29) The goal of variance analysis is for managers to understand why variances arise, to learn, and to improve future performance. 30) Employees logging in to production floor terminals and other modern technologies greatly facilitate the use of a standard costing system.   31) Possible operational causes of an unfavorable direct materials efficiency variance include poor design of products or processes.   32) Effectiveness […]

130.Highland Company buys 70 percent of the stock of Danner Company of $91,000. Danner Company has contributed capital of $70,000 and retained earnings of $60,000. The consolidated financial statements would contain   a. minority interest but not goodwill. b. minority interest and goodwill. c. goodwill but not minority interest. d. neither minority interest nor goodwill.           131.On January 1, 20×7, Walker […]

    91. Magpie Corporation uses the total cost concept of product pricing. Below is cost information for the production and sale of 60,000 units of its sole product. Magpie desires a profit equal to a 25% rate of return on invested assets of $700,000.  Fixed factory overhead cost$38,700 Fixed selling and administrative costs7,500 Variable direct materials cost per unit4.60 Variable direct labor cost per unit1.88 […]

  6) Which of the following capacity levels should a company choose, from a long-run product costing perspective, to allocate budgeted fixed manufacturing costs to products? A) master-budget capacity utilization to highlight unused capacity B) normal capacity utilization for benchmarking purposes C) practical capacity for pricing decisions D) theoretical capacity for performance evaluation   7) Customers expect to pay a price that includes ________. A) […]

    71.Which of the following costs would be most fairly allocated using a volume based cost driver?    A. Inventory holding costs   B. Property taxes   C. Set up costs for product batches   D. Indirect labor costs     72.Hough Company manufactures a wide variety of products. A high proportion of its indirect costs are batch-level costs, such as acquiring materials, moving materials within the factory, and […]

  191. The cost graphs in the illustration below shows various types of cost behaviors.For each of the following costs, identify the cost graph that best describes its cost behavior as the number of units produced and sold increases:  (a) Sales commissions of $5,000 plus $.05 for each item sold. (b) Rent on warehouse of $10,000 per month. (c) Insurance costs of $2,500 per month. (d) […]

    101. A company had investments in long-term available-for-sale securities. At the end of the current year, the company’s portfolio had a $731,000 cost and $730,000 market value. What is the current year’s adjustment to market value given the following account balances at the end of the prior year?   Market Adjustment Available-for-Sale   Unrealized Gain (Loss) Equity 5,000       5,000     […]

Multiple Choice Questions  1.All of the following statements describe qualities of relevance except:    A. Relevant information requires a high degree of precision.   B. Relevant information differs between the alternatives.   C. Relevant information is future oriented.   D. Relevant information includes qualitative as well as quantitative data.     2.Select the correct statement regarding relevant costs and revenues.    A. Relevant costs are also known as unavoidable costs.   B. Relevant […]

  92.Two ratios that provide insight on the relationship between credit sales and receivables are:    A. Current ratio and inventory turnover ratio. B. Accounts receivable turnover and current ratio. C. Average days to collect receivables and asset turnover. D. Accounts receivable turnover and average days to collect receivables. 93.Cost of goods sold/average inventory is the formula for which of these analytical measures?    A. Number of day’s sales in inventory B. Inventory […]

    148. Next year’s sales forecast shows that 20,000 units of Product A and 22,000 units of Product B are going to be sold for prices of $10 and $12, respectively.  The desired ending inventory of Product A is 20% higher than its beginning inventory of 2,000 units.  The beginning inventory of Product B is 2,500 units.  The desired ending inventory of B is 3,000 […]