Which of the following is the operating income an investment center generates before
subtracting common fixed costs that are allocated to the center?
A) Sales volume variance
B) Segment margin
C) Return on investment (ROI)
D) Return on assets (ROA)
The direct materials price variance is calculated as
A) the difference in Actual Quantities (AQ) multiplied by the Actual Price (AP) of the
input.
B) the Actual Quantity (AQP) of direct materials divided by the Actual Quantity (AQ).
C) the difference in prices of the Actual Quantity Purchased (AQP) and the Actual Price
(AP) multiplied by the Actual Quantity Purchased (AQP) and the Standard Price (SP) of
the input purchased.
D) the direct materials Actual Quantity Purchased (AQ) divided by the per unit price.
The following information relates to Woolf Unlimited for the past two years.
What is the price-earnings ratio for the current year?
A) 13.33
B) 1.75
C) 13.00
D) 10.00
Which of the following positions is responsible for the oversight, strategy formulation,
and guidance at a large corporation?
A) CEO
B) Company president
C) Stockholders
D) Board of Directors
Crown Industries has the following information about its standards and production
activity for December:
Assume the allocation base for fixed overhead costs is the number of units to be
produced.
How much are the standard overhead costs allocated to actual production?
A) $48,750
B) $92,500
C) $71,250
D) $25,650
Shining Springs Glass Art manufactures various glass art fixtures, including a
dolphin-glass figurine. The dolphin-glass figurine is produced in the Design
Department and it uses a glass insert that is produced also in the Production
Department. The market price for the glass insert is $900. The plant has excess capacity
and the managerial accountant reported the following information:
What is the lowest acceptable in-house transfer price to the Production Department?
What is the highest acceptable transfer price the Design Department should pay the
Production Department to produce the insert in-house?? What should the managerial
accountant understand if there was not access capacity at the plant to produce the
insert?
The Hummel Corporation reported the following income statement and balance sheet
amounts and additional information for the end of the current year.
Inventory and prepaid expenses account for $28,000 of the current year’s current assets.
Average inventory for the current year is $12,000.
Average net accounts receivable for the current year is $32,000.
There are 40,000 shares of common stock outstanding.
Total dividends paid during the current year were $60,000.
The market price per share of common stock is $25.
What is the company’s times-interest-earned ratio for the current year?
A) 0.77 times
B) 2.50 times
C) 3.50 times
D) 1.00 times
Taylor Company reported the following information for the current year:
What would a vertical analysis report with respect to current year income tax expense?
A) A decrease of $24,768
B) A decrease of 144.80% from prior to current year
C) Income tax expense is 2.00% of net sales revenue
D) A decrease of $4,344
The new managerial accountant at the Recycle Shoppe proposed a method to eliminate
waste, recycle a variety of products to enhance sales, and generate profits. The
operations manager attended a meeting with the creative manager and proposed that the
staff recycle the wood out of the 1,000 old chairs in the warehouse and convert the
wood backing into custom picture frames. The operations manager stated that the old
wooden chairs in the basement are a fire hazard. The managerial accountant believes
that the cost to convert the old wood into custom picture frames is $75,000. The
managerial accountant forecasts earnings from the sale of the custom picture frames at
$50,000.
Compute the payback period, in years. Which of the following illuminates both internal
and external costs to give the manager a complete set of information about how to
generate cost-effective solutions to environmental and social concerns?
A) $1.2; internal costs
B) $1.3; external costs
C) $1.4; cost of goods sold
D) $1.5; life-cycle assessment
The Bedford Corporation reported the following income statement and balance sheet
amounts and additional information for the end of the current year.
Inventory and prepaid expenses account for $30,000 of the current year’s current assets.
Average inventory for the current year is $36,250.
Average net accounts receivable for the current year is $45,000.
There are 35,000 shares of common stock outstanding.
Total dividends paid during the current year were $17,000.
The market price per share of common stock is $20.
What is the days’ sales in receivables for the current year?
A) 27.11 days
B) 20 days
C) 1.107 days
D) 13.4631 days
The following data relate to Austin Corporation for last year:
What is the net cash provided by operating activities for last year on the statement of
cash flows for Austin Corporation?
A) $165,000
B) $123,000
C) $169,000
D) $137,000
A company uses the direct method to prepare the statement of cash flow computes the
amount of cash it receives from customers as
A) cost of goods sold plus ending inventory minus beginning inventory.
B) cost of goods sold minus ending inventory plus beginning inventory.
C) sales revenue plus the decrease (or minus the increase) in accounts receivable.
D) sales revenue minus the decrease (or plus the increase) in accounts receivable.
The managerial accountant at Aquatics Pools and Spas assess a fixed overhead budget
variance of $3,400 U in the month of April. The standard hours in April were 2,900
hours and the standard rate was projected at $13 per machine-hour. There were
unforeseen complications that involved raw materials and the standard rate projected
per machine hour-was inaccurate. What was the standard rate per-machine hour if the
standard fixed overhead cost of production is $41,100? What is the budgeted fixed
overhead amount if the actual fixed overhead is $43,100?
A) $14.17 /machine hour; $39,700
B) $13.86 /machine hour; $44,500
C) $14.15 /machine hour; $46,500
D) $12.15 /machine hour; $40,200
The following information relates to Truman Unlimited for the past two years.
Days’ sales in receivables for the current year is closest to
A) 61.85 days.
B) 50.83 days.
C) 79.50 days.
D) 9.60 days.
Hill Fabricators manufactures a variety of parts that the company can use to produce
metal stud fixtures. The M2 part is a popular universal part used in the production of
several other parts at its manufacturing facility in Ohio. At a recent meeting, the
managerial accountant reported that 11% of its fixed overhead cots assigned to the M2
part will not continue if Hill Fabricators decides to outsource the production of the M2
part at $40 per unit to its competitor, Mason Manufacturing. The managerial accountant
at Hill Fabricators presented the following data that represents the cost to produce 1,100
units of the M2 part in-house:
What are the monthly avoidable costs if Hill Fabricators outsources the production of
the M2 part to Mason Manufacturing? What is the change in operating income? What is
the per unit cost to produce the M2 part?
A) $44,000; $3,720 increase; $64.65
B) $54,680; $3,720 decrease; $46.65
C) $45,320; $7,320 decrease; $64.65
D) $51,320; $7,320 increase; $56.36
In 2013, the employee at Lighthouse Services prepared an annual report for the bank
that revealed total revenue in 2012 was $6,000,000. The manager needs the information
to apply for a loan to purchase new equipment to maintain the operations at the
organization. The report was prepared in accordance with GAAP and the report
contained information about the 2012 financial performance at the company.
Which of the following describes the role of the employee at Lighthouse Services?
A) Managerial Accountant
B) CFO
C) CEO
D) Board of Director
E) Financial Accountant
People’s Public Power is an electric utility company. The new CEO is interested in
implementing new projects that will not only benefit the environment, but will also
benefit the company through cost savings. One of the proposed projects is to offer a
paperless, online billing solution for its customers in Green Township. Preliminary
market research indicates that participation in the paperless option will be between 20
-30% of customers.
Total costs for the paperless system are projected to be $100,000 per quarter, which are
comprised solely of fixed costs for IT personnel and computer hardware. The CEO has
asked you to perform an analysis of the proposed paperless billing system.
Historical costs for the current paper-based system are as follows:
Requirements:
a.Using the historical costs calculate the variable costs per bill under the current system.
b.The company projects that next quarter 650,000 bills will be mailed to customers.
What is the projected cost savings if the maximum number, 30%, of customers choose
the paperless system?
c.What is the projected cost savings if the minimum number, 20%, of customers choose
the paperless system?
