The Nichols Corporation data for the current year:
What would a horizontal analysis report with respect to net sales revenue?
A) There is a sales return of $10.23.
B) There was an increase of 18.00% in net sales revenue.
C) The cost of goods sold is 77.29% of net sales revenue.
D) There is an accounts receivable turnover of 11.26 times.
A ________ company’s balance sheet reports just one inventory called “Inventory.”
A) service
B) merchandising
C) manufacturing
D) All of these types of companies
Selected information about The Staccato Company for the current year and prior year is
given below.
The current year’s net income percentage (as would be found on a vertical analysis of
the income statement for the current year) is
A) 11.00%.
B) 11.98%.
C) 32.74%.
D) 132.74%.
In which of the following common types of business companies have costs of business
activities that include inventory-related freight in costs and the cost of import duties or
tariffs?
A) service company
B) manufacturing company
C) merchandising company
D) all of these companies
The ________ tells managers how much of the overall variance id due to paying a
higher or lower price than expected for the quantity of materials it purchased.
A) production volume variance
B) overhead flexible budget variance
C) price variance
D) quantity variance
On the line in front of each statement, enter the letter corresponding to the term that
best fits that statement. You may use a letter more than once and some letters may not
be used at all.
________has a single category of inventory
________resells products previously purchased ready-made from a supplier
________inventory is not sold for a profit
________produces its own inventory
________transforms raw materials into a new finished product
________completed goods that have not been sold
________partially completed items of manufacturers
________steel, glass, tires, upholstery, and fabric that Toyota uses to manufacture
products
In the last reporting period, Helena’s Heavenly Fixture Company recorded 100,000
units sold for the first time in the history of the company. The price per unit was $89.99
and variable costs per unit at $36.39. Showing all work in the space provided, compute
the contribution margin. Next, compute the fixed costs if the operating income is
$4,020,000.
A) $5,360,000; $1,340,000
B) $5,500,000; $1,360,000
C) $5,575,000; $1,375,000
D) $5,600,000; $1,425,000
The Bedford Corporation reported the following income statement and balance sheet
amounts and additional information for the end of the current year.
Inventory and prepaid expenses account for $30,000 of the current year’s current assets.
Average inventory for the current year is $36,250.
Average net accounts receivable for the current year is $45,000.
There are 35,000 shares of common stock outstanding.
Total dividends paid during the current year were $17,000.
The market price per share of common stock is $20.
What is the earnings per share for the current year?
A) $5.12
B) $4.94
C) $4.05
D) $11.86
The management accountant at Light Manufacturing oversees the company’s day-to-day
operations at the firm. The management accountant observed that the company
generated $800,000 in product sales and the management accountant uses that
information to run the daily business operations. The information is also to the
management accountant because the data reveals which products generate the most
sales; and, the management accountant uses that information to adjust products and
develop the marketing strategy.
Which of the following management accounting responsibilities is the management
accountant using in this example?
A) Planning
B) Directing
C) Controlling
D) Designing
E) Implementing
Claudia Enterprises has budgeted the following amounts for its next fiscal year:
If Claudia Enterprises can reduce fixed expenses by $12,000, how will breakeven sales
in units be affected?
A) Decrease by 400 units
B) Increase by 133 units
C) Increase by 400 units
D) Decrease by 133 units
Maintenance costs at Wilmington Manufacturing over the past six months are listed in
the following table.
Using the high-low method, what would the variable maintenance cost per machine
hour be?
A) $1.25
B) $0.80
C) $0.87
D) $0.88
Taylor Company reported the following information for the current year:
What would a vertical analysis report with respect to current year selling and general
expenses?
A) An increase of $57,768
B) 19% of net sales revenue
C) A decrease of 82.80%
D) 25% of net sales revenue
The managerial accountant at Coastal Edge Manufacturing reported the following data:
The managerial accountant is required to determine the total cost per equivalent unit at
Coastal Edge Manufacturing. What were the (a) the total direct material cost per unit;
(b) the conversion cost per unit; and, (c) total per unit cost of direct material costs and
conversion costs added during January?
Tom’s Taxidermy expects to sell 800 units of its specialty preservation product. The
managerial accountant reported that manager must sell 400 units of specialty product to
breakeven. Compute the margin of safety in units.
A) 100 units
B) 200 units
C) 300 units
D) 400 units
The Hummel Corporation reported the following income statement and balance sheet
amounts and additional information for the end of the current year.
Inventory and prepaid expenses account for $28,000 of the current year’s current assets.
Average inventory for the current year is $12,000.
Average net accounts receivable for the current year is $32,000.
There are 40,000 shares of common stock outstanding.
Total dividends paid during the current year were $60,000.
The market price per share of common stock is $25.
What is the company’s accounts receivable turnover for the current year?
A) 0.04 times
B) 42.00 times
C) 14.60 times
D) 25.00 times
The income statement and a partial balance sheet for Regovich Company is presented
below. Prepare the operating activities section of the statement of cash flows using the
indirect method.
The Print Manufacturing Company manufactures Size 1, Size 2, and Size 3 printer
ribbons to support the printers it manufactures. The managerial accountant reported the
following information:
The managerial accountant at Print Manufacturing noted that the Size 3 printer ribbon
reports a loss and the managerial accountant needs to determine if the company should
drop the Size 3 printer ribbon. What is the increase or decrease in operating income if
the operations manager drops the Size 3 printer ribbon and does not replace it? If the
managerial accountant recommends that the organization drop the Size 3 printer ribbon
and rent out the space the company uses to store the product at $11,000 per year, is
there an increase or a decrease in operating income?
The managerial accountant at the Health Club is required to determine the amount of
cash purchases inventory. The managerial accountant reported a beginning inventory
balance of $900,000 and $8,400,000 in cost of goods sold during the year. The ending
inventory balance during the year was $850,000. Calculate the amount of cash
purchases of inventory during the year. Next, discuss what occurs when there is an
increase in the inventory account. What occurs when there is a decrease in the inventory
account.
Satellite Manufacturing is a company that manufactures satellite parts. The two
departments in the company include the Placement Department and the Organization
Department. The managerial accountant assigned total costs to units completed and to
units in ending Work In Process Inventory and reported the following information:
Which of the following journal entry is needed to transfer the costs?
The managerial accountant at Red Ribbon Distribution Company prepared a report in
the previous quarter and reported 4,200 actual machine hours were used. The actual rate
per machine hour was $32.75 while the standard rate was $28.50. The standard hours
allowed was calculated at 4,000. Compute the variable manufacturing overhead (MOH)
rate variance to determine the accuracy of the forecasted MOH and, the variable MOH
efficiency variance, to determine whether the volume of output was consistent with the
number of machine hours used.
Hill Manufacturing is a large manufacturer that produces a part that inserts into diesel
engines. The company has several large divisions and the managerial accountant
reported the part is currently produced in the assembly department. The managerial
accountant reported that the variable selling expenses and manufacturing costs related
to the production of this part include the following:
Another department at Hill Manufacturing is set up to produce the diesel part and could
produce the part internally rather than purchase the part from an outside supplier. The
managerial accountant reported that the other department has excess capacity and could
produce the part in that department. There is a significant amount of competition in the
marketplace and the current price to produce the part at the other internal department
and a competitor is $1,500.
What is the highest transfer price that the managerial accountant should pay to purchase
the part from a competitor? Calculate the lowest acceptable transfer price if the part was
produced by the internal operations at the other department at Hill Manufacturing.
Briefly explain the flow of inventory through a manufacturing system into a company’s
job costing system from the purchase of materials to the sale of the products.
Sally oversees the accounting operations at Hopewell Distributors. Recently, Sally
suspects an accounting manager commits fraud because the accounting manager in the
operations division submitted a report that had incorrect account receivable totals. Sally
checks the actual receivable totals against the forecasted totals and her assessment is
correct. The manager then reports lower total receivables and compares those totals to
the amount the company actually collects. A recent audit report indicates that the
manager wrote checks payable to cash and cashed the checks. What actions should
Sally take about the information she discovered about the accounting manager in the
operations division?