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978-1118548639 ch01
Chapter 1 – Accounting as a Tool for Management 1-1 Accounting as a Tool for Management Learning Objectives 1. Define managerial accounting. (Unit 1.1) 2. Describe the differences between managerial and financial accounting. (Unit 1.1) 3. List and describe the […]
978-1118548639 ch02 Part 1
Chapter 2 – Cost Behavior and Cost Estimation 2-1 Cost Behavior and Cost Estimation Learning Objectives unit cost. (Unit 2.1) 2. Estimate a cost equation from a set of cost data and predict future total cost from that equation. (Unit […]
978-1118548639 ch02 Part 2
Chapter 2 – Cost Behavior and Cost Estimation 2-11 Exercise 2-9 $290 $100 700 200 b. Fixed cost using the low point = $100 – ($0.38 × 200) = $24 c. Total cost = ($0.38 × MH) + […]
978-1118548639 ch02 Part 3
2-20 Problem 2-23 a. Passengers: Variable cost = $25,459 $22,225 2,430 2,136 = $11 per passenger Fixed cost = $25,459 – ($11 × 2,430) = ($1,271) Fuel expense = ($11 × passengers) – $1,271 Passenger miles: Variable cost […]
978-1118548639 ch03 Part 1
Chapter 3 – Cost-Volume-Profit Analysis and Pricing Decisions 3-1 Cost-Volume–Profit Analysis and Pricing Decisions Learning Objectives 1. Calculate the breakeven point in units and sales dollars. (Unit 3.1) 2. Calculate the level of activity required to meet a target income. […]
978-1118548639 ch03 Part 2
Chapter 3 – Cost-Volume-Profit Analysis and Pricing Decisions 3-11 Exercise 3-8 a. $12x – $3x – $432,000a = $0 $9x = $432,000 x = 48,000 frisbees to breakeven 48,000 frisbees $12 = $576,000 breakeven sales $ b. $9x = […]
978-1118548639 ch03 Part 3
3-21 Exercise 3-19 a. Basic lawn care CM = $40 – $22 = $18 per hour Deluxe lawn care CM = $60 – $28 = $32 per hour Sales mix = 1 deluxe hour for every 4 basic hours Let […]
978-1118548639 ch03 Part 4
Chapter 3 – Cost-Volume-Profit Analysis and Pricing Decisions 3-31 Problem 3-30, continued Total Per unit Sales $2,100,000 $21.00 Variable expenses 1,250,000 12.50 Contribution margin 850,000 $ 8.50 Fixed expenses 400,000 Operating income $ 450,000 c. new variable cost per unit: […]
978-1118548639 ch03 Part 5
Chapter 3 – Cost-Volume-Profit Analysis and Pricing Decisions Problem 3-37 a. molded briefcase contribution margin: $40.00 – $27.40 = $12.60 3-41 leather briefcase contribution margin: $90.00 – $36.00 = $54.00 fixed expenses: $12,750,000 + $300,000 = $13,050,000 Let x = […]
978-1118548639 ch03 Part 6
Solutions for Davis & Davis, Managerial Accounting, 2nd ed. 3-48 SOLUTIONS TO CASES Case 3-42 a. Tiffany’s fixed expenses are a much higher percentage of sales than b. While Blue Nile’s gross margin percentage is 38.3 points below Tiffany’s, its […]
978-1118548639 ch04 Part 1
Chapter 4 – Product Costing for Manufacturing Companies 4-1 Product Costs and Job Order Costing Learning Objectives 1. Distinguish between product and period costs. (Unit 4.1) manufacturing overhead. (Unit 4.1) 3. Trace the flow of product costs through the inventory […]
978-1118548639 ch04 Part 2
Chapter 4 – Product Costing for Manufacturing Companies 4-11 Exercise 4-9 Company 1 Company 2 Company 3 Company 4 Direct materials inventory, beginning $15,000 $25,000 $6,000 $165,000 + Purchases of direct materials 379,000 86,400 51,600 258,400 = Total direct materials […]
978-1118548639 ch04 Part 3
Chapter 4 – Product Costing for Manufacturing Companies 4-21 SOLUTIONS TO PROBLEMS Problem 4-22 c. When Amazon provides shipping services for third-party sellers on its site, it is “selling” the shipping service to the third-party seller. In these cases, the […]
978-1118548639 ch04 Part 4
Chapter 4 – Product Costing for Manufacturing Companies 4-31 Problem 4-27, continued e. CC723 CH291 DS444 Total job cost $1,237,400 $510,000 $460,000 Units produced ÷ 20,000 ÷ 15,000 ÷ 5,000 Cost per unit $61.87 $34.00 $92.00 December Cost of Goods […]
978-1118548639 ch04 Part 5
4-38 Problem 4-30, continued g. Direct Materials $ 75,000 Direct Labor (300 DLH × $14.50/DLH) 4,350 Manufacturing Overhead ($75,000 × 70%) 52,500 Total Cost of Job 3827 $131,850 Markup ($131,850 × 80%) 105,480 Sales Price $237,330 h. Predetermined overhead rate […]
978-1118548639 ch05 Part 1
Chapter 5 – Planning and Forecasting 5-1 Planning and Forecasting Learning Objectives process. (Unit 5.1) 2. Calculate the standard cost of a product. (Unit 5.2) 3. Prepare the operating budget and describe the relationships among its components. (Unit 5.3) 4. […]
978-1118548639 ch05 Part 2
Chapter 5 – Planning and Forecasting 5-11 Exercise 5-9 January February March Quarter Commission $15,000 $29,250 $26,250 $70,500 Bad debt expense 12,000 23,400 21,000 56,400 Depreciation 10,000 10,000 10,000 30,000 Sales staff salaries 25,000 25,000 25,000 75,000 Advertising 1,000 1,000 […]
978-1118548639 ch05 Part 3
Chapter 5 – Planning and Forecasting 5-21 Exercise 5-23 January February March Total Cash Receipts Uncollectible Accounts Receivable December credit sales $ 58,500 $ 58,500 January salesa $300,000 × 70% 210,000 210,000 $300,000 × 26% $78,000 78,000 $300,000 × 4% […]
978-1118548639 ch05 Part 4
Chapter 5 – Planning and Forecasting 5-31 5-31 continued c. 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Annual Budgeted production 440 460 360 570 1,830 × Standard necks per guitar × 1.2 × 1.2 × 1.2 × 1.2 × […]
978-1118548639 ch05 Part 5
Chapter 5 – Planning and Forecasting 5-41 b. Negative behaviors may be mitigated if Kate will: clearly communicate her reasons for changing the standards to the employees. c. Tightening the standards may result in positive behaviors by: motivating […]
978-1118548639 ch05 Part 6
Chapter 5 – Planning and Forecasting Case 5-39 a. Changes from base case in 5-38: decrease price, increase advertising, increase units sold Affected budget components All budgets affected Net income impact Income increases by $5,544 ($81,326 – $75,782) Balance sheet […]
978-1118548639 ch05 Part 7
Chapter 5 – Planning and Forecasting 5-61 5-39b, continued Ending Inventory and Cost of Goods Sold Budget Raw Materials Beginning balance $5,200 Purchases of raw materials 196,384 Less: Ending raw materials inventory (20,700 lbs. $0.32) 6,624 Raw materials used $194,960 […]
978-1118548639 ch05 Part 8
Chapter 5 – Planning and Forecasting 5-39, continued d. Changes from base case in 5-38: Sales price increased to $10.20; 2% cash discount; cash collection pattern changed Affected budget components sales budget, selling and administrative expense budget, cash receipts budget, […]
978-1118548639 ch05 Part 9
Chapter 5 – Planning and Forecasting 5-77 5-40, continued Inventory Purchases Budget July August September Quarter October Budgeted unit sales 4,500 4,700 4,600 13,800 4,600 + Budgeted ending inventorya 1,175 1,150 1,150 1,150 = Total materials required 5,675 5,850 5,750 […]
978-1118548639 Chapter 1
Focus Unit 1 – Focus on C&C Sports F1-1 Managerial Accounting Context: C&C Sports Learning Objectives 1. Describe the business environment of C&C Sports. SOLUTIONS TO GUIDED UNIT PREPARATION 1. C&C Sports has chosen to remain a domestic producer of […]
978-1118548639 Chapter 10 Part 1
Chapter 10 – Decentralization and Performance Evaluation 10-1 Decentralization and Performance Evaluation Learning Objectives 10.1) 2. Prepare a segment margin income statement and evaluate a segment’s financial performance. (Unit 10.2) 3. Evaluate an operating segment or project using return on […]
978-1118548639 Chapter 10 Part 2
Chapter 10 – Decentralization and Performance Evaluation 10–11 Exercise 10-6 a. Hunting Camping Fishing Total Sales revenue $1,250,000 $3,600,000 $2,380,000 $7,230,000 Less variable expenses Cost of goods sold 850,000 2,340,000 1,904,000 5,094,000 Operating expenses 170,000 576,000 238,000 984,000 Contribution margin […]
978-1118548639 Chapter 10 Part 3
Chapter 10 – Decentralization and Performance Evaluation 10–21 Exercise 10–20 a. Playground Pool Gym Return on Investment $3,500 $25,000 = 14% $4,800 $40,000 = 12% $2,700 $15,000 = 18% Residual Income $3,500 – .14($25,000) = $0 $4,800 – .14($40,000) = […]
978-1118548639 Chapter 10 Part 4
Solutions for Davis & Davis, Managerial Accounting, 2nd ed. 10–30 Problem 10-29, continued EVA Archer Barrett Corvell $2,940,000a $2,240,000b $1,064,000c 2,220,000d 1,540,000e 614,000f $ 720,000 $ 700,000 $ 450,000 a$4,200,000 × (1 – 30%) b$3,200,000 × (1 – 30%) c$1,520,000 […]
978-1118548639 Chapter 11 Part 1
Chapter 11 – Performance Evaluations Revisited: A Balanced Approach 11-1 Performance Evaluation Revisited: A Balanced Approach Learning Objectives 1. Identify the desirable characteristics of performance measures. (Unit 11.1) 2. Explain how to use a balanced scorecard to improve an organization’s […]
978-1118548639 Chapter 11 Part 2
Chapter 11 – Performance Evaluations Revisited: A Balanced Approach 11–11 Exercise 11-7 Student answers will vary; however, here are some measures they may provide. Average training hours per employee: Creative teams must develop skills in new methods and technologies to […]
978-1118548639 Chapter 11 Part 3
Chapter 11 – Performance Evaluations Revisited: A Balanced Approach 11–19 Problem 11–18 Activity a. Manufacturing time b. Value–added time Materials moved to production floor 25 – Production in station 1 35 35 Materials moved to station 2 5 – Wait […]
978-1118548639 Chapter 12 Part 1
Chapter 12 – Financial Statement Analysyis 12-1 Financial Statement Analysis Learning Objectives company’s performance. (Unit 12.1) 2. Prepare a common-size balance sheet and income statement and use them to analyze a company’s performance. (Unit 12.2) 3. Calculate and interpret basic […]
978-1118548639 Chapter 12 Part 2
Chapter 12 – Financial Statement Analysyis Exercise 12–10 12–11 a. Gross margin = $4,565,600/$10,177,200 = 44.9% b. ( ) $997,570 + ($300,300 × (1–30%)) Return on assets = =11.1% $10,561,900 + $11,224,270 /2 c. Return on common stockholder’s equity = […]
978-1118548639 Chapter 12 Part 3
Chapter 12 – Financial Statement Analysyis 12–21 Case 12-22, continued 2013 2012 2011 Assets Cash 3.6% 3.1% 2.9% Accounts receivable, net 14.1% 15.5% 13.2% Inventory 6.7% 9.9% 7.8% Prepaid expenses 1.2% 1.2% 0.6% Total current assets 25.6% 29.7% 24.5% Property […]
978-1118548639 Chapter 12 Part 4
Chapter 12 – Financial Statement Analysyis 12–29 Case 12-24, continued 2013 2012 $ change % change Assets Cash $997,734 $1,156,835 $(159,101) (13.8%) Accounts receivable, net 760,643 759,033 1,610 0.2% Inventory 376,897 418,633 (41,736) (10.0%) Prepaid expenses 277,226 302,649 (25,423) (8.4%) […]
978-1118548639 Chapter 13 Part 1
Chapter 13 – Statement of Cash Flows 13-1 Statement of Cash Flows Learning Objectives 1. Categorize cash activities as operating, investing, or financing. (Unit 13.1) 2. Calculate cash flows provided (used) by operating activities using the indirect method. (Unit 13.2) […]
978-1118548639 Chapter 13 Part 2
Chapter 13 – Statement of Cash Flows 13–11 Exercise 13-10 Cash flows from financing activities Loan proceeds $150,000a Common stock cash dividends paid (15,000) Loan repayment (50,000) Net cash provided (used) by financing activities $85,000 Note: Declaration of preferred dividends […]
978-1118548639 Chapter 13 Part 3
Chapter 13 – Statement of Cash Flows 13–21 Problem 13-26 Student answers will vary. Cash flows from operating activities The company has not been able to generate cash from operations in any of the three years reported. Cash flows […]
978-1118548639 Chapter 2 Part 1
Topic Focus 2 – Focus on Process Costing T2-1 Focus on Process Costing Learning Objectives 1. Identify the kinds of companies that use process costing systems. system. 3. Calculate and explain equivalent units of production. 4. Assign costs to completed […]
978-1118548639 Chapter 2 Part 2
T2-8 Exercise T2-7 a. Work backwards from the cost per equivalent unit to determine units completed and transferred out: Materials Conversion Beginning inventory $5,900 $15,000 Added to production 47,300 65,000 Total materials cost $53,200 $80,000 Materials cost per EU […]
978-1118548639 Chapter 3 Part 1
Topic Focus 3 – Variable and Absorption Costing T3-1 Topic Focus: Variable and Absorption Costing Learning Objectives 1. Explain the difference between variable costing and absorption costing. 2. Calculate operating income under variable costing and absorption costing. Summary of End […]
978-1118548639 Chapter 3 Part 2
Solutions for Davis & Davis, Managerial Accounting, 2nd ed. T3-10 SOLUTIONS TO PROBLEMS Problem T3-8 a. 2013 2014 2015 Variable costing Variable costs of production from income statement $2,028,000 Units sold 39,000 Unit product cost $52 $52 $52 Absorption […]
978-1118548639 Chapter 4 Part 1
Topic Focus 4 – Standard Costing T4-1 Standard Costing Learning Objectives control costs. 2. Calculate the fixed overhead volume variance. Summary of End of Chapter Material Difficulty: E = Easy, M = Moderate, D = Difficult Bloom: K = Knowledge, […]
978-1118548639 Chapter 4 Part 2
Solutions for Davis & Davis, Managerial Accounting, 2nd ed. T4-8 Exercise T4-8 a. Manufacturing Overhead …………………………………… 52,000 b. Work in Process Inventory (2,800 boxes × 3 DLH/box × $5.00/DLH) …………………… 42,000 Manufacturing Overhead …………………………… 42,000 To record applied fixed manufacturing […]
978-1118548639 Chapter 5 Part 1
Focus Unit 5 – Focus on Customer Profitability T5-1 Focus on Customer Profitability Learning Objectives 1. Use activity-based costing techniques to measure customer profitability. 2. Identify alternatives for managing unprofitable customer accounts. Summary of End of Chapter Material Difficulty: E […]
978-1118548639 Chapter 5 Part 2
T5-8 Exercise T5-7 a. Of the two customers, Holmes Holographics is most likely an unprofitable customer. Holmes consumes resources at a higher level than Morgan Light and Sound. Addtionally, many of the resources that Holmes consumes are labor-intensive. b. Brown […]
978-1118548639 Chapter 6 Part 1
Chapter 6 – Performance Evaluation: Variance Analysis 6-1 Performance Evaluation: Variance Analysis Learning Objectives 1. Prepare a flexible budget and explain its use in evaluating performance. (Unit 6.1) 2. Calculate the direct materials price and quantity variances. (Unit 6.2) 3. […]
978-1118548639 Chapter 6 Part 2
Chapter 6 – Performance Evaluation: Variance Analysis 6-11 Exercise 6-9 AQ × SP SQ × SP 535,000 ft. × $0.23/ft. (63,000 cables × 8.5 ft.) × $0.23/ft. 535,500 ft. × $0.23/ft. $123,050 $123,165 $115 F Direct materials quantity variance Exercise […]
978-1118548639 Chapter 6 Part 3
Chapter 6 – Performance Evaluation: Variance Analysis 6-21 Exercise 6-26 Direct materials price variance AQ × AP AQ × SP 500,000 lbs. purchased × $?/lb. 500,000 lbs. purchased × $6/lb. $2,750,000 $3,000,000 $250,000 F Direct materials quantity variance AQ × […]
978-1118548639 Chapter 6 Part 4
Chapter 6 – Performance Evaluation: Variance Analysis Problem 6-31 a. Actual Results Flexible Budget Variance Flexible Budget Sales Volume Variance Static Budget Unit sales 14,500 0 14,500 500 U 15,000 Sales revenue $2,972,500 $72,500 F $2,900,000a $100,000 U $3,000,000 Less […]
978-1118548639 Chapter 6 Part 5
6-41 b. Sara’s remarks imply that unfavorable variances are bad without knowing what might have caused those variances. This comment will cause Ken to take actions that produce favorable results in the short– run that could ultimately be bad for […]
978-1118548639 Chapter 6 Part 6
6-48 Case 6-36 a. Actual Results Flexible Budget Variance Flexible Budget Sales Volume Variance Static Budget Unit sales 450,000 0 450,000 50,000 F 400,000 Sales revenue $3,555,000 $45,000 U $3,600,000a $400,000 F $3,200,000 Less variable product expenses Direct materials 865,000 […]
978-1118548639 Chapter 7 Part 1
Chapter 7 – Activity-Based Costing and Activity-Based Management 7-1 Activity-Based Costing and Activity-Based Management Learning Objectives (Unit 7.1) 2. Calculate activity-based product costs. (Unit 7.2) 3. Explain the difference between traditional product costs and activity-based product costs. (Unit 7.2) 4. […]
978-1118548639 Chapter 7 Part 2
Chapter 7 – Activity-Based Costing and Activity-Based Management 7-11 Exercise 7-8 a. Machine setup $200,000 ÷ 800 setups = $250/setup Inspection $120,000 ÷ 400 tests = $300/test Materials receiving $252,000 ÷ 1,800 POs = $140/PO b. Machine setups $ 23,000 […]
978-1118548639 Chapter 7 Part 3
Chapter 7 – Activity-Based Costing and Activity-Based Management 7-21 Problem 7-20 $1,845,000 (25,000 DLH + 16,000 DLH) Tablets Books Direct Materials $3.00 $10.00 Direct Labor 4.00 8.00 Overhead 25,000 DLH 62,500 tablets × $45/DLH = 18.00 16,000 DLH 20,000 tablets […]
978-1118548639 Chapter 7 Part 4
Chapter 7 – Activity-Based Costing and Activity-Based Management 7-31 Problem 7-24, continued Second, allocate costs to each procedure Hip Knee Shoulder Operating room preparation 300a × $720 800 × $720 100 × $720 Operating room use 1,200b × $525 960 […]
978-1118548639 Chapter 7 Part 5
Chapter 7 – Activity-Based Costing and Activity-Based Management 7-41 Problem 7-27, continued c. Profitability using current system Superior Deluxe Ultra Sales revenue $54,000,000 $86,400,000 $102,000,000 Direct materials 17,600,000 27,360,000 40,200,000 Direct labor 10,700,000 13,320,000 16,600,000 Overhead ($120 × total MH) […]
978-1118548639 Chapter 7 Part 6
Chapter 7 – Activity-Based Costing and Activity-Based Management 7-47 Problem 7-29, continued Cost Pool Calculation Activity Rate Fabricating a $230,000 200,000 MH = $1.15/MH Assembly b $120,000 1,250 setups = $96.00/setup c. Balzene Cost Pool Calculation Overhead Fabricating (20,000 units […]
978-1118548639 Chapter 8 Part 1
Chapter 8 – Using Accounting Information to Make Managerial Decisions 8-1 Using Accounting Information to Make Managerial Decisions Learning Objectives 1. Identify relevant information for decision making. (Unit 8.1) 2. Determine the qualitative and quantitative impacts of special-order pricing. (Unit […]
978-1118548639 Chapter 8 Part 2
Chapter 8 – Using Accounting Information to Make Managerial Decisions 8-11 Exercise 8-10 Make Buy Direct materials $ 5 Direct labor 12 Variable overhead 8 Avoidable fixed costs ($10 .4) 4 Relevant cost per unit to make $29 Cost […]
978-1118548639 Chapter 8 Part 3
Chapter 8 – Using Accounting Information to Make Managerial Decisions Problem 8-21 a. The variable costs are the only relevant costs of the special order, so those amounts need to be calculated first. Total manufacturing overhead ($23/unit 400,000 units) […]
978-1118548639 Chapter 8 Part 4
Chapter 8 – Using Accounting Information to Make Managerial Decisions 8-31 Problem 8-27 a. Demand Hours per session Hours needed Math 120 .75 90 Writing 210 1.50 315 Science 100 .50 50 Total 455 b. Math Writing Science Sales price […]
978-1118548639 Chapter 8 Part 5
Solutions for Davis & Davis, Managerial Accounting, 2nd ed. 8-40 SOLUTIONS TO CASES Case 8-32 b. Option 1 Option 2 Option 3 Registration fee revenuea $ 8,925 $ 0 $ 76,440 Expenses Meals 1,875 16,250 Conference materials 675 5,850 Direct […]
978-1118548639 Chapter 9 Part 1
Chapter 9 – Capital Budgeting 9-1 Capital Budgeting Learning Objectives 1. Identify the cash flows associated with capital budgeting decisions. (Unit 9.1) (Unit 9.2) 3. Use net present value to determine the acceptability of a project. (Unit 9.3) 4. Use […]
978-1118548639 Chapter 9 Part 2
Chapter 9 – Capital Budgeting Exercise 9-13 a. The minimum annual payments required would be the amount that 9-11 generates an internal rate of return of 16%. x $111,510 = PVA15, 16% x $111,510 = 5.5755 $111,510 = 5.5755x x […]
978-1118548639 Chapter 9 Part 3
Chapter 9 – Capital Budgeting 9-21 Problem 9-25, continued c. No, Chester should not invest in CIM since the negative NPV and 6.31% internal rate of return indicate that the project does not earn the 12% required rate of return. […]
978-1118548639 Chapter 9 Part 4
Chapter 9 – Capital Budgeting 9-27 SOLUTIONS TO C&C CONTINUING CASE Case 9-30 a. Cash Flow Timing Amount 12% PV Factor Present Value Sales revenue Years 1-9 625,000 5.3282 $3,330,125.00 Direct materials Years 1-9 (500,000) 5.3282 (2,664,100.00) Direct labor Years […]
AC 130 Test 2
Another form of horizontal analysis is called trend analysis. One purpose of planning activities is to monitor day-to-day operations to ensure that processes are operating as expected. Answer: False One purpose of controlling activities is to monitor day-to-day operations to […]
AC 142 Quiz 1
A disadvantage of decentralization is that decision making is spread throughout the organization. This is a disadvantage because a. Managers tend to focus on their own units and lose contact with others in the organization. b. When communication is reduced, […]
AC 216
When there is no work in process inventory at the end of a period, cost accumulation and reporting is extremely easy under process costing, as the product costs are simply added up and divided evenly among the products produced. Managerial […]
AC 225 The difference between a
The difference between a firm’s current assets and its current liabilities is a. Cash flow. b. Working capital. c. Current ratio. d. None of these answer choices are correct. Companies that carry a high level of fixed costs relative to […]
AC 288 Midterm 1
In their book Killer Customers, Larry Selden and Geoffrey Colvin estimate that the bottom 5% of a company’s customers lose as much as 100% of the company’s profits. The job order sheets are the subsidiary ledger that supports the Finished […]
AC 331
Throughput contribution equals a. Sales revenue less fixed costs. b. Sales revenue less product costs. c. Sales revenue less direct materials costs. d. Sales revenues less manufacturing overhead. Which of the following is not a reason that actual direct labor […]
AC 376 Midterm 1
The two approaches to reporting cash flows provided by operating activities are the a. Direct and indirect methods b. The basic and standard methods c. The gross margin and contribution margin methods d. The liquidity and profitability methods A contribution […]
AC 572 Quiz 3
Budget Taxi Service operates a transportation service from the local airport to the major hotels in the area. All the hotels are located within a five mile radius of the airport. A majority of Budget’s customers are business people who […]
AC 666
Which of the following statements is not True? a.A company is unlikely to be successful in the long run without adequate managerial accounting information to support decision making. b.Managerial accounting is completely optional. c.Managerial accounting reports are covered by rules […]
AC 667 Quiz
Impala Industries manufactures a component used by car manufacturers. Impala can produce 1,000,000 components per year. A foreign car manufacturer has approached Impala with an offer to purchase 120,000 components at price of $6 per unit. Impala ‘s results for […]
AC 719 Test
The costs incurred in a process costing system, direct material, direct labor and overhead, are the same as the costs incurred in a job order costing system. The terms standard price and standard cost can be used interchangeably. Answer: False […]
AC 893 Test 1
A top-down budget approach is also referred to as a. Participative budgeting. b. Imposed budgeting. c. Responsibility budgeting. d. None of these answer choices are correct. Which of the following is the simplest method for estimating the fixed and variable […]
AC 899 Quiz 3
Watson, Inc. applies overhead cost based on direct labor hours. In completing the 200 units in job #120, the company incurred $12,000 in direct materials and 500 direct labor hours at $18 per hour. The predetermined overhead rate is $6 […]
Acc 115
When products are completed, which of the following accounts is increased? a. Raw Materials Inventory. b. Work in Process Inventory. c. Finished Goods Inventory. d. Cost of Goods Sold. If a company incurs a lot of different variable overhead costs […]
ACC 140
Which of the following does benchmarking not focus on? a. Identifying best practices b. Studying best practices c. Analyzing best practices d. Eliminating non-value-added processes Benny Books sells first edition books. Benny purchases the books from his supplier for $100 […]
ACC 194 Test 2
The variable overhead spending variance is calculated as a. Actual cost – (actual quantity x standard price). b. Actual cost – (standard quantity x standard price). c. Standard cost – (actual quantity x actual price). d. Actual results minus flexible […]
ACC 205 Quiz 1
In process costing, all materials are added at the beginning of the production process, then labor and overhead is added during the production process. Operating income = Sales revenue – Variable cost per unit – Total fixed costs. Answer: False […]
ACC 211
Barbara’s Boutique wants to know what it takes to have $20,000 in operating income. If her selling price is $20, variable cost is $8 and fixed costs total $40,000, what must her sales revenue be in order to reach her […]
Acc 220 Test 2
Culver, Inc. manufactures motors used in electric toothbrushes and other small appliances. Culver’s fixed overhead rate is $7.60 and the company budgeted 165,000 direct labor hours for the year. During the year Culver produced 320,000 motors and used 164,000 direct […]
ACC 251 Quiz 1
The high-low method of estimating the fixed and variable components of a mixed cost is a precise approach that uses a statistical technique. Earnings per share represents how much of a company’s current net income could be distributed for each […]
ACC 255
Four common cost behavior patterns that serve as the foundation for cost-volume-profit analysis are a.Variable cost, fixed cost, mixed cost, and step cost. b.Variable cost, fixed cost, selling cost, and administrative cost. c.Cost of goods sold, period cost, other cost, […]
Acc 291
Match the following terms to the appropriate statement by placing the letter to the left of each statement. a. Centralization f. Net operating profit b. Decentralization g. Profit center c. DuPont Model h. Residual income (ROI) d. Economic value added […]
ACC 303 Midterm 1
Which of the following does benchmarking focus on? a. Identifying best matrics. b. Analyzing best matrics. c. Studying best processes. d. Exceeding best processes. When products are completed, which of the following accounts is decreased? a. Raw Materials Inventory. b. […]
ACC 338 Quiz 3
Which of the following is a weakness of the accounting rate of return? a. It does not consider cash flows b. It does not consider the time value of money c. Both that it does not consider cash flows and […]
ACC 396 Final
Turnbull Company produces two products and their overhead consists of setups $20,000; machining $2,220,000; and packing $80,000. Data for the current year follow: The overhead allocated to Delta assuming a single overhead rate based on machine hours and assuming ABC, […]
Acc 466 Test 1
Stone Cliff Company manufactures custom-order furniture. During 2013, actual manufacturing overhead totaled $720,000. Based on the 2013 results, and projected production for 2014, management prepared the 2014 budget and estimated that manufacturing overhead would total $800,000. The estimated number of […]
ACC 531 Test
Like the high-low method of estimating the fixed and variable components of a mixed cost, regression analysis uses a statistical technique that identifies the line of best fit. Both the process costing and job order costing systems accumulate product costs […]
Acc 603 Quiz 3
Since the cash budget drives all other components of the master budget, it is imperative that it be as realistic as possible. Variances have very important meanings, even before their causes are identified. Answer: False Variances have little meanings until […]
ACC 604 Midterm 1
When using a standard costing system, recording events related to variable overhead requires four separate entries. Since the purchasing agent is responsible for ordering raw materials, he or she would be the one to negotiate a volume discount. Answer: True […]
ACC 619 Homework
Indicate which of the following costs are classified as mixed or step costs. Answer: Which of the following might be measures of performance for a balanced scorecard? a.Stock price b.Sales revenue c.Customer satisfaction d.All of these answer choices are correct […]
Acc 628
The present value of a future amount may be smaller or larger than the future value. Investing activities include purchases and sales of property and equipment, loans made and collected, and purchases and sales of another company’s stock. Answer: True […]
ACC 644 Test
While customers and cost influence prices, so does a. Contribution margin. b. Fixed versus variable costs. c. Competition. d. Desired profit. Leonora Industries manufactures light fixtures for home, retail, and industrial customers. The retail line has been showing losses for […]
ACC 683 Quiz 3
Which of the following is not a qualitative issue that must be considered before reaching a decision to outsource? a. Potential theft of intellectual property. b. Quality of the outsourced product. c. Number of employees to be terminated. d. All […]
ACC 741 Final
Dun & Bradstreet’s Industry Norms and Key Business Ratios provide financial ratios for key industries, as well as condensed common-sized balance sheets and income statements. In a bottom-up budget approach, at each higher level of management, the budget is reviewed […]
ACC 744 Homework
In a horizontal analysis balance sheet, the percentage change columns do not add up in the same way as the dollar amounts because each of the percentages was calculated using a different denominator. The formula for return on common stockholders’ […]
ACC 793 Midterm 2
Which of the following statements relating to earnings per share is not True? a. Earnings per share is an often-reported measure of the potential return to stockholders. b. Earnings per share is a financial measure. c. Earnings per share is […]
ACC 827 Quiz 3
The main reason for generating new information provided by activity-based costing is a. To help managers make better decisions. b. To provide employees in the accounting department with work to do. c. To calculate variances. d. None of these answer […]
ACC 848 Midterm 1
Which of the following is not a way a company can use information about activities to manage its operations? a. Activity-based budgeting b. Activity-based resource reduction c. Activity-based costing d. All of these answer choices are ways a company can […]
ACC 855
Absorption costing is also referred to as full costing. Identifying whether a measure is a leading or lagging indicator can be difficult, because a lagging indicator of one event can be a leading indicator of another. Answer: True Probably the […]
Accounting 112
Moving the delivery of services from within the organization to a provider outside the organization is referred to as a. Outcome sourcing. b. Outsourcing. c. Delivery diffusion. d. Delivery transfer Most managerial decisions are made at which of the following […]
Accounting 112 Once you have
Once you have determined the net present value of a project, if the net present value is less than zero, the project should be a. Accepted b. Rejected c. Before making a decision, calculate the future value of the project […]
Accounting 167 Midterm 2
Sycamore Industries has provided the following information on a proposed project: Required: a. What is the payback period for the investment? b. What is the simple rate of return on the investment? c. What is the internal rate of return […]
Accounting 216
With activity-based costing, the goal is to a. Develop a product cost that captures the amount of each resource consumed by the activities performed to produce a specific product. b. Develop a product cost that allocates manufacturing overhead to each […]
Accounting 246 In a decision to add
In a decision to add or eliminate a product or service, which of the following is an avoidable cost? a. Common costs b. Depreciation c. Variable overhead d. Allocated overhead Since fixed overhead does not vary with volume within the […]
Accounting 286 Test
If a company chooses to spread overapplied or underapplied overhead to all the accounts that contain applied overhead, which of the following is not a step in the process? a. Add the ending balances in all the accounts. b. Calculate […]
Accounting 288 Homework
Which of the following terms is not used in referring to common costs? a. Allocated cost b. Unavoidable cost c. Traceable cost d. All of these answer choices are used in referring to common costs. Which of the following is […]
Accounting 318 Test 1
A helpful approach to examine changes in the relative size of account balances within a single statement is referred to as a. Common-size analysis. b. Vertical analysis. c. Trend analysis. d. Common-size analysis and Vertical analysis, but not Trend analysis. […]
Accounting 371 Quiz 1
On the cash flow statement, paying a cash dividend to stockholders is a financing activity. Any return a company receives over and above the original investment in a capital asset is called return on investment. Answer: True The task of […]
Accounting 373 Test 1
The sales volume variance reflects a. How efficiently the company operated in producing a given level of sales. b. How effectively the company reached its strategic goals. c. A different volume of products than that specified in the static budget. […]
Accounting 514 Final
Uses of cash are activities that require cash disbursements, which always decrease the amount of cash on hand. To adjust for underapplied overhead, the journal entry includes a debit to Cost of Goods Sold and a credit to Manufacturing Overhead […]
Accounting 549 Final
When preparing the statement of cash flows using the indirect method, gains from financing activities are added to net income to arrive at cash flows from operating activities. When the budget being used is a static budget, the difference between […]
Accounting 586 Test 2
Two calculations that can be made to measure customer profitability are a. Customer net profit and customer earnings per share b. Times revenue earned per customer and customer revenue margin c. Customer net profit and customer profit margin d. Customer […]
Accounting 596 Midterm 1
The first section of the cash budget reconciles the cash available to the borrowing required to meet the minimum cash balance. A decrease in accounts payable is added to net income when using the indirect method of calculating cash flows […]
Accounting 660 Midterm 2
Walker’s Manufacturing began its operations on January 1 of the current year. Walker produced 10,000 units during the year, sold 8,000 units at an average cost of $22 per unit, and had 2,000 units in ending inventory. Variable production cost […]
Acct 102
The Schedule of Cost of Goods Manufactured is nothing more than a restatement of the Work in Process Inventory account. A company that focuses on product differentiation does not need to monitor product costs because if the quality is sufficient […]
Acct 104 A performance measure is
A performance measure is specific if it a. Measures only one activity. b. Relates clearly and directly to the process it measures. c. Is either qualitative or nonfinancial, but not both. d. Is complete and accurate. Which of the following […]
ACCT 120 Quiz 2
An opportunity cost is the contribution margin of the next-best alternative use of the facilities. Both the top-down and bottom-up approaches to budgeting are linear, with budget information flowing in a single direction. Answer: False Both the top-down and bottom-up […]
Acct 168 Quiz
In a responsibility accounting environment, which of the following is not a classification of organizational units? a. Cost centers b. Revenue centers c. Profit centers d. Investment centers The following financial statement items are shown for J&T Manufacturing. Calculate the […]
ACCT 201 Final
In order to prepare the sales budget, one needs a. The number of units expected to be produced and the prices expected to be charged. b. The number of units expected to be sold and the cost of producing each […]
Acct 260 Quiz 3
Barber Industries reported net income of $32,000, earnings per share of $2, and paid dividends of $3 per share or a total of $3,000. The stock sells for $20 per share. What is the price/earnings ratio? a. 10.00 b. 10.67 […]
ACCT 278 Homework
The difference between actual sales volume and budgeted sales volume has nothing to do with the price and quantity variance. Managerial accounting differs from financial accounting in that managerial accounting has no comparable set of rules governing what information must […]
ACCT 355 Quiz 1
Customer-level activities are also referred to as customer-sustaining activities. The American Institute of Certified Public Accountants is the leading organization for management accountants in the United States. Answer: False The Institute of Management Accountants (IMA) is the leading organization for […]
Acct 363
An auto body shop is trying to decide whether or not to purchase a new piece of diagnostic equipment. Which of the following costs would not be relevant to the decision? a. The cost of the new equipment b. The […]
ACCT 384 Homework
Breton Corporation ‘s Longboat division ‘s segment margin as a percentage of net sales is 12% for the current reporting period. The division has net sales revenue of $2,500,000. Operating assets were $800,000 at the beginning of the period and […]
ACCT 401
The master budget is an example of a flexible budget. Manufacturing Overhead is a temporary account that must have a zero balance at the end of the accounting period. Answer: True The inventories used in a process costing system are […]
ACCT 492 Final
A stream of equal cash flows received at set time intervals is called an annuity. Total manufacturing cost is also referred to as cost of goods manufactured. Answer: False Total manufacturing costs include direct material, direct labor and manufacturing overhead […]
Acct 521 Homework
The total amount of manufacturing overhead allocated to a particular product will always be the same for both the traditional overhead allocation method based on direct labor hours and the activity-based costing overhead allocation. The objective of process costing is […]
ACCT 540 Test 1
Brandon, Inc. is a consulting firm headquartered in Dallas. Trish Hardin, CEO of the company plans to attend a professional conference in Atlanta where she intends to network in the pursuit of business. She enjoys shopping and dining in Atlanta […]
ACCT 575
Net operating profit is defined as a. Operating income minus income taxes. b. Sales minus variable costs. c. Contribution margin minus traceable fixed costs. d. Contribution margin minus traceable and allocated fixed costs. Actual direct labor costs may differ from […]
Acct 587 Quiz 2
Top-down budgeting is also referred to as participative budgeting. Absorption costing is used for managerial accounting, but is not allowed for reporting in accordance with generally accepted accounting principles. Answer: False Absorption costing is the cost accumulation method required by […]
Acct 590
Which of the following is a not a consequence of unethical behavior? a.It can lead to illegal activity. b.It can lead to the destruction of the firm. c.It can lead to inferior financial performance. d.All of these answer choices are […]
Acct 612
Which of the following is not a characteristic of a managerial accountant? a.Just a number cruncher b.Analyze and interpret financial data c.Analyze and interpret operating data d.Active participant in the decision making process Which of the following is not a […]
Acct 679 Midterm
Two major weaknesses of the accounting rate of return are that it does not consider cash flows and it is the least accurate capital budgeting technique. A bottom-up approach to budgeting is circular while a top-down approach is linear. Answer: […]
ACCT 737
Assume you have just been hired by a large manufacturing company and have been assigned to a team that has the responsibility of gathering the data for completing the company ‘s master budget. Your first assignment is to make a […]
Acct 762
The cost of selling goods and administrative costs are reported on the income statement as expenses when inventory is sold. Activities that affect a company’s investments in assets other than current operating assets are called financing activities. Answer: False Activities […]
ACCT 782
Murphy Company produces two products: Standard and Deluxe. The company uses an activity-based costing system. Murphy produces 8,000 units of Standard and 2,000 units of Deluxe. The company uses two activity cost pools, with estimated total cost and activity as […]
ACCT 789 Quiz 1
Like process costing, job order costing makes no attempt to track an individual product’s costs, all the products have similar costs. If the net present value of a project is greater than or equal to zero, the project has achieved […]
ACT 110
When a company approaches market share growth under a build strategy, a.The company aims to increase its market share in the industry, even at the expense of short-term earnings and cash flow. b.The company seeks to maintain its current market […]
ACT 382 Midterm 2
Variances are labeled as a. Avoidable or unavoidable. b. Favorable or unfavorable. c. Positive or negative. d. Committed or discretionary. Milsaps Company produces sportsmen’s digital scales. In preparing the current budget, Milsaps’ controller estimates a total of $300,000 in direct […]
ACT 440
Just-in-time implementations are simple and take little or no effort to implement and will work for most companies. When production and sales are equal, a drawback of the contribution format income statement is that is does not produce the same […]
ACT 454 Test 2
Which of the following is not a step in estimating total cost using the high-low method? a.Identify the highest and lowest levels of activity b.Visually “fit” a line to the plotted points c.Compute the variable cost per unit d.Calculate the […]
ACT 501 Homework
The payback period is the time it takes, in years, for an investment to return the original amount of invested capital. Identifying the activities performed in the organization is the most time consuming part of implementing an activity-based costing system. […]
ACT 542
Which of the following is not a way managers use managerial accounting? a.Provide information used in planning, evaluation and controlling functions within an organization. b.To assure appropriate use of its resources c.To assure accountability for its resources d.To communicate information […]
ACT 602 Test
In an outsourcing decision, one important factor is the quality of the outsourced product. If a company follows a strategy of product differentiation, it will seek ways to set its products apart from competitors ‘ in terms of quality, design […]
ACT 634 Test
Which of the following is not a duty of a management accountant under the IMA Statement of Ethical Professional Practice ‘s confidentiality standard? a.Refrain from engaging in any conduct that would prejudice carrying out duties ethically. b.Keep information confidential except […]
ACT 806 Quiz
To calculate the present value of an annuity, multiply a. The principal amount by the present value factor b. The amount to be received each year by the present value factor c. The principal by the discounted interest rate d. […]
ACT 868 Midterm
The two categories – valued-added and non-value added – are defined from the organization’s management perspective. The major factor in the amount of material used in production is the quality of the material. Answer: True The Theory of Constraints seeks […]
ACT 891 Quiz 2
Outward Rowing Company manufactures canoes and kayaks. Due to an increasing focus on fitness, the company has been experiencing an increased demand for its products. Two of its newer products, which are very popular with water sport enthusiasts, require a […]
MET MG 117 Homework
The minimum required rate of return is often referred to as the a. Benchmark rate. b. Hurdle rate. c. Project rate. d. Activity rate. A balanced scorecard does not a. Integrate performance measures across four different perspectives. b. Provide a […]
MET MG 184 Midterm 2
Which of the following is not classified as an overhead cost? a. Electricity to run factory machines b. Insurance to protect the factory contents c. Security guards that protect the factory building d. Advertising cost to promote the finished goods […]
MET MG 213 Quiz 2
A company requires $1,360,000 in sales to meet its net income target. Its contribution margin is 30%, and fixed costs are $240,000. What is the target operating income? a. $408,000 b. $312,000 c. $560,000 d. $168,000 Which of the following […]
MET MG 285
A helpful approach to examine changes in the relative size of account balances within a single statement is referred to as horizontal analysis. Applied overhead is calculated by dividing the actual activity level of application base by the predetermined overhead […]
MET MG 340
Sunk costs are irrelevant in deciding between two alternatives because they are incurred in the past, not the future. The most popular way to begin the budgeting process is the incremental approach. Answer: True A supply chain is a network […]
MET MG 479 Which of the following
Which of the following is not a step in calculating the breakeven point? a. Put everything into “constant” form – sales price per unit, variable cost per unit, total fixed cost. b. Subtract fixed cost from sales revenue. c. Calculate […]
MET MG 600 Quiz 2
In an environment where the there is a constrained resource, the resource should be allocated first to the product with the highest contribution margin. The percentage change, as shown in horizontal analysis, is calculated as: (current year account balance – […]
MET MG 662 Quiz 2
The flexible budget variance is the difference between the static budgeted amounts and the flexible budgeted amounts. The time between an order’s placement and its shipment is referred to as the delivery cycle time. Answer: True The customer net profit […]
MET MG 683 Test
Which of the following employees is typically held accountable for the direct materials price variance? a. Controller b. Purchasing Manager c. Production Manager d. Engineering Department Manager Which of the following is not a short-term tactical benefit of outsourcing a […]
MET MG 691 Final
Identifying activities performed in the organization is the first step in developing activity-based product costs. Which of the following is a way to identify these activities? a. Asking employees what they do b. Analyzing industry averages c. Both asking employees […]
MET MG 725 Test 1
To prepare the sales budget, multiply the forecasted sales units by the budgeted sales price per unit. The formula for the production budget is Budgeted Sales + Budgeted Beginning Inventory – Budgeted Ending Inventory = Budgeted Production. Answer: False The […]
SMG AC 113
Which of the following is a factor that influences the discount rate? a. b. Inflation c. Both the level of risk and inflation d. Neither the level of risk nor inflation The 2013 and 2014 partial balance sheets for Ottoman […]
SMG AC 131 Midterm 1
Assume a sales price per unit of $25, variable cost per unit $15, and total fixed costs of $18,000. If no units are sold, how much cost would the company incur? a. Zero. b. The amount of variable costs at […]
SMG AC 166 Quiz 2
Standard direct labor prices are also referred to as direct labor rates. The final component of the operating budget is the ending inventory and cost of goods sold budget. Answer: True The costs of acquiring inventory are reported on the […]
SMG AC 243 Midterm
A budget is an operating plan that may be expressed in either financial or non-financial terms. Preparers of managerial accounting information are generally not active participants in the decision making process. Answer: False Preparers of managerial accounting information are no […]
SMG AC 290 Test 1
Which of the following is not an explanation for a favorable variable overhead spending variance? a. Paid less than expected for indirect material b. Used variable overhead items efficiently c. Paid less than expected for indirect labor d. Efficient use […]
SMG AC 297 Test 1
Which of the following is not classified as a variable period cost? a. Sales commissions b. Packaging for delivery c. Depreciation on delivery trucks d. All of these answer choices are variable period costs. A 10 percent decrease in sales […]
SMG AC 330 Quiz
In March, Connor’s, Inc. completed 150,000 units; 12,000 units still in process at the end of the period were 60% complete with respect to materials and conversion. Required: a. How many equivalent units were in Connor’s ending work in process […]
SMG AC 338 Quiz 1
The following information has been gathered by the controller of Acme Industries. Required: Using standard costing, prepare the following journal entries. a. Purchase of direct materials on account b. Transfer of direct materials into production c. Recording of payroll d. […]
SMG AC 342 Quiz 3
In implementing an activity-based costing system, after all the activities have been identified and the appropriate level of detail selected, the activities are combined into activity cost pools based on their a. Behavior b. Function c. Cost drivers d. Cost […]
SMG AC 349 Final
Assume that activity cost is $93,000, predetermined total overhead is $120,000, actual overhead is $98,000, and the company has three product lines, the activity rate is a. $32,667 per product line b. $31,000 per product line c. $40,000 per product […]
SMG AC 357 Midterm 2
Even if an organization relies solely on one performance measurement, it cannot easily be misled into thinking all is well, when in reality, all is not well. Unavoidable costs are incurred under all alternatives, thus they are always relevant. Answer: […]
SMG AC 453 Midterm 2
Cash receipts budget with discounts’ƒGarden Gnomes Company produces various types of lawn ornaments. The company ‘s sales budget for the first six months of the coming year is as follows. All sales are made on credit. Garden Gnomes is planning […]
SMG AC 487 Quiz 2
Ron White Inc. plans to introduce a new product and is using the target cost approach. Projected sales revenue is $810,000 ($4.05 per unit) and target costs are $730,000. What is the desired profit per unit? a. $0.40 b. $2.03 […]
SMG AC 502 Midterm 1
Direct materials standards specify both a. Quantity and efficiency. b. Quantity and price. c. Efficiency and price. d. Quality and Usage. The standard cost of direct material is the a. Standard price of direct material input x standard quantity of […]
SMG AC 521
Jordan Corporation reported net income of $20,000 and paid cash dividends of $7,000. Changes in balanced sheet accounts for the year were as follows: Based on the above information, what is the amount of net cash provided by operations? a. […]
SMG AC 601
With a fixed cost, the cost per unit varies proportionately with changes in the level of activity. The payback period is used most often as a screening tool, by companies that have established a maximum acceptable payback period. Answer: True […]
SMG AC 693 Quiz 1
When an asset is sold at a gain or loss, the book value of the assets is reported as a sale in the investing section of the statement of cash flows. Equivalent units (EU) of production is based on the […]
SMG AC 700
Which of the following formulas is not used to calculate the breakeven point? a. Total fixed costs divided by contribution margin per unit. b. Total fixed costs divided by (sales price per unit less variable cost per unit). c. Total […]
SMG AC 798
Which of the following is the formula for the accounting rate of return? a. Net initial investment Annual cash flow b. Project revenue – project operating expenses Initial investment – salvage of old asset c. Present value of future cash […]
SMG AC 827 Quiz 3
Which of the following assets would not be included in average operating assets used to calculate ROI? a. Building b. Equipment used in production c. Equipment no longer in use d. Factory machinery Identify each of the following costs in […]
SMG AC 871 Midterm
At the end of January, Monroe Industries had completed 65,000 units and left 8,000 units in Work In process, 60% complete with respect to materials and 80% complete with respect to conversion. How many equivalent units will be used to […]