The investigation of materials price variance usually begins in the:\tcontroller’s office.\taccounts payable department.\tfirst production department.\tpurchasing department\t\u00a0\t\u00a0\t\u00a0\tHollis Industries produces flash drives for computers, which it sells for $20 each. Each flash drive costs $13 of variable costs to make. During April, 1,000 drives were sold. Fixed costs for March were $2 per unit for a total of $1,000 for the month. How much is the contribution margin ratio?\t35%\t25%\t75%\t65%\t\u00a0\t\u00a0\t\u00a0\tWhich of the following statements is not true?\tWhen a company’s sales revenue is decreasing, high operating leverage is good because it means that profits will decrease at a slower pace than revenues decrease.\tWhen a company’s sales revenue is increasing, high operating leverage is good because it means that profits will increase rapidly.\tCompanies that have higher fixed costs relative to variable costs have higher operating leverage.\tOperating leverage refers to the extent to which a company’s net income reacts to a given change in sales.\t\u00a0\t\u00a0\t\u00a0\tWhich of the following will not result in an unfavorable controllable margin difference?\tSales under budget; costs under budget\tSales exceeding budget; costs under budget\tSales under budget; costs over budget\tSales exceeding budget; costs over budget\t\u00a0\t\u00a0\t\u00a0\t5\t\u00a0\tBased on the following data, what is the amount of working capital?\t\u00a0\tAccounts payable”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd..$64,000\tAccounts receivable”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd..114,000\tCash”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd. 70,000\tIntangible assets”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd100,000\tInventory”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd. 138,000\tLong-term investments”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd..160,000\tLong-term liabilities”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd “\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd200,000\tShort-term investments”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd80,000\tNotes payable (short-term)”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd..56,000\tProperty, plant, and equipment”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd..1,340,000\tPrepaid insurance”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd”\ufffd.2,000\t$370,000\t$332,000\t$326,000\t$284,000\t\u00a0\t\u00a0\t6\tMiller Manufacturing’s degree of operating leverage is 1.5. Warren Corporation’s degree of operating leverage is 3. Warren’s earnings would go up (or down) by ________ as much as Miller’s with an equal increase (or decrease) in sales.\t2 times\t4.5 times\t1.5 times\t1\/2 times\t\u00a0\t\u00a0\t7\tWhat is the primary difference between a static budget and a flexible budget?\tThe static budget contains only fixed costs, while the flexible budget contains only variable costs.\tThe static budget is prepared only for units produced, while a flexible budget reflects the number of units sold.\tThe static budget is constructed using input from only upper level management, while a flexible budget obtains input from all levels of management.\tThe static budget is prepared for a single level of activity, while a flexible budget is adjusted for different activity levels.\t\u00a0\t\u00a0\t8\tBen Gordon, Inc. manufactures 2 products, wheels and seats. The company has estimated its overhead in the assembling department to be $660,000. The company produces 300,000 wheels and 600,000 seats each year. Each wheel uses 2 parts, and each seat uses 3 parts. How much of the assembly overhead should be allocated to wheels?\t$165,000\t$220,000\t$264,000\t$282,856\t\u00a0\t\u00a0\t9\tFinancial and managerial accounting are similar in that both:\tproduce general-purpose reports.\tdeal with the economic events of an enterprise.\thave reports that are prepared quarterly and annually.\thave the same primary users.\t\u00a0\t\u00a0\t10\tIt costs Garner Company $12 of variable and $5 of fixed costs to produce one bathroom scale which normally sells for $35. A foreign wholesaler offers to purchase 3,000 scales at $15 each. Garner would incur special shipping costs of $1 per scale if the order were accepted. Garner has sufficient unused capacity to produce the 3,000 scales. If the special order is accepted, what will be the effect on net income?\t$6,000 decrease\t$9,000 decrease\t$6,000 increase\t$45,000 increase\t\u00a0\t\u00a0\t11\tWhich one of the following is an example of a period cost?\tA manager’s salary for work that is done in the corporate head office.\tA box cost associated with computers.\tA change in benefits for the union workers who work in the New York plant of a Fortune 1000 manufacturer.\tWorkers’ compensation insurance on factory workers’ wages allocated to the factory.\t\u00a0\t\u00a0\t12\tThe Mac Company has four plants nationwide that cost $350 million. The current fair value of the plants is $300 million. The plants will be reported as assets at:\t$300 million.\t$350 million.\t$600 million.\t$700 million.\t\u00a0\t\u00a0\t13\tAre advanced receipts from customers treated as revenue at the time of receipt? Why or why not?\tYes, the intent of the company is to perform the work and the customer is confident that the services will be completed.\tNo, the amount of revenue cannot be adequately determined until the company completes the work.\tYes, they are treated as revenue at the time of receipt because the company has access to the cash.\tNo, revenue cannot be recognized until the work is performed.\t\u00a0\t\u00a0\t14\tWhich statement is correct?\tThe cash basis of accounting is objective because no one can be certain of the amount of revenue until the cash is received.\tAs long as management is ethical, there are no problems with using the cash basis of accounting.\tAs long as a company consistently uses the cash basis of accounting, generally accepted accounting principles allow its use.\tThe use of the cash basis of accounting violates both the revenue recognition and expense recognition principles.\t\u00a0\t\u00a0\t15\tIf a plant is operating at full capacity and receives a one-time opportunity to accept an order at a special price below its usual price, then:\tthe order will likely be accepted.\tonly variable costs are relevant.\tthe order will likely be rejected.\tfixed costs are not relevant.\t\u00a0\t16\tKimble Company applies overhead on the basis of machine hours. Given the following data, compute overhead applied and the under- or overapplication of overhead for the period:\t\u00a0\tEstimated annual overhead cost $1,600,000\tActual annual overhead cost $1,575,000\tEstimated machine hours 400,000\tActual machine hours 390,000\t$1,560,000 applied and $15,000 underapplied\t$1,560,000 applied and $15,000 overapplied\t$1,600,000 applied and $15,000 overapplied\t$1,575,000 applied and neither under- nor overapplied\t\u00a0\t\u00a0\t17\tScorpion Production Company planned to use 1 yard of plastic per unit budgeted at $81 a yard. However, the plastic actually cost $80 per yard. The company actually made 3,900 units, although it had planned to make only 3,300 units. Total yards used for production were 3,960. How much is the total materials variance?\t$3,960 F\t$48,600 U\t$900 U\t$4,860 U\t\u00a0\t\u00a0\t18\tWhich of the following statements concerning users of accounting information is incorrect?\tPresent creditors are considered external users.\tTaxing authorities are considered external users.\tRegulatory authorities are considered internal users.\tManagement is considered an internal user.\t\u00a0\t\u00a0\t19\tTop management notices a variation from budget and an investigation of the difference reveals that the department manager could not be expected to have controlled the variation. Which of the following statements is applicable?\tDepartment managers should be credited for favorable variances even if they are beyond their control.\tDepartment managers should be held accountable for all variances from budgets for their departments.\tDepartment managers’ performances should not be evaluated based on actual results to budgeted results.\tDepartment managers should only be held accountable for controllable variances for their departments.\t\u00a0\t\u00a0\t20\tDanner Corporation reported net sales of $650,000, $720,000, and $780,000 in the years 2016, 2017, and 2018, respectively. If 2016 is the base year, what percentage do 2018 sales represent of the base?\t120%\t83%\t20%\t108%\t\u00a0\t\u00a0\t21\t\u00a0\tLa More Company had the following transactions during 2016:\tSales of $9,000 on account\tCollected $4,000 for services to be performed in 2017\tPaid $3,750 cash in salaries for 2016\tPurchased airline tickets for $500 in December for a trip to take place in 2017\tWhat is La More’s 2016 net income using accrual accounting?\t\u00a0\t$9,250\t$9,750\t$5,250\t$5,750\t22\tIf there are no units in process at the beginning of the period, then:\tthe units started into production will equal the number of units transferred out.\tthe company must be using a job order cost system.\tthe units to be accounted for will equal the units transferred out and the units in process at the end of the period.\tonly one computation of equivalent units of production will be necessary.\t\u00a0\t\u00a0\t\u00a0\t23\tWhich of the following is not an underlying assumption of CVP analysis?\tSales mix is constant.\tBeginning inventory is larger than ending inventory.\tCost classifications are reasonably accurate.\tChanges in activity are the only factors that affect costs.\t\u00a0\t24.\tIn performing a vertical analysis, the base for sales revenues on the income statement is:”\ufffd\u00a0\t\u00a0\t\u00a0\u00a0\u00a0 “\ufffdnet sales.\u00a0\u00a0\u00a0\t\u00a0\u00a0\u00a0 “\ufffdcost of goods available for sale.\u00a0\t\u00a0\u00a0\u00a0 “\ufffdsales revenue.\t\u00a0\u00a0\u00a0 “\ufffdnet income.\t\u00a0\t25\t\u00a0\tDifferences between a job order cost system and a process cost system include all of the following except the:”\ufffd\t\u00a0\u00a0\u00a0 “\ufffdunit cost computations.\u00a0\t\u00a0\u00a0\u00a0 “\ufffdflow of costs.\t\u00a0\u00a0\u00a0 “\ufffddocuments used to track costs.\t\u00a0\u00a0\u00a0 “\ufffdpoint at which costs are totaled.\t\u00a0\t26\tHenson Company began the year with retained earnings of $380,000. During the year, the company recorded revenues of $500,000, expenses of $380,000, and paid dividends of $40,000. What was Henson’s retained earnings at the end of the year?”\ufffd\t\u00a0\u00a0\u00a0 “\ufffd$460,000\t\u00a0\u00a0\u00a0 “\ufffd$540,000\t\u00a0\u00a0\u00a0 “\ufffd$840,000\t\u00a0\u00a0\u00a0 “\ufffd$500,000\t\u00a0\t27\tAt September 1, 2017, Baxter Inc. reported Retained Earnings of $423,000. During the month, Baxter generated revenues of $60,000, incurred expenses of $36,000, purchased equipment for $15,000 and paid dividends of $6,000. What is the balance in Retained Earnings at September 30, 2017?”\ufffd\t\u00a0\t$24,000 credit\t“\ufffd$423,000 debit\t“\ufffd$426,000 credit\t“\ufffd$441,000 credit\t\u00a0\t28\t\u00a0\tAn activity-based overhead rate is computed as follows:”\ufffd\t\u00a0\t\u00a0\t\u00a0\u00a0\u00a0 “\ufffdestimated overhead divided by actual use of cost drivers.\t\u00a0\u00a0\u00a0 “\ufffdactual overhead divided by estimated use of cost drivers.\t\u00a0\u00a0\u00a0 “\ufffdestimated overhead divided by estimated use of cost drivers.\t\u00a0\u00a0\u00a0 “\ufffdactual overhead divided by actual use of cost drivers.\t\u00a0\t\u00a0\t29.\tWhich is the last step in developing the master budget?”\ufffd\t\u00a0\t\u00a0\u00a0\u00a0 “\ufffdPreparing the cash budget\t\u00a0\u00a0\u00a0 “\ufffdPreparing the cost of goods manufactured budget\t\u00a0\u00a0\u00a0 “\ufffdPreparing the budgeted balance sheet\t\u00a0\u00a0\u00a0 “\ufffdPreparing the budgeted income statement\t\u00a0\t30\tThe entry to record the acquisition of raw materials on account is:”\ufffd\t\u00a0\t\u00a0\t\u00a0\u00a0\u00a0 “\ufffdManufacturing Overhead\u00a0 Raw Materials Inventory Accounts Payable\t\u00a0\u00a0\u00a0 “\ufffdWork in Process Inventory Accounts Payable\t\u00a0\u00a0\u00a0 “\ufffdRaw Materials Inventory Accounts Payable\t\u00a0\u00a0\u00a0 “\ufffdAccounts Payable Raw Materials Inventory<\/p>\n","protected":false},"excerpt":{"rendered":"
The investigation of materials price variance usually begins in the: controller’s office. accounts payable department. first production department. purchasing department \u00a0 \u00a0 \u00a0 Hollis Industries produces flash drives for computers, which it sells for $20 each. Each flash drive costs Read More …<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-200400","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/200400","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/comments?post=200400"}],"version-history":[{"count":0,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/200400\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/media?parent=200400"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/categories?post=200400"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/tags?post=200400"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}