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Accounting:  Concepts & Applications, 11e Chapter 21  1 81.Inner Corporation sells space heaters. The contribution margin is $5.40 per heater. If fixed costs are $540,000, what would be the total number of heaters sold at the break-even point? a. 100,000 b. 150,000 c. 200,000 d. 250,000 82.Duke Corporation sells fans for $20 per unit. In 2011, fixed costs are expected.
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Accounting:  Concepts & Applications, 11e Chapter 21  1 41.If total costs are $27,000 and $36,000 for activity levels of 5,000 and 8,000, respectively, how much are fixed costs? a. $12,000 b. $8,000 c. $6,000 d. $0 42.What is the total costs for a company with per-unit variable costs of $12 and total fixed costs of $51,000 if it sells 8,000.
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Accounting:  Concepts & Applications, 11e Chapter 20  1 2.Use the following information to prepare a cost of goods manufactured schedule for Beaverton Company for the year ended December 31, 2011: Ending raw materials inventory $17,000 Ending work-in-process inventory 22,000 Depreciation-factory 7,000 Direct labor 35,000 Indirect labor 5,000 Indirect materials 6,000 Insurance-factory 10,000 Beginning work-in-process inventory 27,000 Beginning raw materials inventory 15,000 Payroll taxes-factory 7,000 Property taxes-factory 9,000 Raw materials purchased 32,000 .
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Accounting:  Concepts & Applications, 11e Chapter 21  1 61.Cash2U Company had the following income statement: Sales revenue (1,000 units) $400,000 Variable costs  220,000 Contribution margin $180,000 Fixed costs  126,000       Net income $ 54,000 Given this data, Cash2U Company's contribution margin percentage is: a. 40% b. 45% c. 50% d. 55% 62.The limiting assumptions of C-V-P analysis include all of the following, EXCEPT: a. The behavior of revenues and cost are linear throughout the.
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Accounting:  Concepts & Applications, 11e Chapter 21  1 91.As activity level increases within the relevant range, per-unit fixed costs usually will: a. Increase b. Decrease c. Remain the same d. Vary randomly 92.As activity level increases within the relevant range, total variable costs usually will: a. Increase b. Decrease c. Remain the same d. Vary randomly 93.When all other factors remain constant, which of the following is true? a. An increase.
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Accounting:  Concepts & Applications, 11e Chapter 20  1 51.The formula for the reorder point without safety stock is: a. Maximum daily sales ? Average lead time b. Average daily sales - Maximum daily sales ? Average lead time c. Maximum daily sales - Average daily sales ? Average lead time d. Average daily sales ? Average lead time 52.A short.
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Accounting:  Concepts & Applications, 11e Chapter 19  1 7.StoneWorks is a company that sells tile. It has three profit centers: ceramic, stone and granite. Financial information for the three centers for the year just ended follows: Ceramic Stone  Granite Revenue $100,000 $125,000 $150,000 Fixed costs: Costs unique to the profit center 30,000 45,000 64,000 Costs allocated by the retail store 6,000 7,000 8,000 Variable costs as a percentage.
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Accounting:  Concepts & Applications, 11e Chapter 20  1 7.Mosten's Retail Outlet collected the following information regarding two of its inventory items. Toasters Blenders Annual demand 45,000 10,000 Cost per unit $    12 $    14 Annual carrying cost per unit $     3 $     4 Ordering cost $   300 $   200 1. Calculate the economic order quantity (EOQ) for toasters and blenders. 2. Calculate the total carrying costs for toasters. 3. Calculate the total ordering costs for toasters. 8.Abernathy Imports.
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Accounting:  Concepts & Applications, 11e Chapter 21  1 7.Winslow Company sold 10,000 swing sets this past year at $280 each. The company incurred expenses of $560,000 for rent, administrative salaries, and insurance for the building. The cost per unit for Winslow was $168. The CEO, Ms. Dunlop, wants to know what.
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Accounting:  Concepts & Applications, 11e Chapter 20  1 21.Carrying too much inventory can cause which of the following problems? a. Increase in ordering costs b. Increase in inventory shrinkage c. Decreased bulk order discounts d. Increased risk of price increases 22.Inventory shrinkage is caused by: a. Spoilage b. Theft c. Breakage d. All of these are correct 23.Use of the ROI formula can help a company: a. Determine true profit b. Maximize return.
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Accounting:  Concepts & Applications, 11e Chapter 19  1 91.Frank Company, which has total assets of $300,000, has an opportunity to invest $80,000 in a new project that will generate a return of $16,000 per year. Given this information, if Frank Company uses 15% as a minimum rate of return, how much.
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Accounting:  Concepts & Applications, 11e Chapter 19  1 31.The variance computed by multiplying the difference between the actual rate and the standard rate by the actual hours is: a. The labor rate variance b. The materials price variance c. The manufacturing overhead efficiency variance d. The labor efficiency variance 32.The difference between standard hours and actual hours multiplied by the.
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Accounting:  Concepts & Applications, 11e Chapter 20  1 .71.Which of the following is the income statement formula for the absorption costing method? a. Sales Revenue - Cost of Goods Sold = Gross Margin - All Fixed Expenses = Operating Income b. Sales Revenue - All Variable Costs = Contribution Margin - All Fixed Expenses.
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Accounting:  Concepts & Applications, 11e Chapter 21  1 5.During the past year, United Memories sold 150,000 units. Each of these units was sold at a price of $75. At the end of the year, the accounting department identified the costs per unit to be: $20 in materials, $15 for selling costs,.
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Accounting:  Concepts & Applications, 11e Chapter 19  1 61.Costs that a manager CANNOT control are called: a. Direct costs b. Indirect costs c. Uncontrollable costs d. Segment costs 62.Costs that a manager can control are called: a. Indirect costs b. Product costs c. Controllable costs d. Managed costs 63.Which of the following informs management whether actual sales prices were higher or lower than expected? a. Sales price variance b. Sales volume variance c. Market share.
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Accounting:  Concepts & Applications, 11e Chapter 21  1 71.If variable costs are $46 per unit, revenues are $76 per unit, and fixed costs are $7,500, the break-even point is: a. 1,000 units b. 500 units c. 250 units d. 100 units 72.To reach a target income of $20,000, a firm with fixed costs of $10,000 and a per-unit contribution margin.
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Accounting:  Concepts & Applications, 11e Chapter 19  1 11.In which of the following is a manager responsible for costs, revenues, and assets? a. Revenue center b. Cost center c. Profit center d. Investment center 12.In which of the following is a manager responsible for only costs? a. Responsibility center b. Cost center c. Profit center d. Investment center 13.How can an organization prevent decisions made by a decentralized manager.
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Accounting:  Concepts & Applications, 11e Chapter 19  1 PROBLEM 1.Sequim Company is a decentralized company with two segments: Micro and Macro.  Additionally, for each segment, Sequim’s sales are split between the two states of Oregon and Washington.  The following is information applicable to revenue for the year.  Budget Actual Micro - Oregon $400,000 $375,000 Micro - Washington .
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Accounting:  Concepts & Applications, 11e Chapter 19  1 3.The Clarke Manufacturing Company collected the following information for the month of July: Standard production 70,000 units Actual production 68,000 units Standard materials per unit 3 pounds Materials purchased and used in July 200,600 pounds Standard price for material $0.60 per pound Actual price for material $0.58 per pound 1. Compute the materials price and quantity variances for July. 2. Prepare journal entries for the.
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Accounting:  Concepts & Applications, 11e Chapter 19  1 41.Given this information, the labor efficiency variance is: a. $42,000 unfavorable b. $42,000 favorable c. $28,000 unfavorable d. $28,000 favorable 42.Given this information, the labor rate variance is: a. $40,000 unfavorable b. $40,000 favorable c. $42,000 unfavorable d. $42,000 favorable The following information relates to Bergen Corporation: Standard cost per unit:   Direct materials (6 pounds) $18   Direct labor (3 hours) 24 Actual resources used:   Direct materials 12,500 pounds at.
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Accounting:  Concepts & Applications, 11e Chapter 19  1 9.Compute the missing data items, (a) through (f), in the following table: Division X Division Y Revenue $345,000 $287,500 Net income $69,000 $57,500 Total assets (a) $143,750 Profit margin ratio (b) (d) Assets turnover ratio (c) (e) ROI 10% (f) 10.The following information has been gathered from the accounting department at a local grocery store: Net income $  180,000 Net sales revenue 750,000 Total assets:      2011 1,200,000      2012 1,400,000 Cost of goods sold 350,000 What.
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Accounting:  Concepts & Applications, 11e Chapter 21  1 121.Refer to the above graph. On the cost-volume-profit graph, the area between point G, the origin of the graph, and the point at which Line B crosses the sales axis represents the: a. Profit area b. Total costs c. Loss area d. Fixed costs 122.Refer to the above graph. Area A on the profit.
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Accounting:  Concepts & Applications, 11e Chapter 21  1 51.If the fixed costs relative to a specific product increase while the variable costs and sales price remain constant, the contribution margin will: a. Increase b. Decrease c. Remain unchanged d. The answer cannot be determined from the information given 52.If a company has a positive contribution margin, the maximum amount of.
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Accounting:  Concepts & Applications, 11e Chapter 20  1 61.Swanson Supplies has an economic order quantity of 100 units for item X of inventory. The annual demand for the product is 1,400 units and the cost to place an order is $25. What is the unit carrying cost? a. $3.50 b. $7.00 c. $14.00 d. $10.00 62.Which inventory costing method assigns.
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Accounting:  Concepts & Applications, 11e Chapter 19  1 51.Based on this information, the journal entry to record the labor costs and variances for Bergen Corporation would include a debit to: a. Work-in-process inventory for $48,000 b. Labor rate variance for $885 c. Labor efficiency variance for $800 d. Wages payable for $46,315 52.Twin Pines Custom Trim established the standard labor.
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Accounting:  Concepts & Applications, 11e Chapter 20  1 PROBLEM 1.Complete the following table by listing the types of firms (manufacturing, service, or merchandising) that would use each balance sheet or income statement item. Raw materials inventory Work-in-process inventory Selling and administrative expenses Merchandise inventory Finished goods inventory Work-in-process services Purchases of materials Gross margin Supplies inventory Over/underapplied manufacturing/service overhead Direct labor Applied manufacturing/service overhead Cost.
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Accounting:  Concepts & Applications, 11e Chapter 20  1 9.Franklin Company manufactures picture frames. The following information is available for 2011. Sales volume (in units) 150,000 Production volume (in units) 200,000 Total fixed selling and administrative expenses $200,000 Variable selling expenses per unit $1.50 Total fixed production costs $650,000 Variable production cost per unit $6.20 Beginning inventory $0 Sales price per unit $15 Create an income statement for Franklin.
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Accounting:  Concepts & Applications, 11e Chapter 20  1 41.The private investigation firm of Watson & Holmes is conducting an investigation for a wealthy movie star. The investigation is estimated to take 6 months to complete and will use $2,000 in supplies, $120,000 in labor, and $80,000 in overhead. Watson & Holmes’.
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Accounting:  Concepts & Applications, 11e Chapter 20  1 MULTIPLE CHOICE 1.The formula for a typical income statement is: a. Sales - Cost of goods sold - Selling & administrative expenses = Operating income b. Operating income = Gross margin - (Selling & administrative expenses + Cost of goods sold) c. Sales - Selling & administrative expenses - Cost.
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Accounting:  Concepts & Applications, 11e Chapter 21  1 21.Which of the following costs would LEAST likely be a variable cost? a. Indirect materials b. Direct labor c. Sales commissions d. Plant manager's salary 22.Costs that would NOT be graphed as a straight line are: a. Variable costs b. Total costs c. Fixed costs d. Stepped costs 23.Zodiac Company's total costs are increasing in direct proportion to the increases in.
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Accounting:  Concepts & Applications, 11e Chapter 20  1 3.The following end of year information is given for Ashland Company.  Raw materials used during the year $  1,150,000 Beginning raw materials inventory 112,000 Ending raw materials inventory 120,000 Applied manufacturing overhead 2,400,000 Direct labor costs 900,000 Beginning work-in-process inventory 400,000 Ending work-in-process inventory 360,000 Cost of goods sold 3,200,000 Beginning finished goods inventory 500,000 Ending finished goods inventory 440,000 Calculate the following items.
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Accounting:  Concepts & Applications, 11e Chapter 21  1 131.Total contribution margin will increase in a two-product firm if total units sold remain the same and: a. Fewer products with the highest contribution margin are sold b. More products with the highest contribution margin are sold c. More products with the lowest contribution margin are sold d. Fixed costs decrease 132.McCammon.
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Accounting:  Concepts & Applications, 11e Chapter 19  1 12.Matsuma Manufacturing Company uses standard direct labor hours to apply variable manufacturing overhead to Work-in-Process Inventory. The following data were taken from the records: June:    Budgeted units 20,000    Budgeted hours 5,000    Actual variable manufacturing overhead $48,500    Actual units produced 19,500    Actual direct labor hours 5,100 Annual variable manufacturing overhead data:   .
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Accounting:  Concepts & Applications, 11e Chapter 20  1 31.Florence Company sells lawn mowers. The following information is available for Florence’s inventory for 2011.  Units purchased at undiscounted prices before price increase 500 Units purchased after price increase 300 Original actual price $225 Discounted purchase price $200 New actual price $270 Calculate Florence’s lost discount for the year. a. $100,000 b. $22,500 c. $7,500 d. $12,500 32.Florence Company sells lawn mowers..
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Accounting:  Concepts & Applications, 11e Chapter 21  1 101.As fixed costs increase, the break-even point in units will: a. Increase b. Decrease c. Remain the same d. Unable to determine without variable cost information 102.A company's break-even point would change if there were an increase in: a. Sales volume b. Total fixed costs due to a plant addition c. Total production volume d. Total variable costs due to.
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Accounting:  Concepts & Applications, 11e Chapter 20  1 5.Fiesta and Sierra both operate catalog sales firms. The following information is available for 2011 and 2012: Fiesta Sierra Gross Margin:    2011 $175,000 $350,000    2012 150,000 380,000 Inventory:    December 31, 2011 $ 70,000 $280,000    December 31, 2012 60,000 300,000 1. Calculate each company's ROI in inventory for 2012. 2. Which company manages inventory better? Explain your answer. 6.During the first quarter of 2011, Dewey Company.
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Accounting:  Concepts & Applications, 11e Chapter 20  1 11.Which of the following values would be the most desirable for inventory turnover? a. 9 b. 6 c. 3 d. Not enough information to tell 12.The following information is for Saratoga Company: Raw materials used during the year $  375,000 Beginning raw materials inventory 28,000 Ending raw materials inventory 30,000 Applied manufacturing overhead 700,000 Direct labor costs 250,000 Beginning work-in-process inventory 100,000 Ending work-in-process inventory 90,000 Cost of.
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Accounting:  Concepts & Applications, 11e Chapter 19  1 71.The type of center that is evaluated on the basis of residual income is a(n): a. Investment center b. Profit center c. Revenue center d. Cost center 72.Which of the following will most likely increase the return on investment? a. Increasing costs b. Increasing sales c. Increasing the level of operating assets d. Decreasing sales 73.Profit margin is equal to: a. Net income.
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Accounting:  Concepts & Applications, 11e Chapter 21  1 3.The following information has been compiled by the accounting department at Wallace Enterprises. The manager, Thomas Hicks, wants you to calculate the variable cost rate and total fixed costs from the information given. Mr. Hicks wants you to use the high-low method of.
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Accounting:  Concepts & Applications, 11e Chapter 19  1 14.The following information is given for Reardan Company: Actual fixed manufacturing overhead $500,000 Budgeted fixed manufacturing overhead $475,000 Actual production 1,500 Budgeted production 1,250 Standard direct labor hour per unit 10 Fixed manufacturing overhead is applied to production based on direct labor hours. 1. Compute the fixed manufacturing overhead budget variance. 2. Compute the volume variance. 15.Lake Stevens Manufacturing.
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Accounting:  Concepts & Applications, 11e Chapter 19  1 81.Walnut Company has sales of $1,000,000 and total expenses of $900,000. If operating assets are $500,000, the return on investment is: a. 10% b. 20% c. 30% d. 40% 82.Walnut Company has sales of $1,000,000 and total expenses of $900,000. If operating assets are $500,000, and a minimum required return of 15%,.
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Accounting:  Concepts & Applications, 11e Chapter 21  1 31.The slope of the line in a scattergraph represents the: a. Variable cost per unit b. Fixed cost per unit c. Mixed cost per unit d. Opportunity cost per unit 32.Which of the following is a common method of analyzing mixed costs? a. High-Low b. Scattergraph c. Both high-low and scattergraph d. Neither high-low nor scattergraph 33.The scattergraph method is used.
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Accounting:  Concepts & Applications, 11e Chapter 19  1 101.Based on this information, the variable manufacturing overhead applied to Work-in-Process Inventory is: a. $18,000 b. $19,200 c. $27,000 d. $36,000 102.Based on this information, the variable manufacturing overhead spending variance is: a. $2,000 favorable b. $2,000 unfavorable c. $800 favorable d. $800 unfavorable 103.Based on this information, the manufacturing overhead efficiency variance is: a. $1,200 favorable b. $1,200 unfavorable c. $2,000 favorable d. $2,000 unfavorable The following information is.
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Accounting:  Concepts & Applications, 11e Chapter 19  1 5.To produce one unit of PL734 requires 1.5 direct labor hours at a standard cost of $15.00 per hour. During the month of April, 41,000 units were produced using 63,450 direct labor hours of labor at a cost of $926,370. 1. Compute the labor rate.
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Accounting:  Concepts & Applications, 11e Chapter 19  1 21.Which of the following is NOT an advantage of standard costing? a. Standards are reported as specific figures but are treated by managers as ranges of acceptable performance b. The setting of standard costs requires a careful analysis of operations c. Standard costs provide a basis for measuring performance.
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Accounting:  Concepts & Applications, 11e Chapter 21  1 111.Everclean Company cleans draperies. It charges $90 to clean a full-size drape, and its variable and fixed costs are $55 per drape and $10,000 per year, respectively. Given these data, if Everclean's fixed costs increased to $15,000, how many drapes must the firm.
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Accounting:  Concepts & Applications, 11e Chapter 21  1 11.Which of the following types of costs remain constant per unit within a certain relevant range? a. Opportunity costs b. Sunk costs c. Fixed costs d. Variable costs 12.The two components of a mixed cost are: a. Relevant costs and fixed costs b. Variable costs and opportunity costs c. Variable costs and relevant costs d. Variable costs and fixed costs 13.Relevant.
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Accounting:  Concepts & Applications, 11e Chapter 21  1 Chapter 21—Cost Behavior and Decisions using C-V-P Analysis MULTIPLE CHOICE 1.Which of the following items is NOT a key factor involved in cost-volume-profit (C-V-P) analysis? a. Time value of money b. Fixed and variable costs c. Sales revenue d. The mix of products sold 2.C-V-P analysis is useful to managers in: a. Planning b. Controlling decisions c. Evaluating decisions d. All of.
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Accounting:  Concepts & Applications, 11e Chapter 19  1 111.Which variance is NOT considered to be an input variance? a. Variable manufacturing overhead spending variance b. Variable manufacturing overhead efficiency variance c. Volume variance d. Fixed manufacturing overhead budget variance 112.Which of the following would NOT be part of total over- or underapplied manufacturing overhead? a. Volume variance b. Variable manufacturing overhead efficiency variance c. Fixed manufacturing.
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Accounting:  Concepts & Applications, 11e Chapter 21  1 PROBLEM 1.The following information is given for Kooskia Company Units Produced Total Fixed Costs Variable Costs per Unit 0-500 $20,000 $40 501-1,000 $27,000 $40 1,001-1,500 $34,000 $50 1,501-2,000 $41,000 $50 Compute the following items for Kooskia Company. a. What is the fixed cost per unit when 400 units are produced? b. What is the total variable cost when 300 units are produced? c. What is the.
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