Smithson Corporation had the following selected balance sheet changes for the past
year:
The company’s operating income during the year was $35,000. What is the net cash
provided by operating activities during last year on the statement of cash flows for
Smithson Corporation (using the indirect method)?
A) $25,000
B) $45,000
C) $92,000
D) $10,000
As managers use less and different types of direct materials, which of the following
standards do managers focus on to enhance sustainability in the workplace?
A) Quantity/Efficiency standard
B) Price standard
C) Flexible standard
D) Both A and B
Rubber City Cycles manufactures carbon fiber bicycle frames for professional racing
and avid amateur cyclists. Rubber City has found a CNC (computer numerical control)
machine that will significantly reduce manufacturing waste while improving the quality
of the frames. The new CNC machine will increase annual fixed costs by $13,750, but
will decrease variable cost per unit by $150. Rubber City expects to sell 750 frames
next year.
Annual data for the current system are as follows:
By what amount will the breakeven point in dollars increase (decrease) if Rubber City
purchases the new CNC machine?
A) ($62,500)
B) $62,500
C) ($312,500)
D) $312,500
The following data relate to Whitmore Enterprises for last year:
What is the net cash provided by operating activities for last year on the statement of
cash flows for Whitmore Enterprises?
A) $132,000
B) $133,000
C) $163,000
D) $152,000
Paula Corporation is trying to predict its manufacturing overhead costs for the
upcoming year; they are debating the use of the high-low method versus the use of
regression analysis. They have gathered information about their manufacturing
overhead costs in each of the past six months. A table containing their cost data and the
associated machine hours in each month (the cost driver) follows.
The company performed a regression analysis using the above data and had the
following results. (Note: the results are excerpts so not all of the regression analysis
results are presented.)
Required:
a.What is the cost equation if the high-low method is used to estimate costs?
b.Using the high-low method, predict total manufacturing overhead costs if Paula
Corporation uses 12,000 hours.
c.What is the cost equation if regression analysis is used to estimate costs (use the
results from the regression analysis provided)?
d.Using the results from the regression analysis provided, predict total manufacturing
overhead costs if Paula Corporation uses 12,000 hours.
e.Which method (high-low or regression analysis) is a better predictor of total
manufacturing overhead costs? Why?
The following information relates to Woolf Unlimited for the past two years.
What is the current ratio for the current year?
A) 1.00
B) 13.00
C) 1.75
D) 2.30
The following information relates to Truman Unlimited for the past two years.
The rate of return on total assets for the current year is closest to
A) 0.85.
B) 0.06.
C) 0.10.
D) 0.09.
Karlene is the new managerial accountant at the Bay Beach House Restaurant. Karlene
complies with principles and standards that help accountants deal with ethical
challenges that she can encounter in the workplace. The principles and standards ensure
that management accountants exhibit the highest level of ethical behavior. The four
ethical standards include competence, confidentiality, integrity, and credibility. Which
of the following requires management accountants comply with the four ethical
standards?
A) IMA’s Statement on Ethical Professional Practice
B) Certified Management Accountant (CMA)
C) Sarbanes-Oxley Act of 2002
D) Certified Public Accountant (CPA)
E) The Federal Reserve Board
Which of the following cost of quality categories represent the cost incurred to provide
“warranty repair on a juicer?”
A) Prevention costs
B) Appraisal costs
C) External failure costs
D) Internal failure costs
Direct materials are added at the beginning of the process and conversions costs are
uniformly applied. Other details include:
Required:
a.What are the total equivalent units for direct materials?
b.What are the total equivalent units for conversion costs?
c.What is the cost per equivalent unit for direct materials?
d.What is the cost per equivalent unit for conversion costs?
e.What is the total cost of units completed and transferred out?
f.What is the total cost of units remaining in ending WIP?
Cross Roads Manufacturing currently uses a traditional costing system. The company
allocates overhead to its two products, Zips and Dees, using a predetermined
manufacturing overhead rate based on direct labor hours. Here is data related to the
company’s two products:
The amount of manufacturing overhead that would be allocated to one unit of Dees
using an activity-based costing system would be closest to
A) $94.82.
B) $64.46.
C) $48.53.
D) $13.20.
Scott Incorporated has been in business for several months. Because of increased
competition in the region for part adapters, the managers at Scott Incorporated is
considering cutting sales price from $32 per adapter to $28 per adapter.
If the variable expenses remain at $21 per adapter and the fixed expenses remain at
$6,500, how many adapters will the managers need to sell to break even? Compute the
breakeven sales in units.
A) 902 units
B) 908 units
C) 928 units
D) 982 units
Use the direct method of cash flows to answer the question.
Calculate the amount of cash paid to purchase merchandise during the year.
What are the three primary responsibilities of managers that use managerial accounting
as described in the chapter? Give an example of each type of responsibility applicable
to a managerial accountant.
Use the indirect method of preparing a statement of cash flows to answer the question.
Ending balances for Sunday Hut are listed below:
Net income for this year was $97,000 and dividends of $24,000 were declared and paid
this year.
What was the net cash used for investing activities?
List the operating budgets in order of use and describe the purpose of each budget on
the list below Describe the relationship between each budget.
The managerial accountant at New Jewelry considers an investment in a gem cleaning
piece of equipment that may increase the value of gems because it fills in the fractures
of lower-value gems. The initial cost of the equipment is $1,480,000; whereas the
annual net cash inflow is $425,000. The managerial accountant projects a useful life of
13 years. The resale value of the equipment is forecasted at $450,000. Calculate the
annual depreciation expense. What is the expected payback period of this investment?
Match the term on the right with the appropriate definition provided on the right.
The following information is available for three companies. The information relates to
the companies’ plant assets. For each of the companies, determine the unknown
amounts.
The managerial accountant at the Holly and Ivy Tree Store reported that the company
anticipates sales of $600,000 in September and October, $625,000 in November,
$635,000 in December, and note that the sales figure is $640,000 in January. The
August sales revenue was equal to the September sales revenue. The managerial
accountant establishes the prices at the Holly and Ivy Tree Store on its merchandise to
ensure the company earns 45% gross profit on its sales. The managerial accountant
expects the ending inventory at the store to equal 12% of the next month’s cost of goods
sold.
Compute the COSG, inventory, and purchases budget for October, November, and
December.
Identify four advantages of standard costs and variances.
The following direct materials variance computations are incomplete. Fill in the
missing values, and identify the direct materials flexible budget variance as favorable or
unfavorable.