Barber Industries reported net income of $32,000, earnings per share of $2, and paid
dividends of $3 per share or a total of $3,000. The stock sells for $20 per share. What is
the price/earnings ratio?
a. 10.00
b. 10.67
c. 1.50
d. 6.67
Assume that the accounts receivable balances are $110,000, $112,000 and $116,000 for
2011, 2012, and 2013, respectively. The trend percentage for 2013 is
a. 3.6%
b. 5.5%
c. 103.6%
d. 105.5%
As volume changes, which of the following items do not change?
a. Total sales revenue
b. Total variable costs
c. Total fixed costs
d. Total contribution margin
Assume you are planning a spring break ski trip to Colorado. You are preparing a
budget of your costs. You are staying at a lodge that has a special where the lodge
charges you $2 for each ski lift ride. You believe you will ride the ski lift 40 times
during the week, so you budget $80. The ski lift charge is an example of a
a.Fixed cost.
b.Variable cost.
c.Mixed cost.
d.Step cost.
The selling price of a unit is $20 and the variable product cost per unit is $14. In
addition, a sales commission of 5% is paid on each sale. If the variable cost per unit
(excluding sales commission) increases by 1%, what will be the new contribution
margin?
a. $4.86
b. $5.10
c. $5.16
d. $6.00
When using a normal costing system
a. Direct material and direct labor are recorded at standard cost and overhead is applied
to products using a predetermined overhead rate.
b. Direct material and direct labor are recorded at actual cost and overhead is treated as
a period cost.
c. Direct material and direct labor are recorded at actual cost and overhead is applied to
products using a predetermined overhead rate.
d. Direct material and direct labor are recorded at standard cost and overhead is treated
as a period cost.
Michael’s Industries purchased some land in exchange for 1,000 shares of Michael’s
voting common stock with a market value of $15 each. How will this transaction be
reported on the statement of cash flows?
a. As a non-cash investing and financing transaction
b. As a non-cash financing transaction
c. As a non-cash investing transaction
d. As a use of cash in the investing section and a source of financing in the financing
section
Which of the following is not a reason companies use key performance indicators?
a. Align business activity with corporate strategy
b. Improve company performance
c. Improve timeliness of business decisions
d. All of these answer choices are reasons companies use key performance indicators
Which of the following are managers most likely to monitor whether using product
differentiation or low-cost production strategy?
a.Customer satisfaction
b.The production process
c.External information such as competitor actions
d.None of these answer choices are correct.
The 2013 and 2014 partial balance sheets for Ottoman Industries are shown below.
Calculate Ottoman’s working capital for 2014.
a. $26,000
b. $36,000
c. 1.65
d. 1.53
Bayline, Inc. manufactures two types of surf boards, Beginner and Longboard.
Manufacturing overhead has been applied on the basis of direct labor hours. Bayline
gathers some activity information and is interested in implementing an activity-based
costing system. The company wants all overhead costs to be allocated to products. The
overhead cost pools and activity drivers are as follows:
Other product information is as follows:
Required:
a. Using the traditional method, determine the overhead rate per direct labor hour.
b. Using the activity-based costing approach, determine the two activity rates.
c. Using the activity-based costing approach, determine the unit product cost for the
Beginner board.