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978-0133058789 Chapter 1 Part 1
1 CHAPTER 1 COVERAGE OF LEARNING OBJECTIVES LEARNING OBJECTIVE FUNDA- MENTAL ASSIGN- MENT MATERIAL CRITICAL THINKING EXERCISES AND EXERCISES PROBLEMS CASES, EXCEL, COLLAB., & INTERNET EXERCISES LO1: Explain why accounting is essential for decision makers and managers. 30, 31 52, […]
978-0133058789 Chapter 1 Part 2
14 1-39 (15-20 min.) This problem can form the basis of an introductory discussion of the entire field of management accounting. Text Exhibit 1-1 provides more details. 1. The focus of management accounting is on helping internal users make better […]
978-0133058789 Chapter 10 Part 1
CHAPTER 10 COVERAGE OF LEARNING OBJECTIVES LEARNING OBJECTIVE FUNDA– MENTAL ASSIGN– MENT MATERIAL CRITICAL THINKING EXERCISES AND EXERCISES PROBLEMS CASES, EXCEL, COLLAB., & INTERNET EXERCISES LO1: Define decentralization and identify its expected benefits and costs. A2, A4, B4 25, 26 […]
978-0133058789 Chapter 10 Part 2
Copyright ©2014 Pearson Education, Inc., Publishing as Prentice Hall. 428 10-38 (25 min.) 1. The two separate components highlight certain features of profitability that are not revealed by the single calculation. a. The importance of capital turnover as a key […]
978-0133058789 Chapter 10 Part 3
The company is $6 better off with the contribution of $24 from selling lumber rather than $18 from selling the chair. Another way to view this problem is that, if the lumber can be sold for $72, using it to […]
978-0133058789 Chapter 11 Part 1
CHAPTER 11 COVERAGE OF LEARNING OBJECTIVES LEARNING OBJECTIVE FUNDA- MENTAL ASSIGN– MENT MATERIAL CRITICAL THINKING EXERCISES AND EXERCISES PROBLEMS CASES, EXCEL, COLLAB., & INTERNET EXERCISES LO1: Describe capital budgeting decisions and use the net present value (NPV) method to make […]
978-0133058789 Chapter 11 Part 2
Copyright ©2014 Pearson Education, Inc., Publishing as Prentice Hall. 469 11-50 (30-40 min.) Answers are in Mexican pesos. 1. After-tax cash operating savings, .6 × 150,000 = 90,000 PV of cash operating savings, 90,000 × 3.1272 281,448 2. See Exhibit […]
978-0133058789 Chapter 11 Part 3
2018 127,500 .4371 54,812 (24,244) 2019 264,900 .3704 50,893 26,649 2020 294,300 .3139 9,229 35,878 2. The payback time is just under four years as shown by the Cumulative Net Cash Flow column. Because the maximum allowable payback period is […]
978-0133058789 Chapter 12 Part 1
CHAPTER 12 COVERAGE OF LEARNING OBJECTIVES LEARNING OBJECTIVE FUNDA- MENTAL ASSIGN- MENT MATERIAL CRITICAL THINKING EXERCISES, AND EXERCISES PROBLEMS CASES, NIKE 10K, EXCEL, COLLAB. & INTERNET EXERCISES LO1: Describe the general framework for cost allocation. A1, B1 37, 39, 44 […]
978-0133058789 Chapter 12 Part 2
12-36 (10-15 min.) 1. None. The entire joint cost is allocated to the main product. 2. $40,000. The total inventory cost of the pulp is the separable cost, that is, the cost incurred after the split-off point. 3. Inventory cost […]
978-0133058789 Chapter 12 Part 3
Exhibit 12-47, Part 2 Model 1 Model 2 Model 3 Direct materials: Model 1: ¥4,000 × 80 boards ¥320,000 Model 2: ¥6,000 × 160 boards ¥960,000 Model 3: ¥8,000 × 300 boards ¥2,400,000 Material handling activity1: Model 1: ¥30.13245 × […]
978-0133058789 Chapter 13 Part 1
CHAPTER 13 COVERAGE OF LEARNING OBJECTIVES LEARNING OBJECTIVE FUNDA- MENTAL ASSIGN- MENT MATERIAL CRITICAL THINKING EXERCISES AND EXERCISES PROBLEMS CASES, NIKE 10K, EXCEL, COLLAB. & INTERNET EXERCISES LO1: Compute budgeted factory-overhead rates and apply factory overhead to production. A1,B2 33,34,38,39, […]
978-0133058789 Chapter 13 Part 2
Copyright ©2014 Pearson Education, Inc., Publishing as Prentice Hall. 577 13-50 (15-20 min.) (Note that final dollar amounts are rounded to the nearest dollar.) 1. Overhead rate = ($277,800 + $103,200) ÷ 69,450 machine hours = $5.48596 per machine hour […]
978-0133058789 Chapter 13 Part 3
13-63 (25-30 min.) 1. Total dollars and machine hours are in thousands: Year Base a Base b* Base c 20X1 $36,000 ÷ 2,500 $36,000 ÷ 2,637.5 $36,000 ÷ 3,000 = $14.40 = $13.65 = $12.00 20X2 $36,000 ÷ 2,850 $36,000 […]
978-0133058789 Chapter 14 Part 1
CHAPTER 14 COVERAGE OF LEARNING OBJECTIVES CASES, FUNDA- CRITICAL NIKE 10K, MENTAL THINKING EXCEL, ASSIGN-EXERCISES COLLAB. & MENT AND INTERNET LEARNING OBJECTIVE MATERIAL EXERCISES PROBLEMS EXERCISES LO1: Distinguish between A1,B1 15,16,18,20, 52, 54, 55 job-order costing and 29 process costing. […]
978-0133058789 Chapter 14 Part 2
Copyright ©2014 Pearson Education, Inc., Publishing as Prentice Hall. 625 14-34 (10-15 min.) 1. Work in process – Assembly 73,600 2. Work in process — Assembly 59,000 Accrued payroll 59,000 Direct labor in February 3. Work in process — Assembly […]
978-0133058789 Chapter 15 Part 1
CHAPTER 15 COVERAGE OF LEARNING OBJECTIVES LEARNING OBJECTIVE FUNDAMENTAL ASSIGNMENT MATERIAL ADDITIONAL ASSIGNMENT MATERIAL EXCEL, COLLAB., & INTERNET EXERCISES LO1: Read and interpret the basic financial statements. 24, 25, 32, 38, 51 54 LO2: Analyze typical business transactions using the […]
978-0133058789 Chapter 15 Part 2
15-38 (20-30 min.) Case 1 2 3 4 5 6 7 X $11,000 $3,000 $9,000 $14,000 $7,500 $ 8,000 $ 4,200 Y 6,000 7,000 2,000 3,900 Z 2,000 3,000 9,000 100 A 4,500 4,800 B 16,500 15,200 Computations: 1: X […]
978-0133058789 Chapter 16 Part 1
CHAPTER 16 COVERAGE OF LEARNING OBJECTIVES LEARNING OBJECTIVE FUNDAMENTAL ASSIGNMENT MATERIAL ADDITIONAL ASSIGNMENT MATERIAL EXCEL, COLLAB., & INTERNET EXERCISES LO1: Recognize and define the main types of assets in the balance sheet of a corporation. A1, B1 37, 38, 42, […]
978-0133058789 Chapter 16 Part 2
16-52 (10-20 min.) DENALI ALE COMPANY Supporting Schedule to Statement of Cash Flows Reconciliation of Net Income to Net Cash Provided by Operating Activities For the Year Ended December 31, 20X1 (in thousands) Net income $239 Adjustments to reconcile net […]
978-0133058789 Chapter 17 Part 1
CHAPTER 17 COVERAGE OF LEARNING OBJECTIVES LEARNING OBJECTIVE FUNDAMENTAL ASSIGNMENT MATERIAL ADDITIONAL ASSIGNMENT MATERIAL EXCEL, COLLAB., & INTERNET EXERCISES LO1: Contrast accounting for investments using the equity method and the market-value method. A1, B1, B3 25, 29, 36, 39, 41 […]
978-0133058789 Chapter 17 Part 2
The consolidated balance sheet would be as follows: Assets = Liab.+Stockholders’ Equity Invest- Cash ment and Accounts Noncon- Stock- in Other Payable, trolling holders’ Alberta + Assets = etc. Interest + Equity Ace Mining’s accounts: Beginning of year 1,000 = […]
978-0133058789 Chapter 2 Part 1
CHAPTER 2 COVERAGE OF LEARNING OBJECTIVES LEARNING OBJECTIVE FUNDA– MENTAL ASSIGN– MENT MATERIAL CRITICAL THINKING EXERCISES AND EXERCISES PROBLEMS CASES, NIKE 10K, EXCEL, COLLAB., & INTERNET EXERCISES LO1: Explain how cost drivers affect cost behavior. A1, B1 25, 26, 28, […]
978-0133058789 Chapter 2 Part 2
2-42 (15 min.) a b 1. 100% Full 50% Full Room revenue @ $54 $1,971,000 a $ 985,500 b Variable costs @ $9 328,500 164,250 Contribution margin 1,642,500 821,250 Fixed costs 900,000 900,000 Net income (loss) $ 742,500 $ (78,750) […]
978-0133058789 Chapter 2 Part 3
2-59 (15-25 min.) 1. Let N = number of hamburgers per month $1.25N = $.71N + $1,782 $.54N = $1,782 N = 3,300 per month, or 3,300 ÷ 30 = 110 per day 2. Multiply the answers in (1) by […]
978-0133058789 Chapter 3 Part 1
CHAPTER 3 COVERAGE OF LEARNING OBJECTIVES LEARNING OBJECTIVE FUNDA- MENTAL ASSIGN- MENT MATERIAL CRITICAL THINKING EXERCISES AND EXERCISES PROBLEMS CASES, NIKE 10K, EXCEL, COLLAB., & INTERNET EXERCISES LO1: Explain management influences on cost behavior. 26, 33 39 52, 56 LO2: […]
978-0133058789 Chapter 3 Part 2
Labor, $12, 14% Other Costs, $40, 45% Materials, $36, 41% Other Costs, $40, 63% Labor, $6, 9% Materials, $18, 28% Labor, $44, 44% Other Costs, $20, 20% Materials, $36, 36% Labor, $18, 32% Materials, $18, 32% Other Costs, $20, 36% […]
978-0133058789 Chapter 3 Part 3
3-49 (35-50 min.) 1. The three graphs are as follows: $30 $40 $50 $60 $70 $80 7,500 7,600 7,700 7,800 7,900 8,000 Direct Labor Hours Support Costs ($000) $30 $40 $50 $60 $70 $80 2,000 2,200 2,400 2,600 2,800 3,000 […]
978-0133058789 Chapter 4 Part 1
CHAPTER 4 COVERAGE OF LEARNING OBJECTIVES LEARNING OBJECTIVE FUNDA– MENTAL ASSIGN– MENT MATERIAL CRITICAL THINKING EXERCISES AND EXERCISES PROBLEMS CASES, EXCEL, COLLAB. & INTERNET EXERCISES LO1: Describe the purposes of cost management systems. 31, 34 50 LO2: Explain the relationship […]
978-0133058789 Chapter 4 Part 2
Therefore, ABC produces the information used in ABM. If managers in companies with ABC systems do not use that information to aid decision making, they are sacrificing many (if not most) of the benefits of the investment in an ABC […]
978-0133058789 Chapter 4 Part 3
3. The activity-based costing system is generally more accurate because it better allocates costs on a cause/effect basis. The Produce Department uses all of the produce monitoring activity. The activity-based costing system recognizes this and allocates these costs to the […]
978-0133058789 Chapter 5 Part 1
CHAPTER 5 COVERAGE OF LEARNING OBJECTIVES LEARNING OBJECTIVE FUNDA– MENTAL ASSIGNMENT MATERIAL CRITICAL THINKING EXERCISES AND EXERCISES PROBLEMS CASES, EXCEL, COLLAB. & INTERNET EXERCISES LO1: Discriminate between relevant and irrelevant information for making decisions. 23,30,37,38 49,50,51,54, 57 66 LO2: Apply […]
978-0133058789 Chapter 5 Part 2
5-37 (20 min.) 1. Total Total Variable Fixed Costs Costs $9 $150 Volume in Number Volume in Number of Lunches of Lunches Total Costs Variable Fixed Volume in Number of Lunches 2. There are correct ways and incorrect ways to […]
978-0133058789 Chapter 5 Part 3
5-53 (20 min.) Basic Marginal Total Number of flights per month 3,000 120 3,120 Available seats 300,000 12,000 312,000 Seats filled 156,000 2,400 158,400 Percent filled 52% 20% 51% Revenue $31,200,000 $240,000 $31,440,000 Variable expenses 21,840,000 120,000 21,960,000 Contribution margin […]
978-0133058789 Chapter 6 Part 1
CHAPTER 6 COVERAGE OF LEARNING OBJECTIVES LEARNING OBJECTIVE FUNDA- MENTAL ASSIGN- MENT MATERIAL CRITICAL THINKING EXERCISES AND EXERCISES PROBLEMS CASES, EXCEL, COLLAB. & INTERNET EXERCISES LO1: Use a differential analysis to examine income effects across alternatives, and show that an […]
978-0133058789 Chapter 6 Part 2
6-38 (10 min.) 1. Answer (a): $6,000 ÷ 6,000 = $1.00 2. Answer (a): Product C is the only product that produces an incremental profit ($35,000 – $28,000) – $6,000 = $1,000. 6-39 (5-10 min.) 1. The only relevant item […]
978-0133058789 Chapter 6 Part 3
6-55 (15 min.) 1. Incremental Revenue, $10 × 4,000 $40,000 Incremental Cost 30,000 Incremental Profit $10,000 Therefore, Western should process further. 2. a. The joint costs can increase by any amount, since they are sunk and irrelevant. Western should always […]
978-0133058789 Chapter 7 Part 1
CHAPTER 7 Introduction to Budgets and Preparing the Master Budget COVERAGE OF LEARNING OBJECTIVES LEARNING OBJECTIVE FUNDA- MENTAL ASSIGNMENT MATERIAL CRITICAL THINKING EXERCISES AND EXERCISES PROBLEMS CASES, EXCEL, COLLAB. & INTERNET EXERCISES LO1: Explain how budgets facilitate planning and coordination. […]
978-0133058789 Chapter 7 Part 2
Schedule 3, Selling and General Administrative Expenses: Total selling and general administrative expenses $84,600 Less fixed expenses 27,000 Total variable expenses for year (vary with sales) $57,600 October variable expenses: $57,600 × (October sales Year’s sales) = $57,600 × […]
978-0133058789 Chapter 7 Part 3
EXHIBIT 7-42A HIGH DEFINITION LCD DIVISION Sales forecasts 50” Displays 42” Displays Sales mix 1 1.25 Month Sales change 1 1 1-Oct 3,200 3,200 4,000 2-Nov 2,400 2,400 3,000 3-Dec 5,600 5,600 7,000 4-Jan 3,200 3,200 4,000 5-Feb 3,200 3,200 […]
978-0133058789 Chapter 8 Part 2
8-39 (20-25 min.) 1. Monetary amounts are in thousands of dollars. Actual Results Flexible- Sales at Actual Budget Flexible Activity Static Prices Variance Budget Variances Budget Millions of passenger miles 1,320 – 1,320 220 F 1,100* Revenue 434,280** 27,720 U […]
978-0133058789 Chapter 8 Part 3
8-49 (25-35 min.) This problem is complicated by the need to include an allowance for defective units in the standard costs. Note that some accountants object to standards that “accept defects” by allowing for defects in the standards. Direct Materials […]
978-0133058789 Chapter 9 Part 1
CHAPTER 9 COVERAGE OF LEARNING OBJECTIVES LEARNING OBJECTIVE FUNDA– MENTAL ASSIGN– MENT MATERIAL CRITICAL THINKING EXERCISES AND EXERCISES PROBLEMS CASES, EXCEL, COLLAB., & INTERNET EXERCISES LO1: Describe the relationship of management control systems to organizational goals. 28, 30, 36 50, […]
978-0133058789 Chapter 9 Part 2
9-41 (20-30 min.) Units Total Average Week Completed Cycle Time Cycle Time 1 564 14,108 25.0 2 544 14,592 26.8 3 553 15,152 27.4 4 571 16,598 29.1 5 547 17,104 31.3 6 552 16,673 30.2 The cycle time objective […]
978-0133058789 Chapter 9 Part 3
3M – “3M employees continuously challenge the upper limits of product reliability and capability through process and product innovation and the application of proven quality principles. Underlying this effort is a strong corporate commitment to the Six Sigma strategy for […]
AC 14981
An example of an operating activity on the statement of cash flows is federal taxes paid. Assume the direct method is used. The allocation of joint costs to joint products should affect the decision to sell or process the joint […]
AC 25872
Which of the following is NOT a period expense in a merchandising firm? A) Selling Expense B) Administrative Expenses C) R&D Expenses D) Cost of Goods Sold Michael Company uses job-order costing. The company has gathered the following data: Direct […]
AC 26013
In job-order costing, the journal entry to record actual factory overhead costs incurred would include a Credit to Factory Department Overhead Control. A flexible budget is different from a variable budget. FALSE Learning Outcome: Prepare a flexible budget and discuss […]
AC 27294
When calculating the budgeted overhead rate, the numerator of the fraction is the actual amount of the cost driver. The payback model measures profitability as well as how quickly investment dollars are recouped. FALSE Learning Outcome: Calculate the NPV, internal […]
AC 41283
When an investing company owns less than 50 percent of another company, the companies must prepare consolidated financial statements. Assume a company uses process costing. When factory overhead is applied to the units in production, Finished Goods Inventory is the […]
AC 42387
A hotel has the following organizational goal: Increase employee satisfaction. Which one of the following is the best performance measure of the organizational goal? A) number of new employees trained B) turnover rate of hotel employees C) overall rating on […]
AC 71106
The most important contributor to the variance between actual and applied overhead costs is ________. A) poor forecasting B) inefficient use of overhead items C) price changes in overhead items D) operating at a different level of volume than the […]
AC 76787
To apply the budgeted overhead costs to a job, the budgeted overhead rate is multiplied by the ________. A) actual production in units B) expected production in units C) actual amount of cost driver used by the job D) expected […]
AC 78928
During a period of inflation, the LIFO method reports a larger cost of goods sold amount than FIFO. The elements of a financial budget for a merchandising firm include the capital budget, the cash budget and the budgeted balance sheet. […]
AC 79696
Segments are responsibility centers for which a separate measure of revenues and costs is obtained. In the absence of taxes, depreciation expense on a long-term asset is a relevant cash flow for the NPV model. FALSE Learning Outcome: Calculate the […]
AC 85500
BEE Company is considering the replacement of a machine that is presently used in production. Which of the following items are irrelevant to the replacement decision? A) annual operating cost of the old machine (2 years left) B) original cost […]
AC 96701
For costs that accountants cannot directly trace to products or services, accountants use ________ or ________. A) ABC methods; payback method B) cost-budgeting methods; ignore remaining costs C) sensitivity analysis; financial planning models D) cost-allocation methods; leave costs unallocated When […]
Acc 16330
The following information is available for Arnett Company: Current assets $100,000 Current liabilities $75,000 Property, plant and Long-term liabilities 100,000 equipment 150,000 Stockholders’ equity 125,000 Other assets 50,000 Total liabilities and Total assets $300,000 stockholders’ equity $300,000 Invested capital is […]
ACC 22845
What is the final step in the four-step process to allocate indirect costs to cost objects? A) Accumulate indirect costs for a period of time in a cost pool. B) Select an allocation base for each cost pool. C) Multiply […]
Acc 26694
The contribution margin per unit of a given product guides managers when deciding which product to emphasize in a sales mix. Process-costing systems apply costs to like products that are usually mass-produced in continuous fashion through a series of production […]
Acc 33028
The methods to approximate cost functions are not ________; managers frequently use two or more together to avoid ________ in measuring cost behavior. A) the same; duplication B) mutually exclusive; errors C) complementary; errors D) similar; duplication Which of the […]
ACC 33461
When determining a transfer price, outlay cost is often the variable cost for producing the item transferred. The inventory method a company uses does not affect its income statement. FALSE Learning Outcome: None Job-order costing only applies to specific jobs […]
ACC 37409
Increasing capital turnover is one of the advantages of implementing the JIT philosophy. An accounting firm is setting the audit fee for a proposed engagement. The budgeted direct professional labor hours are 100 hours at a rate of $100 per […]
Acc 38812
Value engineering is used primarily during the distribution stage of the value chain. Decreasing cycle time often results in bringing products more quickly to customers. TRUE Learning Outcome: None Accrued interest payable is a long-term liability because it relates to […]
Acc 46354
The limited liability of stockholders in a corporation means that ________. A) the company’s creditors cannot seek payment from the stockholders as individuals if the corporation cannot pay its debt B) the company’s creditors cannot receive more than the face […]
Acc 52626
Murphy Company produces dolls. Each doll sells for $20.00. Variable costs per unit are $14.00 and total fixed costs for the period are $435,000. What is the break-even point in units? A) 21,750 B) 31,071 C) 51,176 D) 72,500 Janitors […]
ACC 56099
A unit of ending inventory has a cost of $100 per unit. The selling price per unit is $200. The replacement cost per unit is $90. What value is reported for this inventory on the balance sheet? A) $90 B) […]
Acc 64584
Examples of service departments in a hospital include the housekeeping and laundry departments. Goodwill is amortized on the consolidated financial statements. FALSE Learning Outcome: None Management control systems in nonprofit organizations will never be as highly developed as in profit-seeking […]
ACC 70326
Unfavorable variances ________ represent bad decisions made by managers. A) always B) sometimes C) never D) none of the above Managers’ incentives for performance are defined as the ________. A) relationship between cost and perceived benefit B) relationship between goal […]
ACC 77408
Listed below are selected accounts for Dentice Corporation: December 31, 2013 December 31, 2014 Accounts Receivable $20,000 $40,000 Inventory $70,000 $30,000 Accounts Payable $20,000 $88,000 Wages payable $22,000 $1,000 For the year ended December 31, 2014, net income was $50,000 […]
Acc 78077
In the United States, Generally Accepted Accounting Principles are developed primarily by ________. A) International Accounting Standards Board B) Financial Accounting Standards Board C) Securities and Exchange Commission D) International Accounting Federation In a special order decision, which of the […]
ACC 78743
In a job-order system, which of the following statements is TRUE? A) The Work-in-Process Inventory account is increased by the actual factory overhead costs incurred for a job. B) The Work-in-Process Inventory account is increased by the applied factory overhead […]
ACC 81241
When managers make decisions, the accountant’s primary role is ________. A) making the decision B) providing information that may be useful to the manager C) uncertain because it depends on the decision being made D) uncertain because it depends on […]
ACC 84213
In a manufacturing company, product costs used for external reporting include ________. A) direct material costs plus direct labor cost only B) indirect production costs only C) direct material costs plus direct labor cost plus indirect production costs D) direct […]
ACC 84619
Atlanta Senior Center is planning its annual fundraiser. The event committee has developed the following budget for the event. Ballroom rental $3,000 Entertainment $2,500 Printing $600 plus $9 per person Food $30 per person Decorations $700 plus $5 per person […]
Acc 87683
Toto Company has the following data available: Sales for the year ended December 31, 2012 $106,950 Gross profit for the year ended December 31, 2012 $45,150 Net income for the year ended December 31, 2012 $7,300 Total Current Assets, December […]
ACC 91318
Under the immediate write-off method of disposing of underapplied or overapplied overhead costs, current net income is ________ by underapplied overhead costs and current net income is ________ by overapplied overhead costs. A) increased, decreased B) decreased, increased C) not […]
Acc 92976
When a company acquires all of the common stock of a subsidiary, the books of the subsidiary are no longer used. Accounts payable, wages payable and income taxes payable are all considered to be current liabilities. TRUE Learning Outcome: None […]
ACC 94898
Reasons for the post-audit of an investment project do NOT include ________. A) ensuring that the investment expenditures are proceeding on time and within budget B) providing information for improving future predictions of cash flows C) evaluating the continuation of […]
Acc 96411
Managers need to know program costs to make ongoing decisions such as which programs to emphasize or deemphasize and the pricing of programs. Local managers in decentralized organizations tend to duplicate services that may be less expensive if centralized. TRUE […]
Accounting 16828
Opportunity costs apply to resources that a company has committed to purchase. Joint costs are not allocated to a by-product. TRUE Learning Outcome: None The balance sheet shows a company’s financial status at only one point in time. TRUE Learning […]
Accounting 27057
Staff managers give advice to line managers and have authority over line managers. In a linear mixed cost function, the slope of the function is the fixed cost per unit of the cost driver. FALSE Learning Outcome: Define and distinguish […]
Accounting 34984
A company is considering two investment projects. If they use the total project approach and the differential approach, both approaches produce ________. A) different answers B) similar answers C) the same answer D) not enough information is given to make […]
Accounting 38911
What is the after-tax amount of annual cash operating savings associated with a proposed machine? A) operating savings times the tax rate B) operating savings times (1 minus the tax rate) C) $0 D) operating savings The most recent income […]
Accounting 40725
Worbel Company has variable costs of $5 per unit and a selling price of $10 per unit. Fixed costs are $100,000. Planned unit sales for 2015 are 25,000 units. Actual unit sales for 2014 were 22,000. What is the margin […]
Accounting 50721
Qualitative aspects of information can carry more weight than quantitative aspects in a business decision. One purpose of a post-audit is to provide information for improving future predictions of cash flows. TRUE Learning Outcome: Calculate the NPV, internal rate of […]
Accounting 51513
When reconciling net income to net cash provided by operating activities, a(n) ________ is an addition to net income. A) increase in inventories B) increase in accounts receivable C) increase in wages payable D) decrease in taxes payable What will […]
Accounting 54426
The Bombard Company reports the following information: Sales for the year ended December 31, 2012 $106,950 Gross profit for the year ended December 31, 2012 $45,150 Net income for the year ended December 31, 2012 $10,300 Total Current Assets, December […]
Accounting 66093
Which of the following is an example of using cost information for operational control? A) determination of Cost of Goods Sold for the income statement B) identification of capital assets to acquire for expansion purposes C) selection of value-chain function […]
Accounting 68961
Par value is the value that is printed on the face of the stock certificate. In a linear mixed cost function, the slope of the function is the fixed cost per unit of the cost driver. FALSE Learning Outcome: Define […]
Accounting 87005
Dodge Company had the following information: Budgeted factory overhead costs $90,000 Actual factory overhead costs $82,000 Budgeted machine hours 40,000 Actual machine hours 35,500 Assume machine hours are the cost driver of factory overhead costs. The budgeted factory overhead rate […]
Accounting 87655
Division AA does not have excess capacity to produce Product XX. The division can sell Product XX for $10 per unit outside the company. Variable costs are $6 per unit. Division BB wants to purchase Product XX from Division AA […]
Accounting 95093
The sales price is $30 per unit, the contribution margin is $8 per unit and total fixed costs are $32,000. What is the break-even point in units? A) 857 B) 1,200 C) 2,000 D) 4,000 Wendell Company has the following […]
ACCT 11634
Preferred stockholders receive cash dividends before common stockholders. Managers evaluated using net book value for plant assets will tend to replace assets sooner than managers evaluated using gross book value. FALSE Learning Outcome: Discuss and calculate various performance measures used […]
Acct 11781
Historical data may have a direct bearing on a decision made today. The internal rate of return and the net present value methods usually result in the same investment decisions. TRUE Learning Outcome: Calculate the NPV, internal rate of return, […]
Acct 12673
Investors need more detailed information about products or services than managers. If a company uses the variable-costing approach, a manager may be tempted to produce unneeded units to increase operating income. FALSE Learning Outcome: None Gross margin is a subtotal […]
ACCT 16625
Dooley Company has the following information available for variable overhead costs. Direct labor hours are the cost driver for variable overhead costs. Actual variable overhead costs $4,700 Standard variable overhead costs $1.20 per hour Actual direct labor hours 3,750 hours […]
ACCT 21038
Garcia Company has two service departments, Maintenance and Human Resources. Garcia Company also has two production departments, Mixing and Finishing. Maintenance costs are allocated based on square footage while Human Resources costs are allocated based on number of employees. The […]
Acct 23528
In a manufacturing company, ________. A) inventoriable costs only become an expense when the company sells the inventory B) inventoriable costs become an expense as soon as the company finishes manufacturing the product C) there is only one inventory account […]
Acct 27118
When referring to a cost function, plausibility refers to whether you can rely upon the cost function for predicting the future. Two popular methods for allocating service department costs to user departments are the direct method and the step-up method. […]
ACCT 31436
A hotel has the following organizational goal: Increase employee satisfaction. Which one of the following is the best performance measure of the organizational goal? A) number of new employees trained B) turnover rate of hotel employees C) overall rating on […]
ACCT 33885
Franklin Company uses activity-based costing, and normally produces 1,000,000 units per month. At this level of production, the costs per unit are as follows: Direct materials used $14 Direct labor $6 Variable indirect production $1 Setup costs $3 For 1,000,000 […]
ACCT 36073
Each value chain function should focus on activities that ________. A) create profits for the seller B) create bonuses for top management C) create higher stock prices for the company’s stock D) create value for the customer When preparing segmented […]
ACCT 45375
In job-order costing, the journal entry to record the transfer of completed goods from the production area would include a Credit to ________. A) Cost of Goods Sold B) Finished Goods Inventory C) Factory Department Overhead Control D) Work-In-Process Inventory […]
ACCT 45414
If the segments in a firm buy from the same outside suppliers all the time, they are good candidates for decentralization. Markup is the amount by which cost exceeds price. FALSE Learning Outcome: None When adding or dropping a product […]
Acct 52647
The corporate culture is a larger influence on the ethical climate of an organization than a code of ethics. An operating budget is the major part of the master budget that focuses on the balance sheet and supporting schedules. FALSE […]
Acct 59603
If a company allocates costs of central services to products based on sales, ________ should be used as the allocation base. A) actual usage B) estimated usage C) actual sales D) budgeted sales A manager has several forecasts of sales […]
Acct 65937
In capital budgeting decisions, the riskiness of a project may be shown by ________. A) the size of the future cash inflows from the project B) the size of the future cash outflows from the project C) the timing of […]
Acct 66191
A transfer price exists when two segments of the same organization sell ________. A) a product to the same customer B) a product to each other C) a product in a foreign country D) the same service to customers In […]
ACCT 66465
John Company has two service departments, Maintenance and Human Resources. John Company also has two production departments, Mixing and Finishing. Maintenance costs are allocated based on square footage while Human Resources costs are allocated based on number of employees. The […]
ACCT 67224
When managers make decisions, the decision process used has the following steps in the order of occurrence: A) Historical and Other Information, Prediction Model, Prediction, Decision Model, Decision, Implementation, Feedback B) Historical and Other Information, Decision Model, Prediction Method, Implementation, […]
Acct 76644
Service departments in organizations exist to support ________. A) other service departments and customers only B) producing departments and suppliers only C) other service departments, producing departments and customers D) producing departments and customers only The following information is available […]
Acct 82141
A company is trying to decide which product to manufacture. The following information is available: Costs Product A Product B Direct Materials 1 $2.00 per unit $2.20 per unit Direct Materials 2 $1.25 per unit $1.50 per unit Direct Materials […]
Acct 90646
Two common methods for comparing alternative investments are the total project approach and the conversion approach. In a make-or-buy decision, if plant facilities will remain idle when the decision is made to outsource a part used in a product, then […]
Acct 95658
Sharpie Company has variable costs of 75% of total revenues and fixed costs of $40 million per year. What is the break-even point in dollars? A) $40 million B) $53.33 million C) $100 million D) $160 million Marketing is the […]
ACCT 96644
Historical or past information can have an indirect bearing on a manager’s decision because ________. A) the past decision resulted in a favorable outcome B) it can help predict the future C) the past decision resulted in a bonus for […]
ACT 16711
Liabilities are economic resources. A disadvantage of decentralization in organizations is higher overhead costs due to duplication. TRUE Learning Outcome: None The operating budget is a better measure of a company’s long-term performance than the financial budget. TRUE Learning Outcome: […]
ACT 20413
Unexpired costs are expenses. When a company acquires all of the common stock of a subsidiary, the books of the subsidiary are no longer used. FALSE Learning Outcome: None The variable overhead spending variance is the difference between the actual […]
ACT 30661
A management control system is a logical integration of techniques to gather and use data and to evaluate performance. A company will bid near the minimum sales price to establish a presence in new markets or with a new customer. […]
ACT 30811
Jimmy Industries Inc. reported the following information about the production and sale of its only product during the first month of operations: Selling price per unit $65.00 Sales $78,000 Direct materials used $25,000 Direct labor $42,000 Variable factory overhead $17,000 […]
ACT 38087
The cash paid to purchase equipment is included in the ________ section of the statement of cash flows. A) operating B) investing C) financing D) noncash Which of the following statements about depreciation is FALSE? A) Depreciation does not generate […]
ACT 40124
The following information was gathered for all the products made by the Ringaling Company: Budgeted direct labor hours 31,000 Actual direct labor hours 32,400 Budgeted factory overhead costs $147,250 Actual factory overhead costs $149,980 Assume the cost driver for factory […]
ACT 49128
Some level of decentralization in an organizational structure creates benefits for most organizations. When using the direct method of preparing the statement of cash flows, depreciation expense is added to net income. FALSE Learning Outcome: None In job-order costing, time […]
ACT 59695
In perfect competition, the profit-maximizing volume is the quantity at which ________. A) marginal cost equals price B) contribution margin equals fixed cost C) marginal revenue equals price D) price exceeds marginal cost When allocating service department costs to producing […]
ACT 67376
Buddy Company manufactures a part for its production cycle. The costs per unit for 5,000 units of the part are as follows: Per Unit Direct materials $3.00 Direct labor 5.00 Variable factory overhead 4.00 Fixed factory overhead 4.00 Total costs […]
ACT 67796
Wetzel Company has the following information available for the past quarter: Division A Division B Division C Sales $250,000 $400,000 $350,000 Variable expenses 52% 30% 40% Fixed expenses controllable by division manager $60,000 $200,000 $175,000 Fixed expenses controllable by others […]
ACT 71308
Key Company has a targeted sales volume of 62,300 units. Total fixed costs are $31,200. The contribution margin per unit is $1.20. What is targeted net income? A) $31,200 B) $37,440 C) $43,560 D) $74,760 The following information is available […]
ACT 85105
When developing cost functions, which of the following statements is FALSE? A) The cost function must be believable. B) The cost function should explain past cost behavior. C) Personal observations of costs and activities provide the best evidence of a […]
ACT 86130
The Corrao Company reports the following information: Sales for the year ended December 31, 2012 $106,950 Gross profit for the year ended December 31, 2012 $45,150 Net income for the year ended December 31, 2012 $7,300 Total Current Assets, December […]
ACT 93639
On January 1, 2014, a parent company purchased 90 percent of the stock in a subsidiary. On January 1, 2010, no goodwill was recorded and the book value of the subsidiary’s assets equals the market value of the subsidiary’s assets. […]
MET MG 18951
When the actual volume of production exceeds the expected volume of production, the production volume variance is ________ and fixed overhead is ________. A) favorable; underapplied B) favorable; overapplied C) unfavorable; underapplied D) unfavorable; overapplied The Foreign Corrupt Practices Act […]
MET MG 41375
Jensen Company produces dolls. Each doll sells for $20.00. Variable costs are $14.00 per unit. If the break-even volume in dollars is $1,446,000, then the total fixed costs for the period are ________. A) $361,500 B) $433,800 C) $516,425 D) […]
MET MG 55861
A company’s operating cycle can be longer than one year. The effectiveness of any budgeting system depends directly on the attitudes of top management toward the budgeting system. TRUE Learning Outcome: Discuss basic budgeting concepts and identify and prepare the […]
MET MG 57644
Goodwill is amortized on the consolidated financial statements. As the terms are used in the budgeting process, it is possible for a company to be efficient at the same time it is ineffective. TRUE Learning Outcome: Discuss standard costing and […]
MET MG 67557
Todd Company has two production departments called Assembly and Finishing. The maintenance department serves both production departments. Maintenance costs are allocated based on labor hours. Budgeted fixed costs for the maintenance department are $30,000. Budgeted variable costs for the maintenance […]
MET MG 88338
Past costs are irrelevant in equipment replacement decisions. The controller is primarily concerned with a company’s financial matters and the treasurer is concerned with a company’s operating matters. FALSE Learning Outcome: Discuss the legal, ethical and business concepts that affect […]
MET MG 89852
In a make-or-buy decision for a part for a product, which of the following qualitative factors play a role? A) quality of purchased part B) credit terms offered by supplier of part C) timeliness of delivery of purchased part by […]
MET MG 90750
Which statement about TQM is FALSE? A) TQM focuses on product quality. B) TQM minimizes costs by maximizing quality. C) TQM focuses on the prevention of defects and on customer satisfaction D) Management accountants have no role in the application […]
MET MG 93884
In general, many more costs are direct costs instead of indirect costs when the cost object is a ________ instead of a(n) ________. A) product; department B) product; activity C) product; resource D) department; product Biden Company manufactures small jewelry […]
MET MG 99553
How can a company avoid lying by employees when preparing a budget? A) reward good budget forecasts B) reward good performance against the budget C) reward good budget forecasts and reward good performance against the budget D) reward good recipes […]
SMG AC 17839
What happens when the cost-driver activity level increases within the relevant range? A) Total fixed costs increase. B) Fixed costs per unit of cost driver decrease. C) Total variable costs decrease. D) Variable costs per unit of cost driver decrease. […]
SMG AC 21390
Robert Company acquired 40% of the voting stock of Boulder Company for $40 million. At the end of Year 1, Boulder Company reports net income of $15 million and pays cash dividends of $5 million. At the end of Year […]
SMG AC 23629
How should Unearned Rent Revenue be classified on a balance sheet at December 31, 2013? The rental contract covers the period, January 1, 2013 through December 31, 2015. A) current liability only B) long-term liability only C) current and long-term […]
SMG AC 25996
New Jersey Company is considering two investments. The relevant data follows: Project A Project B Cost $200,000 $300,000 Annual cash savings (end of year) $50,692 $60,995 Terminal salvage value $50,000 $70,000 Estimated useful life in years 5 5 Minimum desired […]
SMG AC 26552
In job-order costing, the journal entry to record the completion of goods would include a Debit to Cost of Goods Sold. A merchandising company has Raw Materials Inventory. FALSE Learning Outcome: Describe the basics of managerial accounting and its function […]
SMG AC 29609
Treasury stock is a deduction from total stockholders’ equity. An operating budget is the major part of the master budget that focuses on the balance sheet and supporting schedules. FALSE Learning Outcome: Discuss basic budgeting concepts and identify and prepare […]
SMG AC 33265
The following data points are available. This is an example of a ________ cost. Units Costs 600 $560 650 $565 800 $580 900 $590 A) variable B) fixed C) mixed D) none of the above According to the Financial Executives […]
SMG AC 40678
Examples of activity centers with indirect costs include receiving, testing and packaging. Process-costing systems apply costs to like products that are usually mass-produced in continuous fashion through a series of production processes. TRUE Learning Outcome: Discuss process costing systems and […]
SMG AC 46988
Juan Company’s after-tax operating income was $882 million. Average total assets were $5,900 million and average total stockholders’ equity was $4,050 million. Juan Company’s cost of capital was 10%. Juan Company uses total assets as the measure of invested capital. […]
SMG AC 50200
The main qualities of accounting information that make accounting information useful for decision making are ________ and ________. A) relevance; reliability B) relevance; comparability C) consistency; comparability D) relevance; faithful representation Who provides assurance to external users about the reliability […]
SMG AC 53163
If the actual volume of production differs from the expected volume of production, the fixed overhead costs used for budgeting and product costing are ________. A) the same B) different C) indeterminate D) changing over the accounting period Investigating the […]
SMG AC 64697
The differential approach to investments can be used to compare any number of projects. Period costs include selling and administrative expenses. TRUE Learning Outcome: Describe the basics of managerial accounting and its function within an organization Capital turnover can be […]
SMG AC 70014
Selected items from the financial statements for Lorna Company are listed below: Paid in capital, December 31, 2014 $100,000 Retained earnings, December 31, 2014 $75,000 Common stock dividends declared in 2014 $75,000 Net income for the year ended December 31, […]
SMG AC 78863
Which of the following costs is a variable cost? A) rental expense for factory building for manufacturer of electronics B) lease cost for factory machine for manufacturer of electronics C) fuel for airplane for airline D) depreciation expense of airplane […]
SMG AC 84693
When preparing a flexible budget income statement, ________ costs are constant at different levels of activity. A) variable B) step C) contributed D) fixed At 60,000 machine hours, Clark Company’s static budget for variable overhead costs is $180,000. At 60,000 […]
SMG AC 88565
Campbell Company gathered the following information for the year ended December 31, 2015: Units produced 45,000 Units expected to be produced 45,000 Units sold 43,200 Direct labor $137,200 Direct materials used $126,400 Fixed selling and administrative expenses $51,000 Variable selling […]