A favorable sales volume variance in sales revenue suggests a(n) ________.
A.
increase in actual sales price per unit as compared to budgeted sales price
B.
decrease in actual fixed costs
C.
increase in actual va
...
A favorable sales volume variance in sales revenue suggests a(n) ________.
A.
increase in actual sales price per unit as compared to budgeted sales price
B.
decrease in actual fixed costs
C.
increase in actual variable cost per unit as compared to expected variable cost per unit
D.
increase in number of actual units sold when compared to the expected number of units sold
Five Seasons is a merchandiser of packed foods. The company provides the following information for the year:
Sales Revenue
$141,000
Cost of Goods Sold
60,000
Operating Expenses
66,000
Net Income
15,000
Number of Units Sold
23,000
How much was the unit cost per item of product sold? (Round your answer to the nearest cent.)
A.
$100.65
B.
$6.13
C.
$5.48
D.
$2.61
The vertical analysis statement of Peterson, Inc. is as shown below:
Peterson, Inc.
Comparative Income Statement
Years Ended December 31, 2017 and 2016
(In millions)
2017
Percent of Total
2016
Percent of Total
Net Sales
$6,355
100.0%
$4,920
100.0%
Cost of Goods Sold
3,370
53.0
2,200
44.7
Gross Profit
2,985
47.0
2,720
55.3
Operating Expenses:
Selling Expenses
675
10.6
580
11.8
Administrative expenses
410
6.5
425
8.6
Total Operating Expenses
1,085
17.1
1,005
20.4
Operating Income
1,900
29.9
1,715
34.9
Other Revenues and (Expenses):
Interest Revenue
0
0
0
0.0
Interest Expense
(400)
(6.3)
(695)
(14.1)
Total Revenues and (Expenses)
(400)
(6.3)
(695)
(14.1)
Income Before Income Taxes
1,500
23.6
1,020
20.7
Income Tax Expense
230
3.6
210
4.3
Net Income
$1,270
20.0%
$810
16.5%
The 20% shown for net income in 2017 signifies that net income _______.
A.
is 20% of gross profit
B.
is 20% of net sales revenues
C.
increased by 20% over the previous year
D.
equals 20 times of the income before income tax
Caty Couture sells designer shirts for $43 per shirt. It incurs monthly fixed costs of $7,000. The contribution margin ratio is calculated to be 20%. What is the breakeven point in units?
A.
131 units
B.
814 units
C.
163 units
D.
5,600 units
The following details are provided by a manufacturing company:
Product line
Investment
$1,190,000
Useful life
12 years
Estimated annual net cash inflows for first year
$400,000
Estimated annual net cash inflows for second year
$390,000
Estimated annual net cash inflows for next ten years
$490,000
Residual value
$90,000
Depreciation method
Straightminusline
Required rate of return
12%
Calculate the payback period for the investment. (Round your answer to two decimal places.)
A.
2.98 years
B.
2.82 years
C.
1.98 years
D.
2.20 years
Gloria's Bakery sells three large muffins for every two small ones. A small muffin sells for $6 with a variable cost of $2. A large muffin sells for $8 with a variable cost of $2.50. What is the weighted-average contribution margin? (Round your intermediate calculations to one decimal place.)
A.
$4.90 per muffin
B.
$5.50 per muffin
C.
$4.00 per muffin
D.
$4.75 per muffin
Which of the following describes the production budget?
A.
It provides the quantity of finished goods to be produced during a budget period.
B.
It aids in planning to ensure the company has adequate inventory and cash on hand.
C.
It helps in planning to ensure the business has adequate cash.
D.
It depicts the breakdown of sales on the basis of terms and conditions of collection of sales revenue.
Manufacturing overhead includes all manufacturing costs, such as direct labor and direct materials.
True
False
False
The management of Vert Lawnmowers has calculated the following variances:
Direct materials cost variance
$11,000 U
Direct materials efficiency variance
36,000 F
Direct labor cost variance
17,000 F
Direct labor efficiency variance
14,000 U
Variable overhead cost variance
2,000 F
Variable overhead efficiency variance
6,000 F
Fixed overhead cost variance
3,500 F
When determining the total production cost flexible budget variance, what is the total manufacturing overhead variance of the company?
A.
$8,000 F
B.
$6,000 F
C.
$11,500 F
D.
$3,500 F
The net present value and internal rate of return methods are appropriate for longer-term investments because they ignore the time value of money.
True
False
A favorable direct materials cost variance occurs when the actual direct materials cost incurred is greater than the standard direct materials cost.
True
False
A flexible budget summarizes revenues and costs for various levels of sales volume within a relevant range.
True
False
Glendale Brands Company uses standard costs for its manufacturing division. Standards specify 0.1 direct labor hours per unit of product. At the beginning of the year, the static budget for variable overhead costs included the following data:
Production volume
6,300 units
Budgeted variable overhead costs
$13,500
Budgeted direct labor hours (DLHr)
630 hours
At the end of the year, actual data were as follows:
Production volume
4,000 units
Actual variable overhead costs
$15,400
Actual direct labor hours (DLHr)
495 hours
What is the variable overhead efficiency variance? (Round any intermediate calculations to the nearest cent, and your final answer to the nearest dollar.)
A.
$2,955 U
B.
$2,036 U
C.
$2,955 F
D.
$2,036 F
Neptune Company sold 2,200 units in November at a price of $45 per unit. The variable cost is $20 per unit. Calculate the total contribution margin.
A.
$99,000
B.
$55,000
C.
$143,000
D.
$44,000
Fantabulous Products sells 2,200 kayaks per year at a price of $460 per unit. Fantabulous sells in a highly competitive market and uses target pricing. The company has $1,000,000 of assets, and the shareholders wish to make a profit of 17% on assets. Assume all products produced are sold. What is the target full product cost?
A.
$1,012,000
B.
$842,000
C.
$17,000,000
D.
$1,184,040
Which of the following is used to determine how the sales revenue of a company has changed from one year to the next?
A.
vertical analysis of the balance sheet
B.
vertical analysis of the income statement
C.
horizontal analysis of the balance sheet
D.
horizontal analysis of the income statement
Macaulay Roller Skates has three product--D, E, and F. The following information is available:
D
E
F
Sales revenue
$80,000
$40,000
$31,000
Variable costs
(40,000)
(10,000)
(12,000)
Contribution margin
$40,000
$30,000
$19,000
Fixed costs
(20,000)
(10,000)
(25,000)
Operating income (loss)
$20,000
$20,000
$(6,000)
The company is deciding whether to drop product line F because it has an operating loss. Assuming fixed costs are unavoidable, if Macaulay drops product line F and does not replace it, what effect will this have on operating income?
A.
Operating income will decrease $19,000.
B.
Operating income will increase $6,000.
C.
Operating income will increase $25,000.
D.
Operating income will increase $19,000.
A quarterly report filed with the Securities and Exchange Commission is called a Form 10-K.
True
False
The debt to equity ratio shows the proportion of total liabilities relative to total equity.
True
False
Contribution margin is the difference between net sales revenue and variable costs.
True
False
An annuity is a stream of equal cash payments made at equal time intervals.
True
False
Smith Industries is considering replacing a machine that is presently used in its production process.
Which of the following is irrelevant to the replacement decision?
Old Machine
Replacement
Machine
Original cost
$55,000
$46,000
Remaining useful life in years
5
5
Current age in years
5
0
Book value
$33,000
Current disposal value in cash
$9,000
Future disposal value in cash (in 5 years)
$0
$0
Annual cash operating costs
$8,000
$4,000
Which of the information provided in the table is irrelevant to the replacement decision?
A.
the current disposal value of the old machine
B.
the annual cash operating costs
C.
the original cost of the old machine
D.
the sales price of the new machine
Assume that Anna's cellphone service provider charges $6 per month and $0.4 per minute per call. If Anna's current bill is $80, how many calling minutes did Anna use?
A.
200 minutes
B.
185 minutes
C.
220 minutes
D.
170 minutes
An unfavorable variance means more cost has been incurred than planned.
True
False
The production budget is the first component of the operating budget.
True
False
Managerial accounting reporting by a public firm is required to follow the rules of GAAP and guidelines of the Securities and Exchange Commission.
True
False
Custom Furniture manufactures a small table and a large table. The small table sells for $800, has variable costs of $540 per table, and takes 10 direct labor hours to manufacture. The large table sells for $1,620, has variable costs of $1,000, and takes eight direct labor hours to manufacture. Calculate the contribution margin per direct labor hour for the small table.
A.
$54 per direct labor hour
B.
$260 per direct labor hour
C.
$26 per direct labor hour
D.
$62 per direct labor hour
The following details are provided by Doppler Company:
Initial investment
$2,020,000
Discount rate
12%
Yearly cash flows
1
$734,000
2
$596,000
3
$596,000
4
$596,000
5
$734,000
Present Value of $1:
10%
11%
12%
13%
1
0.909
0.901
0.893
0.885
2
0.826
0.812
0.797
0.783
3
0.751
0.731
0.712
0.693
4
0.683
0.659
0.636
0.613
5
0.621
0.593
0.567
0.543
Calculate the NPV of the project.
A.
$959,500
B.
$330,060
C.
$252,500
D.
$1,015,050
Which of the following statements is true of the budgeting process?
A.
It is a continuous process that encourages communication.
B.
Managers and employees are motivated to accept the budget's goals because they enjoy having their work monitored and evaluated.
C.
If a company carefully plans for its future, there will be no need to make modifications during the budget period.
D.
It shows the actual performance of the business.
South State, Inc. used $150,000 of direct materials and incurred $63,000 of direct labor costs during the year. Indirect labor amounted to $270,000, while indirect materials used totaled $52,500. Other operating costs pertaining to the factory included utilities of $133,500; maintenance of $74,880; repairs of $53,100; depreciation of $131,000; and property taxes of $74,120. There was no beginning or ending finished goods inventory, but Work-in-Process inventory began the year with a $5,600 balance and ended the year with a $7,500 balance.
How much is the cost of goods manufactured?
A.
$13,100
B.
$1,007,700
C.
$1,000,200
D.
$1,002,100
e-Shop, Inc. has net sales on account of $1,600,000. The average net accounts receivable are $620,000. Calculate the days' sales in receivables. (Round any intermediate calculations and your final answer to two decimal places.)
A.
313.90 days
B.
2.58 days
C.
141.47 days
D.
365.00 days
The breakeven point is the point where the sales revenues are equal to the fixed costs.
True
False
Drenning Timber Products has estimated the following amounts for its next fiscal year:
Total fixed expenses
$834,500
Sale price per unit
41
Variable expenses per unit
30
What will happen to the breakeven point (in units) if Drenning can reduce fixed expenses by $22,500?
A.
The breakeven point will decrease by 549 units.
B.
The breakeven point will increase by 549 units.
C.
The breakeven point will decrease by 750 units.
D.
The breakeven point will decrease by 2,046 units.
The residual value is discounted as a single lump sum because it will be received only once, when the asset is sold.
True
False
Manufacturing companies have inventory accounts, but merchandising companies do not.
True
False
Nobula Corp. is preparing their budget for the second quarter and provides the following data:
Apr
May
Jun
Budgeted purchases of direct materials
$20,000
$24,000
$23,000
Budgeted Cash Payments for Purchases of direct materials
Apr
May
Jun
40% of previous month purchases
$6,000
$8,000
$9,600
60% of current month purchases
12,000
14,400
13,800
Total cash payments
$18,000
$22,400
$23,400
Assume that accounts payable pertains only to suppliers of inventory. Based on the above data, the amount of Accounts Payable that should be shown in the budgeted balance sheet as of June 30 is ________.
A.
$13,800
B.
$9,200
C.
$23,400
D.
$9,600
Given the following information, determine the cost of goods sold.
Direct Labor Incurred
$61,000
Manufacturing Overhead Incurred
177,000
Direct Materials Used
155,000
Finished Goods Inventory, Jan. 1
198,000
Finished Goods Inventory, Dec. 31
97,500
Work-in-Process Inventory, Jan. 1
221,500
Work-in-Process Inventory, Dec. 31
109,000
A.
$606,000
B.
$505,500
C.
$614,500
D.
$295,500
Davis Naturals manufactures bulk quantities of cleaning fluids. It currently sells 1,300 containers a month at a sales price of $16 per unit. If a new fragrance is added, $18 per unit could be charged for the improved product. It would cost a total of $1,000 per month to make that alteration. Operating income would ________.
A.
increase by $2,600
B.
increase by $1,600
C.
decline by $2,600
D.
decline by $1,000
Diemans Corp. has provided a part of its budget for the second quarter:
Apr
May
Jun
Cash collections
$40,000
$40,000
$43,000
Cash payments:
Purchases of direct materials
7,000
7,000
4,500
Operating expenses
6,000
9,000
7,000
Capital expenditures
20,000
4,000
4,600
The cash balance on April 1 is $14,000. Assume that there will be no financing transactions or costs during the quarter. Calculate the projected cash balance at the end of April.
A.
$41,000
B.
$54,000
C.
$21,000
D.
$67,900
An efficiency variance measures how well the business uses its materials or human resources.
True
False
[Show More]
.png)
.png)
.png)
![Preview of ACC-350 Quiz 2 [Chapter 21] (Q&A Review)](https://scholarfriends.com/storage/ACC-350 Quiz 2 [Chapter 21] (Q&A Review).png)
.png)
.png)
 (Q&A).png)
.png)
.png)
.png)
.png)
.png)
.png)
.png)
