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Study Resources (Accounting)

28) Groovelex Inc. reports the following information: Units produced 550 units Units sold 500 units Sale price $120 per unit Direct materials $25 per unit Direct labor $12 per unit Variable manufacturing overhead $13 per unit Fixed manufacturing overhead $16,500 per year Variable selling and administrative costs $6 per unit Fixed selling and administrative costs $12,500 per year There are no beginning inventories. What is the ending balance in finished goods inventory using absorption costing? A) $8,500 B) $8,000 C) $6,000 D).
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41) An unfavorable sales volume variance in operating income suggests a(n) ________. A) increase in number of actual units sold when compared to the expected number of units sold B) decrease in number of actual units sold when compared to the expected number of units sold C) increase in variable expenses per unit D).
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38) E-trax Inc. has provided the following financial information for the year 2015: Finished Goods Inventory: Beginning balance, in units 600 Units produced 2,500 Units sold 2,600 Ending balance, in units 500 Production Costs: Variable manufacturing costs per unit $60 Total fixed manufacturing costs $30,000 What is the unit product cost for 2015 using absorption costing? A) $72 B) $60 C) $65 D) $56 39) E-trax Inc. has provided the.
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31) Jupiter Inc. reports the following information for August: Sale revenue $800,000 Variable costs 200,000 Fixed costs 75,000 Calculate the operating income for August using variable costing. A) $625,000 B) $450,000 C) $525,000 D) $420,000 32) Nimtrans Inc. reports the following information for August: Sale revenue $800,000 Variable cost of goods sold 200,000 Fixed cost of goods sold 100,000 Variable selling and administrative costs 150,000 Fixed selling and administrative costs 75,000 Calculate the.
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21) Onyx Décor Company has prepared a static budget at the beginning of the month. At the end of the month, following information has been retrieved from the records. Static budget: Sales volume: 2,000 units: Price: $50 per unit Variable expense: $12 per unit: Fixed expenses: $25,000 per month Operating income: $51,000 Actual results: Sales volume:.
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11) Diemans Corp. has provided a part of its budget for the second quarter: Apr May June Cash collections $40,000 $45,000 $52,000 Cash payments: Purchases of inventory 4,500 7,200 4,500 Operating expenses 7,900 5,600 9,000 Capital expenditures 0 20,000 4,600 The cash balance on April 1 is $12,000. Assume that there will be no financing transactions or costs during the quarter. Calculate the cash balance at the end of April. A) $50,000 B).
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18) Gould Enterprises sells computer disks for $1.50 per disk. Unit variable expenses total $0.90. The breakeven point in units is 3,000 and expected sales in units are 4,300. What is the margin of safety in dollars? A) $4,500 B) $1,950 C) $3,870 D) $6,450 19) McPherson Company is facing a $6 increase in the.
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14) Young Guns Company, which sells tents, has provided the following information: Price per unit $40 Variable cost per unit 12 Fixed costs per month $12,600 What are the required sales in units for Young to break even? A) 252 units B) 1,050 units C) 315 units D) 450 units 15) Young Company has provided the following information: Price per unit $40 Variable cost per.
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16) When the total fixed costs decreases, the contribution margin per unit ________. A) increases B) decreases C) remains the same D) decreases proportionately 17) When the total fixed costs decreases, the breakeven point ________. A) increases B) decreases C) remains the same D) increases proportionately 18) When the selling price per unit decreases, the breakeven point ________ A) increases B) decreases C).
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21) Acme Inc. has prepared its third quarter budget and provided 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 13,000 25,000 0 The cash balance on June 30 is projected to be $4,000. The company has to maintain a minimum cash balance of $5,000 and is authorized to borrow at the end of.
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11) Kevin Couriers Company prepared the following static budget for the year 2015: Static Budget Units/Volume 5,000 Per Unit Sales Revenue $3.00 $15,000 Variable Expenses 1.50 7,500 Contribution Margin 7,500 Fixed Expenses 4,000 Operating Income/(Loss) $3,500 If a flexible budget was prepared at a volume of 7,000, calculate the amount of operating income. A) $3,500 B) $10,500 C) $6,500 D) $4,000 12) Ibis Paper Company prepared the following static budget for the.
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5) Freighters Inc. has provided the following extracts from their budget for the first quarter of the forthcoming year: Jan Feb March Purchases on account $280,000 $295,000 $310,000 The vendors allowed terms of payment as follows: Month of purchase 25% First month after the purchase 50% of the balance Second month after the purchase balance 50% Calculate the total payment on account for the month.
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26) A small business produces a single product and reports the following data: Price $8.00 per unit Variable cost $5.00 per unit Fixed cost $21,000 per month Volume 10,000 per month The company believes that the volume will go up to 11,000 units if the company reduces its price to $7.50.How would this change affect operating income? A) It will go up by $2,500. B).
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31) The phone bill for a company consists of both fixed and variable costs. Refer to the 4-month data below and apply the high-low method to answer the question. Minutes Total Bill January 460 $3,000 February 200 $2,675 March 160 $2,625 April 300 $2,800 What is the variable cost per minute? A) $1.25 B) $0.67 C) $1.08 D) $0.58 32) The phone bill for a corporation consists of both fixed.
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21) Which of the following costs does not change in total despite changes in volume? A) fixed cost B) variable cost C) mixed cost D) total production cost 22) Costs that have both variable and fixed components are called ________. A) fixed cost B) variable cost C) mixed cost D) contribution cost 23) Which of the following costs changes in.
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3) While preparing the budgeted balance sheet of a merchandising company, the amount of merchandise inventory can be obtained from the ________. A) merchandise inventory account B) inventory, purchases, and cost of goods sold budget C) production budget. D) capital expenditure budget and cash budget 4) Freighters Inc. has the following budgeted figures: Calculate the.
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21) Which of the following is considered a period cost under variable costing but not under absorption costing? A) fixed selling and administrative costs B) variable manufacturing costs C) fixed manufacturing overhead D) variable selling and administrative costs 22) Which of the following is considered a period cost in absorption costing? A) variable manufacturing overhead costs B).
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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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1) A standard is a price, cost, or quantity that is expected under normal conditions. 2) A standard cost system is an accounting system that uses standards for product costs. 3) Standard costs help motivate employees by serving as benchmarks against which their performance is measured. 4) A standard cost system helps management.
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4) Fixed costs divided by contribution margin per unit equals breakeven point in unit sales. 5) CVP analysis assumes that the selling price per unit does not change as volume changes. 6) Fixed costs divided by the contribution margin ratio equals the breakeven point in sales dollars. 7) The breakeven point is the.
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21) Edge Inc. had two products—Le Chaud and Le Frais. Financial data for both the products follow: Le Chaud Le Frais Unit sold 2,200 units 800 units Sale price per unit $500 $1,000 Variable manufacturing cost per unit 320 750 Sale commission (% of sales) 7% 5% It had two sale executives—Jack Lynch and Peter Cho. Each of them sold a total of 1,500 units.
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6) Higher fixed costs decrease the total contribution margin required to break even. 7) Higher fixed costs increase the total number of units required to break even. 8) When the variable cost per unit increases, the contribution margin on each unit decreases. 9) If the variable cost per unit decreases, the total number.
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38) Isphase Inc. has provided the following financial data for 2014: Units produced and sold 3,500 units Sale price $220 per unit Direct materials $25 per unit Direct labor $45 per unit Variable manufacturing overhead $30 per unit Variable selling and administrative costs $20 per unit Fixed manufacturing overhead $105,000 per year Fixed selling and administrative costs $140,000 per year There are no beginning inventories. Prepare an income statement for the year using the traditional.
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6) In service companies, variable costing can be used for profitability analysis and contribution margin analysis. 7) Perfect Clean Inc. provides housekeeping services. The following financial data has been provided. Service Revenue $50,000 Cleaning Supplies Used 22,500 Wages Expense 20,350 Office Rent Expenses 5,250 Depreciation—Machinery 750 Calculate the contribution margin and the contribution margin ratio. A) $8,520; 17.0% B) $7,550; 15.1% C) $8,250; 16.5% D) $7,150;.
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8) Components of the master budget are—the operating budget, the capital expenditures budget, and the financial budget. 9) Preparation of the production budget is the first step in the preparation of operating budget. 10) The capital expenditures budget represents the company's plan for purchasing the long-term assets. 11) Which of the following budgets.
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15) Young Company has provided the following information: Price per unit $40 Variable cost per unit 12 Fixed costs per month $10,000 What is the contribution margin ratio? A) 12% B) 60% C) 40% D) 70% 16) Garcia's, a company that sells fishing nets provides the following information about its product: Targeted operating income $ 50,000 Selling price per unit 6.00 Variable cost per unit 1.50 Total fixed costs 125,000 What.
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1) Absorption costing is more appropriate when determining the product costs for long-term planning. 2) Some costs are not controllable in the long-run. However, in the short run, all costs are controllable. 3) A business segment is an identifiable part of the company for which financial information is available. 4) For short-term pricing.
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12) Kapital Inc. has prepared the operating budget for the first quarter of 2015. 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:.
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1) The capital expenditures budget is prepared before the preparation of the cash budget. 2) For any organization, the primary source of cash is from its customers. 3) The cash budget is the prerequisite for the master budget. 4) The output of a cash budget is input for an operating budget. 5) Delleate Inc..
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18) Flexlux Inc. reports the following information: Units produced 500 units Units sold 500 units Sale price $110 per unit Direct materials $20 per unit Direct labor $15 per unit Variable manufacturing overhead $10 per unit Fixed manufacturing overhead $15,000 per year Variable selling and administrative costs $5 per unit Fixed selling and administrative costs $10,000 per year What is the unit product cost using variable costing? A) $50 B) $55 C) $45 D) $65 19) Medbam Inc. has collected the following data.
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31) The Carolina Products Company has completed the flexible budget analysis for the second quarter, which is as given below. Actual Results Flexible Budget Variance Flexible Budget Sales Volume Variance  Static Budget Units/Volume 12,800 0 12,800 800 F 12,000 Sales Revenue $62,720 $1,280 U $64,000 $4,000 F $60,000 Variable Expenses 27,520 640 U 26,880 1,680 U 25,200 Contribution Margin $35,200 $1,920 U $37,120 $2,320 F $34,800 Fixed Expenses 34,100 100 U 34,000 0 34,000 Operating Income/(loss) $1,100 $2,020 U $3,120 $2,320 F $800 Which of the following statements would be a correct interpretation of the flexible budget variance for fixed expenses? A) decrease.
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11) High-Tech Computer Services provide services to corporate and individual customers. During the month of June, the corporate business segment provided services to 500 customers and earned $60,000 in revenue. The individual business segment provided services to 400 customers and earned $35,000 in revenue. The variable costs for the corporate.
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44) Star Moving Systems Inc. has provided the following details for goods purchased on account in different months. Jan$35,000 Feb28,000 March34,000 April39,000 May32,000 June29,000 The terms of payment offered by the suppliers are to pay 70% in the month of purchase and 30% in the following month. Calculate the payments on account made during the first six.
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15) From the following details provided by NutShell Inc., prepare the cost of goods sold budget for the year 2015. Direct material per unit$65 Direct labor hours per unit2 hours Direct labor rate per hour$50 Manufacturing overhead cost per direct labor hour$20 Beginning inventory units1,000 Selling price per unit$250 First Second ThirdFourth QuarterQuarter QuarterQuarter Budgeted units to be.
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5) Both the traditional income statement approach and the contribution margin approach will yield the same answer for calculating breakeven points. 6) Arturo Company sells two generators—Model A and Model B—for $456 and $390, respectively. The variable cost of Model A is $404 and of Model B is $320. If Arturo.
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41) Danby Inc. has the following cost data: Direct materials $38 per unit Direct labor 52 per unit Variable manufacturing overhead 15 per unit Fixed manufacturing overhead 10,000 per year Calculate the unit product cost using absorption costing when production is 200 units, 400 units, and 800 units. 42) Silver Rex Inc. has provided the following data for the year 2015: Direct materials $10 per unit Direct labor $15 per.
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11) The traditional income statement format is prepared under absorption costing. 12) The contribution margin format of the income statement categorizes costs by their behavior. 13) The fixed manufacturing overhead is considered a product cost in variable costing and a period cost in absorption costing. 14) Which of the following statements is true.
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1) Variable costing considers direct materials, direct labor, variable manufacturing overhead, and fixed manufacturing overhead as product costs. 2) Absorption costing considers fixed selling and administrative costs as product costs. 3) Absorption costing is required by the Generally Accepted Accounting Principles (GAAP) for financial statements issued to investors, creditors, and other external.
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41) Gamma Corp. has prepared a preliminary cash budget for the third quarter as shown below: Cash Budget Jul Aug Sep Beginning cash balance $32,000 $4,400 $6,900 Plus: Cash collections 49,400 51,000 44,600 Cash available $81,400 $55,400 $51,500 Less: 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 Ending cash balance $4,400 $6,900 $1,900 Subsequently, the marketing department revised its figures for cash collections. New data are as follows: $52,000 in July, $50,000 in August,.
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15) Bricks Inc. provides architectural services. Service Revenue30,000 Salary and Other Variable Costs20,350 Rent Expenses4,500 Depreciation Expenses500 Requirements: a) Calculate the contribution margin, contribution margin ratio, and operating income. b) Bricks provided service to 150 customers during the month. Determine the average amount the company charged each customer. 16) Home-Plus Inc. has two business segments—Commercial and Residential. The.
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24) Edge Inc. had two products—Le Chaud and Le Frais. Financial data for both the products follow: Le Chaud Le Frais Unit sold 2,200 units 800 units Sale price per unit $500 $1,000 Variable manufacturing cost per unit 320 750 Sale commission (% of sales) 7% 5% It had two sale executives—Jack and Peter. Each of them sold a total of 1,500 units during the.
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