Managerial Accounting help
Bassmy
Bus207, Blended
Managerial Accounting , Summer 2013
Test for Chapters 1-6
Each Questions 1-52 are worth 5 pts.
Question 53 is worth 40pts.
1. Manufacturing overhead consists of: |
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A. all manufacturing costs, excepts direct materials and direct labor B. all manufacturing costs C. indirect materials but not indirect labor D. indirect labor but not indirect materials
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· 2. Which of the following should NOT be included as part of manufacturing overhead at a company that makes office furniture? |
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· A. sheet steel in a file cabinet by the company B. manufacturing equipment depreciation C. idle time for direct labor D. taxes on a factory building |
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· 3. Which of the following costs would not be included as part of manufacturing overhead? |
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A. Insurance on sales vehicles B. Depreciation of production equipment C. Lubricants for production equipment D. Direct labor overtime premium |
4. The advertising cost that Pepsi incurred to air its commercials during the Super Bowl can best be described as a: |
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A. fixed cost B. variable cost C. product cost A. D. prime cost |
5. Each of the following would be a period cost except: |
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· A. depreciation of a machine used in manufacturing B. the salary of the company president's secretary C. the cost of the general accounting office D. sales commissions |
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6. Which of the following costs is an example of a period rather than a product cost? |
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A. Wages of salespersons B. Depreciation on production equipment C. Wages of production machine operators D. insurance on production equipment |
7. Which of the following would be considered a product cost for external financial reporting purposes |
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A. Cost of sand spread on the factory floor to absorb oil from manufacturing machines B. cost of a wharehouse used to store finished goods C. Cost of guided public tours through the company's facilities D. Cost of travel necessary to sell the manufactured product |
8. The salary of the president of a manufacutring company would be classified as which of the following? |
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A. Period cost B. product cost C. Manufacturing overhead D. Direct labor |
9. Conversion cost do NOT include: |
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A. Direct materials B. depreciation C. Indirect labor D. indirect materials
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10. Last month, when 10,000 units of a product were manufactured, the cost per unit was $60. At this level of activity, variable costs are 50% of total unit costs. If 10,500 units are manufactured next month and cost behavior patterns remain unchanged the: |
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A. Total cost per unit will decrease B. Total variable cost will remain unchanged C. fixed cost will increase in total D. variable cost per unit will increase |
11. Variable cost: |
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A. remains constant on a per unit basis as the number of units produced increases B. increases on a per unit basis as the number of units produced increases C. remians the same in total as production increases D. decreases on a per unit basis as the number of units produced increases
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12. Which of the following statement regarding fixed costs is incorrect? |
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A. Expressing fixed costs on a per unit basis usually is the best approach for decision making B. Fixed costs expressed on a per unit basis will decrease with increases in activity C. Total fixed costs are constant within the relevant range D. Fixed costs expressed on a per unit basis will increase with decreases in activity
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13. The term "relevant range" means the range of activity over which: |
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A. The assumptions about fixed and variable cost behavior are reasonable valid B. relevant costs are incurred C. costs may fluctuate D. production may vary |
14. Brace Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year, the estimated direct labor-hours were 21,600 hours. At the end of the year, actual direct labor-hours for the year were 20,400, the actual manufacturing overhead for the year was $506,920, and manufacturing overhead for the year was underapplied by $23,440. The estimated manufacturing overhead at the beginning of the year used in the predetermined overhead rate must have been:
A. 501,920
B. 531,445
C. 483,489
D. 511,920
15. Snappy Company has a job-order costing system and uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. Manufacturing overhead cost and direct labor hours were estimated at $100,000 and 40,000 hours, respectively, for the year. In July Job#334 was completed at a cost of $5,000 in direct materials and $2,499 in direct labor. The labor rate is $6 per hour. By the end of the year, Snappy had worked a total of 45,000 direct labor-hours and had incurred $110, 250 actual manufacturing overhead cost.
If Job #334 contained 200 units, the unit product cost on the completed job cost sheet would be:
A. 37.00
B. 42.00
C. 41.90
D. 39.50
16. Guerra Electronics manufactures a variety of electronic gadgets for use in the home. Which of the following would probably be the most accurate measure of activity to use for allocating the cost of inspecting the finished product at Gurerra.
A. Machine-hours
B. Direct labor-hours
C. Inspection time
D. Number of inspections
17. Daston Company manufactures tow products, Product F and Product G. The company expects to produce and sell 1,600 units of Product F and 3,000 units of Product G during the current year. The Company used activity-based costing to compute unit product costs for external reports. Data relating to the company's three activity pools are given below for the current year:
Activities Est. Overhead ____________Expected Activity________________
Cost Product F Product G Total
Machine setupps $14,960 130 90 220
Purchase orders 63,360 650 1,110 1,760
General factory 32,240 1,280 1,200 2,480
Required: Use activity based costing to determine the overhead cost per unit for each product.
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The difference between total sales in dollars and total variable expenses is called:
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East Company manufactures and sells a single product with a positive contribution margin. If the selling price and the variable expense per unit both increase 5% and fixed expenses do not change, what is the effect on the contribution margin per unit and the contribution margin ratio?
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Which of the following formulas is used to calculate the contribution margin ratio?
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21. |
Brasher Company manufactures and sells a single product that has a positive contribution margin. If the selling price and variable expenses both decrease by 5% and fixed expenses do not change, then what would be the effect on the contribution margin per unit and the contribution margin ratio?
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22.. |
The break-even point in unit sales is found by dividing total fixed expenses by:
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23.. |
The break-even point in unit sales increases when variable expenses:
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24.. |
The margin of safety percentage is computed as:
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25. |
The amount by which a company's sales can decline before losses are incurred is called the:
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26. |
The degree of operating leverage can be calculated as:
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27. |
A company has provided the following data: If the sales volume decreases by 25%, the variable cost per unit increases by 15%, and all other factors remain the same, net operating income will:
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28. |
Butteco Corporation has provided the following cost data for last year when 100,000 units were produced and sold: All costs are variable except for $100,000 of manufacturing overhead and $100,000 of selling and administrative expense. There are no beginning or ending inventories. If the selling price is $10 per unit, the net operating income from producing and selling 110,000 units would be:
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29. |
Sensabaugh Inc., a company that produces and sells a single product, has provided its contribution format income statement for January. If the company sells 1,600 units, its total contribution margin should be closest to:
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30. |
Gaudy Inc. produces and sells a single product. The company has provided its contribution format income statement for May. If the company sells 4,300 units, its net operating income should be closest to:
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31. |
The contribution margin ratio is 25% for Grain Company and the break-even point in sales is $200,000. To obtain a target net operating income of $60,000, sales would have to be:
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32. |
The contribution margin ratio is 30% for the Honeyville Company and the break-even point in sales is $150,000. If the company's target net operating income is $60,000, sales would have to be:
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33. |
The Herald Company manufactures and sells a single product which sells for $50 per unit and has a contribution margin ratio of 30%. The company's monthly fixed expenses are $25,000. If Herald desires a monthly target net operating income equal to 20% of sales dollars, sales in units will have to be (rounded):
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34. |
Street Company's fixed expenses total $150,000, its variable expense ratio is 60% and its variable expenses are $4.50 per unit. Based on this information, the break-even point in units is:
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35. |
South Company sells a single product for $20 per unit. If variable expenses are 60% of sales and fixed expenses total $9,600, the break-even point will be:
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36. |
Darth Company sells three products. Sales and contribution margin ratios for the three products follow: Given these data, the contribution margin ratio for the company as a whole would be:
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37. |
Knoke Corporation's contribution margin ratio is 29% and its fixed monthly expenses are $17,000. If the company's sales for a month are $98,000, what is the best estimate of the company's net operating income? Assume that the fixed monthly expenses do not change.
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38. |
Balonek Inc.'s contribution margin ratio is 57% and its fixed monthly expenses are $41,000. Assuming that the fixed monthly expenses do not change, what is the best estimate of the company's net operating income in a month when sales are $112,000?
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39. |
Danneman Corporation's fixed monthly expenses are $13,000 and its contribution margin ratio is 56%. Assuming that the fixed monthly expenses do not change, what is the best estimate of the company's net operating income in a month when sales are $41,000?
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40. |
Data concerning Runnells Corporation's single product appear below: The company is currently selling 6,000 units per month. Fixed expenses are $424,000 per month. The marketing manager believes that a $7,000 increase in the monthly advertising budget would result in a 100 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change?
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Weinreich Corporation produces and sells a single product. Data concerning that product appear below: The company is currently selling 2,000 units per month. Fixed expenses are $131,000 per month. The marketing manager believes that an $18,000 increase in the monthly advertising budget would result in a 170 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change?
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42. |
Data concerning Lancaster Corporation's single product appear below: Fixed expenses are $105,000 per month. The company is currently selling 1,000 units per month. Management is considering using a new component that would increase the unit variable cost by $44. Since the new component would increase the features of the company's product, the marketing manager predicts that monthly sales would increase by 400 units. What should be the overall effect on the company's monthly net operating income of this change?
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43. |
Ribb Corporation produces and sells a single product. Data concerning that product appear below: Fixed expenses are $913,000 per month. The company is currently selling 9,000 units per month. Management is considering using a new component that would increase the unit variable cost by $6. Since the new component would increase the features of the company's product, the marketing manager predicts that monthly sales would increase by 400 units. What should be the overall effect on the company's monthly net operating income of this change?
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44. |
Data concerning Moscowitz Corporation's single product appear below: Fixed expenses are $375,000 per month. The company is currently selling 8,000 units per month. The marketing manager would like to cut the selling price by $15 and increase the advertising budget by $23,000 per month. The marketing manager predicts that these two changes would increase monthly sales by 3,100 units. What should be the overall effect on the company's monthly net operating income of this change?
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53. In October, Patnode Inc., a merchandising company, had sales of $294,000, selling expenses of $27,000, and administrative expenses of $35,000.
The cost of merchandise purchased during the month was $211,000. The beginning balance in merchandise inventory account was $38,000 and the ending balance was $34,000.
1. Prepare a tradition format income statement for October.
2. Prepare a contribution format income statement for October.
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