The methodology(ies) of allocating joint-process costs is(are) based on
A.net realizable value, only.
B.physical measures, only.
C.both net realizable value and physical measures.
D.None of the answers is correct.
Java Gourmet Coffee
Java Gourmet Coffee reports the following data for April 2010 where 200,000 pounds
of roasted gourmet coffee beans were actually produced (note: standard costs do not
allow for any wastage), Actual:
Standard:
Refer to Java Gourmet Coffee. Calculate the flexible budget for direct materials.
A.$115,500
B.$105,500
C.$100,000
D.$ 95,500
Who manages cost and managerial accounting in most organizations?
A.Controller
B.Treasurer
C.Board of directors
D.Chief executive officer
What is the excess of projected sales units or dollars over the break-even point?
A.gross profit.
B.margin of safety.
C.contribution margin.
D.gross margin.
Berringer Company is considering an investment that will generate cash revenues of
$100,000 per year for 8 years, and have cash expenses of $70,000 per year for 8 years.
The cost of the asset is $80,000, and it will be depreciated using straight-line
depreciation over its 8 year life. Berringer pays income taxes at a rate of 30%. The cost
of capital is 12%
Required:
a. Prepare an analysis showing the annual after tax cash flow associated with this asset.
b. Compute the net present value of this investment using the cash flow you computed
in a above.
Which critical success factor means giving the customer what the firm promised; it is
the degree to which the customer is satisfied?
A.Service
B.Quality
C.Quantity
D.Cost
Multiple-product profit analysis. Miguel’s Supreme Tacos produces two types of soft
tacos, chicken and steak, with the following characteristics:
The total fixed costs for the company are $200,000.
Required:
a. What is the anticipated level of profits for the expected sales volumes?
b. Assuming that the product mix would be 40 percent chicken and 60 percent steak at
the break-even point, compute the break-even volume.
c. If the product sales mix were to change to four chicken tacos for each steak taco,
what would be the new break-even volume?
Return on Investment (ROI) is equal to the
A.Profit Margin Percentage x Investment Turnover Ratio.
B.Sales Margin Percentage x Investment Turnover Ratio.
C.Profit Margin Percentage x Accounts Receivable Turnover Ratio.
D.Sales Margin Percentage x Accounts Receivable Turnover Ratio.
To record the cost of producing the same type of tables made of different materials, but
undergoing the same manufacturing process, a furniture manufacturing company would
most likely use a(n)
A.process costing system.
B.variable costing system.
C.job costing system.
D.operation costing system.
Which of the following is an example of appraisal costs?
A.Field testing
B.Inspection of incoming materials
C.Warranty repairs
D.Quality engineering
A company makes two products. The company can sell all of either product it can
make. The relevant data for these two products follows:
Total fixed overhead is $250,000. The company has 100,000 machine hours available
for production. The company should select which product to maximize operating
profits?
A.Product A because it uses less machine time.
B.Product A because its contribution margin per machine hour is $5.00.
C.Product B because its contribution margin per unit is $10.
D.Product B because its contribution margin per machine hour is $6.67.
Which of the following costing system is appropriate for a company that produces
customized products?
A.job costing.
B.process costing
C.operation costing.
D.standard costing.
Which of the following represent the three major influences on pricing decisions?
A.customers, competitors, and costs.
B.controls, customer, and competitors.
C.costs, competitors, and controls.
D.costs, controls, and customers.
Terrapin Computing Systems
Terrapin Computing Systems manufactures and sells various computer products and has
two decentralized divisions: (1) Production and (2) Marketing. The Marketing Division
has always purchased a particular large tower case from Production at $58 per unit. The
Production Division is considering raising the price to $75 per unit. The Production
Division’s costs related to the large tower case production is as follows:
The Marketing Division handles the promotion and distribution of the large tower case
purchases from the Production Division and sells each large tower case for $100.
Marketing Division incurs monthly fixed costs of $5,000. Marketing Division sells
2,000 units per month. Marketing Division can buy the same large tower case from
outside suppliers for $75.
Refer to Terrapin Computing Systems. If the Marketing Division purchases the large
tower case from outside suppliers, the facilities the Production Division uses to
manufacture the large tower case would remain idle. The Production Division is
operating below capacity because of weak global demand for the product.
What should be the large tower case transfer price between the Production Division and
Marketing Division in order for Terrapin to optimize profits?
A.$ 55
B.$ 58
C.$ 75
D.$100
Analyzing costs in an engineering company. On June 1, XEON Engineering, which
oversees the
cleanup of asbestos condemned buildings, had two jobs in process with the following
costs incurred to date:
In addition, overhead is applied to these jobs at the rate of 100 percent of direct labor
costs.
As of June 1, XEON had incurred direct materials costs as shown in the table, mostly
for laboratory testing materials.
During June, XEON completed both jobs and recorded them as Cost of Goods Sold.
The University A job required no more direct materials in June, but it did require $1,200
of direct labor to complete. The Muldoon Community Center Project job required $400
of direct materials and $2,000 of direct labor to complete.
XEON started a new job, Sea Breeze Elementary Project, during June and put $1,600 of
direct labor costs into this job and $400 of direct materials. The Sea Breeze Project has
not been completed as of the end of June.
Required: Provide the cost of direct materials, direct labor, and overhead (at 150
percent of direct labor cost) for the three jobs.
Treadway Commission
The 1987 recommendations of the Treadway Commission focused on publicly held
companies. For each area listed below, explain how a company can improve its overall
financial reporting process, increase the likelihood of preventing fraudulent financial
reporting, and detect it earlier when it occurs.
Refer to the Treadway Commission. Explain why the Treadway Commission believes
the internal audit function plays an important role in deterring financial fraud.
What is the relationship between actual, budgeted, and applied fixed manufacturing
costs?
Latway Company is considering opening a new sales territory. Management expects the
initial investment to be $150,000 and subsequent investments of $100,000 and $50,000
at the end of the first and second years. Net cash flow from the sales territory is
expected to yield after-tax cash inflow for 5 more years: $75,000 for the first two years
and $60,000 for the remaining years. The company’s cost of capital is 12 percent.
Calculate the net present value of this project.
What are the issues in measuring the investment base for calculating return on
investment?