1) Classify the following cost as a selling or general and administrative period cost or as
a direct or indirect product cost by entering the dollar amount in the appropriate
column: Hale Company paid sales commissions of $48,000.
2) List the internal control procedures that a company should adopt to protect its cash
receipts.
3) Company A makes and sells a single product. For each of the following changes,
indicate whether the break-even point increases (i.e., break even would occur at a
higher volume of sales), decreases, is not affected, or the direction of change cannot be
determined from the information given. Assume that nothing changes except the given
item(s).
What happens to the break-even point when variable cost per unit and total fixed costs
both increase?
4) What is the effect on the accounting equation of a cash payment for an operating
expense?
5) How would you do vertical analysis of an income statement? Of a balance sheet?
6) How is the current portion of long-term liabilities reported on a classified balance
sheet?
7) Indicate how the event affects the elements of the financial statements. If the
transaction affects a given element of the financial statements, enter the dollar amount
below that financial statement element with a plus to indicate an increase or a minus for
a decrease. If the item affects cash flow, indicate whether it is an operating activity,
investing activity, or financing activity.
Ling Corporation paid a $4,000 cash dividend to its owners.
8) What is an annuity, as the term is used in capital investment decisions?
9) Managerial accounting is not bound by generally accepted accounting principles
(GAAP) but clearly is influenced by GAAP. Budgets and the budgeting process
demonstrate connections to GAAP. Discuss.
10) For Bazile Company in 2010, the magnitude of operating leverage was 3.0.
Demonstrate what this magnitude of operating leverage would mean for the company’s
profitability by creating an example.