After the sales budget is prepared, the production budget is normally prepared next.
a. True
b. False
Answer:
Jacoby Company received an offer from an exporter for 30,000 units of product at $15
per unit. The acceptance of the offer will not affect normal production or domestic sales
prices. The following data are available:
What is the differential revenue from the acceptance of the offer?
a. $450,000
b. $630,000
c. $510,000
d. $120,000
Answer:
The method of analyzing capital investment proposals in which the estimated average
annual income is divided by the average investment is the average rate of return
method.
a. True
b. False
Answer:
The level of inventory of a manufactured product has increased by 5,000 units during a
period. The following data are also available:
What would be the effect on income from operations if variable costing is used rather
than absorption costing?
a. $50,000 decrease
b. $50,000 increase
c. $65,000 increase
d. $65,000 decrease
Answer:
Which of the following are the two main types of cost accounting systems for
manufacturing operations?
a. process cost and general accounting systems
b. job order cost and process cost systems
c. job order and general accounting systems
d. process cost and replacement cost systems
Answer:
If budgeted beginning inventory is $8,000, budgeted ending inventory is $9,400, and
budgeted cost of goods sold is
$10,260, budgeted production should be
a. $1,400
b. $9,600
c. $11,660
d. $11,550
Answer:
Frosting
Match the items below for a bakery to the type of cost (a-d).
a. Direct materials
b. Direct labor
c. Factory overhead
d. Non-manufacturing cost
Answer:
The document authorizing the issuance of materials from the storeroom is a
a. materials requisition
b. purchase requisition
c. receiving report
d. purchase order
Answer:
The Sierra Company produces its product at a total cost of $89 per unit. Of this amount,
$14 per unit is selling and administrative costs. The total variable cost is $58 per unit
and the desired profit is $28 per unit.
Determine the markup percentage using the (a) total cost, (b) product cost, and (c)
variable cost concept.
Answer:
In a job order cost accounting system for a service business, materials costs are
normally included as part of overhead.
a. True
b. False
Answer:
A form prepared periodically for each processing department summarizing the units for
which the department is accountable and the units to be assigned costs and the costs
charged to the department and the allocation of these costs is termed a
a. factory overhead production report
b. manufacturing cost report
c. process cost report
d. cost of production report
Answer:
What information is generally included in the Management Discussion and Analysis
(MD&A) section of a corporate annual report?
Answer:
Comparable financial statements are designed to compare the financial statements of
two or more corporations.
a. True
b. False
Answer:
In contribution margin analysis, the quantity factor is computed as:
a. the increase or decrease in the number of units sold multiplied by the planned unit
sales price or unit cost
b. the increase or decrease in unit sales price or unit cost multiplied by the planned
number of units to be sold
c. the increase or decrease in the number of units sold multiplied by the actual unit sales
price or unit cost
d. the increase or decrease in the unit sales price or unit cost multiplied by the actual
number of units sold
Answer:
Budget performance reports prepared for the vice president of production would
generally contain less detail than reports prepared for the various plant managers.
a. True
b. False
Answer:
Part of the cash budget is based on information drawn from the capital expenditures
budget.
a. True
b. False
Answer:
Which of the following is most associated with financial accounting?
a. can have both objective and subjective information
b. can be prepared periodically, or as needed
c. prepared in accordance with GAAP
d. can be prepared for the entity or segment
Answer:
The sales, income from operations, and invested assets for each division of Grosbeak
Company are as follows:
(a) Using the DuPont formula, determine the profit margin, investment turnover, and
rate of return on investment for each division. Round profit margin percentage to two
decimal places, investment turnover to four decimal places, and rate of return on
investment to one decimal place.
(b) Which division is the most profitable per dollar invested?
Answer:
The following data is given for the Stringer Company:
Overhead is applied on standard labor hours.
The direct materials quantity variance is
a. 22,800 favorable
b. 22,800 unfavorable
c. 52,000 favorable
d. 52,000 unfavorable
Answer:
The following data relate to direct labor costs for the current period:
What is the direct labor rate variance?
a. $18,000 unfavorable
b. $4,500 favorable
c. $17,100 unfavorable
d. $3,600 favorable
Answer:
Ptarmigan Company produces two products. Product A has a contribution margin of
$20 and requires 4 machine hours. Product B has a contribution margin of $18 and
requires 3 machine hours. Determine the most profitable product assuming the machine
hours are the constraint.
Answer:
A company reports the following:
Sales $2,400,000
Average total assets 1,500,000
Determine the ratio of sales to assets. Round your answer to one decimal place.
Answer:
Internal rate of return method
Match the methods that follow with the correct category (a’“b).
c. Methods that does not use present value
d. Methods that uses present value
Answer:
The balance of Material Q on May 1 and the receipts and issuances during May are as
follows:
Determine the cost of each of the issuances under a perpetual system, using the FIFO
method.
Answer:
The Sawtooth Leather Company manufactures leather handbags and moccasins. For
simplicity, the company has decided to use a single plantwide factory overhead rate
method to allocate factory overhead. Calculate the amount of factory overhead to be
allocated to each unit using direct labor hours.
Handbags = 60,000 units, 2 hours of direct labor
Moccasins = 40,000 units, 3 hours of direct labor
Total budgeted factory overhead cost = $360,000
Answer:
Determine the average rate of return for a project that is estimated to yield total income
of $250,000 over 4 years, cost $480,000, and has a $20,000 residual value.
Answer: