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AT10- 1 Achievement Test 10 PART III — FLEXIBLE BUDGETS (22 points) Newton Company uses a flexible budget for overhead based on direct labor hours (DLH). Master budget figures, based on 900,000 direct labor hours, and actual overhead for March, when 86,000 labor hours were worked, are as follows: Master BudgetMarch Actual Variable: Indirect labor$   315,000$ .
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AT11- 1 Achievement Test 11 PART II — TRUE/FALSE (20 points) Instructions: Designate whether each of the following statements is true or false by circling the T or F. TF              1.If actual costs are less than standard costs, the variance is favorable. TF              2.A materials quantity variance is calculated as the difference between the standard.
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  Problem G - III — Capital Budgeting (16 points) Scranton Company is considering a capital investment of $1,000,000 in new equipment. It is expected to have a useful life of 10 years with no salvage value. Depreciation is computed by the straight-line method. During the life of the investment, annual net.
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Problem F - IV — Budgeting (18 points) Marlene of Mars has budgeted the following unit sales for the first quarter of 2012:   Units January72,000 February108,000 March90,000 It takes two pounds of direct materials, which cost $6 per pound, to manufacture one Orbital Orb. It is Marlene of Mar’s policy to have a finished goods.
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PART VII — RATIO ANALYSIS (21 points) The condensed financial statements of Western Corporation for 2012 are presented below. Western CorporationWestern Corporation Balance SheetIncome Statement December 31, 2012For the Year Ended December 31, 2012 AssetsRevenues$2,000,000 Current assetsExpenses Cash and short-termCost of goods sold1,080,000   investments$   30,000Selling and admin Accounts receivable70,000  expenses495,000 Inventories     110,000Interest expense              25,000 Total current assets210,000Total expenses       .
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____              21.Barken Company's records show the following for the month of January:               Total Retained Earnings at January 1 ..................$600,000               Total Retained Earnings at January 31 .................750,000               Total Revenues ..................................1,005,000               Total Dividends Declared ...........................60,000               Total expenses for January were:               a.$1,110,000.               b.$1,155,000.               c.$855,000.               d.$795,000.               22.Stetson Company's financial information is presented below.                            .
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  Problem H - IV Present Value/Future Value Calculation (10 points) Ramond Motor Works leases a building for 20 years. The lease requires 20 annual payments of $10,000 each, with the first payment due immediately. The interest rate in the lease is 10%. What is the present value of the cost of.
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  Problem E - II — Cost of Goods Manufactured and Sold (20 points) Selected account balances of Worthington Manufacturers Inc. appear below for 2012: Beginning of YearEnd of Year Finished Goods Inventory$50,000$  64,000 Work In Process Inventory60,00070,000 Raw Materials Inventory92,00052,000 Sales720,000 Direct Labor90,000 Factory Supervisory Salaries36,000 Income Tax Expense50,000 Factory Insurance24,000 Raw Material Purchases150,000 Administrative Expenses34,000 Sales Returns and Allowances30,000 Factory Depreciation44,000 Indirect Labor22,000 Selling Expenses70,000 Instructions Using.
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AT10- 1 Achievement Test 10 PART II — BUDGETARY PLANNING (32 points) This problem consists of four independent mini-problems. Omit headings other than those already given. A.Washer Manufacturing produces and sells containers designed to hold liquid beverages. The sales budget for 2012 is as follows: 1st quarter  — 130,000 units3rd quarter — 180,000 units 2nd quarter.
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AT11- 1 Achievement Test 11 PART III — (30 points) VARIANCE ANALYSIS Better Bats, Inc. manufactures aluminum baseball bats that it sells to university athletic departments. It has developed the following per unit standard costs for 2012 for each baseball bat: Direct MaterialsDirect LaborManufacturing Overhead Standard quantity2 pounds (Aluminum)½ hour½ hour Standard price$3.90$9.75$6.00 Unit standard cost$7.80$4.875$3.00 In 2012, the.
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  Problem H - II — Partnership Income Allocation (10 points) Rita and Mia report net income of $100,000. Partner salary allowances are Rita $40,000 and Mia $20,000.  Indicate the division of net income to each partner, assuming the income ratios are Rita 70% and Mia 30%. Instructions Indicate the division of net income.
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  Problem H - I — Multiple Choice (20 points) Circle the one best answer.               1.Which one of the following payroll taxes does not result in a payroll tax expense for the employer? a.Federal income tax. b.FICA tax. c.Federal unemployment tax. d.State unemployment tax.               2.Which of the following would not be classified as a short-term.
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AT10- 1 Achievement Test 10 Achievement Test 10: Chapters 20-21 PART I — MULTIPLE CHOICE (26 points) Instructions:  Designate the best answer for each of the following questions. ____              1.Walnut Company produced 96,000 units in 46,000 direct labor hours. Production for the period was estimated at 99,000 units and 49,500 direct labor hours. A flexible.
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Problem F - II — Cost-Volume-Profit (24 points) Monilus Missles Company prepared the following income statement for 2012: MONILUS MISSLES COMPANY Income Statement For the Year Ended December 31, 2012 ——————————————————————————————————————————— Sales (40,000 units).............................................$1,000,000 Variable expenses..............................................  600,000 Contribution margin.............................................400,000 Fixed expenses................................................  240,000 Net income....................................................$  160,000 Instructions Answer the following independent questions and show computations to support your answers. 1.What is Monilus’ break-even point.
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____              11.The most useful measure for evaluating the performance of the manager of an investment center is                             a.contribution margin.                             b.controllable margin.                             c.return on investment.                             d.income from operations. ____              12.Which of the following capital budgeting techniques explicitly takes the time value of money into consideration?                             a.Annual rate.
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  Problem G - I — Multiple Choice (22 points) Circle the one best answer.               1.A standard which represents an efficient level of performance that is attainable under expected operating conditions is called a(n) a.ideal standard. b.loose standard. c.tight standard. d.normal standard.               2.Tom Thumb Pie Company developed the following per unit standards for its product: 4.
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PART VIII — STATEMENT OF CASH FLOWS (20 points) Presented below is information related to the operations of Myers Corporation. December  2012  2011  2012_ Cash              $  55,000              $  40,000              Sales$400,000 Accounts receivable              60,000              48,000Cost of goods sold                190,000 Inventory              42,000              22,000              Gross profit              210,000 Prepaid expenses              17,000              20,000              Depreciation expense              15,000 Land              36,000              20,000              Other operating expenses                136,000 Building             .
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AT10- 1 Achievement Test 10 PART IV — COMPUTATION OF RETURN ON INVESTMENT (ROI) (20 points) For the year ended December 31, 2012, Reese Company reports the following: Sales$6,000,000 Variable costs3,200,000 Controllable fixed costs2,000,000 Average operating assets4,000,000 Instructions: Compute ROI for each of the following situations. Show all computations. 1.The year ended December 31, 2012. _________________ ÷ _________________ = ________% 2.For.
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AT11- 1 Achievement Test 11 PART IV — CAPITAL BUDGETING (20 points) Harley Company is considering a capital investment of $800,000 in new equipment. It is expected to have a useful life of 10 years with no salvage value. Depreciation is computed by the straight-line method. During the life of the investment, annual.
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  Problem H - III — Variance Analysis (15 points) Ola Means was reviewing her business activities at the end of 2012 and decided to prepare a Owner’s Equity Statement. At the beginning of the year her assets were $270,000, liabilities were $150,000, and owner’s capital was $120,000. The net income for.
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  Problem E - IV — Equivalent Units and Process Costing (25 points) The Blending Department of Vanilo Manufacturers has the following production and manufacturing cost data for January. Production: Beginning inventory 16,000 units that are 100% complete as to materials and 40% complete as to conversion costs; units started into production 54,000;.
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Problem F - V — Contribution Margin (14 points) Carmine Sports Company makes two products, footballs and baseballs. Additional information follows: FootballsBaseballs Units  8,000  5,000 Sales$120,000$50,000 Variable costs72,00014,000 Fixed costs    18,000   18,000 Net income$30,000$  18000 Profit per unit$3.75$3.60 If Carmine Sports has unlimited demand for both products, which product should the company emphasize?     .
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  Problem E - V — Activity-Based Costing (15 points) Ruston Company manufactures two products: vats and tanks. During June, 400 vats and 800 tanks were produced and overhead costs of $66,000 were incurred. The following information related to overhead costs was available:         Activity            Cost Driver     Total Cost Materials handlingNumber of requisitions$56,000 Machine.
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____              11.If ending inventory is overstated, net income and assets will be:               Net Income   Assets                 a.UnderstatedUnderstated               b.OverstatedOverstated               c.UnderstatedOverstated               d.Overstated Understated ____              12.One of the two constraints in accounting is:               a.comparability.               b.materiality.               c.faithful representation.               d.relevance. ____              13.The assumption that assumes a company will continue in operation long enough to carry out its existing.
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PART II — MATCHING (18 points) Instructions: Designate the terminology that best represents the definition or statement given below by placing the identifying letter(s) in the space provided. No term should be used more than once.               A.Activity-based costing              N.              Job cost sheet               B.Annual rate of return              O.              Noncontrollable costs               C.Budgetary control             .
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  Problem G - V — Income Statement (17 points) Vesuvius Climbers Supply Company uses a standard cost accounting system. During April, 2012, Vesuvius reported the following manufacturing variances: Materials price variance$3,200F Materials quantity variance4,800U Labor price variance1,200U Labor quantity variance4,400U Overhead controllable1,000F Overhead volume6,000U In addition, 30,000 units of product were sold at $36 per unit. Each unit.
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PART IV — RATIO ANALYSIS (14 points) The condensed financial statements of Justice Corporation for 2012 are presented below. Justice CorporationJustice Corporation Balance SheetIncome Statement December 31, 2012For the Year Ended December 31, 2012 AssetsRevenues$2,000,000 Current assetsExpenses Cash and short-termCost of goods sold900,000   investments$   40,000Selling and administrative Accounts receivable70,000  expenses800,000 Inventory    140,000Interest expense       50,000 Total current assets250,000Total expenses  1,750,000 Property, plant,.
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  Problem H - VI — Special Journals (15 points) Circle the correct answer to each situation. (a)A sales journal will be used for: Credit SalesCash SalesSales Discounts YesNoYesNoYesNo (b)A single-column purchases journal will be used for: Purchase Returns Cash PurchasesPurchases on Accountand Allowances YesNoYesNoYesNo (c)A multiple-column purchases journal will be used for: Supplies PurchasedEquipment Purchases Cash Purchaseson Accounton.
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PART II — MATCHING (20 points) Instructions Designate the terminology that best represents the definition or statement given below by placing the identifying letter(s) in the space provided. No letter should be used more than once.               A.Additions and improvements               X.              Full disclosure principle               B.Allowance method              Y.              Going concern assumption               C.Amortization              Z.             .
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PART III — ADJUSTING ENTRIES (20 points) The trial balance of Shift Company shows the following balances for selected accounts on November 30, 2012: Prepaid Insurance$  15,000Unearned Service Revenue$  1,500 Equipment40,000Notes Payable24,000 Accumulated Depreciation8,800Interest Payable400 Instructions: Using the additional information given below, prepare the appropriate monthly adjusting entries at November 30. Show computations. 1.Revenue earned for.
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Problem F - III — Materials Purchases Budget (12 points) The budget components for Carrion Secure Storage Company for the quarter ended June 30 appear below. Carrion sells secure storage boxes for $24 each. Budgeted sales and production for the next three months are:     Sales   Production April 40,000 units52,000 units May 100,000 units92,000 units June.
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____              31.Carne Manufacturing declared a 10% stock dividend when it had 200,000 shares of $5 par value common stock outstanding. The market price per common share was $15 per share when the dividend was declared. The entry to record this dividend declaration includes a credit to:                             a.Stock Dividends of.
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AFinal Exam: Chapters 14-23 PART I — MULTIPLE CHOICE (60 points) Instructions:  Designate the best answer for each of the following questions. ____              1.A responsibility center that incurs costs (and expenses) and generates revenues is classified as a(n)                             a.cost center.                             b.revenue center.                             c.profit center.                             d.investment center. ____              2.The most useful.
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Problem F - I — Multiple Choice (22 points) Circle the one best answer.               1.Beermen Company sells a single product with a contribution margin of $24 per unit, fixed costs of $148,800, and sales for the current year of $200,000. How much is Beermen’s break-even point? a.4,600 units. b.$51,200. c.6,200 units. d.2,133 units.               2.Poe Incorporated’s.
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PART I — MULTIPLE CHOICE (80 points) Instructions: Designate the best answer for each of the following questions. Questions 1 and 2 are based on the following information: Poin Company recently incurred the following costs: (1)Purchase price of land and dilapidated building$330,000 (2)Real estate broker's commission14,000 (3)Net demolition costs of dilapidated building42,000 (4)Excavation costs for new building44,000 (5)Architect's.
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  Problem H - V — Payroll Accounting (15 points) Romirez Company had the following payroll data for the year: Gross earnings of employees$2,400,000 Employee earnings not subject to FICA tax440,000 Employee earnings not subject to FUTA or SUTA tax1,530,000 Assume the following: FICA tax rate8% State Unemployment tax rate5.4%(SUTA) Federal Unemployment tax rate.8%(FUTA) Instructions Compute Romirez's payroll tax expense for.
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Problem F - VI — Sales Mix, Break-Even Units and Dollars (10 points) Splash Drawers sells computer monitors and computer projectors. The business is divided into two divisions along product lines. Variable costing income statements for the current year are presented below: MonitorsProjectors  Total   Sales$1,400,000$600,000$2,000,000 Variable costs  840,000  420,000     1,260,000 Contribution margin$560,000$  180,000740,000 Fixed costs     518,000 Net income$  .
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  Problem H - VII — Investment Journal Entries (15 points) On January 1, Monarch  Corporation purchased a 30% equity in Crayon Creations Company for $720,000. At December 31, Crayon Creations declared and paid a $80,000 cash dividend and reported net income of $196,000. Prepare the necessary journal entries for Monarch Corporation. .
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AT11- 1 Achievement Test 11 Achievement Test 11: Chapters 22-23 PART I — MULTIPLE CHOICE (30 points) Instructions:  Designate the best answer for each of the following questions. ____              1.The annual rate of return method of capital budgeting ignores the                             a.time value of money.                             b.timing of the cash flows.                             c.length of time.
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  Problem G - VI —Flexible Overhead Budget (18 points) Aloe Medical Aids Company has 16,000 machine hours available to use to produce either Bandages or Braces. The cost accounting department developed the following unit information for each of the products: BandagesBraces Sales price$114$142 Direct materials3842 Direct labor3028 Variable manufacturing overhead1624 Fixed manufacturing overhead612 Machine hours required.61.2 Management desires to.
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PART IV — BANK RECONCILIATION (15 points) A review of the November 30 bank statement and other data of Huron Company reveals the following: 1.Balance per bank statement on November 30 ........................$17,400 2.Balance per books on November 30 ...............................$12,488 3.NSF Check from J. Smith in payment of account ......................$150 4.Collection of $3,500, 4-month, 6% note.
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  Problem E - I — Multiple Choice (20 points) Circle the one best answer.               1.Cost of goods manufactured during a period is obtained by taking the total manufacturing costs incurred during the period and adding and subtracting the following inventories: AddingSubtracting a.Beginning finished goods inventoryEnding finished goods inventory b.Beginning work in process inventoryEnding finished.
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PART III — VARIANCE ANALYSIS (19 points) Martin Company developed the following standard costs for its product in 2012:   Standard Cost Card   Unit Standard Cost Direct materials(5 pounds @ $4.50 per pound)$22.50 Direct labor(4 hours @ $7.90 per hour)31.60 Manufacturing overhead Variable(4 hours @ $4 per hour)16.00 Fixed(4 hours @ $3 per hour)  12.00 $82.10 The company planned to work.
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____              21.A company’s planned activity level for next year is expected to be 100,000 machine hours. At this level of activity, the company budgeted the following manufacturing overhead costs:           Variable                Fixed         Indirect materials$60,000Depreciation$25,000 Indirect labor80,000Taxes5,000 Factory supplies10,000Supervision25,000 A flexible budget prepared at the 90,000 machine hours level of activity would allow total manufacturing overhead costs of              .
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PART VI — DEPRECIATION (12 points) Huff Company purchased equipment for $800,000 cash on July 1, 2012. The estimated life is 6 years or 1,000,000 units; salvage value is estimated at $80,000. Actual activity was 180,000 units in 2012, and 200,000 units in 2013. Instructions: Compute the annual depreciation expense for 2012.
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PART V — INVENTORY (12 points) Potter Company had a beginning inventory of 100 units at a cost of $13 per unit on August 1. During the month, the following purchases and sales were made.      Purchases              Sales        August4              250 units at $14August7              100 units August15              350 units at $15August11                80 units August28              200 units at.
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PART II — MATCHING (cont.) ___              10.A characteristic of information that means it is capable of making a difference in a decision. ___              11.An assumption that the economic life of a business can be divided into artificial time periods. ___              12.This method of accounting for uncollectible accounts is required when bad debts are.
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