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Principals Of Managerial Accounting: Final Exam 1 Homework 1.1 1.2 2.1 2.2 3.1 3.2 4.1 4.2 5.1 5.2 6.1 6.2 7.1 7.2 8.1 8.2 9.1 9.2 10.1 10.2 11.1 11.2 12.1 12.2 13.1 13.2 14.1 14.2 15.1 15.2 Learnsmart 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 | Exam 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 | Final Exam 1 2 Homework Help?
Selling
and administrative expenses are considered to be:
a period cost under variable costing. A common cost that should not be assigned to a particular product on a segmented income statement is: the salary of the corporation president. Gangwer Corporation produces a single product and has the following cost structure: 
The absorption costing unit product cost is: $95 
There were no beginning or ending inventories. The absorption costing unit product cost was: $130  A manufacturing company that produces a single product has provided the following data, concerning its most recent month of operations: 
What is the absorption costing unit product cost for the month? $125  The activity rate for the "designing products" activity cost pool is closest to: $128 per product design hour Designing products: $582,016 / 4,547 product design hours = $128 per product design hour Data concerning three of the activity cost pools of Burlingame LLC, a legal firm, have been provided below:  $158 per meeting hour Meeting with clients: $1,102,050 / 6,975 meeting hours = $158 per meeting hour Wecker Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products:  Data concerning two products appear below:  How much overhead cost would be assigned to Product V09X using the activity-based costing system? $10,385.22 The overhead cost charged to Product V09X is:   Data for one of the company's products follow:  How much overhead cost would be assigned to Product P59G using the activity-based costing system? $10,014.40 The overhead cost charged to Product P59G is:   Distribution of Resource Consumption across Activity Cost Pools: Activity Cost Pools  The "Other" activity cost pool consists of the costs of idle capacity and organization sustaining costs that are not assigned to products. How much indirect factory wages and factory equipment depreciation cost would be assigned to the Customer Orders activity cost pool? $247,000 Allocations to the Customer Orders activity cost pool:  How much indirect factory wages and factory equipment depreciation cost would NOT be assigned to products using the activity-based costing system? $104,000 Allocations to the Other activity cost pool: 
Veltri Corporation is working on its direct labor budget for the next two months. Each unit of output requires 0.77 direct labor-hours. The direct labor rate is $11.20 per direct labor-hour. The production budget calls for producing 7,100 units in October and 6,900 units in November. The company guarantees its direct labor workers a 40-hour paid work week. With the number of workers currently employed, that means that the company is committed to paying its direct labor work force for at least 5,480 hours in total each month even if there is not enough work to keep them busy. What would be the total combined direct labor cost for the two months? $122,752.00 Direct Labor Budget  Hagos Corporation is working on its direct labor budget for the next two months. Each unit of output requires 0.84 direct labor-hours. The direct labor rate is $9.40 per direct labor-hour. The production budget calls for producing 2,100 units in June and 1,900 units in July. If the direct labor work force is fully adjusted to the total direct labor-hours needed each month, what would be the total combined direct labor cost for the two months? $31,584.00 Direct Labor Budget 
update the static planning budget to reflect the actual level of activity of the period. Salyers Family Inn is a bed and breakfast establishment in a converted 100-year-old mansion. The Inn's guests appreciate its gourmet breakfasts and individually decorated rooms. The Inn's overhead budget for the most recent month appears below:  The Inn's variable overhead costs are driven by the number of guests. What would be the total budgeted overhead cost for a month if the activity level is 53 guests? $7,159.20 Variable cost per guest for supplies = $148.20 / 57 guests = $2.60 per guest Variable cost per guest for laundry = $216.60 / 57 guests = $3.80 per guest 
Stock Manufacturing Corporation has prepared the following overhead budget for next month.  The company's variable overhead costs are driven by machine-hours. What would be the total budgeted overhead cost for next month if the activity level is 6,600 machine-hours rather than 6,900 machine-hours? $84,860.00  Clovis Midwifery's cost formula for its wages and salaries is $2,680 per month plus $245 per birth. For the month of September, the company planned for activity of 118 births, but the actual level of activity was 121 births. The actual wages and salaries for the month was $33,290. The wages and salaries in the flexible budget for September would be closest to: $32,325 2,680 + (245 x 121) = 32,325 Bargas Framing's cost formula for its supplies cost is $2,240 per month plus $6 per frame. For the month of May, the company planned for activity of 808 frames, but the actual level of activity was 810 frames. The actual supplies cost for the month was $7,090. The supplies cost in the flexible budget for May would be closest to: $7,100 2,240 + 6 / 810 = 7,100 Kara Catering uses two measures of activity, jobs and meals, in the cost formulas in its budgets and performance reports. The cost formula for catering supplies is $310 per month plus $84 per job plus $17 per meal. A typical job involves serving a number of meals to guests at a corporate function or at a host's home. The company expected its activity in July to be 15 jobs and 127 meals, but the actual activity was 14 jobs and 126 meals. The actual cost for catering supplies in July was $3,620. The activity variance for catering supplies in July would be closest to: $101 F 
Because the flexible budget is less than the planning budget, the variance is favorable (F). Orscheln Snow Removal's cost formula for its vehicle operating cost is $2,800 per month plus $381 per snow-day. For the month of February, the company planned for activity of 17 snow-days, but the actual level of activity was 14 snow-days. The actual vehicle operating cost for the month was $7,920. The activity variance for vehicle operating cost in February would be closest to: $1,143 F 
Because the flexible budget is less than the planning budget, the variance is favorable (F). When computing standard cost variances, the difference between actual and standard price multiplied by actual quantity yields a(n): price variance If the labor efficiency variance is unfavorable, then actual hours exceeded standard hours allowed for the actual output. Last month 75,000 pounds of direct material were purchased and 71,000 pounds were used. If the actual purchase price per pound was $0.50 more than the standard purchase price per pound, then the materials price variance was: $37,500 U The Litton Company has established standards as follows: · Direct material: 3 pounds per unit @ $4 per pound = $12 per unit · Direct labor: 2 hours per unit @ $8 per hour = $16 per unit · Variable manufacturing overhead: 2 hours per unit @ $5 per hour = $10 per unit Actual production figures for the past year are given below. The company records the materials price variance when materials are purchased.  The company applies variable manufacturing overhead to products on the basis of standard direct labor-hours.
The
materials price variance is:
$600 F 11,400 - (3,000 pounds / 4 per pound) 11,400 - 12,000 = 600 The materials quantity variance is $800 U SQ = 3 pounds per unit / 600 units = 1,800 pounds Materials quantity variance = (AQ - SQ) SP (2,000 pounds - 1,800 pounds) $4 per pound (200 pounds) 4 per pound = 800 U The labor rate variance is: $440 U 9,240 - (1,100 hours / 8 per hour) 9,240 - 8,800 = $440 U Turnover is computed by dividing average operating assets into: A. invested capital. sales. Which of the following is not an operating asset? Cash Inventory Plant equipment Common stock The purpose of the Data Processing Department of Falena Corporation is to assist the various departments of the corporation with their information needs free of charge. The Data Processing Department would best be evaluated as a: cost center. A company's current net operating income is $16,800 and its average operating assets are $80,000. The company's required rate of return is 18%. A new project being considered would require an investment of $15,000 and would generate annual net operating income of $3,000. What is the residual income of the new project? $300 Soderquist Corporation uses residual income to evaluate the performance of its divisions. The company's minimum required rate of return is 11%. In April, the Commercial Products Division had average operating assets of $100,000 and net operating income of $9,400. What was the Commercial Products Division's residual income in April? -$1,600 Costs which are always relevant in decision making are those costs which are: variable. avoidable. sunk. fixed. A general rule in relevant cost analysis is: A. variable costs are always relevant. differential future costs and revenues are always relevant. Freestone Company is considering renting Machine Y to replace Machine X. It is expected that Y will waste less direct materials than does X. If Y is rented, X will be sold on the open market. For this decision, which of the following factors is (are) relevant? I. Cost of direct materials used II. Resale value of Machine X A. Only I B. Only II C. Both I and II D. Neither I nor II A study has been conducted to determine if Product A should be dropped. Sales of the product total $200,000 per year; variable expenses total $140,000 per year. Fixed expenses charged to the product total $90,000 per year. The company estimates that $40,000 of these fixed expenses will continue even if the product is dropped. These data indicate that if Product A is dropped, the company's overall net operating income would: decrease by $10,000 per year The capital budgeting method that recognizes the time value of money by discounting cash flows over the life of the project, using the company's required rate of return as the discount rate is called the: the net present value method. The internal rate of return of an investment project is the: discount rate that results in a zero net present value for the project. The length of time required to recover the initial cash outlay for a project is determined by using the: the payback method. (Ignore income taxes in this problem) The management of Serpas Corporation is considering the purchase of a machine that would cost $180,000, would last for 5 years, and would have no salvage value. The machine would reduce labor and other costs by $46,000 per year. The company requires a minimum pretax return of 13% on all investment projects. The net present value of the proposed project is closest to: -$18,218 (Ignore income taxes in this problem.) Mcclam, Inc., is considering the purchase of a machine that would cost $100,000 and would last for 9 years. At the end of 9 years, the machine would have a salvage value of $23,000. The machine would reduce labor and other costs by $19,000 per year. Additional working capital of $2,000 would be needed immediately. All of this working capital would be recovered at the end of the life of the machine. The company requires a minimum pretax return of 13% on all investment projects. The net present value of the proposed project is closest to: $3,833 In which section should this be recorded? non-cash investing and financing activities Beta Electronics has a plant asset that cost $45,000 and has accumulated depreciation of $10,000. The plant asset is sold for cash at a $1,000 gain. How much increase in cash flow should Beta report for investing activities? $36,000 Beta Electronics reports the following data for the year ended December 31, 2019: Cash receipt from sale of equipment $30,000 Depreciation Expense 12,000 Cash payment of Dividends 5,000 Cash receipt from issuance of Common Stock 22,000 Net Income 40,000 Cash purchase of Land 25,000 Increase in Current Liabilities 10,000 Decrease in Current Assets other than Cash 8,000 What is the cash flow from operating activities? $70,000 Baker Electronics reported the following data for the year ended December 31, 2019: Cash receipt from sale of equipment $40,000 Depreciation Expense 15,000 Cash payment of Dividends 7,000 Cash receipt from issuance of Common Stock 21,000 Net Income 50,000 Cash purchase of Land 20,000 Increase in Current Liabilities 11,000 Decrease in Current Assets other than Cash 10,000 What is the cash flow from financing activities? $14,000 Which of the following does NOT appear on the statement of cash flows when prepared by indirect method? cash collections from customers The main categories of cash flow activities on the statement of cash flows are operating, investing, and financing. Operating activities are most closely related to current assets and current liabilities Which item does not appear on a statement of cash flows prepared by the indirect method? Collections from customers Wedding.com earned net income of $ 73,000 after deducting depreciation of $ 6,000 and all other expenses. Current assets decreased by $ 5,000, and current liabilities increased by $ 7,000. How much was Wedding.com's cash provided by operating activities (indirect method)? $91,000 Net income + depreciation + assets + liabilities Mountain Water Corp. issued common stock of $28,000 to pay off long- term notes payable of $28,000. In what section(s) would these transactions be recorded? Non-cash investing and financing activities, $28,000 Warner, Inc. expects net cash flow from operating activities to be $160,000, and the company plans purchases of equipment of $ 75,000 and repurchases of stock of $ 16 comma 000. What is Warner's free cash flow? $85,000 Net cash flow - purchases Bakugon Furniture Center had accounts receivable of $ 25,000 at the beginning of the year and $ 60, 000 at year-end. Revenue for the year totaled $ 113, 000. How much cash did the business collect from customers? $78,000 Revenue - (ending accounts - beginning accounts) If accrued liabilities increased during the year, which of the following is correct when using a spreadsheet to complete the statement of cash flows (indirect method)? Increase in Accrued Liabilities would be debited What part of the Liberty's annual report is written by the company and could present a biased view of financial conditions and results? Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) Which of the following is an example of a financing activity on the statement of cash flows? payment of dividends Cash flows are defined as ________. cash received by the business and the cash payments made by the business If merchandise inventory decreases during the year, which of the following is correct when using a spreadsheet to complete the statement of cash flows by the indirect method? Decrease in a current asset would be a debit. Beta Electronics earned net income of $29,000. Included in the net income was $3,000 of depreciation expense. Current assets decreased by $2,000 and current liabilities increased by 4,000. There was also a loss on the sale of a plant asset of $8,000. How much cash is provided by operating activities? $46,000 29,000 + 3,000 + 2,000 + 4,000 Which of the following is an example of an investing activity on the statement of cash flows? sold land for cash Which is a purpose of the Statement of Cash Flows? to evaluate management decisions, to predict ability to pay debt and dividends, and to predict future cash flows The two formats of the operating activities cash flow are ________. indirect and direct Beta Electronics expects net cash flow from operating activities to be $100,000, and the company plans cash purchases of equipment of $55,000 and repurchases of stock of $4,000. What is Beta's free cash flow? $45,000 Free cash flow = Net cash provided by operating activities - Cash payments planned for investments in long term assets Which is NOT one of the three basic types of cash flow activities? retained earnings Baker Electronics reported the following data for the year ended December 31, 2019: Cash receipt from sale of equipment $40,000 Depreciation Expense 15,000 Cash payment of Dividends 7,000 Cash receipt from issuance of Common Stock 21,000 Net Income 50,000 Cash purchase of Land 20,000 Increase in Current Liabilities 11,000 Decrease in Current Assets other than Cash 10,000 What is the cash flow from investing activities? $20,000 Which of the following is not a benefit of budgeting? It provides assurance that the company will achieve its objectives Budgeting is usually most closely associated with which management function? Planning The starting point in preparing a master budget is the preparation of the Sales Budget Which one of the following items would never appear on a cash budget? Depreciation expense Which of the following is true about variable costs: Variable costs vary in total but are fixed per unit The basic difference between a static budget and a flexible budget is that: A static budget is based on one specific level of production and a flexible budget can be prepared for any production level within a relevant range. Which of the following is true about mixed costs? Mixed costs include both fixed and variable components. Mixed costs cause problems in cost-volume-profit calculations and so they must be split out between the fixed and variable components. One way to split out mixed costs (into variable and fixed components) is by using the high-low method. Which of the following is not one of the objectives in utilizing standard costs? To allow a measure of cost assuming ideal or perfect operating conditions. Homework 1.1 1.2 2.1 2.2 3.1 3.2 4.1 4.2 5.1 5.2 6.1 6.2 7.1 7.2 8.1 8.2 9.1 9.2 10.1 10.2 11.1 11.2 12.1 12.2 13.1 13.2 14.1 14.2 15.1 15.2
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