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158.The following information relates to manufacturing overhead for the Chapman Company: Standards: Total fixed factory overhead - $450,000 Estimated production - 25,000 units (100% of capacity) Overhead rates are based on machine hours. Standard hours allowed per unit produced - 2 Fixed overhead rate - $9.00 per machine hour Variable overhead rate - $3.50 per hour Actual: Fixed.
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154.The Everest Company has income from operations of $80,000, invested assets of $500,000, and sales of $1,030,000. What is the profit margin? A.48.5% B.7.8% C.16.0% D.4.3% 155.The Everest Company has income from operations of $80,000, invested assets of $500,000, and sales of $1,030,000. What is the investment turnover? A.6.25 B.2.06 C..49 D.12.88 156.The balanced scorecard measures A.only financial information B.only nonfinancial information C.both.
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149.Define ideal and currently attainable standards. Which type of standard should be used and why? 150.Define nonfinancial performance measures. What are they used for and what are some common examples? 151.Match the following terms with the best definition given. 1.Actual cost < standard cost at actual volumes Nonfinancial performance measure 2.Normal standard Unfavorable cost variance 3.An.
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74.Which of the following would be most effective in a small owner/manager-operated business? A.Profit centers B.Centralization C.Investment centers D.Cost centers 75.Businesses that are separated into two or more manageable units in which managers have authority and responsibility for operations are said to be: A.decentralized B.consolidated C.diversified D.centralized 76.Which of the following is NOT a disadvantage of decentralized operation? A.Competition among managers.
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84.Most manufacturing plants are considered cost centers because the have control over A.sales and costs. B.fixed assets and costs. C.costs only. D.fixed assets and sales. 85.The following is a measure of a manager’s performance working in a cost center. A.budget performance report B.rate of return and residual income measures C.divisional income statements D.balance sheet 86.A responsibility center in which the.
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86.The following data is given for the Harry Company: Budgeted production 26,000 units Actual production 27,500 units Materials: Standard price per ounce $6.50 Standard ounces per completed unit 8 Actual ounces purchased and used in production 228,000 Actual price paid for materials $1,504,800 Labor: Standard hourly labor rate $22 per hour Standard hours allowed per completed unit 6.6 Actual labor hours worked 183,000 Actual total labor costs $4,020,000 Overhead: Actual and budgeted fixed overhead $1,029,600 Standard.
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188.Using the data from the Terrace Industries, determine the divisional income from operations for Districts 1 & 2. District 1 District 2 Sales $300,000 $600,000 Cost of goods sold 120,000 150,000 Selling expenses 55,000 75,000 Service department expenses Purchasing $70,000 Payroll accounting 80,000 Allocate service department expenses proportional to the sales of each district. 189.Franklin Industries has established 12% as the.
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195.Using the data from the Coffee & Cocoa Company, (a) determine the divisional income from operations for the three regions by allocating the service department expenses proportional to the sales of the regions. (b) determine the increase or decrease in net income if C Region did not operate. A Region B Region C Region Sales $600,000 $900,000 $300,000 Cost of goods sold 200,000 350,000 190,000 Selling.
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11.The amount of detail presented in a budget performance report for a cost center depends upon the level of management to which the report is directed. 12.The primary accounting tool for controlling and reporting for cost centers is a budget. 13.Responsibility accounting reports that are given to lower level managers are usually.
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66.The standard costs and actual costs for direct materials for the manufacture of 2,500 actual units of product are as follows: Standard Costs Direct materials (per completed unit) 1.04 kilograms @$8.75 Actual Costs Direct materials 2,500 kilograms @ $8 The amount of direct materials price variance is: A.$1,875 unfavorable B.$1,950 favorable C.$1,875 favorable D.$1,950 unfavorable 67.The standard costs and actual costs for.
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21.The underlying principle of allocating operating expenses to departments is to assign to each department an amount of expense proportional to the revenues of that department. 22.Property tax expense for a department store's store equipment is an example of a direct expense. 23.Depreciation expense on store equipment for a department store is.
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104.The following financial information was summarized from the accounting records of Train Corporation for the current year ended December 31: Rails Division Locomotive Division Corporate Total Cost of goods sold $47,200 $30,720 Direct operating expenses 27,200 20,040 Net sales 98,000 68,000 Interest expense $2,040 General overhead 18,160 Income tax 4,700 The income from operations for the Locomotive Division is: A.$47,800 B.$20,600 C.$17,240 D.$37,280 105.The following financial information was summarized from the accounting records of Train Corporation.
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1.Separation of businesses into more manageable operating units is termed decentralization. 2.The process of measuring and reporting operating data by areas of responsibility is termed responsibility accounting. 3.A decentralized business organization is one in which all major planning and operating decisions are made by top management. 4.A centralized business organization is one in.
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156.The following information is for the standard and actual costs for the Happy Corporation. Standard Costs: Budgeted units of production - 16,000 (80% of capacity) Standard labor hours per unit - 4 Standard labor rate - $26 per hour Standard material per unit - 8 lbs. Standard material cost - $ 12 per pound Standard variable overhead.
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184.Star Co. was organized on August 1 of the current year. Projected sales for the next three months are as follows: August $250,000 September 200,000 October 275,000 The company expects to sell 50% of its merchandise for cash. Of the sales on account, 40% are expected to be collected in the month of the sale and the.
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182.The treasurer of Systems Company has accumulated the following budget information for the first two months of the coming year: March April Sales. $450,000 $520,000 Manufacturing costs 290,000 350,000 Selling and administrative expenses 41,400 46,400 Capital additions 250,000 --- The company expects to sell about 35% of its merchandise for cash. Of sales on account, 80% are expected to be collected in full in.
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114.Hamlin Corporation had $220,000 in invested assets, sales of $242,000, income from operations amounting to $48,400, and a desired minimum rate of return of 3%. The rate of return on investment for Hamlin is: A.4% B.22% C.3% D.6.4% 115.Chicks Corporation had $1,100,000 in invested assets, sales of $1,210,000, income from operations amounting to $242,000, and.
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134.What additional information is needed to find the rate of return on investment if income from operations is known? A.Invested assets B.Residual income C.Direct expenses D.Sales 135.The Western Division of Bestboot Company has a rate of return on investment of 15% and an investment turnover of 1.2. What is the profit margin? A.10% B.12.5% C.9% D.6% 136.The best measure of.
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11.In most businesses, cost standards are established principally by accountants. 12.It is correct to rely exclusively on past cost data when establishing standards. 13.Ideal standards are developed under conditions that assume no idle time, no machine breakdowns, and no materials spoilage. 14.Currently attainable standards do not allow for reasonable production difficulties. 15.If employees are.
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1.A variable cost system is an accounting system where standards are set for each manufacturing cost element. 2.One reason not to depend solely on historical records to set standards is that there may be inefficiencies contained in past costs. 3.Standard costs serve as a device for measuring efficiency. 4.The standard cost is how.
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51.If income from operations for a division is $6,000, invested assets are $25,000, and sales are $30,000, the profit margin is 20%. 52.If income from operations for a division is $6,000, invested assets are $25,000, and sales are $30,000, the investment turnover is 1.2. 53.If income from operations for a division is.
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159.Using the following information, prepare a factory overhead flexible budget for Andover Company where 6,000 units is considered normal capacity. Include capacity at 75%, 90%, 100%, and 110%. Total variable cost is $6.25 per unit and total fixed costs are $38,000. The information is for month ended August 31, 2012. 160.Prepare.
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41.The most effective means of presenting standard factory overhead cost variance data is through a factory overhead cost variance report. 42.Since the controllable variance measures the efficiency of using variable overhead resources, if budgeted variable overhead exceeds actual results, the variance is favorable. 43.An unfavorable volume variance may be due to a.
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124.In an investment center, the manager has the responsibility for and the authority to make decisions that affect: A.the assets invested in the center, but not costs and revenues B.costs and assets invested in the center, but not revenues C.both costs and revenues for the department or division D.not only costs and revenues, but.
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144.Assume that Division J has achieved income from operations of $165,000 using $900,000 of invested assets. If management desires a minimum rate of return of 8%, the residual income is: A.$72,000 B.$13,200 C.$185,000 D.$93,000 145.Division A of Mocha Company has sales of $155,000, cost of goods sold of $83,000, operating expenses of $43,000, and invested.
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180.Purple Inc. production budget for Product X for the year ended December 31 is as follows: Product X Sales 640,000 units Plus desired ending inventory 85,000 Total 725,000 Less estimated beginning inventory, Jan. 1 90,000 Total production 635,000 In Purple's production operations, Materials A, B, and C are required to make Product X. The quantities of direct materials expected to be.
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164.Materials used by Jefferson Company in producing Division C's product are currently purchased from outside suppliers at a cost of $10 per unit. However, the same materials are available from Division A. Division A has unused capacity and can produce the materials needed by Division C at a variable cost.
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192.A department store apportions payroll costs on the basis of the number of payroll checks issued. Accounting costs are apportioned on the basis of the number of reports. The payroll costs for the year were $231,000 and the accounting costs for the year totaled $75,500. The departments and the number.
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179.Piano Company’s costs were over budget by $52,000. The Piano Company is divided in two regions. The first region’s costs were over budget by $5,000. Determine the amount that the second region’s cost was over or under budget. 180.Using the data from the Ace Guitar Company, determine the divisional income from.
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137.The Trumpet Company produced 8,600 units of a product that required 3.25 standard hours per unit. The standard fixed overhead cost per unit is $1.20 per hour at 29,000 hours, which is 100% of normal capacity. Determine the fixed factory overhead volume variance. 138.Oak Company produces a chair that requires 6.
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96.Which of the following is not a reason for a direct materials quantity variance? A.Malfunctioning equipment B.Purchasing of inferior raw materials C.Increased material cost per unit D.Spoilage of materials 97.The formula to compute direct labor rate variance is to calculate the difference between A.actual costs + (actual hours * standard rate) B.actual costs - standard cost C.(actual hours.
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21.Principle of exceptions allows managers to focus on correcting variances between standard costs and actual costs. 22.Because accountants have financial expertise, they are the only ones that are able to set standard costs for the production area. 23.While setting standards, the managers should never allow for spoilage or machine breakdowns in their.
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76.If the wage rate paid per hour differs from the standard wage rate per hour for direct labor, the variance is termed a: A.variable variance B.rate variance C.quantity variance D.volume variance 77.If the actual direct labor hours spent producing a commodity differs from the standard hours, the variance is termed a: A.time variance B.price variance C.quantity variance D.rate variance 78.The.
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154.Standard and actual costs for direct materials for the manufacture of 1,000 units of product were as follows: Actual costs 1,550 lbs. @ $9.10 Standard costs 1,600 lbs. @ $9.00 Determine the (a) quantity variance, (b) price variance, and (c) total direct materials cost variance. 155.Standard and actual costs for direct labor for the manufacture of.
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41.Investment turnover (as used in determining the rate of return on investment) focuses on the rate of profit earned on each sales dollar. 42.The ratio of sales to investment is termed the rate of return on investment. 43.The major advantage of the rate of return on investment over income from operations as.
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72.An activity base is used to charge service department expenses. Match each of the following questions with an activity base. 1.Number of employees Maintenance 2.Equally amongst divisions Human Resources 3.Number of miles Payroll Accounting 4.Number of computers in department Purchasing 5.Number of work orders President’s office 6.Number of payroll checks Marketing 7.Number of purchase requisitions Transportation 8.Number of advertising campaigns Information Systems 73.Match the following terms with.
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178.Based on the following production and sales data of Shingle Co. for March of the current year, prepare (a) a sales budget and (b) a production budget. Product T Product X Estimated inventory, March 1 28,000 units 20,000 units Desired inventory, March 31 32,000 units 15,000 units Expected sales volume: Area I 320,000 units 260,000 units Area II 190,000 units 130,000 units Unit sales price $6 $14 179.Crystal Company.
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61.A disadvantage to using the residual income performance measure is that it encourages managers to spend only the minimum acceptable rate of return on assets set by upper management. 62.The DuPont formula uses financial information to measure the performance of a business. 63.The DuPont formula uses financial and nonfinancial information to measure.
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116.The following data is given for the Zoyza Company: Budgeted production 26,000 units Actual production 27,500 units Materials: Standard price per ounce $6.50 Standard ounces per completed unit 8 Actual ounces purchased and used in production 228,000 Actual price paid for materials $1,504,800 Labor: Standard hourly labor rate $22 per hour Standard hours allowed per completed unit 6.6 Actual labor hours worked 183,000 Actual total labor costs $4,020,000 Overhead: Actual and budgeted fixed overhead $1,029,600 Standard.
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146.Rosser Company produces a container that requires 4 yds. of material per unit. The standard price of one yard of material is $4.50. During the month, 9,500 chairs were manufactured, using 37,300 yards. Required: Journalize the entry to record the standard direct materials used in production. 147.The following data is given.
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56.Which of the following conditions normally would not indicate that standard costs should be revised? A.The engineering department has revised product specifications in responding to customer suggestions. B.The company has signed a new union contract which increases the factory wages on average by $2.00 an hour. C.Actual costs differed from standard costs for.
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157.The Finishing Department of Pinnacle Manufacturing Co. prepared the following factory overhead cost budget for October of the current year, during which it expected to operate at a 100% capacity of 10,000 machine hours: Variable cost: Indirect factory wages $18,000 Power and light 12,000 Indirect materials 4,000 Total variable cost $34,000 Fixed cost: Supervisory salaries $12,000 Depreciation of plant and equipment 8,800 Insurance and property.
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141.The following are inputs and outputs to the help desk. Operator training Number of calls per day Maintenance of computer equipment Number of operators Number of complaints Identify whether each is an input or an output to the help desk. 142.Greyson Company produced 8,300 units of their product that required 4.25 standard hours per unit. The standard.
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31.The service department will determine its service department charge rate and charge the company’s divisions or departments according to their use of that particular service department. 32.The profit center income statement should include only controllable revenues and expenses. 33.Controllable expenses are those that can be influenced by the decisions of the profit.
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94.The costs of services charged to a profit center on the basis of its use of those services are called: A.operating expenses B.noncontrollable charges C.service department charges D.activity charges 95.Division X reported income from operations of $975,000 and total service department charges of $575,000. Therefore: A.net income was $400,000 B.the gross profit margin was $400,000 C.income from operations.
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