The Skagit Company manufactures Hooks and Nooks. The following shows the
activities per product and total activity information:
Calculate the total factory overhead to be charged to Nooks.
a. $300,000
b. $400,000
c. $488,000
d. $600,000
The direct labor and overhead costs of providing services to clients are accumulated in
a. finished services expense
b. work in process
c. administrative salaries expense
d. overhead
A company is preparing its cash budget. Its cash balance on January 1 is $290,000 and
it has a minimum cash requirement of $340,000. The following data has been provided:
What is the amount of cash excess or deficiency (after considering the minimum cash
balance required) for February?
a. deficiency of $109,100
b. excess of $10,900
c. deficiency of $900
d. excess of $109,100
Miramar Industries manufactures two products: A and B. The manufacturing operation
involves three overhead activities’”production setup, material handling, and general
factory activities. Miramar uses activityÂbased costing to allocate overhead to
products. An activity analysis of the overhead revealed the following estimated costs
and activity bases for these activities:
Each product’s total activity in each of the three areas are as follows:
What is the activity rate for material handling?
a. $1.50 per part
b. $3.75 per part
c. $7.50 per part
d. $2.50 per part
Income from operations minus minimum acceptable income from operations
Match the definition that follows with the term (a-e) it defines.
a. Controllable revenues
b. Profit margin
c. Investment turnover
d. Rate of return on investments
e. Residual income
In the long run, for a business to remain in operation, the revenues from products sold
should normally cover all costs and expenses and provide a reasonable income.
a. True
b. False
normal standard
Match the following descriptions with the term (a-e) it describes:
a. Ideal standard
b. Nonfinancial performance measure
c. Currently attainable standard
d. Unfavorable cost variance
e. Favorable cost variance
The following information pertains to Newman Company. Assume that all balance
sheet amounts represent both average and ending balance figures and that all sales were
on credit.
Assets
Income Statement
Sales $90,000
Cost of goods sold 45,000
Gross margin $45,000
Operating expenses 20,000
Net income $25,000
Number of shares of common stock
6,000
Market price of common stock $40
Dividends per share $1.00
Cash provided by operations $40,000
What is the rate earned on total assets for this company?
a. 8.1%
b. 6.8%
c. 10.5%
d. 16.1%
The recording of the factory labor incurred for general factory use would include a
debit to
a. Factory Overhead
b. Wages Payable
c. Wages Expense
d. Cost of Goods Sold
useful for comparing one company to another or a company with industry averages
Match each definition that follows with the term (a’“h) it defines.
a. discontinued operations
b. extraordinary items
c. change from one generally accepted accounting principle to another
d. horizontal analysis
e. vertical analysis
f. common-sized financial statements
g. current position analysis
h. profitability analysis
As of January 1 of the current year, the Grackle Company had accounts receivables of
$50,000. The sales for January, February, and March were as follows: $120,000,
$140,000, and $150,000, respectively. Of each month’s sales, 20% are for cash. Of the
remaining 80% (the credit sales), 60% are collected in the month of sale, with the
remaining 40% collected in the following month. What is the total cash collected (both
from accounts receivable and cash sales) in the month of March?
a. $74,800
b. $146,800
c. $102,000
d. $116,800
shows expected results at only one activity level
Match the phrase that follows with the term (a-e) it describes.
a. static budget
b. flexible budget
c. master budget
d. sales budget
e. production budget
The amount of detail presented in a budget performance report for a cost center depends
upon the level of management to which the report is directed.
a. True
b. False
In a cost center, the manager has responsibility and authority for making decisions that
affect
a. revenues
b. investments in assets
c. both costs and revenues
d. costs
The Atlantic Company sells a product with a break-even point of 3,000 sales units. The
variable cost is $60 per unit, and fixed costs are $270,000.
Determine the (a) unit sales price, and (b) break-even points in sales units if the
company desires a target profit of $36,000.
Lead time reduction can be a cost-saving goal for any processed item.
a. True
b. False
Below is a table for the present value of $1 at compound interest.
Below is a table for the present value of an annuity of $1 at compound interest.
Using the tables above, if an investment is made now for $20,000 that will generate a
cash inflow of $7,000 a year for the next 4 years, what would be the present value of
the investment cash inflows, assuming an earnings rate of 12%?
a. $20,352
b. $3,969
c. $22,190
d. $21,259
Managerial accounting information includes both historical and estimated data.
a. True
b. False
The approach that required the transfer price to be less than the market price but greater
than the supplying division’s variable costs per unit is called the
a. cost price approach
b. negotiated cost approach
c. standard cost approach
d. market price approach
Supervisor salaries and indirect factory wages would normally appear in the direct labor
cost budget.
a. True
b. False