Variances

10

20

30

40

50

Chapter 5

10

20

30

40

50

Chapter 1/2

10

20

30

40

50

Misc.

10

20

30

40

50

Budgets

10

20

30

40

50

Variances

Ques

tion

An unfavorable sale price variance reflects a. Fewer units sold than budgeted. b. A lower actual selling price than budgeted. c. An increase in the cost of products causing a decrease in income for the period. d. A decrease in the amount of cash received from customers.

10Variances

Answ

er

b. A lower actual selling price than budgeted

10Variances

Ques

tion

Facebook, Inc. gathered the following direct labor cost information for the month of July: Actual direct labor hours68,500Standard direct labor hours allowed for actual production67,200Actual direct labor rate per hour$12.10Standard direct labor rate per hour$11.75

The direct labor price variance is:

a. $15,730U b. $23,975U c. $15,275F d. $23,520F

20Variances

Answ

er

b. $23,975U

20Variances

Ques

tion

Deer Park Inc. gathered the following direct materials cost information for the month of July:Standard Quantity Allowed for production34,700 gallonsQuantity used in production33,900 gallonsActual price per gallon purchased$8.50Standard price per gallon$8.85

The direct materials usage variance is:

a. $ 4,250U b. $ 4,425F c. $6,800U d. $7,080F

30Variances

Answ

er

d. 7,080F

30Variances

Ques

tion

What is the direct labor usage variance?a. |AP-SP|xAHb. |AH-SH|xSPc. |AQ-SQ|xSPd. |AP-SP|xAQ purchased

40Variances

Answ

er

b. |AH-SH|xSP

40Variances

Ques

tion

What is the sales price variance?a. |ASP-SSP|xAQb. |AQ-SQ|xSSPc. I don’t know

50Variances

Answ

er

a. |ASP-SSP|xAQ

50Variances

Chapter 5

Ques

tion

If a product has a selling price of $21 and a markup of 75%, what is product’s cost? a. $12b. $15.75c. $28d. Not enough information

10Chapter 5

Answ

er

a. $12

10Chapter 5

Ques

tion

The bookkeeper who records cash receipts also deposits daily cash receipts at the bank on his way home from work. This is a violation of which of the following characteristics of good internal control: a. requiring proper authorization b. separating incompatible duties c. physically controlling assets and documents d. maintaining adequate documents and records

20Chapter 2

Answ

er

b. separating incompatible duties

20Chapter 2

Ques

tion

The producer of Hit Records receives a bonus rate of 8%. The bonus base is income before bonus or taxes. The tax rate is 30%. Hit Records just had an income before bonus or taxes of $1,250,000. How much is the producer’s bonus? a. $30,000b. $1,250,000c. $70,000d. $100,000

30Chapter 5

Answ

er

d. $100,000

30Category 2

Ques

tion

The Marriot plans to pay its managers a bonus to encourage performance. The bonus rate is 15% and the bonus base is net income after bonus but before taxes. The Marriot’s expected income before bonus or taxes is $1,500,000. Determine the amount of the expected bonus. a. $195,652.17b. $225,000.00c. $135,640.36d. $99,304.85

40Chapter 5

Answ

er

a. $195,652.17

40Chapter 5

Ques

tion

Falcon Industries’ president receives a bonus equal to 10% of income before bonus and taxes. Assuming the company’s income before bonus and taxes was $5,625,000 and tax rate is 25% determine the amount of the president’s net incomea. $3,800,000b. $3,796,875c. $511,363.64d. I forgot how to do this

50Chapter 5

Answ

er

b. $3,796,875

50Chapter 5

Chapter 1/2

Ques

tion

In its annual report Home Depot reported the value of its ending inventory, rather than the number of units on hand. This best describes an application of the: a. Periodicity conceptb. Business entity conceptc. Going concern conceptd. Monetary unit concept

10Chapter 1/2

Answ

er

d. Monetary Unit Concept

10Chapter 1/2

Ques

tion

Rubbermaid is using its equipment to create durable plastic bins to sell. This is an example of: a. Investing activityb. Operating activityc. Financing activityd. Both b and c

20Chapter 1/2

Answ

er

b. Operating Activity

20Chapter 1/2

Ques

tion

You’re reviewing the financial statements for UPS Delivery Company. Which of the following would you expect to find on the income statement? a. The cost incurred to clean the uniforms of the delivery personnelb. The amount of money owed to the bankc. The amount of cash in the bankd. The amount paid to purchase a new delivery truck

30Chapter 1/2

Answ

er

a. The cost incurred to clean the uniforms of the delivery personnel

30Chapter 1/2

Ques

tion

Morgan Stanley paid its shareholders $1,000,000 dividends for quarter 3. This is an example of: a. Investing activityb. Operating activityc. Financing activityd. Planning activity

40Chapter 1/2

Answ

er

d. Financing

40Chapter 1/2

Ques

tion

Prepaid insurance is an example of a(n): a. Liability c. Owners’ Equityb. Asset d. Revenue

50Chapter 1/2

Answ

er

b. Asset

50Chapter 1/2

Misc.

Ques

tion

Goods shipped from a seller’s warehouse on March 10, 2011, arrived at the buyer’s warehouse on March 16, 2011. The invoice for goods arrived at the buyer’s accounting department on March 13, 2011 and was paid on March 20, 2011. If the goods were sold FOB shipping point, the buyer took legal title on: a. March 20, 2011b. March 13, 2011c. March 10, 2011d. March 16, 2011

10Misc.

Answ

er

c. March 10, 2011

10Misc.

Ques

tion

A cost that does not change in total as the activity changes is a:

a. Fixed cost b. Variable costc. Mixed cost d. None of the above

20Misc.

Answ

er

a. Fixed Cost

20Misc.

Ques

tion

The Manhattan Company sells its one and only product for $89.00 per unit. Variable costs per unit amount to $63.50 and total fixed costs are $3,697,500. If Manhattan increases its selling price to $95, how will this affect the breakeven point in units?

a. The breakeven point will increase 27,619 units. b. The breakeven point will decrease 106,078 units. c. The breakeven point will increase 41,300 units. d. The breakeven point will decrease 27,619 units.

30Misc.

Answ

er

d. The breakeven point will decrease 27,619 units.

30Misc.

Ques

tion

On September 1, 2009, IBM paid $2,400 in advance for a one year insurance policy that covers the period September 1, 2009 through August 31, 2010. What amount of insurance expense should Olpe report for the year ended December 31, 2009?

a. $800 b. $1,200 c. $2,400 d. $0

40Misc.

Answ

er

a. $800

40Misc.

Ques

tion

The Nancy Manufacturing Company has kept track of the number of units they have produced each month and the cost to produce those units for the past six months.

Using the high/low method, what is the estimated total cost if 14,000 units are produced in January?

a. $62,000 b. $70,000 c. $75,000 d. $80,000

50Misc.

Month Number of Units Cost of Units Produced

July 10,000 $60,000August 11,000 $66,000September 20,000 $110,000October 16,000 $90,000November 12,000 $70,000December 18,000 $102,000

Answ

er

d. $80,000

50Misc.

Budgets

Ques

tion

All of the following are benefits of budgeting except: a. Resource allocationb. Evaluation and controlc. Performingd. Planning

10Category 5

Answ

er

Performing

10Category 5

Ques

tion

Apple estimates it will sell 25,000 units in April 2014. They expect unit sales to increase 10% each month for the remainder of the year. The expected sales price for 2014 is $20. What is the sales revenue for June 2014?a. $605,000b. $700,000c. $500,000d. $650,000

20Category 5

Answ

er

a. $605,000

20Category 5

Ques

tion

Microsoft estimates that: 30% of customers will pay in the month of the sale to take advantage of a 3% discount30% of their customers will pay in the month following the sale40% of their customers will pay 2 months following the saleThe 2013 sales budget includes estimated sales revenue of:November: $66,500December: $68,400January: $50,000February: $60,000March: $45,000

Cash Receipts for March are:a. 51,000b. 51,095c. 51,500d. No idea

30Category 5

Answ

er

51,095

30Category 5

Ques

tion

Walmart wants to maintain an ending finished goods inventory of 10% of the next months expected sales. Estimated sales in units for the first 4 months of 2014:January: 6,000February: 5,000March: 3,500April: 5,000What is the production required for February?a. 5,150b. 5,000c. 4,850d. 4,800

40Category 5

Answ

er

4,850

40Category 5

Ques

tion

Bergstorms industries sold 460,000 trash barrels at $12 each during the first quarter of 2008. Unit sales are projected to increase 5% each quarter while the selling price will be reduced by $.50 each quarter. The estimated sales revenue for the fourth quarter of 2008 is:a. $5,520,000b. $5,554,500c. $5,591,329d. $5,000,000

50Category 5

Answ

er

$5,591,329

50Category 5