
E) |
Remains
constant |
Increases |
Choice B
Choice E
Choice A
Choice C
Choice D
Question-15
The schedule of cost of
goods manufactured is divided into four parts consisting of all of the
following except:
Computation of cost of goods manufactured.
Overhead.
Direct labor.
Computation of cost of goods sold.
Direct materials.
Question-16
Using the information
below for Singing Dolls, Inc., determine the total manufacturing costs incurred
during the year:
|
Work in
Process, January 1 |
50,000 |
|
Work in
Process, December 31 |
37,000 |
|
Direct
materials used |
$12,500 |
|
Total
Factory overhead |
5,500 |
|
Direct
labor used |
26,500 |
$89,000.
$13,000.
$94,500.
$44,500.
$57,500.
Question-17
Which of
the following costs is not included in factory overhead?
Depreciation
of manufacturing equipment.
Direct
materials.
Manufacturing
supplies used.
Indirect
labor.
Payroll
taxes on the wages of factory supervisors.
Question-18
Managerial
accounting is different from financial accounting in that:
Managerial
accounting includes many projections and estimates whereas financial accounting
has a minimum of predictions.
Managerial
accounting is used extensively by investors, whereas financial accounting is
used only by creditors.
Managerial
accounting never includes nonmonetary information.
Managerial
accounting is more focused on the organization as a whole and financial
accounting is more focused on subdivisions of the organization.
Managerial
accounting is mainly used to set stock prices.
Question-19
Current information for
the Healey Company follows:
|
Beginning
raw materials inventory |
$15,200 |
|
Raw
material purchases |
60,000 |
|
Ending
raw materials inventory |
16,600 |
|
Beginning
work in process inventory |
22,400 |
|
Ending
work in process inventory |
28,000 |
|
Direct
labor |
42,800 |
|
Total
factory overhead |
30,000 |
All raw materials used were traceable to specific units of product. Healey
Company's total manufacturing costs for the year are:
$125,800.
$139,000.
$128,600.
$137,000.
$131,400.
Question-20
Using the information
below for Singing Dolls, Inc., determine cost of goods manufactured for the
year:
|
Work in
Process, January 1 |
50,000 |
|
Work in
Process, December 31 |
37,000 |
|
Total
Factory overhead |
5,500 |
|
Direct materials
used |
$12,500 |
|
Direct
labor used |
26,500 |
$52,000.
$13,000.
$57,500.
$94,500.
$44,500.
ACC201C Chapter 19 quiz Score 95%
Question-1
Andrew Industries purchased $165,000 of raw materials on account during the
month of March. The beginning Raw Materials Inventory balance was $22,000, and
the materials used to complete jobs during the month were $141,000 direct
materials and $13,000 indirect materials. What amount will Andrew transfer to
Work In Process Inventory for the month of March?
$33,000
$13,000
$165,000
$154,000
$141,000
Question-2
A source document that an employee uses to report how much time was spent
working on a job or on overhead activities and that is used to determine the
amount of direct labor to charge to the job or to determine the amount of
indirect labor to charge to factory overhead is called a:
Payroll Register.
General Ledger.
Factory Overhead Ledger.
Time ticket.
Factory payroll record.
Question-3
The B&T Company's production costs for May are: direct labor, $13,000;
indirect labor, $6,500; direct materials, $15,000; property taxes on production
equipment, $800; heat, lights and power, $1,000; and insurance on plant and
equipment, $200. B&T Company's factory overhead incurred for May is:
$2,000.
$6,500.
$36,500.
$8,500.
$21,500.
Question-4
CWN Company uses a job order costing system and last period incurred $80,000 of
actual overhead and $100,000 of direct labor. CWN estimates that its overhead
next period will be $75,000. It also expects to incur $100,000 of direct labor.
If CWN bases applied overhead on direct labor cost, its predetermined overhead
rate for the next period should be:
80%.
133%.
125%.
75%.
107%.
Question-5
The amount by which the overhead applied to jobs during a period exceeds the
overhead incurred during the period is known as:
Overapplied overhead.
Estimated overhead.
Adjusted overhead.
Underapplied overhead.
Predetermined overhead.
Question-6
The ending inventory of finished goods has a total cost of $9,000 and consists
of 600 units. If the overhead applied to these goods is $3,000, and the
overhead rate is 75% of direct labor, how much direct materials cost was
incurred in producing these units?
$9,000.
$4,000.
$3,750.
$6,000.
$2,000.
Question-7
A type of production that yields customized products or services for each
customer is called:
Process production.
Job order production.
Job lot production.
Just-in-time production.
Customer orientation production.
Question-8
The overhead cost applied to a job during a period is recorded with a credit to
Factory Overhead and a debit to:
Indirect Labor.
Cost of Goods Sold.
Jobs Overhead Expense.
Work in Process Inventory.
Finished Goods Inventory.
Question-9
A document in a job order costing system that is used to record the costs of producing
a job is a(n):
Units-of-production sheet.
Finished goods summary.
Job cost sheet.
Job lot.
Process cost system.
Question-10
Minstrel Manufacturing uses a job order costing system. During one month
Minstrel purchased $198,000 of raw materials on credit; issued materials to
production of $195,000 of which $30,000 were indirect. Minstrel incurred a
factory payroll of $150,000, paid in cash, of which $40,000 was indirect labor.
Minstrel uses a predetermined overhead application rate of 150% of direct labor
cost. Minstrel's beginning and ending Work in Process Inventory are $15,500 and
$27,000 respectively. Compute the cost of product transferred to Finished Goods
Inventory:
$413,000.
$415,000.
$558,500.
$440,000.
$428,500.
Question-11
A materials requisition is a source document used by materials managers of a
manufacturing company to order raw materials from suppliers; it serves the same
purpose as a purchase order in a merchandising company.
True
False
Question-12
Material amounts of under- or overapplied factory overhead are always closed
entirely to Cost of Goods Sold at the end of an accounting period.
True
False
Question-13
Job order costing is applicable to manufacturing firms only and not service
firms.
True
False
Question-14
Job order costing systems normally use:
Real inventory systems.
Perpetual inventory systems.
Periodic inventory systems.
General inventory systems.
Any inventory systems is acceptable.
Question-15
In comparison to a general accounting system, a cost accounting system for a
manufacturing company places an emphasis on:
Continually updating costs of materials, work in process, and finished goods
inventories.
Total costs.
Large volume operations involving standardized products.
Products and average costs.
Periodic inventory counts.
Question-16
If overhead applied is less than actual overhead incurred, it is:
Overapplied.
Underapplied.
Fully applied.
Normal.
Expected.
Question-17
Both direct and indirect labor costs are recorded on the individual job cost
sheets.
True
False
Question-18
The production activities for a customized product represent a(n):
Operation.
Job.
Unit.
Process.
Pool.
Question-19
There are two basic types of cost accounting systems: job order costing and
periodic costing.
True
False
Question-20
Job cost sheets are used to track all of the costs assigned to a job, including
direct materials, direct labor, overhead, and all selling and administrative
costs.
True
False
ACC201C Chapter21 Quiz Score 95%
Question-1
As the level of volume of
activity increases, the variable cost per unit remains constant.
True
False
Question-2
Mullis Corp. manufactures
DVDs that sell for $5.00. Fixed costs are $28,000 and variable costs are $3.60
per unit. Mullis can buy a newer production machine that will increase fixed
costs by $8,000 per year, but will decrease variable costs by $0.40 per unit.
What effect would the purchase of the new machine have on Mullis' break-even
point in units?
9,850 unit decrease.
5,714 unit increase.
4,444 unit increase.
No effect.
4,444 unit decrease.
Question-3
If a firm's forecasted
sales are $250,000 and its break-even sales are $190,000, the margin of safety
in dollars is:
$250,000.
$60,000.
$24,000.
$190,000.
$440,000.
Question-4
A product sells for $200
per unit, and its variable costs per unit are $130. The fixed costs are
$420,000. If the firm wants to earn $35,000 pretax income, how many units must
be sold?
6,000.
6,500.
5,500.
5,000.
500.
Question-5
The contribution margin
ratio:
Is the percent of each sales dollar that remains to
cover the variable and fixed costs.
Cannot be used in conjunction with other analytical
tools.
Is the same as the unit contribution margin.
Is the percent of each sales dollar that remains
after deducting the total unit variable cost.
Is the percent of each sales dollar that remains
after deducting the total unit fixed cost.
Question-6
Use the following
information to determine the margin of safety in dollars:
|
Unit
sales |
50,000 Units |
|
Dollar
sales |
$500,000 |
|
Fixed
costs |
$204,000 |
|
Variable
costs |
$187,500 |
$173,600.
$326,400.
$88,500.
$108,500.
$500,000.
Question-7
A company's normal
operating range, which excludes extremely high or low operating levels that are
not likely to occur, is called the:
Margin of safety.
Contribution range.
Break-even point.
Relevant range.
High-low point.
Question-8
A firm sells two products,
Regular and Ultra. For every unit of Regular the firm sells, two units of Ultra
are sold. The firm's total fixed costs are $1,612,000. Selling prices and cost
information for both products follow. What is the firm's break-even point in
units of Regular and Ultra?
|
|
Unit |
Variable |
|
Regular |
$20 |
$8 |
|
Ultra |
24 |
4 |
10,333 of A and 20,667 of B.
31,000 of A and 31,000 of B.
36,167 of A and 72,333 of B.
31,000 of A and 62,000 of B.
62,000 of A and 31,000 of B.
Question-9
A cost that includes both
fixed and variable cost components is called a:
Composite cost.
Differential cost.
Curvilinear cost.
Mixed cost.
Step-variable cost.
Question-10
A visual line fit to
points in a scatter diagram may be used to identify the approximate relation
between past cost and unit data.
True
False
Question-11
The ratio
(proportion) of the sales volumes for the various products sold by a company is
called the:
Inventory
cost ratio.
Production
ratio.
Current
product mix.
Sales
mix.
Relevant
mix.
Question-12
The Goldfarb Company
manufactures and sells toasters. Each toaster sells for $23.75 and the variable
cost per unit is $16.25. Goldfarb's total fixed costs are $25,000, and budgeted
sales are 8,000 units. What is the contribution margin per unit?
$1.25.
$23.75.
$16.25.
$7.50.
$60,000.
Question-13
A company has fixed costs
of $270,000, a unit contribution margin of $14, and a contribution margin ratio
of 55%. If the firm wants to earn a target $60,000 pretax income, what amount
of sales must the company make (rounded to the nearest whole dollar)?
109,090.
381,818.
600,000.
330,000.
490,909.
Question-14
The difference between
sales price per unit and variable cost per unit is the:
Gross profit from sales.
Margin of safety per unit.
Gross margin per unit.
Contribution margin per unit.
Fixed cost per unit.
Question-15
Cost-volume-profit
analysis requires management to classify all costs as either fixed or variable
with respect to production or sales volume within the relevant range of
operations.
True
False
Question-16
At Midland Company's
break-even point of 9,000 units, fixed costs are $180,000 and variable costs
are $540,000 in total. The unit sales price is:
$80.
$40.
$60.
$20.
$100.
Question-17
During its most recent
fiscal year, Dover, Inc. had total sales of $3,200,000. Contribution margin
amounted to $1,500,000 and pretax income was $400,000. What amount should have
been reported as variable costs in the company's contribution margin income
statement for the year in question?
$1,300,000.
$1,700,000.
$2,800,000.
$1,900,000.
$1,100,000.
Question-18
The budgeted income
statement presented below is for Burkett Corporation for the coming fiscal
year. Compute the number of units that must be sold in order to achieve a
target pretax income of $130,000.
|
Sales
(50,000 units) |
|
$1,000,000 |
|
Costs: |
|
|
|
Direct
materials |
$270,000 |
|
|
Direct
labor |
240,000 |
|
|
Fixed
factory overhead |
100,000 |
|
|
Variable
factory overhead |
150,000 |
|
|
Fixed
marketing costs |
110,000 |
|
|
Variable
marketing costs |
50,000 |
920,000 |
|
Pretax
income |
|
$80,000 |
50,000.
53,165.
58,621.
36,207.
81,250.
Question-19
Flannigan Company
manufactures and sells a single product that sells for $450 per unit; variable
costs are $300. Annual fixed costs are $870,000. Current sales volume is
$4,200,000. Compute the break-even point in dollars.
$2,612,612.
$1,304,348.
$4,202,899.
$2,640,000.
$1,740,000.
Question-20
Use the following
information to determine the contribution margin ratio:
|
Unit
sales |
50,000 Units |
|
Unit
selling price |
$14.50 |
|
Unit
variable cost |
$7.50 |
|
Fixed
costs |
$204,000 |
24.5%.
48.3%.
6.9%.
51.7%.
34.1%.
ACC201C
- Chapter 24 Quiz Score 100%
A profit center generates
revenue, incurs costs, and has the authority to make significant investing
decisions.
True
False
A department's direct expenses are usually considered uncontrollable costs.
True
False
No standard rule identifies the best basis of allocating expenses across
departments, so it is impossible to allocate costs in a manner that will be
perceived as fair.
True
False
A joint cost of producing two products can be allocated between those products on
the basis of the relative physical quantities of each product produced.
True
False
If a company reports profit margin of 31.6% and investment turnover of 1.30 for
one of its investment centers, the return on investment must be:
32.9%.
4.11%.
41.1%.
30.3%.
24.3%.
Kragle Corporation reported the following financial data for one of its
divisions for the year; average invested assets of $470,000; sales of $930,000;
and income of $105,000. The investment center profit margin is:
197.9%.
50.5%.
447.6%.
11.3%.
22.3%.
The salaries of employees who spend all their time working in one department
are:
Variable expenses.
Responsibility expenses.
Unavoidable expenses.
Direct expenses.
Indirect expenses.
Differential Chemical produced 10,000 gallons of Preon and 20,000 gallons of
Paron. Joint costs incurred in producing the two products totaled $7,500. At
the split-off point, Preon has a market value of $6.00 per gallon and Paron
$2.00 per gallon. Compute the portion of the joint costs to be allocated to
Preon if the value basis is used.
$3,000.
$4,500.
$5,625.
$2,500.
$1,500.
The amount by which a department's sales exceed its direct expenses is:
Departmental profit.
Departmental contribution to overhead.
Contribution margin.
Net sales.
Gross profit.
Advertising expense can be reasonably allocated to departments on the basis of
each department's proportion of sales.
True
False
Part 7B costs the Midwest Division of Frackle Corporation $30 to make, of which
$21 is variable. Midwest Division sells Part 7B to other companies for $47. The
Northern Division of Frackle Corporation can use Part 7B in one of its
products. The Midwest Division has enough idle capacity to produce all of the
units of Part 7B that the Northern Division would require. What is the lowest
transfer price at which the Midwest Division should be willing to sell Part 7B
to the Northern Division?
$30
$20
$17
$47
$21
The type of department that generates revenues and incurs costs, and its
manager is responsible for the investments made in operating assets is called
a:
Profit center
Cost center
Service department
Investment center
Responsibility center
Indirect expenses are allocated to departments based upon the benefits received
by each department.
True
False
Profit margin for an investment center measures:
How efficiently an investment center generates sales from its invested assets.
Investment center income earned per dollar of sales.
Investment center income compared to target investment center income.
Departmental contribution to overhead.
Investment center income generated from its invested assets.
Direct expenses require allocation across departments because they cannot be
readily traced to one department.
True
False
A department can never be considered to be a profit center.
True
False
Part AR3 costs the Southwestern Division of Luxon Corporation $26 to
make-direct materials are $10, direct labor is $4, variable manufacturing
overhead is $9, and fixed manufacturing overhead is $3. Southwestern Division
sells Part AR3 to other companies for $30. The Northeastern Division of Luxon
Corporation can use Part AR3 in one of its products. The Southwestern Division
has enough idle capacity to produce all of the units of Part AR3 that the
Northeastern Division would require. What is the lowest transfer price at which
the Southwestern Division should be willing to sell Part AR3 to the
Northeastern Division?
$26
$27
$30
$21
$23
A responsibility accounting performance report usually compares actual costs to
budgeted costs amounts by management level.
True
False
Joint costs can be allocated either using a physical basis or a value basis.
True
False
Regardless of the system used in departmental cost analysis:
Neither direct nor indirect costs are allocated.
Indirect costs are allocated, direct costs are not.
Total departmental costs will always be the same.
Both direct and indirect costs are allocated.
Direct costs are allocated, indirect costs are not.
Question-1
|
Butler Corporation is considering the
purchase of new equipment costing $63,000. The projected annual after-tax net
income from the equipment is $2,300, after deducting $21,000 for
depreciation. The revenue is to be received at the end of each year. The
machine has a useful life of 3 years and no salvage value. Butler requires a
11% return on its investments. The present value of an annuity of 1 for
different periods follows: |
|
Periods |
11 Percent |
|
1 |
0.9009 |
|
2 |
1.7125 |
|
3 |
2.4437 |
|
4 |
3.1024 |
|
What is the net present value of the machine? (closest to) |
$6,900.
$51,318.
$63,000.
$56,938.
$(6,062).
Question-2
Walters manufactures
a specialty food product that can currently be sold for $22.50 per unit and has
20,500 units on hand. Alternatively, it can be further processed at a cost of
$12,500 and converted into 12,500 units of Deluxe and 6,500 units of Super. The
selling price of Deluxe and Super are $30.50 and $20.50, respectively. The
incremental net income of processing further would be:
$53,250.
$44,500.
$40,750.
$12,500.
$18,500.
Question-3
Factor Co. can produce a unit of
product for the following costs:
|
Direct material |
$8.50 |
|
Direct labor |
24.50 |
|
Overhead |
42.50 |
|
Total costs per unit |
$75.50 |
An outside supplier offers to provide Factor with all the units it needs at
$45.88 per unit. If Factor buys from the supplier, the company will still incur
65% of its overhead. Factor should choose to:
Buy since the
relevant cost to make it is $60.63.
Buy since the
relevant cost to make it is $47.88.
Buy since the
relevant cost to make it is $33.
Make since the
relevant cost to make it is $47.88.
Make since the
relevant cost to make it is $33.00.
Question-4
|
A product sells for $200 per unit, and its variable costs are 65% of
sales. The fixed costs are $420,000. What is the break-even point in sales
dollars? (Do not round intermediate calculations.) |
$2,100.
$1,200,000.
$646,154.
$6,000.
$420,000.
Question-5
|
Use the following selected information from Wheeler, LLC to determine
the 2015 and 2014 common size percentages for cost of goods sold using Net
sales as the base. |
|
|
2015 |
2014 |
|
Net sales |
$ 358,200 |
$ 295,400 |
|
Cost of goods sold |
174,400 |
131,540 |
|
Operating expenses |
63,490 |
61,190 |
|
Net earnings |
32,020 |
22,770 |
121.3% for 2015 and
100.0% for 2014.
66.4% for 2015 and
65.2% for 2014.
48.7% for 2015 and
44.5% for 2014.
8.9% for 2015 and
7.7% for 2014.
150.6% for 2015 and
153.3% for 2014.
Question-6
Flagstaff Company has
budgeted production units for July of 7,700 units. Variable factory overhead is
$1.2 per unit. Budgeted fixed factory overhead is $18,000, which includes
$2,800 of factory equipment depreciation. Compute the total budgeted overhead
to be reported on the factory overhead budget for the month.
$22,900.
$9,240.
$18,000.
$24,440.
$27,240.
Question-7
Data pertaining to a company's joint
production for the current period follows:
|
|
L |
M |
|
Quantities produced |
420 lbs. |
370 lbs. |
|
Market value at split-off point |
$12.4/lb. |
$24.8/lb. |
Compute the cost to be allocated to Product L for this period's $924 of joint
costs if the value basis is used. (Do not round intermediate calculations.)
$4,972.00.
$462.00.
$589.45.
$1,121.45.
$334.55.
Question-8
Wheeler Company can
produce a product that incurs the following costs per unit: direct materials,
$10.80; direct labor, $24.80, and overhead, $16.80. An outside supplier has
offered to sell the product to Axle for $47.84. If Wheeler buys from the
supplier, it will still incur 45% of its overhead cost. Compute the net
incremental cost or savings of buying.
$3.00 cost per unit.
$4.68 cost per unit.
$3.00 savings per
unit.
$4.89 savings per
unit.
$4.89 cost per unit.
Question-9
Granfield Company has a piece of manufacturing equipment with a book
value of $42,500 and a remaining useful life of four years. At the end of the
four years the equipment will have a zero salvage value. The market value of
the equipment is currently $22,500. Granfield can purchase a new machine for
$125,000 and receive $22,500 in return for trading in its old machine. The new
machine will reduce variable manufacturing costs by $19,500 per year over the four-year
life of the new machine. The total increase or decrease in net income by
replacing the current machine with the new machine (ignoring the time value of
money) is:
$24,500 decrease
$24,500 increase
$78,000 decrease
$20,000 decrease
$53,750 increase
Question-10
|
Product A has a sales price of $21
per unit. Based on a 12,000-unit production level, the variable costs are $9
per unit and the fixed costs are $8 per unit. Using a flexible budget for
14,500 units, what is the budgeted operating income from Product A? |
$96,000.
$52,500.
$22,500.
$14,500.
$78,000.
Question-11
|
A company is considering the purchase
of new equipment for $60,000. The projected annual net cash flows are
$24,500. The machine has a useful life of 3 years and no salvage value.
Management of the company requires a 12% return on investment. The present
value of an annuity of 1 for various periods follows: |
|
Periods |
Present value of an annuity of 1 at
12% |
|
1 |
0.8929 |
|
2 |
1.6901 |
|
3 |
2.4018 |
|
What is the net present value of this machine assuming all cash flows
occur at year-end? |
$(1,156)
$3,500
$56,442
$23,500
$20,000
Question – 12
Current information
for the Healey Company follows:
|
Beginning raw materials inventory |
$14,600 |
|
Raw material purchases |
54,000 |
|
Ending raw materials inventory |
16,000 |
|
Beginning work in process inventory |
21,800 |
|
Ending work in process inventory |
27,400 |
|
Direct labor |
39,800 |
|
Total factory overhead |
29,400 |
All raw materials used were traceable to specific units of product. Healey
Company's total manufacturing costs for the year are:
$116,200.
$127,400.
$131,200.
$124,600.
$121,800.
Question-13
|
Maxim manufactures a cat food product
called Green Health. Maxim currently has 10,000 bags of Green Health on hand.
The variable production costs per bag are $3.70 and total fixed costs are
$10,000. The cat food can be sold as it is for $9.05 per bag or be processed
further into Premium Green and Green Deluxe at an additional $2,100 cost. The
additional processing will yield 10,000 bags of Premium Green and 3,100 bags
of Green Deluxe, which can be sold for $8.05 and $6.05 per bag, respectively.
If Green Health is processed further into Premium Green and Green Deluxe, the
total gross profit would be: |
$101,355.
$50,155.
$99,255.
$60,155.
$97,155.
Question-14
|
Fernwood Company is preparing the company's statement of cash flows
for the fiscal year just ended. The following information is available: |
|
Retained earnings balance at the beginning of the
year |
$ 253,000 |
|
Cash dividends declared for the year |
55,000 |
|
Proceeds from the sale of equipment |
93,800 |
|
Gain on the sale of equipment |
5,100 |
|
Cash dividends payable at the beginning of the year |
24,200 |
|
Cash dividends payable at the end of the year |
32,000 |
|
Net income for the year |
121,000 |
The amount of cash paid for dividends was:
$47,200.
$64,800.
$55,000.
$56,200.
$66,000.
Question-15
Ahngram Corp. has 1,000 defective units
of a product that cost $2.90 per unit in direct costs and $6.40 per unit in
indirect cost when produced last year. The units can be sold as scrap for $3.90
per unit or reworked at an additional cost of $2.40 and sold at full price of
$11.70. The incremental net income (loss) from the choice of reworking the
units would be:
($2,400).
$5,400.
$0.
$2,400.
$9,300.
Question-16
|
A sporting
equipment store expects to purchase $7,200 of ski boots in October. The store
had $3,200 of ski boots in merchandise inventory at the beginning of October,
and expects to have $2,200 of ski boots in merchandise inventory at the end
of October to cover part of anticipated November sales. What is the budgeted
cost of goods sold for October? |
$10,400.
$7,200.
$5,400.
$9,400.
$8,200.
Question-17
Bluebird Mfg. has
received a special one-time order for 15,000 bird feeders at $3.60 per unit.
Bluebird currently produces and sells 75,000 units at $7.60 each. This level
represents 80% of its capacity. Production costs for these units are $4.40 per
unit, which includes $2.55 variable cost and $1.85 fixed cost. If Bluebird
accepts this additional business, the effect on net income will be:
$38,250 decrease.
$15,750 increase.
$12,000 decrease.
$54,000 increase.
$38,250 increase.
Question-18
|
Carmel Corporation is considering the
purchase of a machine costing $38,000 with a 4-year useful life and no
salvage value. Carmel uses straight-line depreciation and assumes that the
annual cash inflow from the machine will be received uniformly throughout each
year. In calculating the accounting rate of return, what is Carmel's average
investment? |
$38,000.
$23,750.
$19,000.
$11,875.
$9,500.
Question-19
|
Bagwell's net income for the year
ended December 31, Year 2 was $192,000. Information from Bagwell's comparative
balance sheets is given below. Compute the cash received from the sale of its
common stock during Year 2. |
|
At December 31 |
Year 2 |
Year 1 |
|
Common Stock, $5 par value |
$ 507,000 |
$ 456,300 |
|
Paid-in capital in excess of par |
955,000 |
859,300 |
|
Retained earnings |
695,000 |
588,300 |
$50,700.
$146,400.
$106,700.
$192,000.
$95,700.
Question-20
CWN Company uses a
job order costing system and last period incurred $82,000 of actual overhead
and $100,000 of direct labor. CWN estimates that its overhead next period will
be $73,000. It also expects to incur $100,000 of direct labor. If CWN bases applied
overhead on direct labor cost, its predetermined overhead rate for the next
period should be:
122%.
112%.
73%.
137%.
82%.
Question-21
Alfarsi Industries uses the net present value method to make investment
decisions and requires a 15% annual return on all investments. The company is
considering two different investments. Each require an initial investment of
$14,300 and will produce cash flows as follows:
|
End of Year |
Investment |
|
|
A |
B |
|
|
1 |
$9,700 |
$0 |
|
2 |
9,700 |
0 |
|
3 |
9,700 |
29,100 |
The present value factors of $1 each year at 15% are:
|
1 |
0.8696 |
|
2 |
0.7561 |
|
3 |
.6575 |
The present value of an annuity of $1 for 3 years at 15% is 2.2832
The net present value of Investment A is:
$(14,300).
$14,800.
$(22,148).
$19,133.
$7,847.
Question-22
Lattimer Company had
the following results of operations for the past year:
|
Sales (15,000 units at $12.10) |
|
$181,500 |
|
Variable manufacturing costs |
$99,000 |
|
|
Fixed manufacturing costs |
22,500 |
|
|
Selling and administrative expenses (all fixed) |
37,500 |
(159,000) |
|
Operating income |
|
$22,500 |
A foreign company whose sales will not affect Lattimer's market offers to buy
5,200 units at $7.70 per unit. In addition to existing costs, selling these
units would add a $0.27 selling cost for export fees. If Lattimer accepts this
additional business, the special order will yield a:
$4,316 profit.
$8,684 loss.
$5,720 profit.
$3,484 loss.
$2,080 loss.
Question-23
|
A company is considering purchasing a
machine for $22,200. The machine will generate an after-tax net income of
$3,800 per year. Annual depreciation expense would be $3,300. What is the
payback period for the new machine? |
3.1 years.
6.7 years.
5.8 years.
44.4 years.
1.6 years.
Question-24
|
A company has fixed costs of $95,200. Its contribution margin ratio is
34% and the product sells for $67 per unit. What is the company's break-even
point in dollar sales? |
$190,400.
$44,800.
$280,000.
$184,800.
$145,600
Question-25
Pepper Department store allocates its service
department expenses to its various operating (sales) departments. The following
data is available for its service departments:
|
Expense |
Basis for allocation |
Amount |
|
Rent |
Square feet of floor space |
$27,000 |
|
Advertising |
Amount of dollar sales |
$36,000 |
|
Administrative |
Number of employees |
$54,000 |
The following information is available for its three operating (sales)
departments:
|
|
Square |
Dollar |
Number of |
|
A |
3,300 |
$289,000 |
9 |
|
B |
3,700 |
$309,000 |
11 |
|
C |
3,900 |
$432,000 |
13 |
|
Totals |
10,900 |
$1,030,000 |
33 |
What is the total advertising expense allocated to Department C?
$18,599.
$15,099
.
$36,000.
$8,400.
$16,899.
Question-26
|
Minor Electric has
received a special one-time order for 900 light fixtures (units) at $21 per
unit. Minor currently produces and sells 4,500 units at $22.00 each. This
level represents 75% of its capacity. Production costs for these units are
$28.50 per unit, which includes $19.00 variable cost and $9.50 fixed cost. To
produce the special order, a new machine needs to be purchased at a cost of
$875 with a zero salvage value. Management expects no other changes in costs
as a result of the additional production. If Minor wishes to earn $1,825 on
the special order, the size of the order would need to be: |
1,350 units.
2,700 units.
1,303 units.
43 units.
5,400 units.
Question-27
|
Georgia, Inc. has collected the following data on one of its products.
The direct materials price variance is: |
|
Direct materials standard (4 lbs @ $1/lb) |
$ 4 per finished unit |
|
Total direct materials cost variance—unfavorable |
$ 22,750 |
|
Actual direct materials used |
125,000 lbs |
|
Actual finished units produced |
25,000 units |
$20,750 favorable.
$2,250 favorable.
$2,250 unfavorable.
$25,000 unfavorable.
$22,750 unfavorable.
Question-28
Vextra Corporation is considering the
purchase of new equipment costing $40,500. The projected annual cash inflow is
$12,100, to be received at the end of each year. The machine has a useful life
of 4 years and no salvage value. Vextra requires a 12% return on its
investments. The present value of an annuity of $1 for different periods
follows:
|
Periods |
12 Percent |
|
1 |
0.8929 |
|
2 |
1.6901 |
|
3 |
2.4018 |
|
4 |
3.0373 |
What is the net present value of the machine (rounded to the nearest whole
dollar)?
$(36,751).
$(3,000).
$6,751.
$(3,749).
$40,500.
Question-30
The following data concerns a proposed equipment purchase:
|
Cost |
$125,000 |
|
Salvage value |
$3,000 |
|
Estimated useful life |
4 years |
|
Annual net cash flows |
$45,100 |
|
Depreciation method |
Straight-line |
The annual average investment amount used to calculate the accounting rate of
return is:
rev: 06_01_2016_QC_CS-50109
$31,250
$62,500
$61,000
$39,950
$64,000
Question-30
|
Using the information below for Singing Dolls, Inc., determine cost of
goods manufactured for the year: |
|
Work in Process, January 1 |
$52,000 |
|
Work in Process, December 31 |
38,000 |
|
Total Factory overhead |
6,500 |
|
Direct materials used |
13,500 |
|
Direct labor used |
27,500 |
$14,000.
$47,500.
$99,500.
$61,500.
$55,000.
Question-33
Markson Company had the following
results of operations for the past year:
|
Sales (8,000 units at $19.70) |
|
$157,600 |
|
Variable manufacturing costs |
$84,800 |
|
|
Fixed manufacturing costs |
14,700 |
|
|
Variable selling and administrative expenses |
10,800 |
|
|
Fixed selling and administrative expenses |
19,700 |
(130,000) |
|
Operating income |
|
$27,600 |
A foreign company whose sales will not affect Markson's market offers to buy
2,000 units at $13.55 per unit. In addition to variable manufacturing costs,
selling these units would increase fixed overhead by $1,570 for the purchase of
special tools. If Markson accepts this additional business, its profits will:
Decrease by $5,400.
Decrease by $4,770.
Increase by $1,630.
Increase by $3,200.
Decrease by $1,570.
Question-34
The following present value factors are
provided for use in this problem.
|
Periods |
Present Value of $1 at 8% |
Present Value of anAnnuity of $1 at
8% |
|
1 |
0.9259 |
0.9259 |
|
2 |
0.8573 |
1.7833 |
|
3 |
0.7938 |
2.5771 |
|
4 |
0.7350 |
3.3121 |
Xavier Co. wants to purchase a machine for $36,800 with a four year life and a
$1,000 salvage value. Xavier requires an 8% return on investment. The expected
year-end net cash flows are $11,800 in each of the four years. What is the
machine's net present value (round to the nearest whole dollar)?
$(3,018).
$(2,283).
$39,818.
$2,283.
$3,018.
Question-35
|
The following present value factors are provided for use in this
problem. |
|
Periods |
Present value |
Present value of an annuity of 1 at
9% |
|
1 |
0.9174 |
0.9174 |
|
2 |
0.8417 |
1.7591 |
|
3 |
0.7722 |
2.5313 |
|
4 |
0.7084 |
3.2397 |
|
Cliff Co. wants to purchase a machine for $82,000, but needs to earn
an 9% return. The expected year-end net cash flows are $32,000 in each of the
first three years, and $36,000 in the fourth year. What is the machine's net
present value (round to the nearest whole dollar)? |
$(998).
$106,504.
$(56,498).
$132,000.
$24,504.
Question-32
|
Dallas Company uses a job order
costing system. The company's executives estimated that direct labor would be
$3,990,000 (190,000 hours at $21/hour) and that factory overhead would be
$1,490,000 for the current period. At the end of the period, the records show
that there had been 170,000 hours of direct labor and $1,190,000 of actual
overhead costs. Using direct labor hours as a base, what was the
predetermined overhead rate? (Round your answer to two decimal places.) |
$8.76 per direct labor hour.
$6.93 per direct labor hour.
$6.26 per direct labor hour.
$7.84 per direct labor hour.
$7.34 per direct labor hour.
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