question

Which of the following items is a measure of a company's ability to collect receivables? A) days' sales in receivables B) account receivable balance C) inventory turnover ratio D) current ratio

answer

A) days' sales in receivables

question

What is the Profit Margin Ratio? A) Operating Income / Net Assets B) Net Assets / Operating Income C) Operating Income / Net Sales D) Operating Income / Average Total Sales

answer

C) Operating Income / Net Sales = Profit Margin Ratio

question

Goods that have been started in the manufacturing process but are not yet complete are included in the ___. A) Cost of Goods Sold account B) Raw Materials Inventory account C) Finished Goods Inventory account D) Work-In-Process Inventory account

answer

D) Work-In-Process Inventory account

question

Under process costing, the costs incurred by each department are recorded in ___. A) a production cost report B) a job cost sheet C) the cost of good sold account D) the finished goods inventory account

answer

A) a production cost report

question

Which of the following statements is true of the budgeting process? A) It includes the qualitative targets of a company B) It shows the actual performance of the business C) It leads to slack where managers understate expected expenses D) It is a continuous process that encourages communication

answer

D) It is a continuous process that encourages communication

question

Which of the following is true of service companies? A) Service companies modify and resell products they buy from manufacturers B) All costs of service companies are product costs C) Revenues of service companies are only recorded on cash receipt D) Service companies carry no inventories of products for sale

answer

D) Service companies carry no inventories of products for sale

question

What is a strategic budget? A) A budget prepared for only on level of sales volume B) A short-term financial plan used to coordinate the activities needed to achieve the short-term goals of the company C) A long-term financial plan used to coordinate the activities needed to achieve the long-term goals of the company D) A budget prepared for various levels of sales volume

answer

C) A long-term financial plan used to coordinate the activities needed to achieve the long-term goals of the company

question

What is the definition of manufacturing overhead? A) Direct materials plus direct labor B) Costs that cannot be easily and cost-effectively traced to a cost object; Includes all manufacturing costs except direct materials and direct labor C) The labor cost of employees who convert raw materials into finished products D) Labor costs for activities that support the production process but either cannot be conveniently traced directly to specific finished products or are not large enough to justify tracing to the specific product

answer

B) Costs that cannot be easily and cost-effectively traced to a cost object; Includes all manufacturing costs except direct materials and direct labor

question

The cupcake company sold 20,000 cupcakes last year (2014). Calculate the gross profit of 2014 using the following information: Sales Revenue = $50,000.00 COGS = $30,000.00 Selling and Admin Expenses = $2,000.00 Direct Materials = $1,500.00 Direct Labor = $3,000.00 A) $20,000.00 B) $13,500.00 C) $50,000.00 D) $30,000.00

answer

A) $20,000.00

question

Cash borrowed on a mortgage note would be a(n) ___ activity on the statement of cash flows. A) Investing B) Non-cash C) Financing D) Operating

answer

C) Financing

question

Which of the following best describes the term sensitivity analysis? A) It is a testing technique to determine how results would differ if key assumptions are changed B) It is an evaluation of the accuracy of the assumptions C) It evaluates a company's financial condition by doing financial statement analysis D) It is an analysis of the emotional sensitivity of a company's employees

answer

A) It is a testing technique to determine how results would differ if key assumptions are changed

question

A ___ groups costs by behavior; costs are classified as either variable costs as fixed costs. A) Traditional income statement B) Balance sheet C) Contribution margin income statement D) Absorption costing income statement

answer

C) Contribution margin income statement

question

A company's proportion of fixed costs to variable costs is called its ___. A) Target profit B) Mixed cost C) Cost structure D) Relevant range

answer

C) Cost structure

question

Which of the following businesses is most likely to use a process costing system? A) Law firm B) Construction company C) Specialty printer D) Custom furniture manufacturer

answer

D) Custom furniture manufacturer

question

What is an example of cost centers? A) Product line B) Kiosk in the mall C) Manager of a grocery store D) Division manager

answer

A) Product line

question

The budgeted production of Taurus Inc. is 8,000 units per month. Each unit requires 40 minutes of direct labor to complete. The direct labor rate is $100 per hour. Calculate the budgeted costs of direct labor for the month. A) $633,333.33 B) $$566,666.66 C) $500,000.00 D) $533,333.33

answer

D) $533,333.33

question

The following information was obtained from Fizz Inc.: Advertising Costs = $9,900 Indirect Labor = 11,000 CEO's Salary = 49,000 Direct Labor =41,000 Indirect Materials =7,900 Direct Materials Used = 61,000 Factory Utilities = 700 Factory Janitorial Costs = 2,300 Manufacturing Equipment Depreciation = 2,100 Delivery Vehicle Depreciation =1,100 Administrative Wages and Salaries =21,000 How much were Fizz's period costs? A) $60,000 B) $79,900 C) $92,000 D) $81,000

answer

D) $81,000

question

The cash budget and the budgeted financial statements are collectively known as the ___. A) production budget B) master budget C) financial budget D) operating budget

answer

C) financial budget

question

Which of the following amounts of a flexible budget remain constant within the relevant range when the sales volume changes? A) total contribution margin B) total variable expenses C) total sales variable D) total fixed cost

answer

D) total fixed cost

question

As total fixed costs increase, contribution margin per unit ___. A) Remains the same B) Increases C) Decreases D) Doubles

answer

A) Remains the same

question

Which of the following is not one of the types of budgets that make up the master budget? A) Operating B) Static C) Capital Expenditures D) Financial

answer

B) Static

question

The goal of a balanced scorecard is to ___. A) Increase the market share B) Develop a set of organizational performance measures C) Learning and growth D) Show a financial perspective

answer

B) Develop a set of organizational performance measures

question

Which of the following statements is true of the budgeting process? A) It includes the qualitative targets of a company B) It shows the actual performance of the business C) It leads to slack where managers understate expenses D) It is a continuous process that encourages communication

answer

D) It is a continuous process that encourages communication

question

What is a J-I-T management system? A) An inventory management system in which a company produces just in time to satisfy customer needs B) An inventory management system in which a company produces ahead of time the products to be sure not to run out C) A system in which employees accomplish tasks only when they are asked it D) None of the above

answer

A) An inventory management system in which a company produces just in time to satisfy customer needs

question

Which of the following does the efficiency variable measure? A) How quickly materials are processed into finished goods B) The difference between actual and standard quantity used C) The change in quantities used over time D) The difference between the quantity used by the company and the quantity used by its competitors

answer

B) The difference between actual and standard quantity

question

The journal entry to record indirect labor costs incurred involves a debit to the ___. A) Work-in-Process Inventory account B) Wages Payable account C) Finished Goods inventory account D) Manufacturing Overhead account

answer

D) Manufacturing Overhead Account

question

Which of the following statements is true of costing systems? A) A process costing system would be used by manufacturers of custom-made perfumes B) A job order costing system would be used by manufacturers of baking materials C) A construction company would likely use a process costing system D) An accounting firm would likely use a job order costing system

answer

D) An accounting firm would likely use a job order costing system

question

Threatt Logistics provides the following information: What is the company's profit margin ratio? Operating Income = $1,500,000 Net sales = $13,000,000 Average total assets = $1,800,000 Management's target rate of return = 25% A) 10.2% B) 20.3% C) 11.5% D) 25.4%

answer

C) 11.5%

question

What is a product cost? A) a cost that is expensed when incurred B) part of the inventory and expensed when sold C) the cost that a merchandiser pays for a manufacturer's product D) none of the above

answer

B) part of the inventory and expensed when sold

question

What is the prime cost formula? A) Direct materials + Direct labor B) Direct labor + Overhead C) Direct materials + Overhead D) Overhead + Direct Labor + Direct Materials

answer

A) Direct materials + Direct labor

question

What is one aspect of Just in Time management? A) suppliers deliver large quantities B) suppliers vary from week to week and can be unreliable C) products are made to order and finished goods are kept to a minimum D) products are completed fair in advance and finished goods are in full stock

answer

C) products are made to order and finished goods are kept to a minimum

question

A common size statement reports only percentages that appear in a ___. A) vertical analysis report B) cost statement C) horizontal analysis report D) financial statement

answer

A) vertical analysis report

question

A long term financial plan used to coordinate the activities needed to achieve the long term financial goods of the company is what type of budget? A) operational B) static C) strategic D) flexible

answer

C) strategic

question

How do you find the contribution margin? A) Expected sales - Breakeven sales B) Net sales revenue - Variable costs C) Margin of safety in units * Sales price per unit

answer

B) Net sales revenue - Variable costs

question

Total variable costs + Total fixed costs = ___ A) contribution margin B) total high-low costs C) total mixed costs D) average cost efficiency

answer

C) total mixed costs

question

Which of the following will lower the breakeven point? A) an increase in the sales price per unit B) a decrease in the sales price per unit C) an increase in the total fixed costs D) an increase in the variable costs per unit

answer

A) increase in the sales price per unit

question

Which of the following statements is true of the budgeting process? A) It includes the qualitative targets of a company B) It shows the actual performance of the business C) It leads to slack where managers understate expected expenses D) It is a continuous process that encourages communication

answer

D) It is a continuous process that encourages communication

question

Under process costing, the costs incurred by each department are recorded in? A) a job cost sheet B) the cost of goods sold account C) a product cost report D) the finished goods inventory account

answer

C) a product cost report

question

The goal of the balanced scorecard is to ___. A) increase the market share and maximize shareholders' wealth B) develop a set of organizational performance measures C) maximize operational efficiency D) maximize profits

answer

B) develop a set of organizational performance measures

question

If a company wishes to be a price-taker, which of the following strategies should they take? A) produce a unique product B) enter a competitive market and focus on cost cutting C) exploit the value of a fashionable brand name D) differentiate the product clearly from the competitors

answer

B) enter a competitive market and focus on cost cutting

question

Which of the following statements is true of the budgeting process? A) it includes the qualitative targets of a company B) it shows the actual performance of the business C) it leads to slack where managers understate expected expenses D) it is a continuous process that encourages communication

answer

D) it is a continuous process that encourages communication

question

When the total fixed costs increases, the contribution margin per unit ___. A) remains the same B) increases C) increases proportionately D) decreases

answer

A) remains the same

question

Which of the following would be considered an operating activity on the statement of cash flows under the direct method? A) sale of inventory for cash B) the receipt of cash from sale of equipment C) dividends paid to stockholders D) payment to purchase equipment

answer

A) sale of inventory for cash

question

Which of the following statements is true of the just-in-time costing system? A) it increases the risk of the inventory becoming obsolete or unsalable B) it records summary journal entries before the units are purchased C) it results in increased inventory storage costs D) it increases the need for suppliers to deliver raw materials on time

answer

D) it increases the need for suppliers to deliver raw materials on time

question

Magnolia Inc. has budgeted sales for the first quarter of the next year to be 30,000 units. The inventory on hand at the beginning of the quarter is 5,000 units. The desired ending inventory is 10,000 units. Calculate the budgeted production for the first quarter. A) 20,000 units B) 10,000 units C) 30,000 units D) 35,000 units

answer

D) 35,000

question

The ___ details how the business expects to go from the beginning cash balance to the desired ending cash balance. A) Cash flow statement B) Cash budget C) Capital expenditures budget D) Budgeted income statement

answer

B) Cash budget

question

What does a favorable direct materials cost variance indicate? A) The actual quantity of materials used was less than the standard quantity B) The actual quantity of materials used was greater than the standard quantity C) The actual cost of materials purchased was greater than the standard cost of materials purchased D) The actual cost of materials purchased was less than the standard cost of materials purchased

answer

D) The actual cost of materials purchased was less than the standard cost of materials purchased

question

In this course, the accounting principles that have been covered have dealt with which type of accounting? A) financial accounting B) profit maximizing accounting C) investments D) managerial accounting

answer

D) managerial accounting

question

Which of the following is true of management accounting? A) the external stakeholders of a company are the primary users of management accounting B) management accounting information is used to help managers plan and control their operations C) management accounting information must comply with GAAP D) an external audit by an independent CPA is required for management accounting information

answer

B) management accounting information is used to help managers plan and control their operations

question

The production cost report show the calculations for the physical flows and the ___ flows of the products. A) cash B) cost C) supply D) price

answer

B) cost

question

Improved internal operations would fall under what balanced scorecard perspective? A) financial B) customer C) internal business D) learning and growth

answer

C) internal business

question

WAX-D Inc. has a division that manufactures a component that sells for $150 and has a variable cost of $45. Another division of the company wants to purchase the component. Fixed cost per unit of component is $25. What is the minimum transfer price if the division is operating below its capacity? A) $50 B) $40 C) $70 D) $45

answer

D) $45

question

All of the following are goals of performance evaluation systems except: A) communicating expectations B) benchmarking C) providing feedback D) maximizing profits by cutting costs

answer

D) maximizing profits by cutting costs

question

The cash budget details how the business expects to go from the beginning cash balance to the desired ending cash balance. A) production budget B) capital expenditures budget C) cash budget D) sales budget

answer

C) cash budget

question

When a division is operating at full capacity, the transfer price must be ___. A) a total manufacturing cost B) based on opportunity cost C) a cost-based transfer price D) a market-based transfer price

answer

D) a market-based transfer price

question

The cash budget and the budgeted financial statements are collectively known as the ___. A) financial budget B) production budget C) master budget D) operating budget

answer

A) financial budget

question

Master budgets include all the following except: A) operating budget B) capital expenses budget C) customer budget D) financial budget

answer

C) customer budget

question

Gangi Inc. has budgeted sales for the first quarter of the next year to be 50,000 units. The inventory in hand at the beginning of the quarter is 13,000 units. The desired ending inventory is 8,000 units. Calculate the budgeted production for the first quarter. A) 40,000 units B) 30,000 units C) 45,000 units D) 65,000 units

answer

C) 45,000 units

question

Companies that manufacture identical items through a series of uniform production steps use ___ to determine cost per unit sold A) job order costing B) FIFO method C) weighted average method D) process costing

answer

D) process costing

question

What is the total fixed cost equation? A) Total mixed cost - Total variable cost B) Net sales revenue - Variable cost C) Net sales revenue - Total costs D) Expected sales - Breakeven sales

answer

A) Total mixed cost - Total variable cost

question

How do you calculate Contribution Margin? A) Net sales - Fixed costs B) Net sales - Variable costs C) Fixed costs + Target profits D) Expected sales - Breakeven sales

answer

B) Net sales - Variable costs

question

Webster Inc. has received a bid for 12,00 units. The costing estimates show that they average cost per unit for this bid will be $600. The company uses cost-based pricing and adds 25% markup to total costs. What total price will Webster ask for the entire order? A) $7,200,000 B) $2,250,000 C) $1,800,000 D) $9,000,000

answer

D) $9,000,000

question

Kyanite Corporation reports costs for 2015 as follows: Raw Materials = $50,000 Wages to Line Workers = 25,000 Office Rent = 14,000 Indirect Materials = 30,000 How much is the total product costs for 2015? A) $30,000 B) $105,000 C) $75,000 D) $119,000

answer

B) $105,000

question

Oscar Inc., a manufacturer of gift articles, uses a single plantwide rate to allocate indirect costs. The company allocates manufacturing overhead using a single plantwide rate with machine hours as the allocation base. Estimated overhead cost for the year is $5,000,000. And estimated machine hours are 25,000. During the year, the actual machine hours used over 30,000. Calculate the predetermined overhead allocation rate. A) $200 B) $150 C) $250 D) $166

answer

A) $200

question

The production cost reports show the calculations for the physical flows and the ___ flows of the products. A) cash B) cost C) supply D) price

answer

B) cost

question

Gould Enterprises sells computer disks for $1.50 per disk. Unit variable expenses total $0.90. The breakeven point in units is 3,000 and expected sales in units are 4,300. What is the margin of safety in dollars? A) $4,500 B) $6,450 C) $1,950 D) $3,870

answer

C) $1,950

question

Prevention cost are costs incurred ___. A) in the training of employees B) in customer service C) to detect poor-quality materials, goods, or services D) when a company detects and corrects poor-quality goods or services

answer

A) in the training of employees

question

What is a product cost? A) a cost that is expensed when incurred B) part of the inventory and expensed when sold C) the cost that a merchandiser pays for a manufacturer's product D) none of the above

answer

B) part of the inventory and expensed when sold

question

What is the prime cost formula? A) Direct materials + Direct labor B) Direct labor + Overhead C) Direct materials + Overhead D) Overhead + Direct labor + Direct materials

answer

A) Direct materials + Direct labor

question

Which is NOT included on a balance sheet? A) liabilities B) revenue C) assets D) equity

answer

B) revenue

question

Which of the following statements is true of the just-in-time costing system? A) it increases the risk of the inventory becoming obsolete or unsalable B) it records summary journal entries before the units are purchased C) it results in increased inventory storage costs D) it increases the need for suppliers to deliver raw materials on time

answer

D) it increases the need for suppliers to deliver raw materials on time

question

An unfavorable flexible budget variance in operating income might be due to a(n) ___. A) decrease in fixed costs B) increase in selling price per unit C) increase in variable expenses per unit D) decrease in sales volume

answer

C) increase in variable expenses per unit

question

Which of the following companies is most likely to use job order costing? A) a surfboard manufacturer B) a soft drink company C) a gold refinery D) a law firm

answer

D) a law firm

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