Accounting Multiple Misc Problems

1. Which of the following is not an internal user?
a. Creditor
b. Department manager
c. Controller
d. Treasurer

2. Internal reports are generally
a. aggregated.
b. detailed.
c. regulated.
d. unreliable.

3. The reporting standard for external financial reports is
a. industry-specific.
b. company-specific.
c. generally accepted accounting principles.
d. department-specific.

4. A distinguishing feature of managerial accounting is
a. external users.
b. general-purpose reports.
c. very detailed reports.
d. quarterly and annual reports.

5. The job cost sheet does not show
a. costs chargeable to a specific job.
b. the total costs of a completed job.
c. the unit cost of a completed job.
d. the cost of goods sold.

6. Which one of the following best describes a job cost sheet?
a. It is a form used to record the costs chargeable to a specific job and to determine the total and unit costs of the completed job.
b. It is used to track manufacturing overhead costs to specific jobs.
c. It is used by management to understand how direct costs affect profitability.
d. It is a daily form that management uses for tracking worker productivity on which employee raises are based.

 

7. Manufacturing overhead applied is added to direct labor incurred and to what other item to equal total manufacturing costs for the period?
a. Goods available for sale.
b. Raw materials purchased.
c. Work in process.
d. Direct materials used.

8. At the beginning of the year, Monroe Company estimates annual overhead costs to be $1,600,000 and that 300,000 machine hours will be operated. Using machine hours as a base, the amount of overhead applied during the year if actual machine hours for the year was 315,000 hours is
a. $1,600,000.
b. $1,523,809.
c. $1,120,000.
d. $1,680,000.

9. Which of the following is not used in assigning manufacturing costs to work in process inventory?
a. Actual manufacturing overhead
b. Time tickets
c. Materials requisitions
d. Predetermined overhead rate

10. At the end of the year, any balance in the Manufacturing Overhead account is generally eliminated by adjusting
a. Work In Process Inventory.
b. Finished Goods Inventory.
c. Cost of Goods Sold.
d. Raw Materials Inventory.

11. Which of the following is not a fixed cost?
a. Direct materials
b. Depreciation
c. Lease charge
d. Property taxes

12. A mixed cost contains
a. a variable element and a fixed element.
b. both selling and administrative costs.
c. both retailing and manufacturing costs.
d. both operating and nonoperating costs.

13. A variable cost is a cost that
a. varies per unit at every level of activity.
b. occurs at various times during the year.
c. varies in total in proportion to changes in the level of activity.
d. may or may not be incurred, depending on management’s discretion.

 

14. When budgeted and actual results are not the same amount, there is a budget
a. error.
b. difference.
c. anomaly.
d. by-product.

15. If costs are not responsive to changes in activity level, then these costs can be best described as
a. mixed.
b. flexible.
c. variable.
d. fixed.

16. A static budget is appropriate for
a. variable overhead costs.
b. direct materials costs.
c. fixed overhead costs.
d. None of these.

17. What is the primary difference between a static budget and a flexible budget?
a. The static budget contains only fixed costs, while the flexible budget contains only variable costs.
b. The static budget is prepared for a single level of activity, while a flexible budget is adjusted for different activity levels.
c. The static budget is constructed using input from only upper level management, while a flexible budget obtains input from all levels of management.
d. The static budget is prepared only for units produced, while a flexible budget reflects the number of units sold.

18. A standard which represents an efficient level of performance that is attainable under expected operating conditions is called a(n)
a. ideal standard.
b. loose standard.
c. tight standard.
d. normal standard.

19. The perspectives included in the balanced scorecard approach include all of the following except the
a. internal process perspective.
b. capacity utilization perspective.
c. learning and growth perspective.
d. customer perspective.

20. The customer perspective of the balanced scorecard approach
a. is the most traditional view of the company.
b. evaluates the internal operating processes critical to the success of the organization.
c. evaluates how well the company develops and retains its employees.
d. evaluates the company from the viewpoint of those people who buy its products or services.

— Solve the following problems —

21. Dirt Cleaners, Inc. has the following production data for January:
Transferred out      50,000 units
Ending work in process      6,000 units

The units in ending work in process are 100% complete for materials and 60% complete for conversion costs. There is no beginning work in process. Materials cost is $6 per unit and conversion costs are $11 per unit.

Instructions
Determine the costs to be assigned to the units transferred out and the units in ending work in process.

22. Rhode Company provides architectural services for mall development companies. The following data are available for 2013

Expected Use of
Activity Cost Pool  Estimated Overhead Cost Driver per Activity
Secretarial support  $ 220,000  27,500 professional hours
Direct labor fringe benefits   200,000  $500,000 direct labor cost
Printing and copying    30,000  20,000 pages
Computer support    250,000  62,500 minutes
Liability insurance     140,000  $2,800,000 billed revenue

Instructions
Compute the activity-based overhead rates.

23. Telemark Production’s manufacturing costs for July when production was 2,000 units appears below:
Direct materials $10 per unit
Factory depreciation $16,000
Variable overhead 10,000
Direct labor  4,000
Factory supervisory salaries 11,600
Other fixed factory costs 3,000

Instructions
How much is the flexible budget manufacturing cost amount for a month when 2,200 units are produced?

24. Qwik Service has over 200 auto-maintenance service outlets nationwide. It provides primarily two lines of service: oil changes and brake repair. Oil change-related services represent 75% of its sales and provide a contribution margin ratio of 20%. Brake repair represents 25% of its sales and provides a 60% contribution margin ratio. The company’s fixed costs are $12,000,000 (that is, $60,000 per service outlet).

Instructions
(a) Calculate the dollar amount of each type of service that the company must provide in order to break even.
(b) The company has a desired net income of $45,000 per service outlet. What is the dollar amount of each type of service that must be provided by each service outlet to meet its target net income per outlet?

25. Jent Company reported the following information for 2013:
October November December
Budgeted sales  $320,000 $340,000 $360,000
Budgeted purchases $120,000 $128,000 $144,000

• All sales are on credit.
• Customer amounts on account are collected 40% in the month of sale and 60% in the following month.

Instructions
Compute the amount of cash Jent will receive during November.

26. Seacoast Company provided the following information about its standard costing system for 2013:
Standard Data    Actual Data
Materials 10 lbs. @ $4 per lbs.  Produced 4,000 units
Labor 3 hrs. @ $21 per hr.   Materials purchased 50,000 lbs. for $215,000
Budgeted production 3,500 units  Materials used 41,000 lbs.
Labor worked 11,000 hrs. costing $220,000

Instructions
Calculate the labor price variance and the labor quantity variance.

27. Selected data from the Florida Fruit Company are presented below:
Total assets $1,500,000
Average total assets 1,850,000
Net income 175,000
Net sales 1,300,000
Average common stockholders’ equity 1,000,000
Net cash provided by operating activities 275,000

Instructions
Assuming that no dividends were declared or paid during the period, calculate the following profitability ratios from the above information:
1. Profit margin
2. Asset turnover
3. Return on assets
4. Return on common stockholders’ equity