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Study Resources (Accounting)

191) LampLight Industries gathered the following information for the month of July: Overhead flexible budget: Number of units 10,000 13,000 16,000 Standard machine hours 13,500 17,500 21,500 Budgeted variable overhead costs: $30,000 $29,000 $48,000 Budgeted fixed overhead costs: $53,250 $53,500 $63,000 LampLight actually produced 14,000 units in 17,500 machine hours. Total actual overhead cost of $85,500 consisted of $35,000 variable costs and $50,500 fixed costs. The standard variable.
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106) The following information describes a company's usage of direct labor in a recent period: Actual direct labor hours used 34,000 Actual rate per hour $17.00 Standard rate per hour $16.75 Standard hours for units produced 33,500 How much is the direct labor rate variance? A) $8,375 favorable B) $8,500 favorable C) $8,375 unfavorable D) $8,500 unfavorable 107) The actual cost of direct labor.
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233) Standard Products Company recognizes variances from standards at the earliest opportunity, and the quantity of direct materials purchased is equal to the quantity used. The following information is available for the most recent month. Assume the allocation base for fixed overhead costs is the number of units. Direct MaterialsDirect Labor Standard.
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144) All variances discovered by management must be investigated. 145) Up-to-date standard costs provide a benchmark by which to evaluate actual costs and operations. 146) Managers will want to use management by exception to determine which variances are significant enough to warrant investigation. 147) Price and quantity variances are a way to motivate.
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169) (Present value tables are needed.) Shaker Investments, a private investment holding company, is searching for a new investment opportunity. Shaker Investments has identified two potential investment opportunities: an upstart fast food chain and a growing organic grocery chain. Information for each investment follows: Fast FoodOrganic Grocery ChainChain Investment$975,000$1,500,000 Useful life (years)1515 Estimated annual net.
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41) The ________ section from the statement of cash flows would include the payment of a long-term mortgage payable with cash. A) investing B) financing C) operating D) None of the above 42) Paying cash dividends would be A) a cash outflow from operations. B) a cash outflow from financing. C) a cash outflow from investing. D).
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126) Quinton's Salon cuts men's hair. Labor standards for each cut are as follows: Standard direct labor hours per cut .75 Standard direct labor rate $20.00 The following data relates to the haircuts during the month of October: Actual hours worked 160 Actual total labor cost $3,150 Actual number of haircuts 220 What is the labor efficiency variance for the month of.
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146) (Present value tables are needed.) Cleveland Cove Enterprises is evaluating the purchase of an elaborate hydraulic lift system for all of its locations to use for the boats brought in for repair. The company has narrowed their choices down to two: the B14 Model and the F54 Model. Financial.
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116) When selecting a capital investment project from three alternatives, the project with the highest net present value will always be preferable. 117) The hurdle rate is the length of time it takes to recoup an investment's initial cost from the cash inflows that investment generates. 118) When evaluating the cash flows.
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31) The ________ is the most important section on the statement of cash flows because it reflects the day-to-day operations that determine the future of an organization. A) operating section B) financing section C) investing section D) None of the above 32) Which of the following sections from the statement of cash.
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180) The ________ capital budgeting method uses accrual accounting income. A) accounting rate of return B) payback C) net present value D) internal rate of return 181) Which of the following is not an advantage of post-audits of capital investments? A) They indicate whether project should continue or should be abandoned. B) They help.
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193) If production remains within the relevant range for the period, fixed costs are expected to remain fixed. 194) The fixed overhead budget variance measures the difference between the actual fixed overhead costs incurred and the budgeted fixed overhead costs. 195) The cause of a fixed overhead variance, such as an unanticipated.
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235) Standard Products Company recognizes variances from standards at the earliest opportunity, and the quantity of direct materials purchased is equal to the quantity used. The following information is available for the most recent month. Assume the allocation base for fixed overhead costs is the number of units. Direct MaterialsDirect Labor Standard.
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181) Luka Company uses the following overhead standard costs for a single unit of product: 7.5 hours at $13.50 per hour. Actual data for the month showed overhead costs of $132,000 for 1,800 units produced. What is the difference between actual overhead costs and standard overhead costs allocated to products? A).
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170) The ARR is the only method that uses accrual accounting figures and thus making it important to financial statement users. 171) Neither the payback period nor the IRR capital budgeting method recognizes the time value of money. 172) The payback and accounting rate of return models are conceptually better than the.
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161) The variable overhead rate variance tells managers whether more or less was spent on variable overhead than they expected for the hours worked. 162) The total variable manufacturing overhead variance is composed of the rate variance and the efficiency variance. 163) How is the variable manufacturing overhead efficiency variance calculated? A).
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232) Costanza Manufacturing gathered the following information for the year ended December 31: Actual sales $285,000 Standard sales $285,000 Standard cost of goods sold $200,000 Direct material price variance $4,200 Unfavorable Direct material quantity variance $900 Unfavorable Direct labor rate variance $3,000 Favorable Direct labor efficiency variance $900 Unfavorable Overhead flexible budget variance $2,250 Unfavorable Production volume variance $3,000 Favorable Selling and Administrative $55,000 Prepare a standard cost income statement for Costanza for the year ended December.
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1) Capital investments do not typically require large sums of money. 2) The process of making capital investment decisions is referred to as capital budgeting. 3) Self-check-in machines at airports are an example of capital assets. 4) Capital budgeting is done when common stock is issued. 5) Choosing among alternative capital investments is.
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96) The direct labor flexible budget variance can be divided into two variances: A) rate variance and price variance. B) price variance and usage variance. C) rate variance and efficiency variance. D) price variance and efficiency variance. 97) A favorable direct labor efficiency variance might indicate that A) higher skilled workers were used that performed the.
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116) Active Lifestyle Beverages gathered the following information for Job #928: Standard Total Cost Actual Total Cost Direct labor: Standard: 540 hours at $6.75/hr. 3,645 Actual: 500 hours at $6.50/hr. 3,250 What is the direct labor rate variance? A) $125 favorable B) $125 unfavorable C) $135 favorable D) $135 unfavorable 117) Active Lifestyle Beverages gathered the following information for Job #928: Standard Total Cost Actual.
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142) Nixon's Diner bakes pies in large batches. One batch of pies has the following standard costs and amounts: Standard quantity of sugar (pounds) 115 Standard cost per pound of sugar $ 2.10 Standard direct labor hours per batch of pies 1.5 Standard direct labor cost per hour $ 19.00 Nixon's Diner baked 425 batches of pies in the.
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189) On the line in front of each variance, put the letter of the department that is most likely responsible for that variance. A letter may be used more than once or not at all. A.Production department B.Marketing department C.Purchasing department D.Personnel department ____Direct labor rate variance ____Direct material price variance ____Sales volume variance ____Direct labor efficiency variance ____Direct.
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21) The accounting rate of return uses non-cash flow factors including depreciation in calculating the operating income of the asset. 22) Investments with longer payback periods are more desirable, all else being equal. 23) The payback method can be used when the net cash inflows from a capital investment are unequal. 24).
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41) Gomez Corporation is considering two alternative investment proposals with the following data: Proposal X Proposal Y Investment $ 850,000 $ 468,000 Useful life 8 years 8 years Estimated annual net cash inflows for 8 years $ 125,000 $ 78,000 Residual value $ 40,000 $ - Depreciation method Straight-line Straight-line Required rate of return 14% 10% What is the accounting rate of return for Proposal Y? A) 5.24% B) 4.17% C) 29.17% D) 16.67% 42) The Warren.
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192) The Berwin Company established a master budget volume of 35,000 units for April. Actual overhead costs incurred amounted to $98,500. Actual production for the month was 34,000 units. The standard variable overhead rate was $1.75 per direct labor hour. The standard fixed overhead rate was $1.50 per direct labor.
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143) Weissfeld Corporation manufactures a single product. The direct materials standard calls for 5 pounds of direct material per unit. The standard for direct material cost per pound is $10. A computer error has wiped out the records for the direct labor standards but the following information is found for.
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138) On the line in front of each variance, enter the letters of the items needed to compute that variance. You will enter more than one item on each line. A. Actual labor rate B. Actual labor hours C. Standard labor rate D. Standard labor hours ______Direct labor rate variance ______Direct labor efficiency variance 139) Cuyahoga Corporation.
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140) Pyne Corporation's actual output for a period was assigned the standard labor cost of $32,500. If the company had an unfavorable direct labor rate variance of $1,750 and a favorable direct labor efficiency variance of $975, what was the total actual cost of direct labor incurred during the period? 141).
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213) If a company recognizes variances at the earliest point possible, raw materials inventory will be debited for the actual quantity of raw materials purchased and costed at the actual price paid per unit. 214) A debit balance in the direct materials price variance indicates the standard cost of materials was.
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156) (Present value tables are needed.) Mulheim Corporation is deciding whether to automate one phase of its production process. The equipment has a six-year life and will cost $410,000. Projected net cash inflows from the equipment are as follows: Year 1 $ 120,000 Year 2 $ 100,000 Year 3 $ 110,000 Year 4 $ 100,000 Year 5 $ 95,000 Year.
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51) Suppose Whole Foods is considering investing in warehouse-management software that costs $600,000, has $60,000 residual value and should lead to cash cost savings of $130,000 per year for its five-year life. In calculating the ARR, which of the following figures should be used as the equation's denominator? A) $60,000 B) $600,000 C).
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171) Speaker City designs and manufactures high-end home theater speakers. Speaker City uses a standard overhead rate of 3.5 hours per unit at a cost of $9.50 per hour. Data for the month of June shows that Speaker City produced 500 units and recorded actual overhead costs of $19,500. What.
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203) Shamrock Manufacturing budgeted fixed overhead costs of $2.75 per unit at an anticipated production level of 1,350 units. In July Shamrock incurred actual fixed overhead costs of $4,400 and actually produced 1,300 units. What is Shamrock's fixed overhead budget variance for July? A) $687.50 favorable B) $687.50 unfavorable C) $825.00 favorable D) $825.00 unfavorable 204).
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11) Financing activities include activities that affect long-term liabilities and owner's equity on the balance sheet. 12) Which of the following parties would have an interest in the cash a company has? A) Creditors expecting loans and interest to be repaid B) Employees expecting to be reimbursed for their work C) Investors expecting.
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155) Identify five benefits of standard costs. 156) The variable overhead efficiency variance is calculated as Actual Hours × (Actual Rate - Standard Rate). 157) The production volume variance is favorable whenever expected output is greater than actual output. 158) The variable overhead rate variance may be affected by both indirect labor and.
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