A special journal is ________.
A) an accounting journal designed to record a specific type of transaction
B) an accounting journal that holds individual accounts that support a specific general
ledger account
C) a record of accounts that provides supporting details on individual balances, the total
of which appears in a general ledger account
D) a created list of the accounts used by a business entity to define each class of items
for which cash is spent or received
High Seas Sail Makers manufactures sails for sailboats. The company has the capacity
to produce 36,000 sails per year and is currently producing and selling 25,000 sails per
year. The following information relates to current production:
If a special pricing order is accepted for 5,700 sails at a sales price of $170 per unit,
fixed costs remain unchanged, and there are no variable selling and administrative costs
for this order, what is the change in operating income?
A) Operating income decreases by $627,000.
B) Operating income decreases by $684,000.
C) Operating income increases by $627,000.
D) Operating income increases by $684,000.
Just-in-time costing systems use a combined account for Raw Materials Inventory and
Work-in-Process Inventory known as the ________.
A) Raw Materials Inventory account
B) Work-in-Process Inventory account
C) Raw and In-Process Inventory account
D) Process account
Anything for which managers want a separate measurement of cost is called a
________.
A) responsibility center
B) cost object
C) profit object
D) conversion cost
Lakeside, Inc. estimated manufacturing overhead costs for the year at $371,000, based
on 181,000 estimated direct labor hours. Actual direct labor hours for the year totaled
196,000. The manufacturing overhead account contains debit entries totaling $392,000.
The Manufacturing Overhead for the year was ________. (Round any intermediate
calculations to two decimal places, and your final answer to the nearest dollar.)
A) $49,393 underallocated
B) $49,393 overallocated
C) $9,800 underallocated
D) $9,800 overallocated
Risa, Inc. has provided the following extracts from their budget for the first quarter of
the forthcoming year:
The vendors are allowed the following terms of payment:
Calculate the total payment on account for the month of March.
A) $168,275
B) $136,955
C) $320,000
D) $291,650
In a perpetual inventory system, the credit columns of a typical cash payments journal
are ________.
A) Merchandise Inventory column and Cash column
B) Other Accounts column and Accounts Payable column
C) Merchandise Inventory column and Accounts Payable column
D) Other Accounts column and Cash column
The following details are provided by Volvox Foundry Company:
PV of $1:
What is the NPV of the project?
A) $(636,228)
B) $590,000
C) $618,409
D) $(594,486)
Frittata, Inc. started the year with 200 units in the Finished Goods Inventory account. It
produced 600 units during the year and sold 800 units. If Frittata uses variable costing,
________.
A) its operating income for the period will be higher than under absorption costing
B) its operating income for the period will be lower than under absorption costing
C) its value of ending Finished Goods Inventory reported in the balance sheet will be
higher than under absorption costing
D) its operating income will be the same as under absorption costing
Dartis Tools Co. is considering investing in specialized equipment costing $610,000.
The equipment has a useful life of five years and a residual value of $69,000.
Depreciation is calculated using the straight-line method. The expected net cash inflows
from the investment are given below:
What is the accounting rate of return on the investment? (Round your answer to two
decimal places.)
A) 14.36%
B) 16.19%
C) 12.90%
D) 6.45%
The high-low method is used to ________.
A) determine the highest price that can be charged for a product
B) separate mixed costs into their variable and fixed components
C) identify the relevant and irrelevant costs of a business
D) determine the sales level at highest capacity