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 goal?
a. $33,340
b. $50,000
c. $100,000
d. $150,000
Skipmar Company produces a molded briefcase that is distributed to luggage stores.
The following operating data for the current year has been accumulated for planning
purposes.
Skipmar can produce 1.5 million cases a year. The projected net income for the coming
year is expected to be $1.8 million. Skipmar is subject to a 40% income tax rate. During
the planning sessions, Skipmar’s managers have been reviewing costs and Âexpenses.
They estimate that the company’s variable cost of goods sold will increase 15% in the
coming year and that fixed administrative expenses will increase by $150,000. All other
costs and expenses are expected to remain the same.
Required: a. What amount of sales revenue will Skipmar need to achieve in the coming
year to earn the projected net income of $1.8 million?
b. What price would Skipmar need to charge for the briefcase in the coming year to
maintain the current year’s contribution margin ratio?
Which of the following terms indicate that costs are not directly caused by the cost
object?
a. Allocated
b. Assigned
c. Common
d. All of these answer choices are correct
In an activity-based costing system, which of the following is not a category in which
activities are classified?
a. Variable-level
b. Batch-level
c. Product-level
d. Organization-level
ABC Corporation ‘s North Division generates operating income of $100,000 on
$900,000 in sales. The company had $400,000 in assets at the beginning of the year and
$450,000 at the end of the year. What is the company ‘s return on investment for the
year?
a. 11.1%
b. 23.5%
c. 42.5%
d. 100%
Given the following data, what is the total relevant cost of internal production of 2,000
products?
a. $34,000
b. $40,000
c. $48,000
d. $49,000
Which of the following statements is not True?
a.Managerial accounting reports use historical information.
b.Managerial accounting must not use estimates in preparing reports.
c.Managerial accountants use historical amounts in developing future projections.
d.All of these answer choices are True.
Which of the following activities might you find in retail product segment?
a. Selling
b. Importing
c. Delivering
d. All of these answer choices are correct.
Which of the following items would not be included in the calculation of cash flows
provided by operating activities using the indirect method?
a. An increase in accounts receivable
b. An increase in salaries payable
c. Receipt of cash dividends
d. Repayment of debt
To prepare a pro-forma income statement, information is pulled from
a. The general ledger.
b. The trial balance.
c. Components of the master budget.
d. None of these answer choices are correct.
When using just-in-time inventory management, a company puts good into production
a.In anticipation of customer orders.
b.When inventory levels drop below specified levels.
c.When customer orders are received and goods are received.
d.When the warehouse has enough space to accommodate additional inventory.
Which of the following is not used in calculating the direct labor efficiency variance?
a. The actual quantity of direct labor hours used
b. The standard quantity of direct labor hours allowed for actual production
c. The actual wage rate
d. The standard wage rate
The variable overhead variance is separated into which of the following components?
a. Volume variance and efficiency variance
b. Quantity variance and efficiency variance
c. Spending variance and efficiency variance
d. Spending variance and volume variance
When a company purchases and retires its bonds, which of the following is the correct
reporting on the statement of cash flows?
a. Gain or loss in operating section, amount of cash paid in investing section
b. Gain or loss in financing section, amount of cash received in operating section
c. Gain or loss in operating section, amount of cash paid in financing section
d. Gain or loss in investing section, amount of cash received in operating section
The master budget is an example of a
a. Static budget.
b. Flexible budget.
c. Pro-forma budget.
d. Summary budget.