A firm estimates that it will sell 100,000 units of its sole product in the coming period.
It projects the sales price at $40 per unit, the CM ratio at 60 percent, and profit at
$500,000. What is the firm budgeting for fixed costs in the coming period?
A. $1,600,000
B. $2,400,000
C. $1,100,000
D. $1,900,000
Which ethical standard has been violated if an accountant fails to disclose relevant
information pertaining to a financial statement?
A. Competence
B. Confidentiality
C. Integrity
D. Credibility
Target costing
A. can be applied to services if they are sufficiently uniform.
B. can be applied to services only if they are automated.
C. can be applied to services that are performed in a manufacturing environment.
D. cannot be applied to services.
Rubenstein Company makes small metal containers. The company began April with
250 containers in process that were 30 percent complete as to material and 40 percent
complete as to conversion costs. During the month, 5,000 containers were started. At
month end, 1,700 containers were still in process (45 percent complete as to material
and 80 percent complete as to conversion costs). Using the weighted average method,
what are the equivalent units for conversion costs?
A. 3,450
B. 4,560
C. 4,610
D. 4,910
Ellis Corporation
The following information was extracted from the first year absorption-based
accounting records of Ellis Corporation
Refer to Ellis Corporation. Based on variable costing, if Ellis had sold 12,001 units
instead of 12,000, its income before income taxes would have been
A. $9.50 higher.
B. $11.00 higher.
C. $8.50 higher.
D. $8.33 higher.
Pearce Company
Pearce Company uses a standard cost system for its production process. Pearce
Company applies overhead based on direct labor hours. The following information is
available for July:
Refer to Pearce Company Using the three-variance approach, what is the spending
variance?
A. $23,850 U
B. $23,850 F
C. $14,280 F
D. $14,280 U
Ryan Company
Ryan Company manufactures products X and Y from a joint process that also yields a
by-product, Z. Revenue from sales of Z is treated as a reduction of joint costs.
Additional information is as follows:
Joint costs were allocated using the sales value at split-off approach.
Refer to Ryan Company. The joint costs allocated to product Y were
A. $ 84,000
B. $100,800.
C. $150,000.
D. $168,000.
The formula to compute cost of goods manufactured is
A. beginning Work in Process Inventory plus purchases of raw material minus ending
Work in Process Inventory.
B. beginning Work in Process Inventory plus direct labor plus direct material used plus
overhead incurred minus ending Work in Process Inventory.
C. direct material used plus direct labor plus overhead incurred.
D. direct material used plus direct labor plus overhead incurred plus beginning Work in
Process Inventory.
The contribution margin ratio always increases when the
A. variable costs as a percentage of net sales increase.
B. variable costs as a percentage of net sales decrease.
C. break-even point increases.
D. break-even point decreases.
Division A’s investment in a new project will raise the overall organization’s return on
investment if
A. the return on investment on the new project exceeds the target return of the overall
organization.
B. the return on investment on the new project exceeds the return on investment of
Division A.
C. the return on investment on the new project exceeds the overall organization’s return
on investment.
D. Division A’s return on investment exceeds the return on investment of the overall
organization.
____ is a way of teaching accounting concepts to financially unsophisticated
employees.
A. Data mining
B. Open-book management
C. Game playing
D. BPR