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Study Resources (Accounting)

71) Bruner Stores wants to have 500 shovels in ending inventory on December 31. Budgeted sales for December are 1,950 shovels. The November 30 inventory was 320 shovels. How many shovels should Benson Stores purchase for December? A) 2,770 B) 1,770 C) 2,450 D) 2,130 72) Crafty Carpentry Company produces and sells a shelf for.
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105) List the operating budgets. Describe the purpose of each of the budgets listed and the order in which they are prepared. Describe how the budgets are interrelated. 106) Carlton Cookie Company produces a hand-processed gourmet cookie that is made with organic sugar. Five (5) pounds of organic sugar are required.
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81) Fosnight Enterprises prepared the following sales budget: Month Budgeted Sales March $6,000 April $13,000 May $12,000 June $14,000 The expected gross profit rate is 30% and the inventory at the end of February was $10,000. Desired inventory levels at the end of the month are 20% of the next month's cost of goods sold. What is the desired ending inventory on.
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121) A company's manager would consider which of the following in deciding whether to discontinue its electronics product line? A) The costs it could save by discontinuing the product line B) The revenues it would lose from discontinuing the product line C) How discontinuing the electronics product line would affect sales of its.
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1) Strategic planning involves setting short-term goals extending three to four months into the future. 2) Budgeting is helpful to plan for cash inflows and outflows. 3) A budget is a quantitative expression of a plan that helps managers coordinate and implement the plan. 4) Budgets do not provide benchmarks to help managers.
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21) Managers may intentionally build slack into the budget A) because of uncertainty about the future. B) to make their performance look better. C) to have the resources they need in the event of budget cuts. D) because of all of the above. 22) The budget committee A) rarely has the final say on the.
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194) When making outsourcing (make-or-buy) decisions, the focus is on how best to use available resources. 195) Make or buy decisions are often referred to as outsourcing decisions. 196) All other things being equal, if the incremental costs of outsourcing a product exceed the incremental costs of making a product, it should.
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239) Paula has the following information to evaluate–her current salary of $55,000 versus total revenues of $120,000 and expenses of $75,000 from starting a new business. How much is the opportunity cost associated with starting the new business? A) $55,000 B) $120,000 C) $45,000 D) $75,000 240) Zach has the following information to evaluate–his current.
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78) Corbin Company had the following financial results for last month. What type of responsibility center do these financial results reflect? One store Actual Flexible Budget Flexible Budget Variance (U or F) % of Variance (U or F) Revenues $220,000 $200,000 $ 20,000 F 10.00% F Operating Expenses 80,000 70,000 10,000 U 14.29% U Income from operations before service dept. charges 140,000 130,000 10,000 F 7.69% F Service department charges 40,000 40,000 0 0 Income from operations 100,000 90,000 10,000.
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173) A merchandising company will have a production budget. 174) The master budget of a service company has fewer individual budget components than does the master budget of a manufacturing company. 175) The operating budgets of retailers and manufacturers are virtually identical. 176) Merchandisers use a "cost of goods sold, inventory, and.
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41) Honda's East Liberty Auto Plant where Honda cars are built is most likely treated as a(n) A) cost center. B) investment center. C) profit center. D) revenue center. 42) The central reservation office at MegaBus is most likely treated as a(n) A) cost center. B) investment center. C) revenue center. D) profit center. 43) The regional sales department.
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143) June sales were $5,000 while projected sales for July and August were $6,500 and $7,000, respectively. Sales are 35% cash and 65% credit. All credit sales are collected in the month following the sale. What are the expected collections for July? A) $7,975 B) $5,525 C) $6,825 D) $5,975 144) June sales were $6,000.
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178) Brigg's Breakfast Appliances manufactures two products: Waffle Makers and Coffee Makers. The following data are available: Waffle Makers Coffee Makers Sales price $120 $215 Variable cost $45 $150   The company can manufacture two waffle makers per machine hour and three coffee makers per machine hour. The company's production capacity is 1,200 machine hours per month.   What is the contribution.
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123) All of the following are shown on the combined cash budget except A) projected cash balance at the end of the month. B) projected cash collections and cash payments. C) projected borrowings and repayments. D) All of the above are shown on the combined cash budget 124) A company should ________ when projecting cash.
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31) Which of the following is an advantage of the budgeting process? A) Coordinates the activities of the organization B) Assures that the lowest cost materials will be obtained C) Assures the company will achieve its objectives D) Guarantees that a profit will be achieved 32) Regarding the budgeting process, which of the.
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107) Frisbee Enterprises produces frisbees. Frisbee Enterprises has the following sales projections for the upcoming year: First quarter budgeted frisbee sales in units 20,000 Second quarter budgeted frisbee sales in units 35,000 Third quarter budgeted frisbee sales in units 22,000 Fourth quarter budgeted frisbee sales in units 30,000 Inventory at the beginning of the year was 6,000 frisbees. Frisbee.
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156) Totally Technology manufactures Cameras and Video Recorders. The company's product line income statement follows: Camera Video Recorder Total Sales revenue $300,000 $100,000 $400,000 Cost of goods sold    Variable $75,000 $49,000 $124,000    Fixed $82,000 $28,000 $110,000 Total cost of goods sold $157,000 $77,000 $234,000 Gross profit $143,000 $23,000 $166,000 Marketing and administrative expenses    Variable $25,000 $28,000 $53,000    Fixed $32,000 $19,000 $51,000 Total marketing and administrative expenses $57,000 $47,000 $104,000 Operating income (loss) $86,000 $(24,000) $62,000 Management is considering discontinuing the.
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11) Decentralization allows top management to concentrate on long-term strategic planning. 12) Decentralization allows top management to hire workers with expert knowledge for each business unit. 13) Decentralization may duplicate a company's costs since each business unit may, for example, have its own purchasing department. 14) Goal incongruence frequently exists in decentralized organizations. 15).
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227) Define the term constraints and give an example. What product should be made first when resource constraints exist? 228) Patty's Mailbox Company produces a standard mailbox with variable manufacturing costs of $18 per unit. The selling price of the standard mailbox is $25 per unit. The fixed manufacturing overhead cost.
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131) Westfall Watches has two product lines: Luxury watches and Sporty watches. Income statement data for the most recent year follow: Total Luxury Sporty Sales revenue $490,000 $360,000 $130,000 Variable expenses 355,000 235,000 120,000 Contribution margin 135,000 125,000 10,000 Fixed expenses 76,000 38,000 38,000 Operating income (loss) $59,000 $87,000 $(28,000) If $20,000 of fixed costs will be eliminated by discontinuing the Sporty line, how will operating income be affected? A) Decrease $30,000 B) Increase $10,000 C) Increase.
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113) A cash collections budget is focused on the timing of cash receipts. 114) A company's plan for purchases of property, plant, equipment, and other long-term assets is part of the budgeted balance sheet. 115) The budgeted cash collections from credit customers generally only reflect sales made in the current month. 116) The.
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58) Responsibility accounting performance reports capture the financial performance of cost, revenue and profit centers. 59) A performance report compares expected revenues and expenses against budgeted figures for each responsibility center. 60) The difference between actual results and budgeted amounts is called decentralization. 61) Cost center performance reports typically focus on the static.
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158) For some merchandisers, the primary constraint may be cubic feet of display space. 159) A constraint is a factor that restricts production or sale of a product. 160) Fixed costs affect product mix considerations. 161) An example of an expansion constraint would be the size of the available labor pool. 162) To.
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141) The income statement for Lovely Locks is divided by its two product lines, Curling Irons and Straighteners, as follows:   Curling Irons Straighteners Total Sales revenue $600,000 $260,000 $860,000 Variable expenses $450,000 $210,000 $660,000 Contribution margin $150,000 $50,000 $200,000 Fixed expenses $75,000 $75,000 $150,000 Operating income (loss) $75,000 $(25,000) $50,000 If fixed costs remain unchanged and Lovely Locks discontinues the Straightener line, how will operating income change? A) Will decrease by $150,000 B) Will increase by.
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110) Pristine Yards Manufacturing produces weed whackers. On March 31, Pristine Yards Manufacturing had 144 weed whackers in inventory. The company has a policy that the ending inventory in any month must be 12% of the following month's expected sales. Pristine Yards Manufacturing expects to sell the following number of.
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204) In deciding whether to outsource, managers must consider A) relevant fixed and variable components. B) sunk costs. C) only variable costs. D) none of the above. 205) Outsourcing decisions are sometimes referred to as A) make-or-buy decisions. B) make decisions. C) buy decisions. D) none of the above. 206) All of the following are outsourcing considerations, except A) Are.
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192) Rose Incorporated manufactures two types of vases, small and large. The following per unit data are available: Small VaseLarge Vase Sale price$60$100 Variable costs$35$60 Machine hours required for 1 vase12 Total fixed costs are $600,000 and Rose Incorporated can sell a maximum of 25,000 units of each type of vase annually. Machine hour capacity.
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91) Warshaw Company budgets payroll at $3,600 per month plus a percentage of monthly sales. The June operating expense budget includes total payroll of $13,200 with budgeted sales of $160,000. Sales for July are budgeted at $180,000 while purchases of inventory for July are budgeted at $95,000. Depreciation and insurance.
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31) Lubrizol is a chemical company that specializes in producing lubricants. Lubrizol was acquired in 2011 for $9 billion by investment holding company Berkshire Hathaway. Lubrizol is likely to be classified as a(n) A) cost center. B) investment center. C) profit center. D) revenue center. 32) The reservations department for a car rental chain is.
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169) Define operating budgets and financial budgets. List the specific budgets which are operating budgets. List the specific budgets which are financial budgets. 170) Beyerly Corporation anticipates the following sales revenue over a five month period: Byerly Corporation's sales are 40% cash and 60% credit. The Beyerly Corporation's collection history indicates that.
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163) Goliath Company prepared the following purchases budget: Month Budgeted Purchases June $35,600 July $42,500 August $39,600 September $45,800 October $49,400 All purchases are paid for as follows: 30% in the month of purchase, 45% in the following month, and 25% two months after purchase. What are the total cash disbursements in October for the purchase of merchandise? A) $45,330 B) $39,905 C) $14,820 D) $35,430 164) Lough Company.
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11) Strategic planning involves setting long-term goals that extend 5-10 years into the future. 12) A rolling budget is a budget that is continuously updated so that the next 12 months of operations are always budgeted. 13) The financial budgets project the collection and payment of cash, as well as forecast.
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226) Victoria Technologies makes a part used in the manufacture of digital cameras. Management is considering whether to continue manufacturing the part, or to buy the part from an outside source at a cost of $24.00 per part. Victoria Technologies needs 60,000 parts per year. The cost of manufacturing 60,000 parts.
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1) There are two types of responsibility centers. 2) Responsibility accounting performance reports compare budgets with actual results for each responsibility center. 3) Goal congruence is a system for evaluating the performance of each responsibility center and its manager. 4) A profit center is a responsibility center in which a manager is accountable.
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153) Cave Hardware's forecasted sales for April; May; June; and July are $200,000; $230,000; $190,000; and $240,000; respectively. Sales are 65% cash and 35% credit with all accounts receivables collected in the month following the sale. Cost of goods sold is 75% of sales and ending inventory is maintained at.
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171) PotatoState Manufacturing is preparing its cash payments budget for the coming month. The following information pertains to the cash payments: a.PotatoState Manufacturing pays for 70% of its direct materials purchases in the month of purchase and the remainder the following month. Last month's direct material purchases were $40,000, while FirstState.
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61) Loyal Pet Company expects to sell 5,000 beefy dog treats in January and 9,000 in February for $3 each. What will be the total sales revenue reflected in the sales budget for those months? A) January $15,000; February $27,000 B) January $1,667; February $3,000 C) January $3,000; February $1,667 D) January $27,000; February.
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133) Distribution Corporation collects 40% of a month's sales in the month of sale, 55% in the month following sale, and 5% in the second month following sale. Budgeted sales for the upcoming four months are: April budgeted sales $100,000 May budgeted sales $150,000 June budgeted sales $230,000 July budgeted sales $180,000   The amount of cash that will be.
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193) Becky's Bakery produces two products, cake and pie. Becky's Bakery sells each cake for $15.00 and each pie for $10.00. Variable costs for cakes and pies are respectively, $7.00 and $6.00. There are 3,200 direct labor hours per month available for producing one of the two products. Fixed manufacturing.
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21) A manager is only accountable for expenses in a(n) ________ center. A) cost B) revenue C) profit D) investment 22) The success of a(n) ________ is measured not only by its income, but also by relating that income to its invested capital. A) cost center B) investment center C) profit center D) revenue center 23) Management by.
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68) Management by exception would dictate that the manager investigate which of the following variances? A) Variances which are less than a certain dollar amount or percentage B) Variances which are greater than a certain dollar amount or percentage C) All unfavorable variances D) All favorable and unfavorable variances 69) The performance report for a.
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183) Which of the following types of companies use a sales budget? A) Manufacturing B) Merchandising C) Service D) All of the above 184) Which of the following types of companies use an operating expense budget? A) Manufacturing B) Merchandising C) Service D) All of the above 185) Which of the following types of companies use a "cost.
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111) If a product line has a negative contribution margin, the product is not covering its fixed costs and should be discontinued. 112) If the cost savings from discontinuing a product exceed the lost revenues from discontinuing the product, it should be retained. 113) From a purely financial standpoint, if a product.
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