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Study Resources (Accounting)

33) Henderson Industrial Products Company has three divisions-Construction, Manufacturing, and Military.  It has also identified costs associated with several common service departments and has traced those costs to each division.  The Construction Division Income Statement is shown here: Construction Division Income Statement Henderson is now consolidating the division data into a company.
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41) At June 30, 2012, Alpha Company's cash balance is $4,000.  Alpha is now preparing their cash budget for the third quarter of 2012.  The following data is provided: Cash budget Jul Aug Sep Beginning cash balance $4,000 $8,000 $6,958 Cash collections 50,000 40,000 48,000 Cash available 54,000 48,000 54,958 Cash payments:    Purchases of inventory 31,000 22,000 18,000   .
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11) Allbrand Company uses standard costs for their manufacturing division. Standards specify 0.1 direct labor hours per unit of product.  At the beginning of the year, the static budget for variable overhead costs included the following data: Production volume:  5,000 units Estimated variable overhead costs:$12,500 Estimated direct labor hours:500 hours At the end of.
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26) Dahl Manufacturing is making its operating budget for the 4th quarter of 2012.  Sales are forecast at $60,000 in October, $65,000 in November, and $70,000 in December.  Cost of goods sold it 40% of sales.  Expenses are budgeted as follows: Variable:Miscellaneous:5% of sales Fixed:Salary expense:  $12,600 per month Rent expense:$5,200 per month Depreciation.
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Learning Objective 22-4 1) The budgeted cash collections for the current month typically take into consideration collections pertaining to credit sales of prior months. 2) The cash budget can be prepared before the sales budget. 3) The cash budget may be used to determine whether a company will need additional financing for.
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31) Purchases for May were $100,000, while expected purchases for June and July are $110,000 and $125,000, respectively.  All purchases are paid 25% in the month of purchase and 75% the following month.  At what amount are June payments for purchases budgeted? A) $102,500 B) $107,500 C) $110,000 D) $121,250 32) Hatfield Company has the.
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11) Faas Marine Stores Company manufactures decorative fittings for luxury yachts which require highly skilled labor, and special metallic materials.  Faas uses standard costs to prepare its flexible budget.  For the first quarter of 2011, direct material and direct labor standards for one of their popular products were as follows: Materials:  .
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16) Argyle Company is preparing the operating budget for the first quarter of 2012. They forecast sales of $50,000 in January, $60,000 in February, and $70,000 in March.  Variable and fixed expenses are as follows: Variable:Power cost (40% of Sales) Miscellaneous expenses (5% of Sales) Fixed:Salary expense:  $8,000 per month Rent expense:     $5,000 per.
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Learning Objective 22-5 1) When companies use an enterprise resource planning system to roll up or consolidate the budgets of the individual business units, it is more difficult for managers to conduct sensitivity analysis on their own budget data. 2) Budgets are compared to actual results in order to incorporate better.
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11) Which of the following is an example of the coordination and communication function of a budget? A) A budget demands integrated input from different business units and functions. B) Employees are motivated to achieve the goals set by the budget. C) Budget figures are used to evaluate the performance of managers. D) The.
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56) Mudbug International has budgeted inventory purchases as follows: Apr May Jun Budgeted purchases $80,000 $75,000 $70,000 The budget assumes that 50% of a given month's purchases are paid in the month of purchase, and the remaining 50% is paid out one month later.   Accounts payable to inventory suppliers at March 31 was $38,000.   Please.
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31) Western Outfitters Mountain Sports projected 2011 sales of 75,000 units at a unit sale price of $12.00. Actual 2011 sales were 72,000 units at $14.00 per unit.  Variable costs were budgeted at $4.00 per unit; actual amount was $4.75 per unit.  Budgeted fixed costs totaled $375,000 while actual fixed.
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9) Waycross Construction Company has a pipeyard operation which is run as a cost center.  They are preparing a performance report for the month of March and have provided the data below: Cost Center   Flexible Flexible Budget       Performance Report Actual Budget Variance U/F % variance U/F Wages & benefits $81,200 $80,000 Office lease expense 42,060 45,000 Depreciation expense 39,600 42,000 Insurance expense 33,490 30,000 Other.
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21) Portobello Company prepared the following static budget for the coming month: Static Budget Units/volume 5,000 Per Unit Sales revenue $3.00 $15,000 Variable expenses $1.80 9,000 Contribution margin 6,000 Fixed expenses 5,000 Operating income/(loss) $1,000 Using the format below, please prepare a flexible budget including data at volumes of 4,000 and 6,000 units. Flexible Budget Units/volume 4,000 5,000 6,000 Per Unit Sales revenue $3.00.
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6) Norton Company prepared the following sales budget: Month Budgeted Sales March $200,000 April $180,000 May $220,000 June $260,000 Cost of goods sold is budgeted at 60% of sales, and the inventory at the end of February was $36,000. Desired inventory levels at the end of each month are 30% of the next month's cost of goods sold.  How much are.
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7) One part of the balanced scorecard helps management answer the question: "How do we look to shareholders?"  Which of the four perspectives is being described here? A) Financial perspective B) Customer perspective C) Internal business perspective D) Learning and growth perspective 8) One part of the balanced scorecard helps management answer the question: "How.
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11) Portobello Company prepared the following static budget for the coming month:   Static Budget Units/volume 5,000 Per Unit Sales revenue $3.00 $15,000 Variable expenses $1.80 9,000 Contribution margin 6,000 Fixed expenses 5,000 Operating income/(loss) $1,000 If a flexible budget was prepared at a volume of 6,000, how much would the operating income be? A) ($200) B) $500 C) $2,200 D) $1,000 12) Ibis Company.
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Learning Objective 23-4 1) For standard costing methodology, good business practices would emphasize using unfavorable variances as a way of assigning blame to the responsible managers, and favorable variances as a way of rewarding managers. 2) When a company is using standard costs, a favorable variance is a definite indication that.
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17) Many companies use a balanced scorecard for performance evaluation.  The balanced scorecard has four business perspectives, and utilizes KPIs to evaluate performance in various areas.  Which of the following KPIs would relate to the financial perspective? A) Hours of employee training B) Number of warranty claims C) Percentage of market share D) Return.
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21) A company is analyzing month-end results compared to both static and flexible budgets.  This month the actual sales volume was lower than projected in the static budget. What kind of variance would that produce? A) Unfavorable flexible budget variance for variable expenses B) Unfavorable sales volume variance for variable expenses C) Unfavorable.
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Learning Objective 23-5 1) When completing a standard costing income statement, favorable variances for direct materials or direct labor will go to reduce the "cost of goods sold at standard cost." 2) When completing a standard costing income statement, unfavorable variances for direct materials or direct labor will go to reduce.
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9) In order to prepare a budgeted income statement, several other budgets need to be prepared first.  Which of the following is NOT one of the budgets needed to prepare the budgeted income statement? A) Capital expenditures B) Sales C) Operating expenses D) Inventory, purchases and cost of goods sold 10) The financial budget includes.
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21) Felton Manufacturing provides the following data excerpted from its 3rd quarter budget: Jul Aug Sep Cash collections $50,000 $40,000 $48,000 Cash payments:    Purchases of inventory 31,000 22,000 18,000    Operating expenses 12,000 9,000 11,600    Capital expenditures 0 25,000 0 The cash balance at June 30 is projected to be $4,000.  Based on the above data, how.
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41) Faas Marine Stores Company manufactures decorative fittings for luxury yachts which require highly skilled labor, and special metallic materials.  Faas uses standard costs to prepare its flexible budget.  For the first quarter of 2011, direct material and direct labor standards for one of their popular products were as follows: Materials:  .
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26) Henderson Industrial Products uses a centralized service department for procurement of raw materials, servicing all three of its divisions: Construction, Manufacturing, and Military.  The Construction Division has been allocated a total of $192,000 of costs from the procurement department.  Of that amount, $144,000 is considered traceable to the three.
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11) Onyx Company prepared a static budget at the beginning of the month.  At the end of the month, the company is analyzing actual results versus budget using flexible budget methodology.  Data are as follows: Static budget:Sales volume: 1,000 unitsPrice: $70 per unit Variable expense:  $32 per unitFixed expenses:  $37,500 per month Operating.
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37) When measuring a company's performance, which of the following is NOT a lag indicator? A) Operating income for the last month B) Ratio analysis C) Variance analysis D) The expected growth in future demand for a company's products 38) Which of the following is a lagging indicator? A) Operational performance B) Customer satisfaction C) Financial performance D) Employee.
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11) A product line at Coca-Cola is most likely treated as a(n): A) cost center. B) revenue center. C) profit center. D) investment center. 12) Which of the following is a cost center? A) A company's legal department B) A company's sales department C) A product line of a particular company D) A company's individual stores 13) Which of the.
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58) Craig Manufacturing Company's budgeted income statement includes the following data: Data extracted from budgeted income statement Mar Apr May Jun Sales $120,000 $90,000 $95,000 $100,000 Commission expense - 15% of sales 18,000 13,500 14,250 15,000 Salary exp 30,000 30,000 30,000 30,000 Miscellaneous expense — 4% of sales 4,800 3,600 3,800 4,000 Rent expense 3,600 3,600 3,600 3,600 Utility expense 1,900 1,900.
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33) Hi-value Products Company is creating an operating budget for the 3rd quarter, and is now preparing the operating expense budget.  Assumptions for operating expenses are as follows: Miscellaneous expense — variable portion:  10% of sales revenue Miscellaneous expense — fixed portion: $4,200 per month Salary expense — fixed: $12,000 per month Rent expense.
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11) Manufacturing companies that use standard costs do NOT need to compute inventory cost based on LIFO, FIFO, or weighted average. 12) Price Variance = (Actual Price x Actual Quantity) - (Standard Price x Standard Quantity). 13) Efficiency Variance = (Standard Price x Actual Quantity) - (Standard Price x Standard Quantity). 14) The.
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16) Henderson Industrial Products uses a centralized service department for procurement of raw materials, servicing all three of its divisions-Construction, Manufacturing, and Military.  The total monthly costs of the procurement department are $480,000.  Of these costs, 80% are traceable to the divisions, and 20% are considered untraceable.  Henderson has decided to.
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11) Craig Manufacturing Company's budgeted income statement includes the following data: Data extracted from budgeted income statement Mar Apr May Jun Sales $120,000 $90,000 $95,000 $100,000 Commission exp. - 15% of sales 18,000 13,500 14,250 15,000 Salary exp 30,000 30,000 30,000 30,000 Miscellaneous expense — 4% of sales 4,800 3,600 3,800 4,000 Rent expense 3,600 3,600 3,600 3,600 Utility expense 1,900 1,900.
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27) In a balanced scorecard system, if employee excellence was one of the critical factors, which of the following would be a relevant KPI? A) Revenue growth B) Production yield rate C) Market share D) Employee training hours 28) In a balanced scorecard system, if financial profitability was one of the critical factors, which of.
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11) The performance measurement system should provide incentives for coordinating activities of the subunits and focusing them toward the overall company objectives.  This statement reflects which of the following performance measurement goals? A) Motivating unit managers B) Promoting goal congruence C) Providing feedback D) Benchmarking 12) The performance measurement system should compare the company's performance.
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6) Which of the following BEST describes a business unit where the manager is primarily responsible for cost control? A) Profit center B) Investment center C) Revenue center D) Cost center 7) Which of the following BEST describes a business unit where the manager is primarily responsible for generating sales revenue? A) Profit center B) Investment center C).
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Learning Objective 23-1 1) A static budget is prepared for one level of sales volume. 2) A favorable variance reflects an increase in operating income. 3) A variance is the difference between an actual amount and a budgeted amount. 4) Flexible budgets are budgets that summarize cost and revenue information at various volume.
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19) Rockland Heavy Industries has a sales division that focuses on power cranes.  The sales division is a revenue center.  Below is a partially completed performance report for the month of June. Rockland uses management by exception to investigate flexible budget variances.  On which of the following variances would they.
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21) The following information describes a company's usage of direct labor in a recent period: Actual direct labor hours used 44,000 Actual rate per hour $20 Standard rate per hour $18 Standard hours for units produced 42,000 How much is the direct labor efficiency variance? A) $40,000 unfavorable B) $40,000 favorable C) $36,000 favorable D) $36,000 unfavorable 22) The following information describes a company's.
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Learning Objective 24-2 1) Performance evaluation systems provide top management with a framework for maintaining control over the organization. 2) Companies benchmark their performance against the performance of their competitors and also against their own past performance. 3) Decentralization increases the difficulty of achieving goal congruence among managers. 4) If a manager's performance.
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51) Pentangle Company has prepared a preliminary cash budget for the 3rd quarter as shown below: Cash Budget Jul Aug Sep Beginning cash balance $32,000 $4,400 $6,900 Cash collections 49,400 51,000 44,600 Cash available 81,400 55,400 51,500 Cash payments:    Purchases of inventory 36,000 9,000 11,000    Operating expenses 41,000 30,500 30,900    Capital expenditures 0 9,000 7,700 Total cash payments $77,000 $48,500.
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60) Zygot Biotech Company is budgeting for the 3rd quarter, and provide the following data: Jul Aug Sep Cash collections $50,000 $40,000 $48,000 Cash payments:    Purchases of inventory 31,000 22,000 18,000    Operating expenses 12,000 9,000 11,600    Capital expenditures 0 19,000 0 The cash balance at June 30 is projected to be $5,600.  There are no financing.
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11) Alpine Productions uses a standard costing system for recording transactions; they also prepare an internal-use income statement using standard cost methodology.  At the end of 2011, Alpine reported the following data: Sales revenues:$500,000 Cost of goods sold (standard costing)$382,500 Marketing & admin expenses$105,000 Variances: Sales revenue $4,000 F Direct materials price variance 20 U Direct materials efficiency variance 300.
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Learning Objective 23-6 1) Atlantic Manufacturing Company uses standard costing methodology in their journal entries and accounts.  Standards for direct materials are as follows: Pounds per unit2.0Price per pound$5.00 Atlantic plans to produce 3,000 units of product, and has just purchased 10,000 pounds of raw materials for a net cost of $48,000. .
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Learning Objective 23-2 1) The sales volume variance is the difference between the static budget and the flexible budget amounts, and is caused by actual sales volume being different than budgeted sales volume. 2) Which of the following BEST describes sales volume variance? A) Difference between actual amounts and the flexible budget.
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40) Faas Marine Stores Company manufactures decorative fittings for luxury yachts which require highly skilled labor, and special metallic materials.  Faas uses standard costs to prepare its flexible budget.  For the first quarter of 2011, direct material and direct labor standards for one of their popular products were as follows: Materials:  .
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