ACC201C - Chapter 24 Quiz Score 100%

A profit center generates revenue, incurs costs, and has the authority to make significant investing decisions.
True
False


A department's direct expenses are usually considered uncontrollable costs.
True
False

No standard rule identifies the best basis of allocating expenses across departments, so it is impossible to allocate costs in a manner that will be perceived as fair.
True
False

A joint cost of producing two products can be allocated between those products on the basis of the relative physical quantities of each product produced.
True
False


If a company reports profit margin of 31.6% and investment turnover of 1.30 for one of its investment centers, the return on investment must be:
32.9%.
4.11%.
41.1%.
30.3%.
24.3%.


Kragle Corporation reported the following financial data for one of its divisions for the year; average invested assets of $470,000; sales of $930,000; and income of $105,000. The investment center profit margin is:
197.9%.
50.5%.
447.6%.
11.3%.
22.3%.

The salaries of employees who spend all their time working in one department are:
Variable expenses.
Responsibility expenses.
Unavoidable expenses.
Direct expenses.
Indirect expenses.

Differential Chemical produced 10,000 gallons of Preon and 20,000 gallons of Paron. Joint costs incurred in producing the two products totaled $7,500. At the split-off point, Preon has a market value of $6.00 per gallon and Paron $2.00 per gallon. Compute the portion of the joint costs to be allocated to Preon if the value basis is used.
$3,000.
$4,500.
$5,625.
$2,500.
$1,500.


The amount by which a department's sales exceed its direct expenses is:
Departmental profit.
Departmental contribution to overhead.
Contribution margin.
Net sales.
Gross profit.

Advertising expense can be reasonably allocated to departments on the basis of each department's proportion of sales.
True
False


Part 7B costs the Midwest Division of Frackle Corporation $30 to make, of which $21 is variable. Midwest Division sells Part 7B to other companies for $47. The Northern Division of Frackle Corporation can use Part 7B in one of its products. The Midwest Division has enough idle capacity to produce all of the units of Part 7B that the Northern Division would require. What is the lowest transfer price at which the Midwest Division should be willing to sell Part 7B to the Northern Division?
$30
$20
$17
$47
$21


The type of department that generates revenues and incurs costs, and its manager is responsible for the investments made in operating assets is called a:
Profit center
Cost center
Service department
Investment center
Responsibility center


Indirect expenses are allocated to departments based upon the benefits received by each department.
True
False


Profit margin for an investment center measures:
How efficiently an investment center generates sales from its invested assets.
Investment center income earned per dollar of sales.
Investment center income compared to target investment center income.
Departmental contribution to overhead.
Investment center income generated from its invested assets.


Direct expenses require allocation across departments because they cannot be readily traced to one department.
True
False

A department can never be considered to be a profit center.
True
False


Part AR3 costs the Southwestern Division of Luxon Corporation $26 to make-direct materials are $10, direct labor is $4, variable manufacturing overhead is $9, and fixed manufacturing overhead is $3. Southwestern Division sells Part AR3 to other companies for $30. The Northeastern Division of Luxon Corporation can use Part AR3 in one of its products. The Southwestern Division has enough idle capacity to produce all of the units of Part AR3 that the Northeastern Division would require. What is the lowest transfer price at which the Southwestern Division should be willing to sell Part AR3 to the Northeastern Division?
$26
$27
$30
$21
$23


A responsibility accounting performance report usually compares actual costs to budgeted costs amounts by management level.
True
False

Joint costs can be allocated either using a physical basis or a value basis.
True
False


Regardless of the system used in departmental cost analysis:
Neither direct nor indirect costs are allocated.
Indirect costs are allocated, direct costs are not.
Total departmental costs will always be the same.
Both direct and indirect costs are allocated.
Direct costs are allocated, indirect costs are not.

ACC201C Chapter 17 Quiz Score 95%

Question-1

Financial statement analysis lessens the need for expert judgment.

True

False

Question-2

The comparison of a company's financial condition and performance to a base amount is known as:

Horizontal ratios.

Investment analysis.

Financial reporting.

Risk analysis.

Vertical analysis.

Question-3

How long a company holds inventory before selling it can be measured by dividing cost of goods sold by the average inventory balance to determine the:

Price earnings ratio.

Accounts receivable turnover.

Inventory turnover.

Current ratio.

Days' sales uncollected.

Question-4

The building blocks of financial statement analysis include (1) liquidity, (2) salability, (3) solvency, and (4) profitability.

True

False

Question-5

The market price of Horokhiv Corporation's common stock at the start of 2014 was $47.50 and it declared and paid cash dividends of $3.28 per share. The Dividend yield ratio is:

14.5%.

7.4%.

6.5%.

144.8%.

6.9%.

Question-6

Measures taken from a selected competitor or a group of competitors are often excellent standards of comparison for analysis.

True

False

Question-7

The percent change of a comparative financial statement item is computed by subtracting the analysis period amount from the base period amount, dividing the result by the base period amount and multiplying that result by 100.

True

False

Question-8

Selected current year company information follows:

Net income $15,953

Net sales 712,855

Total liabilities, beginning-year 83,932

Total liabilities, end-of-year 103,201

Total stockholders' equity, beginning-year 198,935

Total stockholders' equity, end-of-year 121,851

The total asset turnover is:

6.28 times

3.64 times

2.81 times

2.24 times

4.67 times

Question-9

Dividing Accounts receivable, net by Net sales and multiplying the result by 365 is the:

Average accounts receivable ratio.

Accounts receivable turnover ratio.

Current ratio.

Days' sales uncollected.

Profit margin.

Question-10

Refer to the following selected financial information from Dodge Company. Compute the company's acid-test ratio.

Cash $42,250

Short-term investments 60,000

Accounts receivable, net 79,500

Merchandise inventory 115,000

Prepaid expenses 9,700

Accounts payable 111,400

2.75.

1.63.

0.92.

2.66.

1.12.

Question-11

Horizontal analysis is used to reveal changes in the relative importance of each financial statement item.

True

False

Question-12

Net income divided by average total assets is:

Total asset turnover.

Profit margin.

Return on total assets.

Days' income in assets.

Current ratio.

Question-13

The return on total assets ratio is a profitability measure.

True

False

Question-14

A high level of expected risk suggests a low price-earnings (PE) ratio.

True

False

Question-15

The base amount for a common-size balance sheet is usually total assets.

True

False

Question-16

The ability to meet short-term obligations and to efficiently generate revenues is called:

Creditworthiness.

Liquidity and efficiency.

Profitability.

Solvency.

Market prospects.

Question-17

Financial statements with data for two or more successive accounting periods placed in columns side by side, sometimes with changes shown in both dollar amounts and percentages, are referred to as:

Serial statements.

Successive statements.

Controlling statements.

Period-to-period statements.

Comparative statements.

Question-18

Rajan Company's most recent balance sheet reported total assets of $1.9 million, total liabilities of $0.8 million, and total equity of $1.1 million. Its Debt to equity ratio is:

0.58

1.00

0.73

0.42

1.38

Question-19

The measurement of key relations among financial statement items is known as:

Ratio analysis.

Financial reporting.

Horizontal analysis.

Investment analysis.

Risk analysis.

Question-20

The return on total assets can be calculated as profit margin times total asset turnover.

True

False

  

                     

ACC201C Chapter 19 quiz Score 95%

Question-1
Andrew Industries purchased $165,000 of raw materials on account during the month of March. The beginning Raw Materials Inventory balance was $22,000, and the materials used to complete jobs during the month were $141,000 direct materials and $13,000 indirect materials. What amount will Andrew transfer to Work In Process Inventory for the month of March?
$33,000
$13,000
$165,000
$154,000
$141,000

Question-2
A source document that an employee uses to report how much time was spent working on a job or on overhead activities and that is used to determine the amount of direct labor to charge to the job or to determine the amount of indirect labor to charge to factory overhead is called a:
Payroll Register.
General Ledger.
Factory Overhead Ledger.
Time ticket.
Factory payroll record.

Question-3
The B&T Company's production costs for May are: direct labor, $13,000; indirect labor, $6,500; direct materials, $15,000; property taxes on production equipment, $800; heat, lights and power, $1,000; and insurance on plant and equipment, $200. B&T Company's factory overhead incurred for May is:
$2,000.
$6,500.
$36,500.
$8,500.
$21,500.

Question-4
CWN Company uses a job order costing system and last period incurred $80,000 of actual overhead and $100,000 of direct labor. CWN estimates that its overhead next period will be $75,000. It also expects to incur $100,000 of direct labor. If CWN bases applied overhead on direct labor cost, its predetermined overhead rate for the next period should be:
80%.
133%.
125%.
75%.
107%.

Question-5
The amount by which the overhead applied to jobs during a period exceeds the overhead incurred during the period is known as:
Overapplied overhead.
Estimated overhead.
Adjusted overhead.
Underapplied overhead.
Predetermined overhead.

Question-6
The ending inventory of finished goods has a total cost of $9,000 and consists of 600 units. If the overhead applied to these goods is $3,000, and the overhead rate is 75% of direct labor, how much direct materials cost was incurred in producing these units?
$9,000.
$4,000.
$3,750.
$6,000.
$2,000.


Question-7
A type of production that yields customized products or services for each customer is called:
Process production.
Job order production.
Job lot production.
Just-in-time production.
Customer orientation production.


Question-8
The overhead cost applied to a job during a period is recorded with a credit to Factory Overhead and a debit to:
Indirect Labor.
Cost of Goods Sold.
Jobs Overhead Expense.
Work in Process Inventory.
Finished Goods Inventory.

Question-9
A document in a job order costing system that is used to record the costs of producing a job is a(n):
Units-of-production sheet.
Finished goods summary.
Job cost sheet.
Job lot.
Process cost system.


Question-10

Minstrel Manufacturing uses a job order costing system. During one month Minstrel purchased $198,000 of raw materials on credit; issued materials to production of $195,000 of which $30,000 were indirect. Minstrel incurred a factory payroll of $150,000, paid in cash, of which $40,000 was indirect labor. Minstrel uses a predetermined overhead application rate of 150% of direct labor cost. Minstrel's beginning and ending Work in Process Inventory are $15,500 and $27,000 respectively. Compute the cost of product transferred to Finished Goods Inventory:
$413,000.
$415,000.
$558,500.
$440,000.
$428,500.


Question-11
A materials requisition is a source document used by materials managers of a manufacturing company to order raw materials from suppliers; it serves the same purpose as a purchase order in a merchandising company.
True
False


Question-12

Material amounts of under- or overapplied factory overhead are always closed entirely to Cost of Goods Sold at the end of an accounting period.
True
False


Question-13
Job order costing is applicable to manufacturing firms only and not service firms.
True
False

Question-14
Job order costing systems normally use:
Real inventory systems.
Perpetual inventory systems.
Periodic inventory systems.
General inventory systems.
Any inventory systems is acceptable.

Question-15
In comparison to a general accounting system, a cost accounting system for a manufacturing company places an emphasis on:
Continually updating costs of materials, work in process, and finished goods inventories.
Total costs.
Large volume operations involving standardized products.
Products and average costs.
Periodic inventory counts.

Question-16
If overhead applied is less than actual overhead incurred, it is:
Overapplied.
Underapplied.
Fully applied.
Normal.
Expected.

Question-17
Both direct and indirect labor costs are recorded on the individual job cost sheets.
True
False

Question-18
The production activities for a customized product represent a(n):
Operation.
Job.
Unit.
Process.
Pool.

Question-19
There are two basic types of cost accounting systems: job order costing and periodic costing.
True
False

Question-20
Job cost sheets are used to track all of the costs assigned to a job, including direct materials, direct labor, overhead, and all selling and administrative costs.
True
False

ACC201C Chapter21 Quiz Score 95%

Question-1

As the level of volume of activity increases, the variable cost per unit remains constant.

True

False

 

Question-2

Mullis Corp. manufactures DVDs that sell for $5.00. Fixed costs are $28,000 and variable costs are $3.60 per unit. Mullis can buy a newer production machine that will increase fixed costs by $8,000 per year, but will decrease variable costs by $0.40 per unit. What effect would the purchase of the new machine have on Mullis' break-even point in units?

9,850 unit decrease.

5,714 unit increase.

4,444 unit increase.

No effect.

4,444 unit decrease.

 

Question-3

If a firm's forecasted sales are $250,000 and its break-even sales are $190,000, the margin of safety in dollars is:

$250,000.

$60,000.

$24,000.

$190,000.

$440,000.

 

Question-4

A product sells for $200 per unit, and its variable costs per unit are $130. The fixed costs are $420,000. If the firm wants to earn $35,000 pretax income, how many units must be sold?

6,000.

6,500.

5,500.

5,000.

500.

 

Question-5

The contribution margin ratio:

Is the percent of each sales dollar that remains to cover the variable and fixed costs.

Cannot be used in conjunction with other analytical tools.

Is the same as the unit contribution margin.

Is the percent of each sales dollar that remains after deducting the total unit variable cost.

Is the percent of each sales dollar that remains after deducting the total unit fixed cost.

 

Question-6

Use the following information to determine the margin of safety in dollars:

Unit sales	50,000 Units
Dollar sales	$500,000
Fixed costs	$204,000
Variable costs	$187,500

$173,600.

$326,400.

$88,500.

$108,500.

$500,000.

 

 

Question-7

A company's normal operating range, which excludes extremely high or low operating levels that are not likely to occur, is called the:

Margin of safety.

Contribution range.

Break-even point.

Relevant range.

High-low point.

 

 

Question-8

A firm sells two products, Regular and Ultra. For every unit of Regular the firm sells, two units of Ultra are sold. The firm's total fixed costs are $1,612,000. Selling prices and cost information for both products follow. What is the firm's break-even point in units of Regular and Ultra?

Product	Unit Sales Price	Variable Cost Per Unit
Regular	$20	$8
Ultra	24	4

10,333 of A and 20,667 of B.

31,000 of A and 31,000 of B.

36,167 of A and 72,333 of B.

31,000 of A and 62,000 of B.

62,000 of A and 31,000 of B.

 

Question-9

A cost that includes both fixed and variable cost components is called a:

Composite cost.

Differential cost.

Curvilinear cost.

Mixed cost.

Step-variable cost.

 

Question-10

A visual line fit to points in a scatter diagram may be used to identify the approximate relation between past cost and unit data.

True

False

 

Question-11

Top of Form

The ratio (proportion) of the sales volumes for the various products sold by a company is called the:

Inventory cost ratio.

Production ratio.

Current product mix.

Sales mix.

Relevant mix.

 

Question-12

The Goldfarb Company manufactures and sells toasters. Each toaster sells for $23.75 and the variable cost per unit is $16.25. Goldfarb's total fixed costs are $25,000, and budgeted sales are 8,000 units. What is the contribution margin per unit?

$1.25.

$23.75.

$16.25.

$7.50.

$60,000.

 

Question-13

A company has fixed costs of $270,000, a unit contribution margin of $14, and a contribution margin ratio of 55%. If the firm wants to earn a target $60,000 pretax income, what amount of sales must the company make (rounded to the nearest whole dollar)?

109,090.

381,818.

600,000.

330,000.

490,909.

 

Question-14

The difference between sales price per unit and variable cost per unit is the:

Gross profit from sales.

Margin of safety per unit.

Gross margin per unit.

Contribution margin per unit.

Fixed cost per unit.

 

Question-15

Cost-volume-profit analysis requires management to classify all costs as either fixed or variable with respect to production or sales volume within the relevant range of operations.

True

False

 

Question-16

At Midland Company's break-even point of 9,000 units, fixed costs are $180,000 and variable costs are $540,000 in total. The unit sales price is:

$80.

$40.

$60.

$20.

$100.

 

Question-17

During its most recent fiscal year, Dover, Inc. had total sales of $3,200,000. Contribution margin amounted to $1,500,000 and pretax income was $400,000. What amount should have been reported as variable costs in the company's contribution margin income statement for the year in question?

$1,300,000.

$1,700,000.

$2,800,000.

$1,900,000.

$1,100,000.

 

 

Question-18

The budgeted income statement presented below is for Burkett Corporation for the coming fiscal year. Compute the number of units that must be sold in order to achieve a target pretax income of $130,000.

Sales (50,000 units)		$1,000,000
Costs:
Direct materials	$270,000
Direct labor	240,000
Fixed factory overhead	100,000
Variable factory overhead	150,000
Fixed marketing costs	110,000
Variable marketing costs	50,000	920,000
Pretax income		$80,000

 

50,000.

53,165.

58,621.

36,207.

81,250.

 

Question-19

Flannigan Company manufactures and sells a single product that sells for $450 per unit; variable costs are $300. Annual fixed costs are $870,000. Current sales volume is $4,200,000. Compute the break-even point in dollars.

$2,612,612.

$1,304,348.

$4,202,899.

$2,640,000.

$1,740,000.

 

Question-20

Use the following information to determine the contribution margin ratio:

Unit sales	50,000 Units
Unit selling price	$14.50
Unit variable cost	$7.50
Fixed costs	$204,000

24.5%.

48.3%.

6.9%.

51.7%.

34.1%.

 

ACC201C Chapter 16 Quiz Score 90%

1.value:

10.00 points

Addams Corporation paid cash dividends totaling $75,000 during its most recent fiscal year. How should this information be reported on Addam's statement of cash flows?

In financing activities as a source of funds.

In financing activities as a use of funds.

In investing activities as a use of funds.

In investing activities as a source of funds.

In operating activities as a source of funds.

 

 Question-2

Northington, Inc. is preparing the company's statement of cash flows for the fiscal year just ended. Using the following information, determine the amount of cash flows from operating activities using the indirect method:

Net income	$182,000
Gain on the sale of equipment	12,300
Proceeds from the sale of equipment	92,300
Depreciation expense—equipment	50,000
Payment of bonds at maturity	100,000
Purchase of land	200,000
Issuance of common stock	300,000
Increase in merchandise inventory	35,400
Decrease in accounts receivable	28,800
Increase in accounts payable	23,700
Payment of cash dividends	32,000

$189,400.

$332,200.

$236,800.

$261,400.

$186,800.

 

Hint:  Net Income +Depreciation expense (equipment)-Gain on sale of equipment-INC in merchandise Inventory+DEC in accounts receivable+INC in accounts payable

= 182000+50000-12300-35400+28800+23700

 

Question-3

Business activities that generate or use cash are classified as operating, investing, or financing activities on the statement of cash flows.

True

False

 

Question-4

Conversion of preferred stock to common stock is disclosed in the financing section of the statement of cash flows.

True

False

 

Question-5

The statement of cash flows is:

A financial statement that reports the cash inflows and cash outflows for an accounting period, and that classifies those cash flows as operating activities, investing activities, or financing activities.

A financial statement that lists the types and amounts of assets, liabilities, and equity of a business on a specific date.

A financial statement that lists the types and amounts of the revenues and expenses of a business for an accounting period.

A financial statement that presents information about changes in equity during a period.

Another name for the statement of financial position.

 

 

Question-6

Both the direct and indirect methods yield the identical net cash flow amount provided or used by operating activities.

True

False

 

Question-7

The gain or loss from retirement of debt is reported under cash flows from operating activities on the statement of cash flows using the direct method.

True

False

 

Question-8

A purchase of land in exchange for a long-term note payable is reported in the investing section of the statement of cash flows.

True

False

 

Question-9

Jamison Company reports depreciation expense of $35,000 for Year 2. Also, equipment costing $140,000 was sold for a $5,000 gain in Year 2. The following selected information is available for Jamison Company from its comparative balance sheet. Compute the cash received from the sale of the equipment.

At December 31	Year 2	Year 1
Equipment	$610,000	$750,000
Accumulated Depreciation-Equipment	428,000	500,000

$23,000.

$40,000.

$67,000.

$35,000.

$38,000.

 

Question-10

The appropriate section in the statement of cash flows for reporting the purchase of equipment for cash is:

Financing activities.

Schedule of noncash investing or financing activity.

Investing activities.

Operating activities.

This is not reported on the statement of cash flows.

 

Question-11

Use the following information to calculate cash received from dividends:

Dividends revenue	$63,500
Dividends receivable, January 1	3,600
Dividends receivable, December 31	3,100

$63,000.

$60,400.

$63,500.

$64,000.

$67,100.

 

Question-12

When analyzing the changes on a spreadsheet used to prepare a statement of cash flows, the cash flows from financing activities generally affect:

Noncurrent liability and equity accounts.

Noncurrent assets.

Net income, current assets, and current liabilities.

Equity accounts only.

Both noncurrent assets and noncurrent liabilities.

 

 

Question-13

A spreadsheet can help organize the information needed to prepare a statement of cash flows.

True

False

 

Question-14

Top of Form

In preparing a company's statement of cash flows for the most recent year using the indirect method, the following information is available:

Net income for the year was	$52,000
Accounts payable increased by	$18,000
Accounts receivable decreased by	$25,000
Inventories increased by	$5,000
Depreciation expense was	$30,000

Net cash provided by operating activities was:

$80,000.

$60,000.

$130,000.

$70,000.

$120,000.

 

Question-15

Top of Form

The first line item in the operating activities section of a spreadsheet for a statement of cash flows prepared using the indirect method is:

Net income.

Cash received from customers.

Adjustments to net income.

Cash.

Increase (decrease) in accounts receivable.

Bottom of Form

 

Question-16

Of the following, which one affects cash during a period?

Writing off an uncollectible account receivable.

The declaration of a cash dividend.

The declaration of a stock dividend.

The payment of interest expense accrued in a previous accounting period.

An adjusting entry recognizing the expiration of prepaid insurance.

 

Question-17

The cash flow on total assets ratio is calculated by:

Dividing average total assets by total cash flows.

Dividing total cash flows by average total assets.

Dividing cash flows from operations by average total assets.

Dividing average total assets by cash flows from investing activities.

Total cash flows divided by average total assets times 365.

 

Question-18

Managers only use the cash flow statement to evaluate the net cash increase or decrease, and do not pay much attention to the details of cash flows from operating activities, cash flows from investing activities, and cash flows from financing activities.

True

False

 

Question-19

If a company borrows money from a bank, the interest paid on this loan should be reported on the statement of cash flows as a(n):

This is not reported in the statement of cash flows.

Financing activity.

Operating activity.

Noncash investing and financing activity.

Investing activity.

 

Question-20

Which of the following transactions or events should be reported as a source of cash from operating activities when using the direct method?

Cash collections from customers.

Cash received from the sale of a building.

Depreciation expense.

Cash received from the sale of treasury stock.

Credit sales.