The manager at East Coast Manufacturing organizes costs to prepare the Costs of
Quality report. The manger compiled the following data:
What of the following cost is the total cost of quality the manager should use to report
the costs in the internal failure cost category?
A) $195,000
B) $180,000
C) $650,000
D) $260,000
E) $290,000
Johnson Trucking Company wants to determine a fuel surcharge to add to its customers’
bills based on the number of miles driven to each area. It wants to separate the fixed
and variable portion of the truck’s operating costs so it has a better idea of how distance
affects these costs. Johnson Trucking Company has the following data available.
Using the high-low method, the fixed costs in a month are
A) $2,100.
B) $13,650.
C) $46,200.
D) $10,500.
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 receivable?
A) The increase of $15,000 will be subtracted from sales revenue.
B) The increase of $15,000 will be added to net income.
C) The increase of $15,000 will be subtracted from net income.
D) The increase of $15,000 will be added to sales revenue.
Using the direct method of cash flow, which of the following is a category in the
statement of cash flows?
A) Amortization expense
B) Loss on sale of equipment
C) Collections from customers
D) Net income
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 dividend yield for the current year?
A) 6.00%
B) 42.11%
C) 26.00%
D) 32.00%
The managerial accountant at Picture Frame Manufacturing reported that the company
plans to transfer $250,000 to the Finished Goods Inventory account for the 40,000
picture frames that were completed during the month of September. Compute the cost
to make one completed picture frame. Assume that the sales revenue per picture frame
is $12 per frame, what is the gross profit per picture frame?
A) $6.25, $5.75
B) $6.25, $10.00
C) $12.00, $5.75
D) $12.00, $6.25
Rubber City Cycles manufactures carbon fiber bicycle frames for professional racing
and avid amateur cyclists. Rubber City has found a CNC (computer numerical control)
machine that will significantly reduce manufacturing waste while improving the quality
of the frames. The new CNC machine will increase annual fixed costs by $13,750, but
will decrease variable cost per unit by $150. Rubber City expects to sell 750 frames
next year.
Annual data for the current system are as follows:
By what amount will the breakeven point in units increase (decrease) if Rubber City
purchases the new CNC machine?
A) (50)
B) 50
C) 250
D) (250)
Kepple Manufacturing currently uses a traditional costing system. The company
allocates overhead to its two products, Zips and Dees, using a predetermined
manufacturing overhead rate based on direct labor hours. Here is data related to the
company’s two products:
The amount of manufacturing overhead that would be allocated to one unit of Zips
using the traditional costing system would be closest to
A) $35.35.
B) $23.57.
C) $47.14.
D) $32.86.
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.
The Polish Factory manufactures natural resources in Ireland. At the beginning of
20XX, the accountant provided the following estimates associated with Department A
and Department B for the coming year:
According to the reports provided by the manager at the Polish Factory, the following
data was presented to represent a job that was completed during the year:
Assume that the Polish Factory uses departmental cost driver rates to allocate
manufacturing overhead to products. The manufacturing overhead costs are allocated
on the basis of machine-hours in Department A on the basis of direct labor-hours in
Department B. First, compute the annual manufacturing cost-allocation rate for
Department A. What are the total manufacturing costs associated with the job and what
is the amount the manager at the Polish Factory should allocate to the job?
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 acid-test ratio for the current year?
A) 0.53
B) 1.98
C) 8.46
D) 1.46
The McCumber Corporation data for the current year:
With respect to net sales revenue, what would a horizontal analysis report?
A) There was an increase of 20.00% in net sales revenue.
B) There is a sales return of $10.40.
C) The cost of goods sold is 77.37% of net sales revenue.
D) There is an accounts receivable turnover of 11.17 times.
The managerial accountant at Sellers Manufacturing produces a product, Part Z that the
company uses to make multiple products at its facility in Virginia. The managerial
accountant reported to the operations manager that 12% of its fixed overhead costs
assigned to Part Z will not continue if Sellers Manufacturing outsources the production
of Product Z at $44 per unit to Manufacturing World. The managerial accountant
reported that to produce 1,200 units of Product Z, Sellers Manufacturing incurs the
following costs:
Should Sellers Manufacturing produce Part Z or outsource it to Manufacturing World?
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 inventory?
A) The decrease of $15,000 will be subtracted from net income.
B) The decrease of $15,000 will be subtracted from cost of goods sold.
C) The decrease of $15,000 will be added to net income.
D) The decrease of $15,000 will be added to cost of goods sold.
Maintenance costs at Wilmington Manufacturing over the past six months are listed in
the following table.
Using the high-low method, what would the total maintenance costs be if 17,500
machine hours were used?
A) $15,200
B) $14,000
C) $27,680
D) $1,200
To follow is information about the units produced and total manufacturing costs for
Pine Enterprises for the past six months.
Using the high-low method, what will the total monthly manufacturing costs be if the
company produces 9,000 units?
A) $8,750
B) $4,500
C) $8,400
D) $4,250
Which of the following items could be found in work in process inventory at a candy
bar manufacturer?
A) Candy bars made but not coated in chocolate
B) Cocoa products to make candy bars
C) Sugar products to make candy bars
D) Candy bars completed but not yet sold
In recent years, there has been an increasing awareness and growing interest in
________ and social responsibility by both consumers and corporations.
A) the bottom line.
B) total quality management.
C) sustainability.
D) just-in-time.