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Accounting Review

Accounting Review

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Quiz 4 Canine Company produces and sells dog treats for discriminating pet owners.

The unit selling price is $10, unit variable costs are $7, and total fixed costs are $3,300. What is the breakeven point in sales dollars? Answer: $11,000 Fixed Company produces a single product selling for $30 per unit. Variable costs are $12 per unit and total fixed costs are $4,000. What is the contribution margin ratio? Answer: 0.60 The breakeven point represents the minimum number of units a company must sell before it earns a profit. Answer: True Fairfield Company management has budgeted the following amounts for its next fiscal year: Total fixed expenses- $832,500; sale price per unit- $40; variable expenses per unit- $25. What will happen to the breakeven point in units if Fairfield can reduce fixed expenses by $22,500? Answer: The breakeven point will decrease by 1,500 units If a unit sells for $11.40 and has a variable cost of $3.80, its contribution margin per unit is $7.60. Answer: True Canine Company produces and sells dog treats for discriminating pet owners. The unit selling price is $10, unit variable costs are $7, and total fixed costs are $3,300. How many dog treats must Canine Company sell to breakeven? Answer: 1,100 A 15% increase in production will result in a 15% increase in: Answer: total variable costs The variable cost per unit is assumed to be constant within a particular relevant range of activity. Answer: True Quiz 3 Traditional costing systems can distort unit manufacturing costs and product profitability when many products are produced and the various products have significantly different production processes. Answer: True

An activity. Inspection department costs are allocated based on the number of inspection hours and the allocation rate is $39 per inspection hour. Assembly department costs are allocated based on the number of machine hours and the cost allocation rate is $27 per machine hour. Each unit produced has a direct materials cost of $70 and a direct labor cost of $65.720 . managers need more accurate estimates of product costs to set prices and to identify the most profitable products. What is Crump s operating income from the order if the units are sold for $225 each? Answer: $20. Answer: False Crump Manufacturing has provided the following info regarding its activity-based costing system: Purchasing department costs are allocated based on purchase orders and the cost allocation rate is $52 per purchase order. Answer: True With increased competition. Answer: True Activity-based costing systems and traditional costing systems tend to always identify the same products as being the most profitable.based system improves the allocation of which of the following manufacturing costs? Answer: indirect manufacturing costs Activity-based costing minimizes cost distortions because: Answer: activity-based costing allocates costs based on cause and effect Business managers can use activity-based costing data to assist them in pricing and product mix decisions and in cost management. 750 machine hours and 50 inspection hours. Crump has an order for 500 units which will require 40 purchase orders. Answer: True A traditional cost allocations system tends to misallocate manufacturing costs because: Answer: indirect manufacturing costs are misallocated Activity-based costing focuses on the activities that cause costs to be incurred.

a beverage manufacturer) Answer: a beverage manufacturer Accounting firms. 175 with a balance of $53. What are the total manufacturing costs for July? Answer: $440. 110 charged with $11. 110? Answer: $34. July 1: $100.000 The records at Smith and Jones Company show Job. Answer: False Marion Company used a job order costing system.000 Work in process inventory. consisted of Job No. an auto repair shop.00 Direct materials used: $50. Answer: False Wall Corporation s selected cost data for July is shown below: Cost of goods manufactured: $420. Answer: True Over allocated overhead occurs when the manufacturing overhead allocated to work in process inventory is less than the amount actually incurred. and healthcare providers are companies that use job order costing.Quiz 2 The entry to record the purchase of materials on account using a job order costing system would include a: Answer: debit to materials inventory Which of the following companies would NOT use job order costing? (a lawn maintenance company. The work in process inventory on December 31.400.000 of directs materials and $12. No. the materials inventory account is debited.000 Manufacturing overhead is allocated at 50% of direct labor cost.125 When materials are requisitioned for a job.000 Work in process inventory. a legal firm. 175 has been charged with manufacturing . July 31: $120. building contractors. 2009. Job No.500 of direct labor. Smith and Jones Company allocated manufacturing overhead at 85% of direct labor cost. What is the total cost of Job No.

000 What is the cost of goods available for sale for 2009? .250.000 Sales Revenue. The company sells light box toys and sold 10.overhead of $16.000 Sales Revenue.000 Selling and Administrative Expenses 90. By how much is manufacturing overhead over/under allocated? Answer: 3.700.000 units in 2009.400 Actual manufacturing overhead for 2009 amounts to $102.000 units in 2009.000 What is the cost of goods sold for 2009? The following information pertains to bright toy Company s operating activities for 2009.250.000 130.000 Selling and Administrative Expenses 90.800 under allocated Quiz 1 Period Costs do NOT include which of the following Factory janitorial costs Which of the following is an example of direct labor Wages of assembly line personnel The following information pertain to Bright Toy Company s operating activities for 2009. allocated manufacturing overhead for 2009 amounts to $98. y y y y y Purchases-$126.000 Merchandise inventory 12/31/2009-10.000 Merchandise inventory 1/1/2009-14. 500. 175? Answer: $17.000 Merchandise inventory 1/1/2009-14. y y y y y Purchases-$126. Marion allocates manufacturing overhead at a rate of 80% of direct labor cost.000 Merchandise inventory 12/31/2009-10. The company sells light box toys and sold 10.000. What was the amount of direct materials charged to Job No.

000 Merchandise inventory 1/1/2009-14. The Company sells light box toys and sold 10. y y y y y Purchases-$126.000 Sales Revenue.000 What is the operating income for 2009? A philosophy of delighting customers by providing them with superior products and services. y y y y y Purchases-$126.250.000 Which of the following statements about managerial accounting is correct? Managerial accounting reports provide detailed information on parts of a company The following information pertains to Bright Toy Company s operating activities for 2009. The company sells light box toys and sold 10.250.000 What is the gross profit for 2009? Which of the following is NOT an objective of management accounting? To provide information to shareholders to assist them with their investment decisions The following information pertains to Bright Toy Company s operating activities for 2009.000 Merchandise inventory 12/31/2009-10.000 Merchandise inventory 12/31/2009-10.000 Selling and Administrative Expenses 90.000 30.000 units in 2009.000 Sales Revenue.000 Selling and Administrative Expenses 90.140. Requires improving quality and eliminating defects and waste: total quality management .000 units in 2009.000 120.000 Merchandise inventory 1/1/2009-14.

and data into a single system: ERP A system in which a company produces just in time to satisfy needs. Suppliers deliver materials just in time to begin production. Enables companies to reach thousands of customers around the world: E-Commerce Software systems that integrate all of a company s world wide functions. and finished units are completed just in time for delivery to customers: Justin-time (JIT) . departments.Use of the internet for such business functions as sales and customer service.

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