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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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157) Cornell Enterprises currently produces several products. Model L78 is showing a net operating loss as indicated by the following condensed income statement prepared for the year ended December 31. You have been hired by Cornell Enterprises to help analyze the decision as to whether to eliminate Model L78. Upon investigation,.
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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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109) Sally Scooters manufactures and sells scooters. Each scooter requires two rear view mirrors. For September, Sally Scooters has budgeted sales of 415 scooters, while 450 scooters are scheduled to be produced. Sally Scooters will begin September with 220 rear view mirrors in its beginning inventory. How many rear view.
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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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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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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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112) Timber Run Company has prepared the following forecasts of monthly sales: January February March April Sales (in units) 3,400 4,790 3,570 3,210 Timber Run Company has decided that the number of units in its inventory at the end of each month should equal 80% of next month's sales. The budgeted cost per unit is $10. How many units should be.
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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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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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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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172) The Alec Corporation sells inflatable pools. On June 30, there were 105 pools in ending inventory, and accounts receivable had a balance of $12,000. Sales of inflatable pools (in units) have been budgeted at the following levels for the upcoming months: Accounts receivable, June 30 $12,000 Number of pools budgeted to.
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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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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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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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162) To maximize profits, produce the product with the lowest contribution margin per unit of the constraint. 163) When making product mix decisions, companies are most profitable when they maximize production of the product with the greatest sales demand. 164) When making product mix decisions, companies are most profitable when they.
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151) 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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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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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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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 credit sales are collected as follows: Month of sale 20% Month after sale 50% Two months after sale 25% Uncollectible 5% Required: Prepare a cash collections budget for each month in the.
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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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161) 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 cash disbursements in October for September purchases? A) $20,610 B) $11,450 C) $8,900 D) $152,667 162) Goliath Company prepared the following.
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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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101) Beloved Baby Company manufactures and sells children's strollers. Each stroller requires eight screws. For September, Beloved Baby Company will begin September with 380 screws in its beginning inventory. Beloved Baby Company has budgeted stroller sales of 530 strollers, while 570 strollers are scheduled to be produced. How many screws.
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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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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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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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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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172) All of the following would be considered in evaluating product or sales mix allocations, except A) deciding which product offers the lowest contribution margin per unit. B) deciding whether fixed costs would change as a result of the product sales mix. C) deciding upon any and all constraints associated with the product/sale.
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130) Which of the following is an example of a financial budget? A) Budgeted balance sheet B) Sales budget C) Budgeted income statement D) Operating expenses budget 131) All of the following are considered when preparing the cash budget except A) payments for inventory. B) cash receipts from customers. C) depreciation expense. D) cash payments to suppliers. 132) The final.
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182) Silvio Enterprises produces three products, with costs and selling prices as follows: Each product requires a certain number of minutes on the drill press. There is only one drill press available so it is the constraint for this product. Model D7 requires 2 minutes of drill press time, Model B3.
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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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51) The store manager for the Dick's Sporting Goods location in Columbus, Ohio, is in charge of a(n) A) cost center. B) investment center. C) profit center. D) revenue center. 52) The manager of the accounting department at Adidas would be in charge of a(n) A) investment center. B) cost center. C) profit center. D) revenue center. 53) The.
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178) Manufacturing, merchandising, and service companies prepare operating expense budgets. 179) Merchandising companies do not prepare a direct materials budget. 180) Service companies do not prepare a cash budget. 181) Which of the following types of companies use a direct materials budget? A) Manufacturing B) Merchandising C) Service D) All of the above 182).
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106) Carlton Cookie Company produces a hand-processed gourmet cookie that is made with organic sugar. Five (5) pounds of organic sugar are required per batch of gourmet cookies. The organic sugar costs $2.40 per pound. The company needs to have 20% of the following month's production needs of organic sugar.
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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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143) 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 Lovely Locks can eliminate fixed costs of $32,000 and increase the sale of Curling Irons by 6,000 units at a selling price of.
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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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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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188) Merchandising companies prepare which of the following budgets? A) Sales B) Cash C) Operating expense D) All of the above 189) All of the following budgets are prepared by service companies except A) cost of goods sold, inventory and purchases. B) cash. C) operating expense. D) sales. 190) All of the following budgets are prepared by merchandising companies.
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153) Black Productions has three models: D, E, and F. The following information is available:   Model D Model E Model F Sales revenue $65,000 $33,000 $24,000 Variable expenses $32,000 $13,000 $14,000 Contribution margin $33,000 $20,000 $10,000 Fixed expenses $16,000 $16,000 $16,000 Operating income (loss) $17,000 $4,000 $(6,000) Black Productions is thinking of discontinuing model F because it is reporting an operating loss. All fixed costs are unavoidable. Black Productions discontinues model F and rents.
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