31) Sara employs 25 professional cleaners. Budgeted costs total $900,000 of which $525,000 are direct costs. Actual indirect costs were $396,900. Budgeted professional labour hours are 500,000 and actual hours were 525,000. What is the budgeted direct cost assignment rate? A) $1.80 per hour B) $1.7857 per hour C) $0.75 per hour D) $1.05 per hour E) $1.00 per hour 32) The difference […]
51. If stockholders want to know how money flowed into and out of the company, what financial statement would they use? A. Income statement B. Statement of cash flows C. Balance sheet D. Statement of retained earnings 52. Cash investments made by stockholders in exchange for capital stock in a business are reported on the statement of cash flows in the: A. financing activities section. B. investing activities section. C. operating […]
70.A company has already incurred a $55,000 cost in partially producing its three products. Their selling prices when partially and fully processed are shown in the following table with the additional costs necessary to finish their processing. Based on this information, should any products be processed further? ProductUnfinished Selling PriceFinished Selling PriceFurther Processing Costs A$72$108$35 B8312442 C9414145 A. All of these products should be […]
Objective 15.3 1) Special cost-allocation problems arise when ________. A) support department costs exceed budgetary estimates B) practical capacity is used as the allocation base C) support departments provide reciprocal services to each other and operating departments D) the same cost-allocation base is used among various support departments 2) Which of the following departments is a support department for a boat manufacturing […]
117.When a service has been performed, but no cash has been received, which of the following statements is true? a. No journal entry would be made. b. The entry would contain a debit to Accounts Payable. c. The entry would contain a debit to Accounts Receivable. d. The entry would contain a credit to Unearned Revenue. 118.Which of the […]
41) How much will internal failure costs change if the internal product failures are reduced by 50 percent with the new procedures? 41) ______ A) $250,000 decrease B) $550,000 decrease C) $10,000 decrease D) $500,000 decrease E) $20,000 decrease 42) How much does external failure costs change if all changes are as anticipated with the new prevention procedures? 42) ______ A) $72,000 decrease […]
55.A company’s flexible budget for 12,000 units of production showed per unit contribution margin of $3.00 and fixed costs, $20,000. The operating income expected if the company produces and sells 18,000 units is: A.$34,000. B.$10,000. C.$18,667. D.$16,000. E.$24,000. 56.Based on predicted production of 12,000 units, a company anticipates $150,000 of fixed costs and $123,000 of variable costs. The flexible budget amounts of fixed […]
11.Which one of the following represents the economic effects of declaring and issuing a stock dividend? a.Has no effect on total assets or total shareholders’ equity b. Decreases the debt/equity ratio c. Decreases total shareholders’ equity d. Increases the current ratio 12.Which one of the following represents the economic effects of issuing a 2-for-1 stock split? a. No effect on par value per share […]
66.A 90-day note issued on April 10 matures on: A. July 9. B. July 10. C. July 11. D. July 12. E. July 13. 67.A company receives a 10%, 120-day note for $1,500. The total interest due on the maturity date is: A. $50.00. B. $150.00. C. $75.00. D. $37.50. E. $87.50. $1,500 * 0.10 * 120/360 = $50.00 […]
152. Sorenson Co., is considering the following alternative plans for financing their company: Plan I Plan II Issue 10% Bonds (at face) – $3,000,000 Issue $10 par Common Stock $4,000,000 $1,000,000 Income tax is estimated at 40% of income.Determine the earnings per share of common stock under the two alternative financing plans, assuming income before bond interest and income tax […]
17.2 Monetary Policy Transmission
1) Steps in the transmission of monetary policy are
A) Congress increases government expenditures on goods and services, leading to an increase in aggregate demand.
B) Congress increases the money supply, which lowers the interest rate, and leads to an increase in aggregate demand.
C) the Federal Reserve increases government expenditures on goods and services, leading to an increase in aggregate demand.
D) the Federal Reserve lowers the federal funds rate, which lowers the real interest rate, and leads to an increase in aggregate demand.
E) Congress increases the budget deficit, which increases the money supply, which increases aggregate supply.
2) Which of the following is NOT an effect from a change in the federal funds rate?
A) change in the real interest rate
B) change in investment
C) change in government expenditures
D) change in aggregate demand
E) change in the quantity of money
3) If the Fed buys U.S. government securities,
A) the federal funds rate will fall.
B) the federal funds rate will rise.
C) the discount rate will fall.
D) bank reserves will decrease.
E) the discount rate will rise.
4) If the Fed sells U.S. government securities,
A) the federal funds rate rises.
B) the U.S. Treasury gains some revenue.
C) the U.S. Treasury loses some revenue.
D) banks' reserves increase.
E) None of the above answers is correct.
5) If the Fed carries out an open market operation and buys U.S. government securities, the federal funds rate ________ and the quantity of reserves ________.
A) falls; increases
B) rises; increases
C) falls; decreases
D) rises; does not change
E) rises; decreases
6) If the Fed carries out an open market operation and sells U.S. government securities, the federal funds rate ________ and the quantity of reserves ________.
A) falls; increases
B) rises; increases
C) rises; does not change
D) falls; decreases
E) rises; decreases
7) In an open market purchase, the Fed ________ government securities, which ________ bank reserves and ________ the federal funds rate.
A) buys; increases; raises
B) buys; decreases; raises
C) sells; increases; lowers
D) sells; decreases; lowers
E) buys; increases; lowers
8) If the Fed buys U.S. government securities from banks, the federal funds rate ________ and banks' reserves ________.
A) falls; increase
B) rises; increase
C) does not change; increases
D) falls; decrease
E) rises; decrease
9) If the Fed sells U.S. government securities to banks, the federal funds rate ________ and banks' reserves ________.
A) falls; increase
B) rises; do not change
C) rises; increase
D) falls; decrease
E) rises; decrease
10) In the short run, to decrease the interest rate, the Federal Reserve ________ the quantity of money by ________ government securities.
A) increases; selling
B) increases; buying
C) decreases; selling
D) decreases; buying
E) None of the above answers is correct because in the short run, the Federal Reserve cannot change the interest rate.
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