Accounting Problems

1.) Henson produces a product that requires 10 standard labor hours at $5/hr. If Henson produces 1,000 units and used 10,000 direct labor hours, the labor rate efficiency variance is:

a.) $10,000

b.) $50,000

c.) 0

d.) None of the above

2.) The present value of cash flow allows an individual to assess.

a.) The value of a present cash flow

b.) The Value of a stream of cash flows in terms of the best alternative

c.) Both A and B

d.) Neither A nor B

3.) The capital expenditures budget is tied closely to the:

a.) Sales Budget

b.) Purchases budget

c.) Cash receipts budget

d.) Cash expenditures budget

4.) There is a fixed cost element in ending inventory using the absorption costing approach.

True or False

5.) The labor efficiency variance is used in activity based costing.

True or False

6.) If production equals sales and there are no beginning or ending inventories:

a.) Variable costing gives a higher net income than absorption costing

b.) Variable costing gives a lower net income than absorption costing

c.) Net income is the same under each assumption

d.) None of the above

7.) Jeremiah pays for 50% of its purchases in the month of purchase, 30% in the month after and 20% in the month after that. For a $100,000 purchase in January, what is the accounts payable with respect to this purchase at the end of February?

a.) $50,000

b.) $30,000

c.) $20,000

d.) None of the above