The inventory accounts generally maintained by a manufacturing firm are only finished
goods and materials.
a. True
b. False
Answer:
Nails and screws used in the production of the bar stools
Bartel Corporation produces bar stools for restaurants. Indicate whether the cost
would typically be considered direct or indirect cost for the cost object given.
a. Direct
b. Indirect
Answer:
A business operated at 100% of capacity during its first month, with the following
results:
Operating expenses:
What is the amount of the income from operations that would be reported on the
absorption costing income statement?
a. $21,000
b. $18,900
c. $18,200
d. $27,900
Answer:
Hayden Company is considering the acquisition of a machine that costs $675,000. The
machine is expected to have a useful life of 6 years, a negligible residual value, an
annual net cash flow of $150,000, and annual operating income of $87,500. What is the
estimated cash payback period for the machine?
a. 3.5 years
b. 4 years
c. 4.5 years
d. 5 years
Answer:
An example of a nonfinancial measure is the number of customer complaints.
a. True
b. False
Answer:
If the contribution margin ratio for France Company is 45%, sales were $425,000, and
fixed costs were $100,000, what was the income from operations?
a. $233,750
b. $91,250
c. $191,250
d. $133,750
Answer:
In the variable costing income statement, deduction of variable selling and
administrative expenses from manufacturing margin yields:
a. differential margin
b. contribution margin
c. gross profit
d. marginal expenses
Answer:
The standard cost is how much a product should cost to manufacture.
a. True
b. False
Answer:
The total manufacturing cost variance consists of
a. direct materials price variance, direct labor cost variance, and fixed factory overhead
volume variance
b. direct materials cost variance, direct labor rate variance, and factory overhead cost
variance
c. direct materials cost variance, direct labor cost variance, and variable factory
overhead controllable variance
d. direct materials cost variance, direct labor cost variance, and factory overhead cost
variance
Answer:
In a process cost system, the amount of work in process inventory is valued by
a. finding the sum of all open job costs
b. allocating departmental costs between completed and partially completed units
c. multiplying units in ending inventory by the direct materials cost per unit
d. finding the sum of all completed jobs
Answer:
The ratio of sales to investment is termed the rate of return on investment.
a. True
b. False
Answer:
If sales are $400,000, variable costs are 80% of sales, and operating income is $40,000,
what is the operating leverage?
a. 0.0
b. 7.5
c. 2.0
d. 1.3
Answer:
Controlling is the process of monitoring operating results and comparing actual results
with the expected results.
a. True
b. False
Answer:
plans an important role for organizations in planning, directing, and controlling a
company’s future goals
Match each phrase that follows with the term (a-f) it describes..
a. budget
b. capital expenditures budget
c. sales budget
d. production budget
e. cash budget
f. budgeted balance sheet
Answer:
Equivalent units of production are the number of units that could have been
manufactured from start to finish during an accounting period.
a. True
b. False
Answer:
At the beginning of the period, the Cutting Department budgeted direct labor of
$30,000 and supervisor salaries of $20,000 for 3,000 hours of production. The
department actually completed 5,000 hours of production. Determine the budget for the
department assuming that it uses flexible budgeting.
Answer:
Hadley Company is considering the disposal of equipment that is no longer needed for
operations. The equipment originally cost $600,000 and accumulated depreciation to
date totals $460,000. An offer has been received to lease the machine for its remaining
useful life for a total of $290,000, after which the equipment will have no salvage
value. The repair, insurance, and property tax expenses that would be incurred by
Hadley on the machine during the period of the lease are estimated at $75,800.
Alternatively, the equipment can be sold through a broker for $230,000 less a 10%
commission.
Prepare a differential analysis report, dated June 15, on whether the equipment should
be leased or sold.
Answer:
Titus Company purchased and used 650 pounds of tomatoes (direct materials) to
produce a taco sauce with a 635 pound standard direct materials requirement. The
standard materials price is $22.40 per pound. The actual price of the tomatoes was
$22.20 per pound. Prepare the journal entries to record (1) the purchase of the tomatoes
and (2) the tomatoes entering production. Titus records standards and variances in the
general ledger.
Answer:
Magnolia, Inc. manufactures bedding sets. The budgeted production is for 55,000
comforters this year. Each comforter requires 7 yards of material. The estimated
January 1 beginning inventory is 31,000 yards with the desired ending balance of
30,000 yards of material. If the material costs $4.00 per yard, determine the materials
budget for the year.
Answer:
What is a major advantage of using percentages rather than dollar changes in doing
horizontal and vertical analysis?
Answer: