Acct Final Exam

Question 15 out of 5 points

Product costs:Answer

Selected Answer: Are expenditures necessary and integral to

finished products

Correct Answer: Are expenditures necessary and integral to

finished products


Use the following information and the indirect method to calculate the net cash provided or used by operating activities:

Cash paid for purchase of plant assets $15,000

Decrease in interest payable 2,000

Depreciation expense 30,000

Gain on retirement of bonds 32,000

Increase in accounts receivable 40,000

Loss on sale of plant assets 5,000

Net Income 76,000

Answer

Selected Answer: $37,0

00

Correct Answer: $37,0

00


Actual fixed overhead for Kapok Company during March was $92,780. The flexible budget for fixed overhead this period is $89,000 based on a production level of 5,000 units. If the company actually produced 4,200 units what is the fixed overhead volume variance for March?Answer


unfavorable


unfavorable


A company's income statement showed the following: net income, $124,000; depreciation expense, $30,000; and gain on sale of plant assets, $14,000. An examination of the company's current assets and current liabilities showed the following changes as a result of operating activities: accounts receivable decreased $9,400; merchandise inventory increased $18,000; prepaid expenses decreased

$6,200; accounts payable increased $3,400. Calculate the net cash provided or used by operating activities.Answer


00


00


Chance, Inc. sold 3,000 units of its product at a price of $72 per unit. Total variable cost per unit is $51, consisting of $32 in variable production cost and $19 in variable selling and administrative cost. Compute the manufacturing margin for the company under variable costing.Answer



Answer Feedback:

($72 - $32) x 3,000 units = $120,000


A company has fixed costs of $90,000. Its contribution margin ratio is 30% and the product sells for $75 per unit. What is the company's break-even point in dollar sales?Answer



Answer Feedback:

Break-even point in dollar sales = $90,000/0.30 = $300,000


A corporation issued 300 shares of its $5 par value common stock in payment of a $1,800 charge from its accountant for assistance in filing its charter with the state. The entry to record this transaction will include:Answer

Selected Answer: A $300 credit to Contributed Capital in Excess of Par Value,

Common Stock

Correct Answer: A $300 credit to Contributed Capital in Excess of Par Value,

Common Stock

Question 8

5 out of 5 points

The three major cost components of a manufactured product are:Answer

Selected Answer: Direct materials, direct labor, and

factory overhead

Correct Answer: Direct materials, direct labor, and

factory overhead


The amount by which the overhead applied to jobs during a period exceeds the overhead incurred during the period is known as:Answer

Selected Answer: Underapplied

overhead

Correct Answer: Overapplied

overhead


Which of the following journal entries correctly records the current month's activity where $125,000 of raw material was purchased for cash, and $75,000 of direct material and $30,000 of indirect materials were used in the production process?

(A) Raw Materials Inventory 125,000

Raw Materials Inventory 105,000

Goods in Process Inventory 75,000

Factory Overhead 30,000

(B) Raw Materials Inventory 125,000

Cash 125,000




(C) Raw Materials Inventory 125,000

Cash 125,000




(D) Cash 125,000





(E) Raw Materials Inventory 125,000

Cash 125,000



Answer

Selected Answer: (C)

above

Correct Answer: (B)

above


Advanced Company reports the following information for the current year. All beginning inventory amounts equaled $0 this year.Units produced this year: 25,000 unitsUnits sold this year: 15,000 unitsDirect Materials: $9 per unitDIrect Labor: $11 per hourVariable overhead: $75,000 in totalFixed overhead: $137,500 in totalGiven Advanced Company's data, compute cost per unit of finished goods under variable costing.Answer

Selected Answer: $23.00

Correct Answer: $23.00

Answer Feedback:

$9 DM + $11 DL + ($75,000/25,000) VOH = $23


When using the indirect method to calculate and report net cash provided or used by operating activities, which of the following is subtracted from net income?Answer

Selected Answer: Decrease in income taxes

payable

Correct Answer: Decrease in income taxes

payable


Six months ago, a company purchased an investment in stock for $65,000. This investment is considered available-for-sale. The current market value of the stock is $68,500. The company should record a:Answer

Selected Answer: Credit to Unrealized Gain-Equity

for $3,500

Correct Answer: Credit to Unrealized Gain-Equity

for $3,500


A company manufactures and sells a product for $120 per unit. The company's fixed costs are $68,760, and its variable costs are $90 per unit. The company's break-even point in units is:Answer

Selected Answer: 2,292

Correct Answer: 2,292

Answer Feedback:

Break-even point = $68,760/($120 - $90) = 2,292 units


Bradford Company budgeted 4,000 pounds of material costing $5.00 per pound to produce 2,000 units. The company actually used 4,500 pounds that cost $5.10 per pound to produce 2,000 units.

What is the direct materials quantity variance?Answer


unfavorable


unfavorable


Montaigne Corp. has the following information about its standards and production activity in November:

Actual total factory overhead incurred

$28,175

Standard factory overhead

Variable overhead $3.10 per unit produced

Fixed overhead

($12,000/6,000 estimated units to be produced)

$2 per unit

Actual units produced 4,800 units

The volume variance is:Answer


0U


0U


A manufacturing company has a beginning finished goods inventory of $14,600, raw material purchases of $18,000, cost of goods manufactured of $32,500, and an ending finished goods inventory of $17,800. The cost of goods sold for this company is:Answer



Answer Feedback:

Beg FG + COGM - End FG = COGS$14,600 + $32,500 - $17,800 =- $29,300


Preferred stock is often issued:Answer

Selected Answer: All of the

above

Correct Answer: All of the

above


A company reports the following information for the current year which is its first year of operations.

Units produced this year ? units

Units sold this year 1,500 units

Direct materials $9 per unit

Direct labor $5 per unit

Variable overhead $7 per unit

Fixed overhead $24,000 in total

If the company's cost per unit of finished goods using absorption costing is $27, how many units were produced?Answer

Selected Answer: 2,000

units

Correct

Answer: 4,000 units


A corporation issued 5,000 shares of $10 par value common stock in exchange for some land with a market value of $60,000. The entry to record this exchange is:

(A) Land 60,000

Common Stock 50,000

Contributed Capital in Excess of Par Value, Common Stock

10,000

(B) Land 60,000

Common Stock 60,000

(C) Land 50,000

Common Stock 50,000

(D) Common Stock 50,000

Contributed Capital in Excess of Par Value, Common Stock

10,000

Land 60,000

(E) Common Stock 60,000

Land 60,000

Answer

Selected Answer: (A)

above

Correct Answer: (A)

above


The following data are available for a company's manufacturing activities:

Beginning goods in process inventory

5,000 units, 1/4 of the labor added this period

Units started and completed

15,000

Ending goods in process inventory

6,000 units, 1/2 the labor added this period

If materials are added when the production process begins and direct labor is applied uniformly throughout the process, what are the equivalent units for direct materials and for direct labor, respectively?Answer

Selected Answer: 21,000;

19,250

Correct Answer: 21,000;

19,250


Employee morale, timeliness of delivery, and the reactions of customers are examples of nonfinancial factors which should be considered when making a managerial decision.Answer

Selected Answer:

True

Correct Answer:

True


Accounting standards:Answer

Selected Answer: Require that companies include a statement of cash flows in a complete set

of financial statements

Correct Answer: Require that companies include a statement of cash flows in a complete set

of financial statements


A company declared a $0.50 per share cash dividend. The company has 20,000 shares authorized, 9,000 shares issued, and 8,000 shares of common stock outstanding.

(A) Retained Earnings 4,000

Common Dividends Payable 4,000

(B) Common Dividends Payable 4,000

Cash 4,000

(C) Retained Earnings 4,500


(D) Common Dividends Payable 4,500

Cash 4,500

(E) Retained Earnings 5,000


Answer

Selected Answer: (A)

above

Correct Answer: (A)

above


A decrease in the fair market value of a security that has not yet been realized through an actual sale of the security is called a(n):Answer

Selected Answer: Unrealized

loss

Correct Answer: Unrealized

loss


Estimated overhead and direct labor costs for the year were $112,500 and $125,000, respectively. During the year, actual overhead was $107,400 and actual direct labor cost was $120,000. The entry to close the over- or underapplied overhead at year-end, assuming an immaterial amount, would include:Answer

Selected Answer: A credit to Cost of Goods Sold

for $600

Correct Answer: A credit to Cost of Goods Sold

for $600


At acquisition, debt securities are:Answer

Selected Answer: Recorded at

cost

Correct Answer: Recorded at

cost


Vision Tester, Inc., a manufacturer of optical glass, began operations on February 1 of the current year. During this time, the company produced 900,000 units and sold 800,000 units at a sales price of $12 per unit. Cost information for this year is shown below.

Production costs

Direct materials $.80 per unit

Direct labor $.70 per unit

Variable overhead $500,000 in total

Fixed overhead $450,000 in total

Non-production costs

Variable selling and administrative

$30,000 in total

Fixed selling and administrative $490,000 in total

Given this information, which of the following is true?Answer

Selected Answer: Net income under variable costing will exceed net income under absorption

costing by $60,000.

Correct Answer: Net income under absorption costing will exceed net income under variable

costing by $50,000.


Long-term investments can include:Answer

Selected Answer: All of the

above

Correct Answer: All of the

above


The following company information is available:

Direct materials used for production 36,000 gallons

Standard quality for units produced 34,400 gallons

Standard cost per gallon of direct material

$6.00

Actual cost per gallon of direct material

$6.10

The direct materials quantity variance is:Answer

Selected Answer: $ 9,600

unfavorable

Correct Answer: $ 9,600

unfavorable

Saturday, November 24, 2012 4:27:56 PM EST

Acct Final Exam

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