final-final

Question 1
5 Points
Danner Corporation reported net sales of $650,000, $720,000, and $780,000 in the years 2016, 2017, and 2018, respectively. If 2016 is the base year, what percentage do 2018 sales represent of the base?

Select the correct answer

120%

83%

108%

20%

Question 2
5 Points
In performing a vertical analysis, the base for sales revenues on the income statement is:

Select the correct answers

net income.

sales revenue.

net sales.

cost of goods available for sale.

Question 3
5 Points
If a plant is operating at full capacity and receives a one-time opportunity to accept an order at a special price below its usual price, then:

Select the correct answer

only variable costs are relevant.

fixed costs are not relevant.

the order will likely be rejected.

the order will likely be accepted.

Question 4
5 Points
Which statement is correct?

Select the correct answer

As long as a company consistently uses the cash basis of accounting, generally accepted accounting principles allow its use.

The use of the cash basis of accounting violates both the revenue recognition and expense recognition principles.

The cash basis of accounting is objective because no one can be certain of the amount of revenue until the cash is received.

As long as management is ethical, there are no problems with using the cash basis of accounting.

Question 5
5 Points
Henson Company began the year with retained earnings of $380,000. During the year, the company recorded revenues of $500,000, expenses of $380,000, and paid dividends of $40,000. What was Hensonâ€s retained earnings at the end of the year?

Select the correct answer

$540,000

$840,000

$500,000

$460,000

Question 6
5 Points
Which of the following will not result in an unfavorable controllable margin difference?

Select the correct answer

Sales under budget; costs over budget

Sales exceeding budget; costs over budget

Sales exceeding budget; costs under budget

Sales under budget; costs under budget

Question 7
5 Points
If there are no units in process at the beginning of the period, then:

Select the correct answer

the units to be accounted for will equal the units transferred out and the units in process at the end of the period.

the company must be using a job order cost system.

only one computation of equivalent units of production will be necessary.

the units started into production will equal the number of units transferred out.

Question 8
5 Points
The investigation of materials price variance usually begins in the:

Select the correct answers

first production department.

purchasing department.

accounts payable department.

controller’s office.

Question 9
5 Points
Miller Manufacturingâ€s degree of operating leverage is 1.5. Warren Corporationâ€s degree of operating leverage is 3. Warrenâ€s earnings would go up (or down) by ________ as much as Millerâ€s with an equal increase (or decrease) in sales.

Select the correct answer

1.5 times

1/2 times

4.5 times

2 times

Question 10
5 Points
Which is the last step in developing the master budget?

Select the correct answer

Preparing the budgeted balance sheet

Preparing the budgeted income statement

Preparing the cost of goods manufactured budget

Preparing the cash budget

Question 11
5 Points
Are advanced receipts from customers treated as revenue at the time of receipt? Why or why not?

Select the correct answer

Yes, they are treated as revenue at the time of receipt because the company has access to the cash.

Yes, the intent of the company is to perform the work and the customer is confident that the services will be completed.

No, revenue cannot be recognized until the work is performed.

No, the amount of revenue cannot be adequately determined until the company completes the work.

Question 12
5 Points
Ben Gordon, Inc. manufactures 2 products, wheels and seats. The company has estimated its overhead in the assembling department to be $660,000. The company produces 300,000 wheels and 600,000 seats each year. Each wheel uses 2 parts, and each seat uses 3 parts. How much of the assembly overhead should be allocated to wheels?

Select the correct answer

$165,000

$220,000

$264,000

$282,856

Question 13
5 Points
An activity-based overhead rate is computed as follows:

Select the correct answer

actual overhead divided by estimated use of cost drivers

estimated overhead divided by actual use of cost drivers.

actual overhead divided by actual use of cost drivers.

estimated overhead divided by estimated use of cost drivers.

Question 14
5 Points
Kimble Company applies overhead on the basis of machine hours. Given the following data, compute overhead applied and the under- or over-application of overhead for the period:Estimated annual overhead cost $1,600,000Actual annual overhead cost $1,575,000Estimated machine hours 400,000Actual machine hours 390,000

Select the correct answer

$1,560,000 applied and $15,000 under-applied

$1,575,000 applied and neither under- nor over-applied

$1,600,000 applied and $15,000 over-rapplied

$1,560,000 applied and $15,000 over-applied

Question 15
5 Points
Which of the following statements concerning users of accounting information is incorrect?

Select the correct answer

Present creditors are considered external users.

Taxing authorities are considered external users.

Management is considered an internal user.

Regulatory authorities are considered internal users.

Question 16
5 Points
Hollis Industries produces flash drives for computers, which it sells for $20 each. Each flash drive costs $13 of variable costs to make. During April, 1,000 drives were sold. Fixed costs for March were $2 per unit for a total of $1,000 for the month. How much is the contribution margin ratio?

Select the correct answer

25%

65%

35%

75%

Question 17
5 Points
At September 1, 2017, Baxter Inc. reported Retained Earnings of $423,000. During the month, Baxter generated revenues of $60,000, incurred expenses of $36,000, purchased equipment for $15,000 and paid dividends of $6,000. What is the balance in Retained Earnings at September 30, 2017?

Select the correct answer

$426,000 credit

$423,000 debit

$24,000 credit

$441,000 credit

Question 18
5 Points
Scorpion Production Company planned to use 1 yard of plastic per unit budgeted at $81 a yard. However, the plastic actually cost $80 per yard. The company actually made 3,900 units, although it had planned to make only 3,300 units. Total yards used for production were 3,960. How much is the total materials variance?

Select the correct answers

$4,860 U

$900 U

$3,960 F

$48,600 U

Question 19
5 Points
Financial and managerial accounting are similar in that both:

Select the correct answer

have the same primary users.

deal with the economic events of an enterprise.

produce general-purpose reports.

have reports that are prepared quarterly and annually.

Question 20
5 Points
Based on the following data, what is the amount of working capital?Accounts payable………………………………………………………..$64,000Accounts receivable……………………………………………………..114,000Cash………………………………………………………………………. 70,000Intangible assets…………………………………………………………100,000Inventory…………………………………………………………………. 138,000Long-term investments…………………………………………………..160,000Long-term liabilities……………………………… ………………………200,000Short-term investments……………………………………………………80,000Notes payable (short-term)………………………………………………..56,000Property, plant, and equipment………………………………………..1,340,000Prepaid insurance…………………………………………………………….2,000

Select the correct answer

$284,000

$326,000

$370,000

$332,000

Question 21
5 Points
Which of the following is not an underlying assumption of CVP analysis?

Select the correct answer

Changes in activity are the only factors that affect costs.

Cost classifications are reasonably accurate.

Sales mix is constant.

Beginning inventory is larger than ending inventory.

Question 22
5 Points
It costs Garner Company $12 of variable and $5 of fixed costs to produce one bathroom scale which normally sells for $35. A foreign wholesaler offers to purchase 3,000 scales at $15 each. Garner would incur special shipping costs of $1 per scale if the order were accepted. Garner has sufficient unused capacity to produce the 3,000 scales. If the special order is accepted, what will be the effect on net income?

Select the correct answer

$45,000 increase

$9,000 decrease

$6,000 increase

$6,000 decrease

Question 23
5 Points
La More Company had the following transactions during 2016:

Sales of $9,000 on account
Collected $4,000 for services to be performed in 2017
Paid $3,750 cash in salaries for 2016
Purchased airline tickets for $500 in December for a trip to take place in 2017

What is La Moreâ€s 2016 net income using accrual accounting?

Select the correct answer

$5,750

$9,250

$9,750

$5,250

Question 24
5 Points
Top management notices a variation from budget and an investigation of the difference reveals that the department manager could not be expected to have controlled the variation. Which of the following statements is applicable?

Select the correct answer

Department managers’ performances should not be evaluated based on actual results to budgeted results.

Department managers should be held accountable for all variances from budgets for their departments.

Department managers should only be held accountable for controllable variances for their departments.

Department managers should be credited for favorable variances even if they are beyond their control.

Question 25
5 Points
Which one of the following is an example of a period cost?

Select the correct answer

A manager’s salary for work that is done in the corporate head office.

A change in benefits for the union workers who work in the New York plant of a Fortune 1000 manufacturer.

A box cost associated with computers.

Workers’ compensation insurance on factory workers’ wages allocated to the factory.

Question 26
5 Points
What is the primary difference between a static budget and a flexible budget?

Select the correct answer

The static budget is prepared for a single level of activity, while a flexible budget is adjusted for different activity levels.

The static budget is prepared only for units produced, while a flexible budget reflects the number of units sold.

The static budget contains only fixed costs, while the flexible budget contains only variable costs.

The static budget is constructed using input from only upper level management, while a flexible budget obtains input from all levels of management.

Question 27
5 Points
Which of the following statements is not true?

Select the correct answers

When a companyâ€s sales revenue is increasing, high operating leverage is good because it means that profits will increase rapidly.

Operating leverage refers to the extent to which a companyâ€s net income reacts to a given change in sales.

Companies that have higher fixed costs relative to variable costs have higher operating leverage.

When a companyâ€s sales revenue is decreasing, high operating leverage is good because it means that profits will decrease at a slower pace than revenues decrease.

Question 28
5 Points
The entry to record the acquisition of raw materials on account is:

Select the correct answer

Accounts Payable Raw Materials Inventory

Raw Materials Inventory Accounts Payable

Work in Process Inventory Accounts Payable

Manufacturing Overhead Raw Materials Inventory Accounts Payable

Question 29
5 Points
Differences between a job order cost system and a process cost system include all of the following except the:

Select the correct answer

unit cost computations.

documents used to track costs.

flow of costs.

point at which costs are totaled.

Question 30
5 Points
The Mac Company has four plants nationwide that cost $350 million. The current fair value of the plants is $300 million. The plants will be reported as assets at:

Select the correct answer

$350 million.

$600 million.

$700 million.
 
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