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Question : 101. Assuming that the number of units produced greater than the : 1295602

Economics

 

 

101. Assuming that the number of units produced is greater than the number of units sold, which of the following statements is true when comparing net income using absorption and variable costing? A. Absorption costing will yield a higher net income.B. Variable costing will yield a higher net income.C. Net income will be the same under both methods.D. Sales revenue will be less using absorption costing.

 

102. Assuming that the number of units produced is less than the number of units sold, which of the following statements is true when comparing net income using absorption and variable costing? A. Absorption costing will yield a higher net income.B. Variable costing will yield a higher net income.C. Net income will be the same under both methods.D. The sales price per unit will be less using absorption costing.

 

103. Tyson Manufacturing has the following cost information available for 2006: 

 

Direct materials

$6.00 per unit

 

Direct labor

$2.00 per unit

 

Variable manufacturing overhead

$1.50 per unit

 

Variable selling and administrative costs

$3.00 per unit

 

Fixed manufacturing overhead

$40,000

 

Fixed selling and administrative costs

$50,000

 

 

 

During 2006, Tyson produced 10,000 units out of which 9,100 units were sold for $50 each. Refer to the Tyson Manufacturing information above. What is net income under variable costing? A. $251,250B. $254,850C. $285,000D. $291,250

 

104. Tyson Manufacturing has the following cost information available for 2006: 

 

Direct materials

$6.00 per unit

 

Direct labor

$2.00 per unit

 

Variable manufacturing overhead

$1.50 per unit

 

Variable selling and administrative costs

$3.00 per unit

 

Fixed manufacturing overhead

$40,000

 

Fixed selling and administrative costs

$50,000

 

 

 

During 2006, Tyson produced 10,000 units out of which 9,100 units were sold for $50 each. Refer to the Tyson Manufacturing information above. What is net income under absorption costing? A. $251,250B. $254,850C. $285,000D. $299,850

 

105. Cornell Products has the following cost information available for 2006: 

 

Direct materials

$1.00 per unit

 

Direct labor

$2.00 per unit

 

Variable manufacturing overhead

$1.50 per unit

 

Variable selling and administrative costs

$  .50 per unit

 

Fixed manufacturing overhead

$30,000

 

Fixed selling and administrative costs

$25,000

 

 

 

During 2006, Cornell produced 6,000 units out of which 5,400 units were sold for $20 each. Refer to the Cornell Products information above. What is net income under variable costing? A. $35,000B. $29,000C. $26,000D. $23,000

 

106. Cornell Products has the following cost information available for 2006: 

 

Direct materials

$1.00 per unit

 

Direct labor

$2.00 per unit

 

Variable manufacturing overhead

$1.50 per unit

 

Variable selling and administrative costs

$  .50 per unit

 

Fixed manufacturing overhead

$30,000

 

Fixed selling and administrative costs

$25,000

 

 

 

During 2006, Cornell produced 6,000 units out of which 5,400 units were sold for $20 each. Refer to the Cornell Products information above. What is net income under absorption costing? A. $23,000B. $29,000C. $26,000D. $35,000

 

107. B & B Manufacturing produces a single product. Last year, the company produced 10,000 units out of which 9,500 were sold. There were no units in beginning inventory. The company had the following costs: 

Variable costs per unit:

 

    Production

$6.00

    Selling and administrative

$2.00

Fixed costs (total):

 

    Production

$15,000

    Selling and administrative

$10,000

 

 

Refer to the B & B Manufacturing information above. What is the unit product cost using variable costing? A. $  8.00B. $  6.00C. $  7.50D. $10.50

 

108. B & B Manufacturing produces a single product. Last year, the company produced 10,000 units out of which 9,500 were sold. There were no units in beginning inventory. The company had the following costs: 

Variable costs per unit:

 

    Production

$6.00

    Selling and administrative

$2.00

Fixed costs (total):

 

    Production

$15,000

    Selling and administrative

$10,000

 

 

Refer to the B & B Manufacturing information above. What is the unit product cost using absorption costing? A. $  8.00B. $  6.00C. $  7.50D. $10.50

 

109. Lockhart Products produces a single product. During 2006 the company incurred the following costs: 

 

Variable product costs

$8.00 per unit

 

Variable period costs

$2.00 per unit

 

Total fixed product costs

$21,000

 

Total fixed period costs

$10,000

 

 

 

Lockhart had no units in beginning inventory. During 2006, 6,000 units were produced and 5,000 units were sold. Which of the following statements is true when comparing net income using absorption versus variable costing? A. Net income will be $3,500 higher using absorption costing than using variable costing.B. Net income will be $3,500 lower using absorption costing than using variable costing.C. Net income will be $4,200 higher using absorption costing than using variable costing.D. Net income will be $4,200 lower using absorption costing than using variable costing.

 

 

 

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July 1, 2023
    

 

 

106. An estimated liability: 
A. Is an unknown liability of a certain amount.
B. Is a known obligation of an uncertain amount that can be reasonably estimated.
C. Is a liability that may occur if a future event occurs.
D. Can be the result of a lawsuit.
E. Is not recorded until the amount is known for certain.

107. Estimated liabilities commonly arise from all of the following except: 
A. Warranties.
B. Vacation benefits.
C. Income taxes.
D. Employee benefits.
E. Unearned revenues.

 

 

108. Employees earn vacation pay at the rate of one day per month. During the month of July, 25 employees qualify for one vacation day each. Their average daily wage is $100 per day. What is the amount of vacation benefit expense to be recorded for the month of July? 
A. $25
B. $100
C. $250
D. $2,500
E. $25,000

 

 

109. Employees earn vacation pay at the rate of one day per month. During the month of June, 10 employees qualify for one vacation day each. Their average daily wage is $150 per day. Which of the following is the necessary adjusting journal entry to record the June vacation benefits? 
A. Debit Vacation Benefits Expense $1,500; credit Prepaid Vacation Benefits $1,500.
B. Debit Vacation Benefits Expense $1,500; credit Vacation Benefits Payable $1,500.
C. Debit Payroll Tax Expense $1,500; credit Payroll Taxes Payable $1,500.
D. Debit Prepaid Vacation Benefits $1,500; credit Vacation Benefits Payable $1,500.
E. Debit Vacation Benefits Payable; credit Vacation Benefits Expense $1,500.

 

 

110. Employee vacation benefits: 
A. Are estimated liabilities.
B. Are contingent liabilities.
C. Are recorded as an expense when the employee takes a vacation.
D. Are recorded as an expense when the employee retires.
E. Increase net income.

 

 

111. A company sold $12,000 worth of bicycles with an extended warranty. It estimates that 2% of these sales will result in warranty work. The company should: 
A. Consider the warranty expense a remote liability since the rate is only 2%.
B. Recognize warranty expense at the time the warranty work is performed.
C. Recognize warranty expense and liability in the year of the sale.
D. Consider the warranty expense a contingent liability.
E. Recognize warranty liability when the company purchases the bicycles.

 

112. A company sold $12,000 worth of bicycles with an extended warranty. It estimates that 2% of these sales will result in warranty work. The current period’s entry to record the warranty expense is: 
A. Debit Warranty Expense $240; credit Cash $240.
B. Debit Prepaid Warranties $240; credit Warranty Expense $240.
C. Debit Estimated Warranty Liability $240; credit Cash $240.
D. Debit Sales Allowances $240; credit Estimated Warranty Liability $240.
E. Debit Warranty Expense $240; credit Estimated Warranty Liability $240.

 

113. The deferred income tax liability: 
A. Results from the income tax expense reported on the income statement differing from the amount of income taxes payable to the government.
B. Is a contingent liability.
C. Can result in a deferred income tax asset.
D. Is never recorded.
E. Is recorded whether or not the difference between taxable income and financial accounting income is permanent or temporary.

 

114. A company estimates that warranty expense will be 4% of sales. The company’s sales for the current period are $185,000. The current period’s entry to record the warranty expense is: 
A. Debit Warranty Expense $7,400; credit Sales $7,400.
B. Debit Warranty Expense $7,400; credit Estimated Warranty Liability $7,400.
C. Debit Estimated Warranty Liability $7,400; credit Warranty Expense $7,400
D. Debit Estimated Warranty Liability $7,400; credit Cash $7,400.
E. No entry is recorded until the items are returned for warranty repairs.

 

 

115. A company has a selling price of $1,800 each for its printers. Each printer has a 2 year warranty that covers replacement of defective parts. It is estimated that 2% of all printers sold will be returned under the warranty at an average cost of $150 each. During November, the company sold 30,000 printers, and 400 printers were serviced under the warranty at a total cost of $55,000. The balance in the Estimated Warranty Liability account at November 1 was $29,000. What is the company’s warranty expense for the month of November? 
A. $26,000
B. $45,000
C. $55,000
D. $60,000
E. $90,000

 

 

 

default image
July 1, 2023
    

 

 

106. An estimated liability: 
A. Is an unknown liability of a certain amount.
B. Is a known obligation of an uncertain amount that can be reasonably estimated.
C. Is a liability that may occur if a future event occurs.
D. Can be the result of a lawsuit.
E. Is not recorded until the amount is known for certain.

107. Estimated liabilities commonly arise from all of the following except: 
A. Warranties.
B. Vacation benefits.
C. Income taxes.
D. Employee benefits.
E. Unearned revenues.

 

 

108. Employees earn vacation pay at the rate of one day per month. During the month of July, 25 employees qualify for one vacation day each. Their average daily wage is $100 per day. What is the amount of vacation benefit expense to be recorded for the month of July? 
A. $25
B. $100
C. $250
D. $2,500
E. $25,000

 

 

109. Employees earn vacation pay at the rate of one day per month. During the month of June, 10 employees qualify for one vacation day each. Their average daily wage is $150 per day. Which of the following is the necessary adjusting journal entry to record the June vacation benefits? 
A. Debit Vacation Benefits Expense $1,500; credit Prepaid Vacation Benefits $1,500.
B. Debit Vacation Benefits Expense $1,500; credit Vacation Benefits Payable $1,500.
C. Debit Payroll Tax Expense $1,500; credit Payroll Taxes Payable $1,500.
D. Debit Prepaid Vacation Benefits $1,500; credit Vacation Benefits Payable $1,500.
E. Debit Vacation Benefits Payable; credit Vacation Benefits Expense $1,500.

 

 

110. Employee vacation benefits: 
A. Are estimated liabilities.
B. Are contingent liabilities.
C. Are recorded as an expense when the employee takes a vacation.
D. Are recorded as an expense when the employee retires.
E. Increase net income.

 

 

111. A company sold $12,000 worth of bicycles with an extended warranty. It estimates that 2% of these sales will result in warranty work. The company should: 
A. Consider the warranty expense a remote liability since the rate is only 2%.
B. Recognize warranty expense at the time the warranty work is performed.
C. Recognize warranty expense and liability in the year of the sale.
D. Consider the warranty expense a contingent liability.
E. Recognize warranty liability when the company purchases the bicycles.

 

112. A company sold $12,000 worth of bicycles with an extended warranty. It estimates that 2% of these sales will result in warranty work. The current period’s entry to record the warranty expense is: 
A. Debit Warranty Expense $240; credit Cash $240.
B. Debit Prepaid Warranties $240; credit Warranty Expense $240.
C. Debit Estimated Warranty Liability $240; credit Cash $240.
D. Debit Sales Allowances $240; credit Estimated Warranty Liability $240.
E. Debit Warranty Expense $240; credit Estimated Warranty Liability $240.

 

113. The deferred income tax liability: 
A. Results from the income tax expense reported on the income statement differing from the amount of income taxes payable to the government.
B. Is a contingent liability.
C. Can result in a deferred income tax asset.
D. Is never recorded.
E. Is recorded whether or not the difference between taxable income and financial accounting income is permanent or temporary.

 

114. A company estimates that warranty expense will be 4% of sales. The company’s sales for the current period are $185,000. The current period’s entry to record the warranty expense is: 
A. Debit Warranty Expense $7,400; credit Sales $7,400.
B. Debit Warranty Expense $7,400; credit Estimated Warranty Liability $7,400.
C. Debit Estimated Warranty Liability $7,400; credit Warranty Expense $7,400
D. Debit Estimated Warranty Liability $7,400; credit Cash $7,400.
E. No entry is recorded until the items are returned for warranty repairs.

 

 

115. A company has a selling price of $1,800 each for its printers. Each printer has a 2 year warranty that covers replacement of defective parts. It is estimated that 2% of all printers sold will be returned under the warranty at an average cost of $150 each. During November, the company sold 30,000 printers, and 400 printers were serviced under the warranty at a total cost of $55,000. The balance in the Estimated Warranty Liability account at November 1 was $29,000. What is the company’s warranty expense for the month of November? 
A. $26,000
B. $45,000
C. $55,000
D. $60,000
E. $90,000

 

 

 

default image
July 1, 2023
    

 

 

106. An estimated liability: 
A. Is an unknown liability of a certain amount.
B. Is a known obligation of an uncertain amount that can be reasonably estimated.
C. Is a liability that may occur if a future event occurs.
D. Can be the result of a lawsuit.
E. Is not recorded until the amount is known for certain.

107. Estimated liabilities commonly arise from all of the following except: 
A. Warranties.
B. Vacation benefits.
C. Income taxes.
D. Employee benefits.
E. Unearned revenues.

 

 

108. Employees earn vacation pay at the rate of one day per month. During the month of July, 25 employees qualify for one vacation day each. Their average daily wage is $100 per day. What is the amount of vacation benefit expense to be recorded for the month of July? 
A. $25
B. $100
C. $250
D. $2,500
E. $25,000

 

 

109. Employees earn vacation pay at the rate of one day per month. During the month of June, 10 employees qualify for one vacation day each. Their average daily wage is $150 per day. Which of the following is the necessary adjusting journal entry to record the June vacation benefits? 
A. Debit Vacation Benefits Expense $1,500; credit Prepaid Vacation Benefits $1,500.
B. Debit Vacation Benefits Expense $1,500; credit Vacation Benefits Payable $1,500.
C. Debit Payroll Tax Expense $1,500; credit Payroll Taxes Payable $1,500.
D. Debit Prepaid Vacation Benefits $1,500; credit Vacation Benefits Payable $1,500.
E. Debit Vacation Benefits Payable; credit Vacation Benefits Expense $1,500.

 

 

110. Employee vacation benefits: 
A. Are estimated liabilities.
B. Are contingent liabilities.
C. Are recorded as an expense when the employee takes a vacation.
D. Are recorded as an expense when the employee retires.
E. Increase net income.

 

 

111. A company sold $12,000 worth of bicycles with an extended warranty. It estimates that 2% of these sales will result in warranty work. The company should: 
A. Consider the warranty expense a remote liability since the rate is only 2%.
B. Recognize warranty expense at the time the warranty work is performed.
C. Recognize warranty expense and liability in the year of the sale.
D. Consider the warranty expense a contingent liability.
E. Recognize warranty liability when the company purchases the bicycles.

 

112. A company sold $12,000 worth of bicycles with an extended warranty. It estimates that 2% of these sales will result in warranty work. The current period’s entry to record the warranty expense is: 
A. Debit Warranty Expense $240; credit Cash $240.
B. Debit Prepaid Warranties $240; credit Warranty Expense $240.
C. Debit Estimated Warranty Liability $240; credit Cash $240.
D. Debit Sales Allowances $240; credit Estimated Warranty Liability $240.
E. Debit Warranty Expense $240; credit Estimated Warranty Liability $240.

 

113. The deferred income tax liability: 
A. Results from the income tax expense reported on the income statement differing from the amount of income taxes payable to the government.
B. Is a contingent liability.
C. Can result in a deferred income tax asset.
D. Is never recorded.
E. Is recorded whether or not the difference between taxable income and financial accounting income is permanent or temporary.

 

114. A company estimates that warranty expense will be 4% of sales. The company’s sales for the current period are $185,000. The current period’s entry to record the warranty expense is: 
A. Debit Warranty Expense $7,400; credit Sales $7,400.
B. Debit Warranty Expense $7,400; credit Estimated Warranty Liability $7,400.
C. Debit Estimated Warranty Liability $7,400; credit Warranty Expense $7,400
D. Debit Estimated Warranty Liability $7,400; credit Cash $7,400.
E. No entry is recorded until the items are returned for warranty repairs.

 

 

115. A company has a selling price of $1,800 each for its printers. Each printer has a 2 year warranty that covers replacement of defective parts. It is estimated that 2% of all printers sold will be returned under the warranty at an average cost of $150 each. During November, the company sold 30,000 printers, and 400 printers were serviced under the warranty at a total cost of $55,000. The balance in the Estimated Warranty Liability account at November 1 was $29,000. What is the company’s warranty expense for the month of November? 
A. $26,000
B. $45,000
C. $55,000
D. $60,000
E. $90,000

 

 

 

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Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

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Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

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Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

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Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

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Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

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