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101. The new Corina watch has an expected selling price per watch of $42, the projected variable cost per unit is $24, and estimated fixed costs per month are $24,120.The expected breakeven point in sales dollars is A. $48,240.B. $32,160.C. $40,200.D. $56,280. 102. In a graph of cost-volume-profit analysis, the A. total revenue line typically begins at a required minimum.
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136. How can activity-based systems help managers in a global marketplace? 137. What would a company using an activity-based management approach attempt to do in regard to activities that add value to the product and those that do not? 138. Define activity-based costing. Explain why this approach to cost assignments is superior to the traditional.
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81. Which of the following is the realistic measure of what an organization is likely to produce, not what it can produce? A. Practical capacityB. Normal capacityC. Ideal capacityD. Excess capacity 82. Theoretical capacity refers to A. the actual activity level at which a business is operating.B. the maximum productive output possible for a business.C. an output level that allows for normal.
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1. Budgeting is the process of identifying, gathering, summarizing, and communicating financial and nonfinancial information about an organization's future activities.  2. All operating budgets should contain revenue and expense components.  3. Evaluating the value chain and capacity issues are not part of the budgeting process.  4. A budget can contain only financial information.  5. Budgetsare plans of action based.
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106. Cellular Solutions Inc. had a very successful year in 2013. Based on a $125 average unit selling price, monthly sales during 2013 were as follows: January $  75,000 February   60,000 March   100,000 April   150,000 May   60,000 June   50,000 July   40,000 August   85,000 September   65,000 October   95,000 November   35,000 December    50,000 Total $865,000 Mr. James, vice president of sales, is preparing the sales budget for 2014..
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1. Costs are not affected by the changes in the volume of production.  2. Cost behavior is defined as the manner in which costs respond to changes in volume or activity.  3. Understanding cost behavior helps managers in planning the optimal mix of services or products to offer.  4. Cost behavior analysis is not useful to a.
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21. A mixed costs line, plotted on a graph, will start at the Y axis at the amount of fixed cost.  22. The high-low method allows managers to differentiate between fixed and variable costs when dealing with mixed costs.  23. When using the high-low method, the accountant assumes the fixed portion of mixed costs to.
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41. A product line's contribution margin represents its contribution to paying off variable costs and to generating a profit.  42. Using or not using the contribution margin for cost-volume-profit computations will not change the resulting amount of breakeven units in a given situation.  43. If fixed costs are $24,000, variable costs are $25 per unit,.
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11. Cost can only be classified as either variable or fixed.  12. An organization’s theoretical operating capacity is the level at which its management expects to operate during a normal business environment.  13. An organization’s practical capacity is its theoretical or ideal capacity reduced by normal and anticipated work stoppages, such as machine breakdowns.  14. An organization’s.
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112. The following information is available from the controller's records for Penelope Ltd.: Sales Purchases May $60,000 $20,000 June 70,000 30,000 July 80,000 25,000 All sales are on credit. Records show that 80 percent of the customers pay during the month of the sale, 15 percent pay the month after the sale, and the remaining 5 percent pay the second month after the.
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145. a. What is the formula for breakeven units?b. How is knowledge of the contribution margin of a product helpful?    In your answer, explain two possible benefits of computing the contribution margin of a product. 146. a. Provide two different ways of computing breakeven units: one with the contribution margin in the computation.
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122. Backflush costing aims at reducing waste in the A. accounting system.B. cost of goods sold.C. storage of raw materials.D. production process. 123. For work done during August, Footprints Company incurred direct materials costs of $104,000 and conversion costs of $260,000. The company employs a just-in-time operating philosophy and backflush costing. At the end of August, it was.
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131. How do managers measure an activity's performance? 132. Distinguish between a supply chain and a value chain. How do they relate to each other? 133. Last year, Amanda Jones opened an ice cream parlor in a busy shopping center. She spent a lot on advertising and attracted many customers into the store, but a.
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71. Which of the following would not require the use of cost behavior analysis? A. Recording the transfer of production costs from one department to anotherB. Projecting anticipated costs of a new projectC. Buying an existing businessD. Changing an existing product or service 72. Which of the following statements most accurately explains the behavior of costs? A. Costs can be.
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61. One of the assumptions of CVP analysis assumes production and sales to be approximately equal.  62. Breakeven sales in dollars can be obtained without knowing the dollar value of contribution margin per unit.  63. If direct materials costs are increased, the breakeven point will decrease.  64. In breakeven analysis adjusted for a profit factor, increasing the.
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114. Sondari Corporation estimates the following for 2014: Sales (all on account) $600,000 Collections of accounts receivable 400,000 Proceeds from bond issuance 200,000 Proceeds from sale of common stock 300,000 Merchandise bought on credit 350,000 Payments of accounts payable 300,000 Cash payments of expenses 60,000 Cash purchase of computerized equipment 100,000 Depreciation of computerized equipment 10,000 Payment on notes payable 20,000 Ending cash balance for 2013 was $150,000.Prepare a cash budget to.
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164. Loren Inc. sold 30,000 units of its product last year with the following results: Sales revenue $900,000 Variable costs 630,000 Fixed costs 190,000 Operating income $ 80,000 The company expects variable costs to increase by $4.00 per unit this year.a. Assuming the unit sale price remains constant, compute the unit contribution margin and the contribution margin ratio for.
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131. Fusion Inc. sells a single product which has a contribution margin of $125 per unit. The fixed cost of Fusion is $195,000. If the company wants to earn $55,000 as operating income, it should sell: A. 2,000 units.B. 1,560 units.C. 440 units.D. 2,500 units. 132. The breakeven formula adjusted for profits may be stated as A. Sales Revenue =.
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79. A cash budget A. is an optional feature of a master budget.B. requires input from all parts of the organization.C. involves nonmonetary information.D. can only be prepared at year end. 80. Which of the following do not serve as a source of data while preparing a cash budget? A. A sales budgetB. Collection recordsC. A budgeted balance sheetD. A budgeted income statement 81. If.
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11. Sales budget is the final product of the budgeting process.  12. Managers do not need to know why a budget is being prepared, as these are prepared by higher authorities.  13. The budgeting function begins with the preparation of a production budget.  14. Revising the budgets to include all planning decisions will improve the quality of.
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101. List the contents of a master budget for a manufacturing organization by identifying the two major components and the budgets within each of them. 102. Fill in the blanks.1. The cash budget serves two purposes. First, it shows the ending _________, which is needed to complete the __________. Second, it highlights period’s.
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102. Which of the following is not a concern when managing inventory in a just-in-time environment? A. Reduction of space needed to store inventoryB. Inventory turnoverC. Labor costD. Inventory size reduction 103. In a just-in-time environment, managing the production process focuses on A. total processing time per unit.B. allocating overhead more accurately.C. reducing inventories.D. units produced per direct labor hour. 104. Which of the following.
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162. Ryan's Landscaping sells a quality brand of hoes, shovels, and rakes in a sales mix of 2:4:2. The company's fixed costs are $61,600. Product data include the following: Unit Sales Price Unit Variable Costs Hoes $12 $8 Shovels 15 7 Rakes 16 8 a. Compute the weighted-average contribution margin.b. Determine the weighted-average breakeven point.c. Calculate the breakeven point for each product.d. Determine.
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166. Ben & Harry Co. sold 100,000 units last year with the following results: Sales revenue $400,000 Variable costs   160,000 Contribution margin $240,000 Fixed costs   100,000 Operating income $140,000 a. Management thinks that a 5 percent reduction in the unit sales price and a $31,000 increase in fixed advertising costs will create a 30 percent increase in unit sales. Assess.
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112. Which of the following is reduced by a just-in-time operations? A. Inspection time and moving timeB. Only storage timeC. Moving time and processing timeD. Inspection time and processing time 113. The actual amount of time that a product is being worked on is known as the A. moving time.B. inspection time.C. processing time.D. queue time. 114. In a just-in-time operating environment, the key measure.
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148. M. E. Taylor Enterprises had the following transactions during October. There were no beginning inventory balances.a. Purchased $37,300 of direct materials, on account.b. Incurred direct labor costs, $29,250.c. Applied $37,500 of overhead to production.d. Completed units costing $88,450.e. Sold units costing $76,130. Using backflush costing, show the flow of costs.
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91. Using the high-low method and the information below, compute the monthly total fixed costs for Coral Corporation. Month Telephone Hours Used Telephone Expenses October 110 $4,400 November 120   4,700 December 160   5,300  A. $8,000B. $2,420C. $5,500D. $5,580 92. Retleb Manufacturing Company noticed that, during its busiest month of 2014, maintenance costs totaled $15,400, resulting from the production of 32,000 units. During its slowest month, $12,600 in maintenance.
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89. Lee Carter Inc. forecast of sales is as follows: July, $50,000; August, $80,000; September, $150,000. Sales are normally 75 percent cash and 25 percent credit. Credit sales are collected in full in the following month. Merchandise cost averages 70 percent of sales price. The company desires an inventory as of.
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31. Successful budget implementation depends on two factors—clear communication and the support of top management.  32. The long-term plan or budget involves every part of the enterprise and is much more detailed than the short-term plan.  33. Only the lowest levels of management can be evaluated using budgets.  34. Participative budgeting results in setting unattainable standards.  35. Budgets identify.
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154. Neverlate is world famous for its precision pocket watches. The company has estimated that variable manufacturing costs and variable selling costs per watch will be $72 and $43, respectively, for 2014. Also during 2014, the company is expecting fixed manufacturing costs to total $291,600 and fixed general and administrative expenses.
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108. Sarusse Inc. produces two products in a single plant utilizing two departments: Shaping and Assembly. Direct labor hour and dollar requirements for 2014 are being projected using 2013 unit standard labor information. Departmental data and routing sequence information are shown below. Product Shaping Assembly R2D2 0.5 0.4 T3E3 0.7 0.6 Labor rate per hour $9 $12 Management has forecasted that.
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39. Which of the following is true of budgets? A. Every budget must contain both revenues and expenses.B. Budgets reduce the comparability concept of accounting.C. The data in budgets are presented in dollars only; nonfinancial data should be excluded.D. Budgets are synonymous with managing an organization. 40. Budgets identify, gather, summarize, and communicate A. financial data only.B. financial and nonfinancial data.C. nonfinancial.
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21. Each period's ending cash balance becomes the beginning cash balance for the next period.  22. Receipt of stock dividends, depreciation, and amortization expense will not be recorded in the cash budget prepared by an organization.  23. The cash budget is derived exclusively from the sales and production budgets.  24. In estimating cash receipts and cash payments.
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141. The graph below depicts two different types of costs. Questions related to the graph should be answered in the spaces provided.a. The line H-B represents what type of cost? ______________________b. Total variable costs for production at point J would be ___________ than at point L.c. Fixed costs per unit at.
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49. Which of the following budgets must managers prepare before they can prepare a direct materials purchases budget? A. Labor budgetB. Overhead budgetC. Production budgetD. Cost of goods manufactured budget 50. Which of the following statements is true? A. The direct materials purchases budget is determined from the direct labor budget.B. The sales budget is the only budget based on an.
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104. Describe three benefits budgeting provides to an organization's success. 105. Match the following sentences with their related terminology. 1. Capital expenditures budget      Has two purposes, one of which is computing the overhead rates for the forthcoming accounting period 2. Selling and administrative expense budget      Can be prepared as soon as the sales budget has been completed and is.
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69. Green Garden Inc. bills and pays selling and administrative expenses the month after they occur. Selling and administrative expenses have both a fixed and a variable component. The fixed component is a constant $47,000 a month. The variable component equals 15 percent of revenues. Given revenues of $800,000 for March,.
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110. Harrisburg Manufacturing produces three products requiring the following inputs of raw materials: Units of Materials Required Product Fabric Metal Jade 2 1 Kolia 1 2 Lymon 2 1 Unit cost and inventory for each raw material: Fabric Metal Unit cost $3 $2 Beginning inventory 10,000 8,000 Ending inventory 9,000 6,000 Scheduled production: Jade: 20,000 Kolia: 10,000 Lymon: 30,000 Prepare a direct materials purchases budget for the year ended December 31,.
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151. Denapasa Manufacturing leases a vacuum cleaning system for a basic monthly fee plus an additional cost per hour used above a given minimum for each month. Given below is the information for the most recent six-month period on the number of machine hours of use and the total cost under.
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144. Listed below are a number of common manufacturing costs. For each cost, state whether the cost would be considered a direct (D) or indirect (I) cost in a traditional manufacturing environment and in a JIT manufacturing environment. Cost Element Traditional Manufacturing Environment JITManufacturing Environment Insurance Property taxes Equipment depreciation Raw materials Materials handling Operating supplies Power Heat and light Labor of equipment.
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31. Regression analysis takes into consideration only the highest and the lowest level of activities to predict cost behavior.  32. A scatter diagram helps to determine if a linear relationship exists between a cost item and its related activity measure.  33. The engineering method of separating costs is sometimes called a regression analysis.  34. CVP analysis can.
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146. The Yeva Company produces children's automobile car seats. The company recently changed from a traditional production environment to just-in-time work cells. The company's car seats are widely distributed in popular retail stores. Would you recommend the use of backflush costing or ABM/ABC for tracking product costs? Explain your choice of.
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111. How many total dollars of sales must Windblow Company sell to break even, if the selling price per unit is $10, variable costs are $5.00 per unit, and fixed costs are $10,000? A. $20,000B. $6,667C. $10,000D. $12,000 112. When fixed costs are $18,000 and the contribution margin per unit is $4, the breakeven point is A. 4,500 units.B. 2,230 units.C. $22,300.D. $72,000. 113. How.
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51. Margin of safety is the excess of actual sales over break even sales.  52. Breakeven analysis helps in finding the level of activity at which sales revenue equals the sum of all variable and fixed costs.  53. A project breaks even when total revenues less variable costs equals fixed costs.  54. In a breakeven scatter diagram,.
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121. Lakeside has gathered the following data in order to calculate the weighted-average breakeven point: Unit Sales Price Unit Variable Costs Unit Sales Product A $150 $100 8,000 Product B 100 60 2,000 Fixed costs incurred is $480,000 The weighted-average breakeven point is A. 11,429 units.B. 10,000 units.C. 5,333 units.D. 10,667 units. 122. Walton reported sales of $640,000, fixed costs of $314,000, and a profit of $92,000. If the contribution margin.
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157. Plunda Co. is planning production for the coming year. The information to be used is based on a projection of cost information for the current year. Projections of the following costs are as follows: Variable costs per unit:    Direct materials $15.80    Direct labor 11.60    Overhead 18.40    Selling costs 8.20 Fixed cost estimates:    Production costs $212,400    Selling and.
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141. President/CEO to her Controller:“On the golf course yesterday I overheard John Jeffers, the CEO for Octal, say that the problem with many manufacturing companies today is their antiquated manufacturing cost accounting systems. It appears to me that our cost accounting system has served us well as our company has grown.
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