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.
Which of the following parties are not interested in a company’s ability to remain
profitable over the long-run?
a. Investors
b. Employees
c. Creditors
d. All of these answer choices are interested in long-term profitability.
If a company chooses to spread overapplied or underapplied overhead to all the
accounts that contain applied overhead, the proration should be based on
a. Equally.
b. The relative size of the ending balance in each account.
c. The account that has had the least overhead applied to it during the month.
d. None of these answer choices are correct.
Georgiana operates a nail salon. She is trying to plan her costs for the next month and is
uncertain as to how to estimate those costs. Help her estimate next month’s costs given
the following information she collected, based on number of customers per month.
Georgiana wants to know what her total costs would be if she estimates 1,450
customers next month.
a.$2,240
b.$6,832
c.$6,996
d.$4,756
The amounts to be included in the standard price of direct labor is generally provided
by
a. Each employee ‘s supervisor.
b. The human resources department.
c. The plant manager.
d. The controller.
The following financial statement items are shown for J&T Manufacturing.
Calculate the common-size percentage for Insurance Expense.
a. 3.3%
b. 5.8%
c. 23.3%
d. 50.0%
Answer the following questions related to liquidity ratios. a. What does liquidity mean?
b. List two reasons liquidity is important to companies. c. What is the difference
between working capital and current ratio? d. What could cause a company’s current
ratio to be high, but its acid-test ratio to be low?
Phillip Co. manufactures decorative pillows designed for use on outdoor patios. Phillip
requires that 30 percent of next month ‘s sales be on hand at the end of each month. The
following information is available regarding budgeted sales of pillows:
What is budgeted production for May?
a. 44,000
b. 48,800
c. 62,000
d. 30,800
Which of the following is not an activity in which managerial accounting is designed to
assist managers?
a.Reporting
b.Controlling
c.Decision making
d.Evaluation
A scattergraph is a simple graph that shows
a.Total costs in relation to volume.
b.The fixed portion of a total cost.
c.The variable portion of a total cost.
d.The point where revenue equals total costs.
Pilot Corporation is considering the purchase of equipment costing $100,000. The
equipment will reduce operating cash expenses by $25,000 each year. The new
equipment has a salvage value of $2,000 and will be depreciated over a 10-year useful
life. The accounting rate of return is closest to
a. 15.2%
b. 25%
c. 25.5%
d. 35%
Which of the following is not an example of a lagging indicator?
a. Earnings per share
b. Grade point average
c. Number of customer complaints
d. All of these answer choices are lagging indicators
Tammy’s Totes sells hand-made tote bags for $10 each. Tammy’s variable costs are $6
per bag and her fixed costs total $4,000 per month. If Tammy’s tax rate is 20%, how
many totes must Tammy sell each month if she wants to earn $5,000 in net income?
a. 1,000
b. 1,250
c. 2,563
d. 2,813
Wil Wheaton, Kirk Enterprises’ controller, is preparing the financial statements for
2013. He has completed the comparative balance sheets and income statement, which
follow, and has gathered this additional information:
ï€ï€ On December 31, 2013, Kirk sold a piece of equipment with an original cost of
$25,000 for $10,000 cash. The equipment had a book value of $13,000.
ï€ï€ On February 1, 2013, Kirk issued $60,000 of common stock to raise cash in
anticipation of the purchase of a new building later in the year.
ï€ï€ On February 2, 2013, Kirk took out a ten-year $110,000 long-term loan to provide
the remaining funds needed to purchase the building.
ï€ï€ On May 15, 2013, Kirk paid $162,000 for the new building.
ï€ï€ The company paid a cash dividend of $9,500.
Required:
Using the direct method, prepare Kirk Enterprises’ statement of cash flows for 2013.
What is EVA and how is it calculated?
Complete the following table, identifying the following as fixed, variable or mixed cost.
Vest Construction Company’s cost of renting a crane for the last four months is as
follows:
Using the high-low method, what is the company’s estimated variable and fixed
component of operating expenses?
You can not classify a unit as a cost, profit, or investment center by looking at its name
or its location on the organizational chart.
Walker Company had net income of $30,000. The company has 10,000 shares of
common stock and 3,000 shares of preferred stock outstanding. There was no change in
the number of shares of stock from the previous year. The company declared and paid
dividends of $2.00 per share on the common stock and $1.70 per share on the preferred
stock. What is Walker’s earning per common share?
Answer the following questions related to the balanced scorecard.
1> Why is the use of the balanced scorecard preferable over performance measurement
based solely on financial data?
2> Why is the balanced scorecard different for different companies?
3> What is a strategy map?