Archives: Quiz

Which of the following formulas is not used to calculate the breakeven point? a. Total fixed costs divided by contribution margin per unit. b. Total fixed costs divided by (sales price per unit less variable cost per unit). c. Total […]

While customers and cost influence prices, so does a. Contribution margin. b. Fixed versus variable costs. c. Competition. d. Desired profit. Leonora Industries manufactures light fixtures for home, retail, and industrial customers. The retail line has been showing losses for […]

Brandon, Inc. is a consulting firm headquartered in Dallas. Trish Hardin, CEO of the company plans to attend a professional conference in Atlanta where she intends to network in the pursuit of business. She enjoys shopping and dining in Atlanta […]

Which of the following is a weakness of the accounting rate of return? a. It does not consider cash flows b. It does not consider the time value of money c. Both that it does not consider cash flows and […]

Walker’s Manufacturing began its operations on January 1 of the current year. Walker produced 10,000 units during the year, sold 8,000 units at an average cost of $22 per unit, and had 2,000 units in ending inventory. Variable production cost […]

Assume you have just been hired by a large manufacturing company and have been assigned to a team that has the responsibility of gathering the data for completing the company ‘s master budget. Your first assignment is to make a […]

Variances are labeled as a. Avoidable or unavoidable. b. Favorable or unfavorable. c. Positive or negative. d. Committed or discretionary. Milsaps Company produces sportsmen’s digital scales. In preparing the current budget, Milsaps’ controller estimates a total of $300,000 in direct […]

Which of the following is not a qualitative issue that must be considered before reaching a decision to outsource? a. Potential theft of intellectual property. b. Quality of the outsourced product. c. Number of employees to be terminated. d. All […]

A company requires $1,360,000 in sales to meet its net income target. Its contribution margin is 30%, and fixed costs are $240,000. What is the target operating income? a. $408,000 b. $312,000 c. $560,000 d. $168,000 Which of the following […]

Which of the following is a not a consequence of unethical behavior? a.It can lead to illegal activity. b.It can lead to the destruction of the firm. c.It can lead to inferior financial performance. d.All of these answer choices are […]

Which of the following assets would not be included in average operating assets used to calculate ROI? a. Building b. Equipment used in production c. Equipment no longer in use d. Factory machinery Identify each of the following costs in […]

When a company approaches market share growth under a build strategy, a.The company aims to increase its market share in the industry, even at the expense of short-term earnings and cash flow. b.The company seeks to maintain its current market […]

At the end of January, Monroe Industries had completed 65,000 units and left 8,000 units in Work In process, 60% complete with respect to materials and 80% complete with respect to conversion. How many equivalent units will be used to […]

Stone Cliff Company manufactures custom-order furniture. During 2013, actual manufacturing overhead totaled $720,000. Based on the 2013 results, and projected production for 2014, management prepared the 2014 budget and estimated that manufacturing overhead would total $800,000. The estimated number of […]

Which of the following does benchmarking focus on? a. Identifying best matrics. b. Analyzing best matrics. c. Studying best processes. d. Exceeding best processes. When products are completed, which of the following accounts is decreased? a. Raw Materials Inventory. b. […]

The minimum required rate of return is often referred to as the a. Benchmark rate. b. Hurdle rate. c. Project rate. d. Activity rate. A balanced scorecard does not a. Integrate performance measures across four different perspectives. b. Provide a […]

Impala Industries manufactures a component used by car manufacturers. Impala can produce 1,000,000 components per year. A foreign car manufacturer has approached Impala with an offer to purchase 120,000 components at price of $6 per unit. Impala ‘s results for […]

The variable overhead spending variance is calculated as a. Actual cost – (actual quantity x standard price). b. Actual cost – (standard quantity x standard price). c. Standard cost – (actual quantity x actual price). d. Actual results minus flexible […]

Which of the following is not classified as an overhead cost? a. Electricity to run factory machines b. Insurance to protect the factory contents c. Security guards that protect the factory building d. Advertising cost to promote the finished goods […]

Which of the following is not a step in estimating total cost using the high-low method? a.Identify the highest and lowest levels of activity b.Visually “fit” a line to the plotted points c.Compute the variable cost per unit d.Calculate the […]

In a responsibility accounting environment, which of the following is not a classification of organizational units? a. Cost centers b. Revenue centers c. Profit centers d. Investment centers The following financial statement items are shown for J&T Manufacturing. Calculate the […]

The sales volume variance reflects a. How efficiently the company operated in producing a given level of sales. b. How effectively the company reached its strategic goals. c. A different volume of products than that specified in the static budget. […]

Which of the following is not a way managers use managerial accounting? a.Provide information used in planning, evaluation and controlling functions within an organization. b.To assure appropriate use of its resources c.To assure accountability for its resources d.To communicate information […]

Sycamore Industries has provided the following information on a proposed project: Required: a. What is the payback period for the investment? b. What is the simple rate of return on the investment? c. What is the internal rate of return […]

Barbara’s Boutique wants to know what it takes to have $20,000 in operating income. If her selling price is $20, variable cost is $8 and fixed costs total $40,000, what must her sales revenue be in order to reach her […]

An auto body shop is trying to decide whether or not to purchase a new piece of diagnostic equipment. Which of the following costs would not be relevant to the decision? a. The cost of the new equipment b. The […]

To calculate the present value of an annuity, multiply a. The principal amount by the present value factor b. The amount to be received each year by the present value factor c. The principal by the discounted interest rate d. […]

The following information has been gathered by the controller of Acme Industries. Required: Using standard costing, prepare the following journal entries. a. Purchase of direct materials on account b. Transfer of direct materials into production c. Recording of payroll d. […]

Net operating profit is defined as a. Operating income minus income taxes. b. Sales minus variable costs. c. Contribution margin minus traceable fixed costs. d. Contribution margin minus traceable and allocated fixed costs. Actual direct labor costs may differ from […]

Culver, Inc. manufactures motors used in electric toothbrushes and other small appliances. Culver’s fixed overhead rate is $7.60 and the company budgeted 165,000 direct labor hours for the year. During the year Culver produced 320,000 motors and used 164,000 direct […]

Barber Industries reported net income of $32,000, earnings per share of $2, and paid dividends of $3 per share or a total of $3,000. The stock sells for $20 per share. What is the price/earnings ratio? a. 10.00 b. 10.67 […]

Which of the following is not a step in calculating the breakeven point? a. Put everything into “constant” form – sales price per unit, variable cost per unit, total fixed cost. b. Subtract fixed cost from sales revenue. c. Calculate […]

The difference between a firm’s current assets and its current liabilities is a. Cash flow. b. Working capital. c. Current ratio. d. None of these answer choices are correct. Companies that carry a high level of fixed costs relative to […]

Which of the following statements relating to earnings per share is not True? a. Earnings per share is an often-reported measure of the potential return to stockholders. b. Earnings per share is a financial measure. c. Earnings per share is […]

Outward Rowing Company manufactures canoes and kayaks. Due to an increasing focus on fitness, the company has been experiencing an increased demand for its products. Two of its newer products, which are very popular with water sport enthusiasts, require a […]

Jordan Corporation reported net income of $20,000 and paid cash dividends of $7,000. Changes in balanced sheet accounts for the year were as follows: Based on the above information, what is the amount of net cash provided by operations? a. […]

Which of the following is not an explanation for a favorable variable overhead spending variance? a. Paid less than expected for indirect material b. Used variable overhead items efficiently c. Paid less than expected for indirect labor d. Efficient use […]

The main reason for generating new information provided by activity-based costing is a. To help managers make better decisions. b. To provide employees in the accounting department with work to do. c. To calculate variances. d. None of these answer […]

A disadvantage of decentralization is that decision making is spread throughout the organization. This is a disadvantage because a. Managers tend to focus on their own units and lose contact with others in the organization. b. When communication is reduced, […]

Two calculations that can be made to measure customer profitability are a. Customer net profit and customer earnings per share b. Times revenue earned per customer and customer revenue margin c. Customer net profit and customer profit margin d. Customer […]

Direct materials standards specify both a. Quantity and efficiency. b. Quantity and price. c. Efficiency and price. d. Quality and Usage. The standard cost of direct material is the a. Standard price of direct material input x standard quantity of […]

The two approaches to reporting cash flows provided by operating activities are the a. Direct and indirect methods b. The basic and standard methods c. The gross margin and contribution margin methods d. The liquidity and profitability methods A contribution […]

If a company chooses to spread overapplied or underapplied overhead to all the accounts that contain applied overhead, which of the following is not a step in the process? a. Add the ending balances in all the accounts. b. Calculate […]

Which of the following employees is typically held accountable for the direct materials price variance? a. Controller b. Purchasing Manager c. Production Manager d. Engineering Department Manager Which of the following is not a short-term tactical benefit of outsourcing a […]

Dion is a marketing communications consultant who specializes in the strategic use of social networking sites. Which of the following types of companies can use Dion’s services? a. Any sized company b. Only large to medium sized companies c. Only […]

Which of the following is a factor that influences the discount rate? a. b. Inflation c. Both the level of risk and inflation d. Neither the level of risk nor inflation The 2013 and 2014 partial balance sheets for Ottoman […]

Budget Taxi Service operates a transportation service from the local airport to the major hotels in the area. All the hotels are located within a five mile radius of the airport. A majority of Budget’s customers are business people who […]

Which of the following is not a way a company can use information about activities to manage its operations? a. Activity-based budgeting b. Activity-based resource reduction c. Activity-based costing d. All of these answer choices are ways a company can […]

A top-down budget approach is also referred to as a. Participative budgeting. b. Imposed budgeting. c. Responsibility budgeting. d. None of these answer choices are correct. Which of the following is the simplest method for estimating the fixed and variable […]

Assume that activity cost is $93,000, predetermined total overhead is $120,000, actual overhead is $98,000, and the company has three product lines, the activity rate is a. $32,667 per product line b. $31,000 per product line c. $40,000 per product […]