In a company that uses the direct method to prepare the statement of cash flows, the
amount of cash it pays to employees is computed as
A) salary expense plus the ending balance salaries payable.
B) salary expense plus the decrease in salaries payable.
C) salary expense plus the increase in salaries payable.
D) salary expense plus the beginning balance in salaries payable.
To follow is information about the units produced and total manufacturing costs for
Pine Enterprises for the past six months.
Using the high-low method, what is the variable cost per unit?
A) $1.44
B) $1.04
C) $0.50
D) $2.00
Which of the following cost of quality categories represent the cost incurred to
“perform preventative maintenance on machinery?”
A) Appraisal costs
B) Prevention costs
C) Internal failure costs
D) External failure costs
Mississippi Mile Travel Company is conducting a sensitivity analysis in order to assess
the company’s margin of safety in units and in dollars. Predicted data indicate that 4,750
travel package sales can be expected while 2,200 package sales are necessary to meet
the company’s breakeven point. Each travel package costs $3,000. Calculate the
company’s margin of safety in package units and dollars.
A) 2,200 travel package units; $5,610,000
B) 2,550 travel package units; $7,650,000
C) 3,500 travel package units; $8,010,000
D) 1,575 travel package units; $4,810,000
The following information relates to Truman Unlimited for the past two years.
The times-interest-earned ratio for the current year is
A) 13.5 times.
B) 16.0 times.
C) 2.0 times.
D) 3.8 times.
Use the following information to do a horizontal analysis of Marcus Corporation’s
income statement for the current year and prior year
What is the percentage change in cost of goods sold?
A) -22.00%
B) 27.00%
C) 127.00%
D) 33.59%
A company uses the direct method to prepare the statement of cash flows. It presents
the following amounts on its financial statements.
*Relates solely to the acquisition of inventory
What will appear in the operating activities section related to salaries payable?
A) The increase of $3,500 will be subtracted from salary expense to determine
payments to employees.
B) The increase of $3,500 will be subtracted from net income.
C) The increase of $3,500 will be added to salary expense to determine payments to
employees.
D) The increase of $3,500 will be added to net income.
On the line in front of each variance, put the letter of the department that is most likely
responsible for that variance. A letter may be used more than once or not at all.
A.Production department
B.Marketing department
C.Purchasing department
D.Personnel department
R-Cubed manufactures custom playground equipment from recycled plastics for city
school districts. The school districts are required to use a certain percentage of recycled
materials to comply with its state grants. As a result, R-Cubed tracks both virgin
(non-recycled) and recycled materials used to manufacture its playground equipment.
R-Cubed uses a predetermined manufacturing overhead rate of $7.00 per direct labor
hour.
Here is a summary of the materials and labor used on a recent job for Stow City
Schools:
Calculate the total cost of the Stow City job.
A) $7,930
B) $7,480
C) $7,280
D) $7,790
Della’s e-Portfolio Design Service has $4,900 fixed expenses. The company’s operating
income is $0 and the contribution margin ratio is 60%.
What are the company’s sales in dollars using the shortcut approach to the contribution
margin ratio?
A) $8,167
B) $8,192
C) $8,198
D) $8,199
Which of the following cost of quality categories represent the cost incurred to seek and
find a new supplier that can provide quality raw materials compared to the low-quality
raw materials received from a current supplier?
A) Prevention costs
B) Appraisal costs
C) Internal failure costs
D) External failure costs
The Stemple Corporation data for the current year:
What would a horizontal analysis report with respect to current liabilities show?
A) Current liabilities are 6.96% of total capital.
B) Current liabilities saw a 72.46% increase from the prior year to the current year.
C) The current ratio is 1.24.
D) Current liabilities saw a 38.00% increase from the prior year to the current year.
The employees at Table Manufacturing perform the following tasks as indicated in
Table A and Table B.
Which of the following is the role of Employee A and Employee B?
A) CFO; CEO
B) Managerial Accountant; Financial Accountant
C) Treasurer; Controller
D) Audit Committee; Cross-Functional Team
E) Cross-Functional Teams; Treasurer
Using the direct method to prepare the statement of cash flows, cash payments to
supplies is computed as
A) interest expense minus the decrease in accounts payable.
B) interest expense minus the decrease in merchandise inventory.
C) purchases minus the increase in accounts payable.
D) interest expense minus the increase in merchandise inventory.
The manager at Tom’s Taxidermy expects to sell 800 units at $30 each unit. In order for
the manager to breakeven, the manager must sell 400 units. What is the margin of
safety in dollars?
A) $12,000
B) $14,000
C) $16,000
D) $24,000
Discuss potential problems and disadvantages to an organization that decentralizes its
operations.
The manager at Cyber Merchandising provided the following Cost of Quality Report to
the managers at the quarterly meeting.
The manager at Cyber Merchandising reported that the percentage of total costs to
quality incurred in each cost category. Which cost of quality in the Costs of Quality
Report are the highest expenditures at the firm? Rank the cost of quality in order from
the lowest percentage cost of quality to the highest percentage cost of quality category.
What can the manager at Cyber Manufacturing do to reduce the costs spent on the total
internal failure costs?
The managerial accountant at Matheson Tool Company is compiling a fixed overhead
volume variance report. According to the data, 4,200 standard hours were tallied at $8
per machine hour, the fixed overhead volume variance was calculated at $2,860 U.
Compute the budgeted fixed overhead cost at $2,860U and compare the budgeted fixed
overhead cost if the fixed overhead volume variance was $2,860F.
The new accountant at the Holiday Card Shoppe reviewed the following information:
Is the system a financial system or a managerial system? Is the accountant at the
Holiday Card Shoppe a managerial accountant or a financial accountant? Why?
The managerial accountant at Sailboat World compiles a monthly overhead variance
report. The company produced 30,584 sailboats in the past month at 0.28 machine hours
per unit. The budgeted fixed overhead cost was $95,000 whereas actual fixed overhead
cost was $96,400. Calculate the standard fixed overhead cost allocated to production at
$11 per machine-hour. Compute the fixed overhead volume variance and the fixed
overhead budget variance.
