1.Of the following items, the one that should be classified as a current asset is a.Trade installment receivables normally collectible in 18 months b.Cash designated for the redemption of callable preferred stock c.Cash surrender value of a life insurance policy of which the company is beneficiary d.A deposit on machinery ordered, delivery of which will be made within six months 2.The advantage of relating […]
121.The Allowance for Doubtful Accounts will appear on the: A.Income statement. B.Balance sheet. C.Cash flow statement. D.Owners’ equity statement. 122.Under the allowance method, when a receivable that had been previously written off is collected: A.Net income is increased. B.Net assets are increased. C.Net income and net assets are not affected. D.Net assets and […]
136. Express the following income statement information in common-size percents and in trend percents using 2013 as the base year. Common-Size Percents Trend Percents 2013 2014 2013 2014 2013 2014 Sales $460,000 $540,000 Cost of goods sold 240,000 290,000 Gross profit $220,000 $250,000 137. A company […]
Objective 17.6 1) An operation costing system would be applicable to: A) batches of similar products where each batch is a variation of a single design B) the construction of a bridge C) a suit-making operation D) Both A and C are correct. 2) Managers find operation costing useful in cost management because it: A) often results in profit maximization B) results […]
19) Determine the amount to be paid to the vendor within the discount period for purchase with an invoice price of $3,000 and credit terms of 2/10, n/30 when $700 has already been returned for credit. The goods were purchased with freight terms of F.O.B shipping point and freight of $50 was included on the invoice. $ ________ 10.4 Learning Objective 10-4 […]
166. Valley Company shows the following customer accounts in its subsidiary ledger and the Accounts Receivable account in the general ledger for the month of July. Prepare a schedule of accounts receivable asproof that the subsidiary ledger balances equals the Accounts Receivable controlling account balance. Laredo Spring Dallas Preston 2,500 1,200 5,650 5,650 3,950 1,950 7,200 […]
21. Portey CompanyPortey uses a perpetual inventory system and had the following inventory transactions for the month of June. June 1 On hand, 100 units at $9.00 each $ 900.00 4 Purchased 120 units at $9.10 each 1,092.00 5 Sold 150 units 10 Purchased 100 units at $9.5 each 950.00 24 Sold 60 units […]
101. Schedule of Activity Costs Quality Control Activities Activity Cost Process audits $55,000 Training of machine operators 26,000 Processing returned products 18,000 Scrap processing (disposal) 29,000 Rework 8,000 Preventative maintenance 30,000 Product design 46,000 Warranty work 12,000 Finished goods inspection 22,000 From the above Schedule of Activity Costs, determine the nonvalue-added costs. A. $67,000B. $ 8,000C. $20,000D. $49,000 102. Schedule of Activity Costs Quality Control Activities Activity […]
62. Inventory records for Dunbar Incorporated revealed the following: Date Transaction Number of Units Unit Cost Apr. 1 Beginning inventory 500 $2.40 Apr. 20 Purchase 400 2.50 Dunbar sold 700 units of inventory during the month. Ending inventory assuming FIFO would be: a. $500. b. $490. c. $470. d. $480. 63. Inventory […]
17.2 Learning Objective 17-2 1) A method of dividing net income or loss between the partners is known as a(n): A) salary allowance. B) interest allowance. C) payroll allowance. D) Both A and B are correct. 2) Which method of allocation of profits and losses is based on a percent of initial investment of the partners? A) Salary allowance B) Salary expense C) Profit […]
51. Speedy Couriers documented the miles driven and total vehicle costs for the past five months as follows:
Number of miles
Total vehicle costs
January -------------
800
$1,095
February -----------
1,000
1,440
March --------------
750
1,200
April ----------------
900
1,380
May -----------------
1,100
1,410
Refer to the Speedy Couriers information above. Using the high/low method, what is the cost equation to predict total vehicle costs? A. Y = $52.50 + $1.67xB. Y = $255 + $1.05xC. Y = $285 + $1.725xD. Y = $750 + $.60x
52. Speedy Couriers documented the miles driven and total vehicle costs for the past five months as follows:
Number of miles
Total vehicle costs
January -------------
800
$1,095
February -----------
1,000
1,440
March --------------
750
1,200
April ----------------
900
1,380
May -----------------
1,100
1,410
Refer to the Speedy Couriers information above. Using the high/low method, if Speedy expects to drive 1,200 miles in June, what will be expected total vehicle costs? A. $1,470.00B. $1,515.00C. $2,056.50D. $1,720.88
53. Denver Manufacturing would like to do a better job budgeting for maintenance costs and, consequently, they have prepared a schedule showing maintenance costs and units produced for the past five months as follows:
Number of
units produced
Total maintenance costs
January -------------
5,400
$4,800
February -----------
6,600
5,180
March --------------
4,900
4,500
April ----------------
5,600
4,900
May -----------------
6,000
5,490
Refer to the Denver Manufacturing information above. Using the high/low method, what is the cost equation to predict total maintenance costs? A. Y = $90 + $.90xB. Y = $2,540 + $.40xC. Y = $1,646 + $.5824xD. Y = $2.50x - $11,320
54. Denver Manufacturing would like to do a better job budgeting for maintenance costs and, consequently, they have prepared a schedule showing maintenance costs and units produced for the past five months as follows:
Number of
units produced
Total maintenance costs
January -------------
5,400
$4,800
February -----------
6,600
5,180
March --------------
4,900
4,500
April ----------------
5,600
4,900
May -----------------
6,000
5,490
Refer to the Denver Manufacturing information above. Using the high/low method, if Denver expects to produce 5,000 units in June, what will be budgeted total maintenance costs? A. $4,590B. $4,558C. $4,540D. $4,363
55. In decision-making, which of the following kinds of costs should always be taken into account? A. Fixed costsB. Variable costsC. Relevant costsD. Sunk costs
56. In decision-making, which of the following statements is true? A. Variable costs can always be viewed as relevant.B. Fixed costs can always be viewed as not relevant.C. Variable costs may or may not be relevant.D. Fixed costs can always be viewed as relevant.
57. In general, when are variable costs not relevant to a decision? A. When they are avoidable.B. When they do not differ among alternatives.C. When they are part of a mixed cost.D. When they are less than fixed costs.
58. In general, when are fixed costs relevant to a decision? A. When they are part of a mixed cost.B. When the fixed cost per unit changes as production changes.C. When they are avoidable.D. When they have already occurred in the past.
59. Another word for a relevant cost is a(n) ____ cost. A. fixedB. unavoidableC. incrementalD. variable
60. University Memorabilia Inc. is a locally run retail shop. The store usually closes at 5:00 pm, but the owners have inquired about the extra costs involved by letting the store stay open until 9:00 pm. The store manager has listed the following monthly expenditures and their related costs:
Item:
1.
Manager salary
$40,000 per year
2.
Store rent
$5,000 per month
3.
Sales’ associates wages
$9 per hour
4.
Store utilities
$4 per hour
Which of the above cost items would be relevant to the decision about staying open extra hours? A. 1, 2, 3, and 4B. 2, 3, and 4C. 2 and 3D. 3 and 4
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