ACCT 505 Final Exam

ACCT 505 Final Exam

1. The gross margin of
Evans Retail Stores, Inc. for the first quarter is:………
2. The contribution
margin of Evans Retail Stores, Inc. for the first quarter is:…….
3. The contribution
margin of Evans Retail Stores, Inc. for the first quarter is:…….
4. The total
contribution margin decreases if sales volume remains the same and:…….
5. A company has
provided the following data:……
6. Wallace, Inc.,
prepared the following budgeted data based on a sales forecast of $6,000,000: ……….
7. The variable
expense per unit is: ………..
8. The break-even
point in sales dollars is: ………….
9. An allocated
portion of fixed manufacturing overhead is included in product costs under:
10. Absorption
Variable …………
11. What is the unit
product cost for the month under variable costing?
12. What is the unit
product cost for the month under absorption costing?
13. What is the net
income for the month under variable costing?
14. What is the net
income for the month under absorption costing?
15. Orion Corporation
is preparing a cash budget for the six months beginning January 1. Shown below
are the company’s expected collection pattern and the budgeted sales for the
period. ……
16. Avril Company
makes collections on sales according to the following schedule:……..
17.A labor efficiency
variance resulting from the use of poor quality materials should be charged to:
18. An unfavorable
labor efficiency variance indicates that:
19. A favorable labor
rate variance indicates that
20. The materials
price variance for January is:
21. The materials
quantity variance for January is:
22. The labor rate
variance for January is:
23. The labor
efficiency variance for January is:
24. How much is the residual
income?
25. How much is the
return on the investment?
26. One of the dangers
of allocating common fixed costs to a product line is that such allocations can
make the line appear less profitable than it really is.
27. In responsibility
accounting, each segment in an organization should be charged with the costs
for which it is responsible and over which it has control plus its share of
common organizational costs.
28. Some managers
believe that residual income is superior to return on investment as a means of
measuring performance, since it encourages the manager to make investment
decisions that are more consistent with the interests of the company as a
whole.
29. The performance of
the manager of Division A is measured by residual income. Which of the
following would increase the manager’s performance measure?
30. A segment of a
business responsible for both revenues and expenses would be called:
30. The Northern
Division of the Smith Company had average operating assets totaling $150,000
last year. If the minimum required rate of return is 12%, and if last year’s
net operating income at Northern was $20,000, then the residual income for
Northern last year was:
31. Company A’s
residual income is:
32. Gata Co. plans to
discontinue a department that has a $48,000 contribution margin and $96,000 of
fixed costs. Of these fixed costs, $42,000 cannot be avoided. What would be the
effect of this discontinuance on Gata’s overall net operating income?
33. Pitkin Company
produces a part used in the manufacture of one of its products. The unit
product cost of the part is $33, computed as follows:
34. Some investment
projects require that a company expand its working capital to service the
greater volume of business that will be generated. Under the net present value
method, the investment of working capital should be treated as:
35. Which of the
following capital budgeting techniques consider(s) cash flow over the entire
life of the project?
36. The net present
value of the project is closest to:
37. The payback period
for the investment would be:
38. The net present
value of this investment would be:
39. The Tse
Manufacturing Company uses a job-order costing system and applies overhead to
jobs using a predetermined overhead rate. The company closes any balance in the
Manufacturing Overhead account to Cost of Goods Sold. During the year the
company’s Finished Goods inventory account was debited for $125,000 and
credited for $110,000. The ending balance in the Finished Goods inventory
account was $28,000. At the end of the year, manufacturing overhead was
overapplied by $4,500. The balance in the Finished Goods inventory account at
the beginning of the year was:
Matthias Corporation
has provided data concerning the company’s Manufacturing Overhead account for
the month of May. Prior to the closing of the overapplied or underapplied
balance to Cost of Goods Sold, the total of the debits to the Manufacturing
Overhead account was $53,000 and the total of the credits to the account was
$69,000. Which of the following statements is true?