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ACCT 526 MIDTERM Questions With
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All of the following are steps outlined by the Institute of Management Accountants (IMA) for resolving ethical conflicts except: Select one: a. None of these b. following the policies of the organization for resolving ethical conflicts c. consulting an objective advisor such as an attorney d. bringing the matter to the attention of local news agencies e. presenting the matter to the audit committee, if a satisfactory resolution is not reached by all higher levels of management - ans--d. bringing the matter to the attention of local news agencies All of the following are examples of managerial accounting information except: Select one: a. monthly income statement for each store b. monthly analysis of product profitability c. None of these d. budget versus actual reports e. annual balance sheet prepared in accordance with US GAAP - ans--c. annual balance sheet prepared in accordance with US GAAP Direct labor costs related to production are: Select one: a. included in manufacturing overhead b. expensed when the products are sold c. expensed in the period in which they are incurred d. period costs - ans--b. expensed when the products are sold Which of the following is classified as a general and administrative expense? Select one: a. utility costs for the production facility b. salaries of sales personnel c. salaries of production supervisors d. None of these e. salaries of human resource department personnel - ans--e. salaries of human resource department personnel Costs of completed but unsold products would be found in which account? Select one: a. work in process inventory
b. cost of goods sold c. raw materials inventory d. None of these e. finished goods inventory - ans--e. finished goods inventory All of the following are included in Balance Sheet accounts containing product costs except: Select one: a. cost of goods manufactured b. None of these c. raw materials d. work in process inventory e. cost of good sold - ans--e. cost of good sold All of the following are examples of firms who would use job costing except: Select one: a. None of these b. a sport drink manufacturing company c. an interior designing firm d. an automobile repair business e. a custom sailboat builder - ans--b. a sport drink manufacturing company All of the following are reasons that managers track revenues and costs using a job costing system except: Select one: a. managers compare actual costs with estimated costs throughout the project to identify unexpected changes as early as possible b. None of these c. managers access the accuracy of original cost estimates d. managers want to know if individual jobs are profitable e. managers use the information to record product costs as period costs - ans--e. managers use the information to record product costs as period costs Process costing is best described by which statement? Select one: a. None of these b. units produced in a process costing system are unique and are produced individually c. there cannot be any beginning or ending work in process inventory with process costing d. product costs are tracked by department and assigned to products passing through each department
$16,500 during 2016, which of the following would not be a reason for the underapplied overhead? Select one: a. None of these b. applied overhead was lower than actual overhead c. applied overhead was higher than actual overhead d. estimated direct labor hours differed from actual direct labor hours e. estimated overhead costs differed from actual overhead costs - ans--c. applied overhead was higher than actual overhead The flow of costs in job order costing: Select one: a. begins with work in process inventory and ends with finished goods inventory b. is necessary to prepare the cost of goods manufactured schedule c. parallels the physical flow of materials as they are converted into finished goods d. begins as soon as a sale occurs - ans--c. parallels the physical flow of materials as they are converted into finished goods Archer Company uses a job order cost system. During the month of September, the company worked on Job B. The information contained on the cost sheet is as follows: Job B Beg Balance $1, Direct Material 800 Direct Labor 2, The company applies overhead at 120% of direct labor cost. During September Job B was completed and sold in October. If Job B sold for $8,000, what was the amount of gross profit for this job? (Ignore any consideration of over/under applied overhead) Select one: a. $3, b. $2, c. $7, d. $640 - ans--d. $ Which of the following costs is typically not a fixed overhead cost for a factory? Select one: a. salaries of factory supervisors b. property taxes on the factory building c. rent on the factory bulding d. indirect materials used in production e. None of these - ans--d. indirect materials used in production You are using the following information to estimate costs: Month Units Cost per Unit
January 2,000 $ February 3,100 $ March 3,800 $ What type of costs are these? Select one: a. None of these b. nonlinear c. fixed d. mixed e. variable - ans--e. variable Last month, Ellison Industries sold its product for $100 per unit. Fixed production costs were $50,000 and variable production costs amounted to $21 per unit. Fixed selling and administrative costs totaled $20,000, and variable selling and administrative costs amount to $3.00 per unit. Dawson produced and sold 6,000 units last month. Using a traditional income statement, which of the following amounts is the gross margin (gross profit)? Select one: a. None of these b. $424, c. $474, d. $386, e. $456,000 - ans--b. $424, Last month, Ellison Industries sold its product for $100 per unit. Fixed production costs were $50,000 and variable production costs amounted to $21 per unit. Fixed selling and administrative costs totaled $20,000, and variable selling and administrative costs amount to $3.00 per unit. Dawson produced and sold 6,000 units last month. Using a contribution margin income statement, which of the following amounts is the contribution margin? Select one: a. None of these b. $424, c. $474, d. $456, e. $386,000 - ans--d. $456, Last month, Ellison Industries sold its product for $100 per unit. Fixed production costs were $50,000 and variable production costs amounted to $21 per unit. Fixed selling and administrative costs totaled $20,000, and variable selling and administrative costs amount to $3.00 per unit. Dawson produced and sold 6,000 units last month. Which of the following amounts represents total fixed costs? Select one: a. $50, b. $144, c. $20, d. None of these e. $70,000 - ans--e. $70,
c. $ d. $ e. $200 - ans--a. $ Paco's Bikes sells 120 bicycles each month for $400 per unit. Variable cost per unit is $160 and fixed costs total $4,800 per month. What is the contribution margin ratio? Select one: a. 250% b. 60% c. 70% d. 40% e. None of these - ans--b. 60% Larimer Company has monthly fixed costs totaling $90,000 and variable costs of $5 per unit. Each unit of product is sold for $20. What is the break-even point in units? Select one: a. 6, b. None of these c. 3, d. 4, e. 18,000 - ans--a. 6, Larimer Company has monthly fixed costs totaling $90,000 and variable costs of $5 per unit. Each unit of product is sold for $20. What is the break-even point in sales dollars? Select one: a. $72, b. $360, c. $120, d. None of these e. $90,000 - ans--c. $120, Larimer Company has monthly fixed costs totaling $90,000 and variable costs of $5 per unit. Each unit of product is sold for $20. How many units must be sold to earn a monthly profit of $135,000? Select one: a. 9, b. 6, c. 15, d. 6, e. None of these - ans--c. 15, Larimer Company has monthly fixed costs totaling $90,000 and variable costs of $5 per unit. Each unit of product is sold for $20. Assume that Larimer Company expects to sell 11,000 units of product this coming month. What is the margin of safety in units?
Select one: a. 7, b. 6, c. 7, d. None of these e. 5,000 - ans--e. 5, Which of the following statements is true regarding operating leverage? Select one: a. Companies with high operating leverage generally experience larger operating profit fluctuations as sales fluctuate then do companies with low operating leverages b. None of these c. Companies with high operating leverage generally experience fewer profit fluctuations as sales fluctuate than do companies with low operating leverage d. Companies with high operating leverage will earn higher profits than companies with low operating leverage e. Companies with high operating leverage will earn lower profits than companies with low operating leverage - ans--a. Companies with high operating leverage generally experience larger operating profit fluctuations as sales fluctuate then do companies with low operating leverages Sauer Company sells folding chairs for $40.00 per unit. Variable cost is $15.00 per unit. Each chair requires 4 direct labor hours and 2 machine hours to produce. Which of the following is the correct contribution margin per machine hour? Select one: a. $12. b. $0. c. None of these d. $0. e. $6.25 - ans--a. $12. Management of Raley Company would like to achieve a target profit after taxes of $80,000. The company's income tax rate is 20 percent. What target profit before taxes is required to earn $80,000 in after tax profit? Select one: a. $400, b. $160, c. $64, d. $100, e. None of these - ans--d. $100,
