Archives: Quiz

The following data pertains to activity and costs for two months: Assuming that these activity levels are within the relevant range, the mixed cost for July was: A. $10,000 B. $35,000 C. $15,000 D. $40,000 Answer: C. Variable cost per […]

Reference: 8-12 Nakhle Kennel uses tenant-days as its measure of activity; an animal housed in the kennel for one day is counted as one tenant-day. During October, the kennel budgeted for 3,000 tenant-days, but its actual level of activity was […]

Diorio Corporation keeps careful track of the time required to fill orders. The times recorded for a particular order appear below: The delivery cycle time was: A. 29.1 hours B. 30.6 hours C. 8 hours D. 2.7 hours Answer: Dieringer […]

Stanfa Corporations standard wage rate is $10.50 per direct labor-hour (DLH) and according to the standards, each unit of output requires 8.0 DLHs. In January, 3,700 units were produced, the actual wage rate was $10.80 per DLH, and the actual […]

A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations: What is the total period cost for the month under absorption costing? A. $58,300 B. $37,100 C. $259,900 D. $201,600 […]

Elard Company uses the FIFO method in its process costing system. The first processing department, the Welding Department, started the month with 17,000 units in its beginning work in process inventory that were 70% complete with respect to conversion costs. […]

Ekmark Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products: Data for one of the company’s products follow: How much overhead cost would be assigned to Product P59G using the activity-based costing system? […]

The overall revenue and spending variance (i.e., the variance for net operating income in the revenue and spending variance column) for May would be closest to: A) $230 F B) $1,200 U C) $1,200 F D) $230 U Answer: Assuming […]

The following materials standards have been established for a particular product: The following data pertain to operations concerning the product for the last month: Required: a. What is the materials price variance for the month? b. What is the materials […]

Financial leverage is negative when: A. the return on total assets is less than the rate of return on common stockholders’ equity. B. total liabilities are less than stockholders’ equity. C. total liabilities are less than total assets. D. the […]

Grosseiller Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 900 units. The costs and percentage completion of these units in beginning inventory were: A total of […]

When switching from a traditional costing system to an activity-based costing system that includes some batch-level costs: A. the unit product costs of high volume products typically change less than the unit product costs of low volume products. B. the […]

The following cost data pertain to the operations of Mancia Department Stores, Inc., for the month of February. The Brentwood Store is just one of many stores owned and operated by the company. The Shoe Department is one of many […]

Echenko Corporation uses a job-order costing system and applies overhead to jobs using a predetermined overhead rate. During the year the company’s Finished Goods inventory account was debited for $380,000 and credited for $335,500. The ending balance in the Finished […]

Carter Corporation applies manufacturing overhead on the basis of machine-hours. At the beginning of the most recent year, the company based its predetermined overhead rate on total estimated overhead of $135,850. Actual manufacturing overhead for the year amounted to $145,000 […]

Welnor Industrial Gas Corporation supplies acetylene and other compressed gases to industry. Data regarding the store’s operations follow: o Sales are budgeted at $320,000 for November, $340,000 for December, and $330,000 for January. o Collections are expected to be 75% […]

The first-stage allocation in activity-based costing is the process by which overhead costs are assigned to activity cost pools. Answer: Discretionary fixed costs arise from annual decisions by management to spend in certain fixed cost areas. Answer: TRUE For liability […]

Paying taxes to governmental bodies is considered an operating activity on the statement of cash flows. Answer: A sales budget is a detailed schedule showing the expected sales for the budget period; typically, it is expressed in both dollars and […]

The present value of a given amount decreases as the number of years over which it is to be discounted also decreases. Answer: When a company issues common stock in exchange for cash, the cash inflow is recorded in the […]

The job cost sheet is used in both job-order and process costing. Answer: Reynold Enterprises sells a single product for $25. The variable expense per unit is $15 and the fixed expense per unit is $5 at the current level […]

Hubiak Corporation produces a single product and has the following cost structure: Compute the unit product cost under absorption costing. Show your work! Answer: When a job has been completed, the goods are transferred from the production department to the […]

Standard costs should generally be based on the actual costs of prior periods. Answer: The revenue and spending variances are the differences between the static planning budget and the actual results for the period. Answer: False In segment reporting, sales […]

In its 2013 income statement, WME reported $440,000 for the cost of goods sold. WME paid inventory suppliers $380,000 in 2013, and its inventory balance decreased by $41,000 during the year. In its reconciliation schedule, WME should: A. Show a […]

Which of the following changes should be accounted for using the retrospective approach?A. A change in the estimated useful life of a depreciable asset. B. A change from straight-line to double-declining-balance depreciation. C. A change from percentage-of-completion to the completed […]

The PBO is increased by: A. An increase in the average life expectancy of employees. B. Amortization of prior service cost. C. An increase in the actuary’s assumed discount rate. D. A return on plan assets that is lower than […]

Which of the following creates a deferred tax liability? A. An unrealized loss from recording inventory at lower of cost or market. B. Accelerated depreciation in the tax return. C. Estimated warranty expense. D. Subscriptions collected in advance. Answer: M […]

Since the lease payments under a lease agreement are normally paid at the beginning of each period, the appropriate compound interest table to be used to determine the amount at which the leased asset should be recorded is the: A. […]

Using the gross method, purchase discounts lost are: A. Included in purchases. B. Added to accounts payable. C. Included in interest expense. D. Deducted from discount income. Answer: The par value of common stock represents: A. The arbitrary dollar amount […]

Under IFRS, the role of the conceptual framework: A.Primarily involves guiding standard setters to make sure that standards are consistent with each other. B.Includes serving as a guide for practitioners when a specific standard does not apply. C.Is less important […]

If an available-for-sale investment is sold for which there are unrealized gains in accumulated other comprehensive income (AOCI), a reclassification adjustment affects other comprehensive income (OCI) in the period of sale by: A. Reducing OCI for the amount of unrealized […]

Harvey’s Junk Jewelry started business January 1, 2013, and uses the LIFO retail method to estimate ending inventory. Listed below is data accumulated for the year ended December 31, 2013: The numerator for the current period’s cost-to-retail percentage is: A. […]

Defined contribution pension plans that link the amount of contributions to company performance are often called: A. Incentive savings plans. B. Thrift plans. C. Savings plans. D. None of the above is correct. Answer: Canliss Mining uses the retirement method […]

Hogan Company had the following account balances for 2013: Hogan reported net income of $300,000 for 2013. Assuming no other changes in current account balances, what is the amount of net cash provided by operating activities for 2013 reported in […]

Canliss Mining uses the replacement method to determine depreciation on its office equipment. During 2011, its first year of operations, office equipment was purchased at a cost of $14,000. Useful life of the equipment averages four years and no salvage […]

If a stock dividend were distributed, when calculating the current year’s EPS, the shares distributed are treated as having been issued: A. At the end of the year. B. At the beginning of the year. C. On the declaration date. […]

Listed below are five terms followed by a list of phrases that describe or characterize each of the terms. Match each phrase with the correct term. 1) 1.Prior period adjustment 2) 2.Depreciation 3) 3.Accelerated methods 4) 4.Change in useful life […]

When we take into account the dilutive effect of stock options, rights, and warrants in the calculation of EPS, the method used is called the:A. Optional method. B. If converted method. C. Dilution method. D. Treasury stock method. Answer: As […]

The quick ratio is: A. The liquidity ratio divided by the equity ratio. B. Current assets minus inventory divided by current liabilities minus accounts payable. C. Current assets minus inventory and prepaid items divided by current liabilities. D. Cash divided […]

In its 2013 income statement, WME reported $695,000 for service revenue earned from membership fees. WME received $681,000 cash in advance from members during 2013. In its reconciliation schedule, WME should: A. Show a $14,000 negative adjustment to net income […]

Which of the following is a correct statement concerning the reporting of the pension plan on the face of the employer’s balance sheet? A. Only the plan assets are separately reported. B. Only the PBO is separately reported. C. Both […]

The net pension liability (PBO minus plan assets) is decreased by:A. Service cost. B. Expected return on plan assets. C. Amortization of net gain-AOCI. D. Prior service cost. Answer: In a postretirement health care plan, prior service cost is attributed […]

The average days inventory for ATC (rounded) for 2013 is: A. Less than 100 days. B. 114 days C. 132 days. D. 151 days. Answer: Listed below are five terms followed by a list of phrases that describe or characterize […]

Examples of internal transactions include all of the following except: A. Writing off an uncollectible account. B. Recording the expiration of prepaid insurance. C. Recording unpaid wages. D. Paying wages to company employees. Answer: Listed below are five terms followed […]

Listed below are five terms followed by a list of phrases that describe or characterize each of the terms. Match each phrase with the correct term. 1)Donated assets 2)Software development costs 3)Restoration costs 4)Lump-sum purchase 5)Copyright A. Capitalized between points […]

Under GAAP, with respect to multiple-element arrangements, if the revenue for a particular part of a multiple-part arrangement does not qualify for separate recognition, it is: A. Never recognized. B. Recognized when the contract is signed or persuasive evidence of […]

Under the conventional retail method, which of the following are not included in the denominator of the current period cost-to-retail conversion percentage? A. Purchase returns. B. Net markups. C. Purchases. D. Net markdowns. Answer: An exclusive 20-year right to manufacture […]

General Product Inc. shipped 100 million coupons in products it sold in 2013. The coupons are redeemable for 30 cents each. General anticipates that 70% of the coupons will be redeemed. The coupons expire on December 31, 2014. There were […]

Inventory records for Herb’s Chemicals revealed the following: March 1, 2013, inventory: 1,000 gallons @ $7.20 = $7,200 The ending inventory assuming FIFO is: A. $5,140. B. $5,080. C. $5,060. D. $5,050. Answer: Short Corporation purchased Hathaway, Inc., for $52,000,000. […]

The interest rate that is printed on the bond certificate is not referred to as the: A. Stated rate. B. Contract rate. C. Nominal rate. D. Effective rate. Answer: Listed below are five terms followed by a list of phrases […]

Sanjeev enters into a contract offering uncertain consideration. The contract pays him $1,000/month for six months of continuous consulting services. In addition, there is a 60% chance the contract will pay an additional $2,000 and a 40% chance the contract […]