The total manufacturing cost variance is
a. the difference between actual costs and standard costs for units produced
b. the flexible budget variance plus the time variance
c. the difference between planned costs and standard costs for units produced
d. none of the answers are correct
Answer:
A product cost is
a. expensed in the period in which it is manufactured
b. shown with current liabilities on the balance sheet
c. shown with operating expenses on the income statement
d. expensed in the period the product is sold
Answer:
Currently, the unit selling price is $50, the variable cost, $34, and the total fixed costs,
$108,000. A proposal is being evaluated to increase the selling price to $54.
(a) Compute the current break-even sales (units).
(b) Compute the anticipated break-even sales (units), assuming that the unit selling
price is increased and all costs remain constant.
Answer:
Work in process inventory increased by $20,000 during the current year. Cost of goods
manufactured was
$180,000. Total manufacturing costs incurred are
a. $198,000
b. $160,000
c. $189,000
d. $200,000
Answer:
In contribution margin analysis, the effect of a difference in the number of units sold,
assuming no change in unit sales price or cost, is termed the quantity factor.
a. True
b. False
Answer:
Variable costs are costs that vary in total in direct proportion to changes in the activity
level.
a. True
b. False
Answer:
The relationship of each asset item as a percent of total assets is an example of vertical
analysis.
a. True
b. False
Answer:
Present entries to record the following summarized operations related to production for
a company using a job order cost system:
Answer:
Factors that reflect the ability of a business to pay its debts and earn a reasonable
amount of income are referred to as solvency and profitability.
a. True
b. False
Answer:
The budgeting process does not involve which of the following activities?
a. Specific goals are established.
b. Periodic comparison of actual results to goals.
c. Execution of plans to achieve goals.
d. Increase in sales by increasing marketing efforts.
Answer:
The formula for calculating the present value factor for an annuity of $1 is
a. Amount to be invested/Annual average net income
b. Annual net cash flow/Amount to be invested
c. Annual average net income/Amount to be invested
d. Amount to be invested/Equal annual net cash flows
Answer:
Department R had 5,000 units in work in process that were 75% completed as to labor
and overhead at the beginning of the period; 30,000 units of direct materials were added
during the period; 32,000 units were completed during the period; and 3,000 units were
40% completed as to labor and overhead at the end of the period. All materials are
added at the beginning of the process. The first-in, first-out method is used to cost
inventories. The number of equivalent units of production for conversion costs for the
period was
a. 32,450
b. 29,450
c. 31,950
d. 26,000
Answer:
Costs that can be influenced by management at a specific level of management are
called:
a. direct costs.
b. variable costs.
c. noncontrollable costs.
d. controllable costs.
Answer:
Which of the following costs is a mixed cost?
a. salary of a factory supervisor
b. electricity costs of $3 per kilowatt-hour
c. rental costs of $10,000 per month plus $0.30 per machine hour of use
d. straight-line depreciation on factory equipment
Answer:
Process manufacturers typically use large machines to process a continuous flow of raw
materials into a finished state.
a. True
b. False
Answer:
Prepare the journal entry for materials and labor, based on the following:
Raw materials issued: Job No. 609, $850; for general use in factory, $600 Labor time
tickets: Job No. 609, $1,600; $400 for supervision
Answer:
Peters Manufacturing Co. operates in a lean manufacturing environment. The company
had scheduled production of 95,000 units during February in its Y12 cell. Actual
February production totaled 88,200 units. Peters had budgeted conversion costs for
February totaling $900,000 and budgeted production hours totaling 2,000.
Compute Peters’ budgeted cell conversion cost per unit for Cell Y12.
Answer:
A $400,000 capital investment proposal has an estimated life of 4 years and no residual
value. The estimated net cash flows are as follows:
The minimum desired rate of return for net present value analysis is 12%. The present
value of $1 at compound interest of 12% for 1, 2, 3, and 4 years is 0.893, 0.797, 0.712,
and 0.636, respectively.
Determine the net present value.
Answer:
Using the following information, prepare a factory overhead flexible budget for Jacob
Company where the total factory overhead cost is $206,500 at normal capacity (100%).
Include capacity at 60%, 80%, 100%, and 120%. Total variable cost is $15.25 per unit
and total fixed costs are $54,000. The information is for month ended October
Answer:
A commercial oven with a book value of $67,000 has an estimated remaining 5 year
life. A proposal is offered to sell the oven for $8,500 and replace it with a new oven
costing $110,000. The new machine has a 5-year life with no residual value. The new
machine would reduce annual maintenance costs by $23,000. Provide a differential
analysis on the proposal to replace the commercial oven.
Answer: