An internal request to transfer raw materials requires personnel to complete a
A) materials requisition document.
B) bill of materials document.
C) purchase order document.
D) labor time record document.
Steeplechase Building Specialties manufactures metal stud to accommodate
commercial framing contractors in the United States. The managerial accountant
reported to the operations manager that there is an order to manufacture 2,000 bundles
of metal stud during the month. The managerial accountant reported the following
information:
Determine the cost equation for the managerial accountant and predict the operating
costs at a volume of 2,000 bundles of metal stud at Steeplechase Building Specialties.
A) $120
B) $220
C) $340
D) $440,120
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 rate of return on common stockholder’s equity for the current
year?
A) 32.00%
B) 42.11%
C) 6.00%
D) 30.77%
The following information relates to Woolf Unlimited for the past two years.
What is the times-interest-earned ratio for the current year?
A) 3.71 times
B) 13.00 times
C) 2.30 times
D) 1.75 times
The following information relates to Truman Unlimited for the past two years.
The acid-test ratio for the current year is
A) 0.85.
B) 0.57.
C) 1.12.
D) 2.00.
A company uses the indirect method to prepare the statement of cash flows. It presents
the following data on its financial statements:
*Relates solely to the acquisition of inventory
What will appear in the operating activities section related to accounts payable?
A) The increase of $10,000 will be subtracted from net income.
B) The increase of $10,000 will be added to net income.
C) The increase of $10,000 will be subtracted from cost of goods sold.
D) The increase of $10,000 will be added to cost of goods sold.
A company uses the indirect method to prepare the statement of cash flows. It presents
the following data on its financial statements:
*Relates solely to the acquisition of inventory
What will appear in the operating activities section related to salary payable?
A) The increase of $2,000 will be added to cost of goods sold.
B) The increase of $2,000 will be added to net income.
C) The increase of $2,000 will be subtracted from cost of goods sold.
D) The increase of $2,000 will be subtracted from net income.
The new employee at Cork Manufacturing reported to work and the employee reviewed
the following information that was audited by the CPA:
Which of the following describes the role of the new employee?
A) Managerial Accountant
B) Financial Accountant
C) CEO
D) Receptionist
E) Secretary
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 current ratio for the current year?
A) 0.38
B) 0.53
C) 1.98
D) 0.50
The McCumber Corporation data for the current year:
With respect to long-term liabilities, what would a horizontal analysis report?
A) Long-term liabilities decreased by 6.15%.
B) Long-term liabilities increased by $8,000.
C) Long-term liabilities increased by 6.15%.
D) Long-term liabilities decreased by $1,800.
The following information relates to Tappan Corporation.
Required:
a.What is the book value per share of common stock for the current year?
b.What is the price-earnings ratio for the current year?
c.What is the rate of return on total assets for the current year?
d.What is the times-interest-earned ratio for the current year?
Papa’s Pastries sells regular donuts and large donuts. For every six regular donuts sold
the manager at Papa’s Pastries sell four large donuts.
Calculate the weighted average contribution margin per unit.
(Present value of annuity table required) Velocity Tire Company’s managerial
accountant assesses the net present value of two different types of tread repair machines
in order to ascertain the better investment option. The Retreadit-2000 will require an
investment of $320,000 while the Econ-4760 will require an investment of $280,000.
Each piece of equipment has a useful life of 10 years with no residual value. The
Retreadit-2000 annual net cash inflow has a static value of $72,000 annually whereas
the Econ-4760 has a static cash inflow predicted at $49,500. The revenue generated by
the chosen product will be invested in an annuity at 12%, compute the net present value
of the two pieces of equipment and state which will be the better investment according
to their respective NPVs.
Jim works at Master Remodeling Company. Jim was elected by the stockholders at
Master Remodeling Company to oversee the internal audit company and the annual
financial statement audit by independent CPAs. Jim does not have a set schedule; and,
Jim meets with others at the company only periodically. What is Jim’s role at Master
Remodeling Company?
The managerial accountant at the Mill Factory informed the factory manager that the
costs to manufacture 20,000 units of a part include the following costs:
The Mill Factory noted that $70,000 of its fixed costs to produce the product is an
avoidable cost. The managerial accountant considers whether the company should make
the product or buy the product from the Frame Factory because the managerial
accountant at the Frame Factory offered to produce and sell 20,000 units of the same
product to the manager at the Mill Factory at $50 per unit. Should the managerial
accountant make-or-buy the product at $50 per unit? What is the total cost to make the
product? What is the total cost to buy the product? Explain your answer.
The managerial accountant at American Memorial Shoppe reported the following data
that reflect the balance sheets during the period ending December 31, 20X2 and
December 31, 20X3:
Compute the balances and analyze the changes that occurred in 20X3 and 20X2. Which
accounts had increases? Which accounts had decreases?
The managerial accountant reviews the report from the internal audit function that
ensures the company’s internal controls and risk management policies are functioning
properly. According to the report, there were discrepancies in the internal controls that
are not in conformance with the organizational policy and applicable law. The
managerial accountant suspects that the CEO is embezzling $30,000 per quarter. What
should the managerial accountant do about this discrepancy? If the accountant fails to
act on this issue, what standard according to the IMA Statement of Ethical Professional
Practice does the accountant violate?
The manager at Clean Oceans Unlimited, in Virginia, conducted a recent meeting with
the operations manager to discuss the results of a recent waste audit conducted by the
city officials and to develop a new sustainability strategy. The manager announced that
the engineer has developed a system that filters the storm-water runoff into the canals
that flow into the Chesapeake Bay. The cost of the new system is $5,500,000. The new
system is expected to eliminate bacteria in run-off water and it is expected to reduce the
level of water pollution that flows into the Chesapeake Bay. The new system is
expected to generate taxes payable to the company of up to $2,500,000 in storm-water
fees each year. The pump is expected to have a life of 20 years.
Compute the payback period, in years. With respect to the business, should the manager
at Clean Oceans Unlimited implement this new sustainability strategy? Include a
discussion about the three factors that relate to sustainability (environmental, economic,
and social factors).
In 2013, the accountant at Star Incorporated, a national time-share company, focused on
an internal sales report that illustrates the sales projections to ensure the sales
representatives achieve their goals in 2013; however, the report was not prepared in
accordance with GAAP. The accountant observed that the total sales produced by the
sales representatives in 2012 were $250,000,000. The accountant is in the process of
establishing the new 2013 sales goals for the sales representatives and the accountant is
concerned about the new sales goals in 2013 since the economy is slow and many
individuals and groups are not purchasing time-share condos.
Is the accountant a management accountant or a financial accountant? What concept
concerns the accountant when the new sales goals are revealed to the sales
representatives and administrative staff? Why?
The income statement and a partial balance sheet for Vespoint Company is presented
below. Prepare the operating activities section of the statement of cash flows using the
indirect method.
Use the direct method of cash flows to answer the question.
Calculate the cost of merchandise purchased during the year.