Prichard Company has developed the following standard cost data based on 60,000
direct labor hours, which is 75% of capacity. Fixed overhead is $360,000 and variable
overhead is $180,000 at this level of activity.
During the current period, the company operated at 80% of capacity and produced
128,000 units. Actual costs were:
Calculate the variable overhead spending and efficiency variance and the fixed
overhead spending and volume variances. Indicate whether each is favorable or
unfavorable.
The sum of the variable overhead spending variance, the variable overhead efficiency
variance, the fixed overhead spending variance is the
____________________________.
Explain the value of separating cash flows into operating activities, investing activities,
and financing activities to financial statement users in analyzing cash flows and the
company’s financial performance and condition.
A company’s stock is selling for $67.20 per share and its earnings per share is $3.50 for
the current year. Calculate the price-earnings ratio.
Describe how to account for and report on contingent liabilities.
The current year-end balance sheet data for a company are shown below:
Calculate this company’s:
(1) Working capital.
(2) Acid-test ratio.
If a partner withdraws from a partnership and the recorded value of his or her equity is
overstated, then a bonus goes to _____________________; if the recorded value of the
withdrawing partner’s equity is understated, then a bonus goes to
_______________________.
Whistler Company determined that in the production of their products last period, they
had a favorable price variance and an unfavorable quantity variance for direct materials.
What might be the cause of this pattern of variances?
What are the four steps in the effective management of variance analysis?
What are methods that a company may use to retire its bonds?
____________________ are the means to take information out of an accounting system
and make it available to users.
What is the overhead volume variance? What would be the cause of a favorable volume
variance?
What are known current liabilities? Cite at least two examples of known current
liabilities.
The ____________ concept is the idea that cash paid (or received) in the future has less
value now than the same amount of cash paid (or received) today.
