Nova ACCt5140 Mid-Term Exam Summer 2017

QUESTION 1

Budgeted cost of goods sold should include which of the following?

a.

Raw materials, direct labor, manufacturing overhead, selling expenses, and administrative expenses

b.

Raw materials and direct labor.

c.

Raw materials, direct labor, manufacturing overhead, and selling expenses.

d.

Raw materials, direct labor, and manufacturing overhead.

2 points Save Answer

QUESTION 2

A cost is $50,000 when 25,000 units are produced, and $50,000 when 50,000 units are produced. This is an example of a(n)

a.

indirect cost.

b.

direct cost.

c.

variable cost.

d.

fixed cost.

2 points Save Answer

QUESTION 3

Lory's Fashions Inc. produces leather handbags. The production budget for the next four months is: July 6,000 units, August 7,000, September 8,000, October 7,000. Each handbag requires 0.5 square meters of leather. Lory's Fashions, Inc.'s leather inventory policy is 30% of next month's production needs. On July 1 leather inventory was expected to be 1,000 square meters. What will leather purchases be in July? (Round your answer to the nearest whole unit)

a.

3,575 square meters

b.

3,050 square meters

c.

3,850 square meters

d.

3,650 square meters

2 points Save Answer

QUESTION 4

Brown Beverage Company produces only 12oz cans of a beverage. A sales budget for the next four months is as follows: March 11,000 units, April 15,000, May 23,000 and June 26,000 cases. Brown Beverage Company's ending finished goods inventory policy in cases is 20% of the following month's sales. What is the budgeted ending finished goods inventory for April? (Round your answer to the nearest whole dollar)

a.

4,600

b.

4,000

c.

2,300

d.

1,500

2 points Save Answer

QUESTION 5

Three of the most common tools of financial analysis are (1) _________________________, (2) ___________________________ and (3) ______________________________.

3 points Save Answer

QUESTION 6

Robin Company has the following balances for the current month:

Direct Materials Used 24,000

Direct Labor 36,800

Sales Salaries 19,200

Indirect Labor 4,800

Production Manager's Salary 9,600

Marketing Costs 14,400

Factory Lease 6,400

What is Robin's total comversion cost?

a.

84,600

b.

23,800

c.

60,600

d.

33,600

2 points Save Answer

QUESTION 7

Prime costs are the same as

a.

Manufacturing costs minus direct materials.

b.

Manufacturing costs minus manufacturing overhead.

c.

Manufacturing costs minus fixed costs.

d.

Manufacturing costs minus non-manufacturing costs.

2 points Save Answer

QUESTION 8

Which of the following is not a source that can be used in preparing the sales budget?

a.

Marketing activities

b.

Prior sales.

c.

The production budget.

d.

Industry trends.

2 points Save Answer

QUESTION 9

Sam's Warehouse Inc has forecast purchases on account to be $365,000 in January, 455,000 in February, $530,000 in March, and $635,000 in April. 70% of purchases are paid for in the month of purchase, the remaining amount is paid in the following month. What are budgeted cash payments for March?

a.

136,500

b.

338,000

c.

507,500

d.

371,000

2 points Save Answer

QUESTION 10

Birch Cabinets, Inc has forecast sales for the next three months as follows: January 4,000 units, February 6,000 units, March 7,500 units. Birch's policy is to have an ending inventory of 40% of the next month's sales needs on hand. January 1 inventory is projected to be 1,500 units. Selling and administrative costs are budgeted to be $15,000 per month plus $5 per unit sold. What are budgeted selling and administrative expenses for February?

a.

$30,000

b.

$15,000

c.

$52,500

d.

$45,000

2 points Save Answer

QUESTION 11

The comparison of a company's financial condition and performance across time is known as

a.

Vertical Analysis

b.

Balance Sheet

c.

Horizontal Analysis

d.

Management by Objectives

2 points Save Answer

QUESTION 12

Contents Inc. has a material standard of 1 pound per unit of output. Each pound has a standard price of $26 per pound. During July, Contents Inc. paid $66,100 for 2,475 pounds, which they used to produce 2,350 units. What is the direct materials quantity variance?

a.

$1,750 unfavorable

b.

$3,250 unfavorable

c.

$3,250 favorable

d.

$1,750 favorable

2 points Save Answer

QUESTION 13

Which of the following functions of management involves comparing actual results with budgeted results?

a.

Control

b.

Directing/Leadng

c.

Organizing

d.

Planning

2 points Save Answer

QUESTION 14

Participative budgeting is an approach to budgeting that

a.

is top-down in nature.

b.

discourages budget slack.

c.

allows top management to set the budget.

d.

is more likely to motivate people to work towards the organization's goals than a top-down approach.

2 points Save Answer

QUESTION 15

A spending variance is made up of

a.

volume variance and quantity variance.

b.

price variance and volume variance

c.

price variance and rate variance.

d.

price variance and quantity variance.

2 points Save Answer

QUESTION 16

What is the main purpose of financial statement analysis?

.Name at least 3 common analytical goals users of financial statements want to accomplish using financial statement analysis

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4 points Save Answer

QUESTION 17

Redco Inc has a direct labor standard of 2 hours per unit of output. The average standard wage is rate of $22.50 per hour. During July, Redco paid $94,750 to employees for 4,445 hours worked. 2,350 units were produced during July. What is the direct labor rate variance? (Round your answer to the nearest whole dollar)

a.

$5,738 UNFAVORABLE

b.

$5263 FAVORABLE

c.

$5263 UNFAVORABLE

d.

$5,738 FAVORABLE

2 points Save Answer

QUESTION 18

Jones Company has budgeted fixed overhead of $135,000 based on budgeted production of 10,000 units. During July, 10,100 units were produced and $134,000 was spent on fixed overhead. What is the fixed overhead spending variance?

a.

$10,100 unfavorable

b.

$1,000 favorable

c.

$1,000 unfavorable

d.

$10,100 favorable

2 points Save Answer

QUESTION 19

Contents, Inc. has a material standard of 1.1 pound per unit of output. Each pound has a standard price of $26. During September, Contents Inc paid $66,500 for 2,585 pounds of raw material, to produce 2,350 units. What is the direct materials price variance? (Round your answer to the nearest whole dollar)

a.

$605 unfavorable

b.

$710 favorable

c.

$605 favorable

d.

$710 unfavorable

2 points Save Answer

QUESTION 20

Robin Company has the following balances for the current month:

Direct Materials 24,000

Direct Labor 36,800

Sales Salaries 19,200

Indirect Labor 4,800

Production Manager Salary 9,600

Marketing Cost 14,400

Factory Lease 6,400

What is Robin's Total Manufacturing Cost

What are Robin's total manufacturing costs?

a.

84,600

b.

23,800

c.

60,600

d.

60,800

2 points Save Answer

QUESTION 21

Which of the following statements about employee motivation is true?

a.

A budget that is too easy to achieve is more likely to motivate than a budget that is too difficult or that is tight but attainable.

b.

A budget that is tight but attainable is more likely to motivate than a budget that is too easy or too difficult to achieve.

c.

Budgets are difficult to use for motivation.

d.

A budget that is too difficult to achieve is more likely to motivate than a budget that is too easy or that is tight but attainable.

2 points Save Answer

QUESTION 22

A cost object is

a.

an item for sale by a business.

b.

an item to which it is not worth the effort of tracing costs.

c.

an item to which managers must directly trace costs.

d.

an item for which managers are trying to determine the cost.

2 points Save Answer

QUESTION 23

What determines the difference between a direct and an indirect cost?

a.

Whether it is related to manufacturing or nonmanufacturing activities.

b.

Whether it can be traced to a specific cost object .

c.

Whether it changes when activity levels change.

d.

Whether it is relevant to a particular decision.

2 points Save Answer

QUESTION 24

A company has an inventory turnover ratio of 4.20, merchandise inventory for 2017 of $87,065, and cost of goods sold of $315,000. What is the average inventory? (Round your answer to the nearest whole dollar and do not use commas or dollar signs in your answer)

2 points Save Answer

QUESTION 25

Cleveland Inc. has forecast sales to be $105,000 in February, $135,000 in March, $150,000 in April, and $175,000 in May. The average cost of goods sold is 50% of sales. All sales are made on credit and sales are collected 75% in the month of sale, and the remaining amount in the month following. What are budgeted cash receipts in May?

a.

173,080

b.

163,130

c.

131,250

d.

168,750

2 points Save Answer

QUESTION 26

A company has a current ratio of 2.10, total liabilities of $197,350, long-term notes payable (the only long-term liability) of $91,350, and a quick ratio of 1.05. What are total quick assets for the company? (Round your answer to the nearest whole dollar and do not use commas or dollar signs in your answer)

2 points Save Answer

QUESTION 27

Chica's Fashions Outlet has forecast purchases to be $350,000 in January, $400,000 in February, $425,000 in March, and $600,000 in April. Purchases average 30% paid in cash, 70% are on credit. Credit purchases are paid 60% in the month of purchase, 30% during the month following, and 10% the second month following the purchase. Cash disbursements in April would be

a.

549,250

b.

369,250

c.

600,000

d.

180,000

2 points Save Answer

QUESTION 28

A cost is $50,000 when 25,000 units are produced, and $100,000 when 50,000 units are produced. This is an example of a(n)

a.

fixed cost.

b.

variable cost.

c.

indirect cost

d.

direct cost.

2 points Save Answer

QUESTION 29

The budgeted income statement is a combination of

a.

All the operating budgets.

b.

The direct materials budget, the direct labor budget, and the manufacturing overhead budget.

c.

All the operating budgets plus the budgeted balance sheet

d.

The production budget, the cost of goods sold budget, and the selling and administrative expense budget.

2 points Save Answer

QUESTION 30

A primary financial budget that is prepared in the budgeting process is the

a.

Inventory budget.

b.

Selling and administrative budget.

c.

Production budget.

d.

Cash budget.

2 points Save Answer

QUESTION 31

Which of the following is an indirect cost of manufacturing a table made of wood and glass, for a firm that manufactures furniture?

a.

The cost of the glass in the table.

b.

The cost of rent on the factory where the table is manufactured.

c.

The cost of the labor used to assemble the table.

d.

The cost of the wood in the table.

2 points Save Answer

QUESTION 32

When are period costs counted as inventory?

a.

After products are completed, but before they are sold.

b.

After products are sold.

c.

Before products are sold.

d.

Never

2 points Save Answer

QUESTION 33

Variable costs are

a.

costs that vary inversely, in total, with the number of units produced.

b.

costs that change, in total, in direct proportion to changes in activity levels.

c.

costs that vary inversely, per unit, with the number of units produced.

d.

costs that stay the same, in total, regardless of activity level.

2 points Save Answer

QUESTION 34

A fixed cost

a.

goes down per unit when activity increases.

b.

goes down in total when activity increases.

c.

goes up in total when activity increases.

d.

goes up in total when activity increases.

2 points Save Answer

QUESTION 35

The starting point for preparing the master budget is the

a.

budgeted balance sheet.

b.

inventory policy.

c.

production budget.

d.

sales budget.

2 points Save Answer

QUESTION 36

A company has a current ratio of 2.01, total liabilities of $193,891, long-term payables of $96,791 (the only long term liability on the books), and a quick ratio of .96. What are total current assets for the company? (Round your answer to the nearest whole dollar and do not use commas or dollar signs in your answer)

2 points Save Answer

QUESTION 37

What is the primary goal of accounting?

a.

To provide information for decision making.

b.

To set long-term goals and objectives.

c.

To motivate others to work towards a plan's success.

d.

To arrange for the necessary resources to achieve a plan.

2 points Save Answer

QUESTION 38

Which of the following is not a characteristic of managerial accounting?

a.

Information is subjective, relevant, future-oriented.

b.

Reports are prepared as needed.

c.

Information is used by internal parties.

d.

Reports are prepared according to GAAP.

2 points Save Answer

QUESTION 39

____________________ is a method of analysis used to evaluate individual financial statement items or groups of items in terms of a specific base amount within the same time period.

2 points Save Answer

QUESTION 40

Which of the following functions of management involves taking actions to implement the plan?

a.

Directing/leading

b.

Planning

c.

Organizing

d.

Control

2 points Save Answer

QUESTION 41

Which of the following is not a characteristic of financial accounting?

a.

Information is used by external parties.

b.

Financial reports are prepared according to GAAP

c.

Information is subjective, relevant and future-oriented.

d.

Reports are prepared periodically.

2 points Save Answer

QUESTION 42

A master budget is an example of a

a.

price variance.

b.

flexible budget.

c.

volume variance

d.

static budget.

2 points Save Answer

QUESTION 43

Bluebird Rubber, Inc. (BRI) is a manufacturer of tires for motorcycles. The company has a unique, patented process for producing tires that has helped the BRI to grow at a high rate since opening. While the owners of BRI have benefited from the company’s sustained profitability, a recent offer to buy their company offered a significant financial gain to the company. The acquirer, MotoJoe, plans to use BRI’s tire production solely for its motorcycles. MotoJoe management believes that this unique feature will help set MotoJoe motorcycles apart from competitors’ products. As MotoJoe works to integrate BRI into its organizational structure, what type of responsibility center would be most appropriate for Bluebird Rubber as a subsidiary that will be solely focused on tire manufacturing?

a.

Cost Center

b.

Investment Center

c.

Profit Center

d.

Revenue Center

2 points Save Answer

QUESTION 44

Ajay Inc. produces metal axels. The sales budget for the next four months is: January 6,500 units, February 7,000, March 7,500, April 8,000. Ajay Inc.'s ending finished goods inventory policy is 25% of the following month's sales. Each axel requires 1.1 hours of unskilled labor (paid $9 per hour) and 1.5 hours of skilled labor (paid $16 per hour). What will be the standard total labor cost for the month of March? (Round your answer to the nearest whole dollar and do not use commas or dollar signs in your answer)

a.

258,488

b.

247,675

c.

262,500

d.

254,256

2 points Save Answer

QUESTION 45

Conversion costs can be defined as

a.

Variable costs plus fixed costs.

b.

Manufacturing costs minus direct materials.

c.

Manufacturing costs plus non-manufacturing costs.

d.

Direct labor plus direct materials

2 points Save Answer

QUESTION 46

Which of the following is not included in the operating budget?

a.

Raw materials purchases budge

b.

Budgeted balance sheet

c.

Sales budget

d.

Selling and administrative budget

2 points Save Answer

QUESTION 47

After selling 4,300 units during the period, Dole Corp. prepared a flexible budget that included $22,962 for direct materials, $36,120 for direct labor, $19,350 for variable overhead, and $46,440 for fixed overhead. Dole originally planned its master budget based on sales of 4,000 units. What would total costs have been on the master budget?

a.

124,872

b.

119,400

c.

116,160

d.

111,070

2 points Save Answer

QUESTION 48

Describe the purpose of horizontal financial statement analysis and how it is applied. Also in your description explain the two types of horizontal analyses and describe how they are different.