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Accounting MCQs_09 Dec




Question;1)Under a relevant;range of production, when total quantities sold increase, total fixed costs;a.;increase;b.;decrease;c.;remain equal;d.;there is no;relationship;2)Conversion costs are;a.;only direct material;b.;only direct labor;c.;only overhead;d.;overhead and direct labor;3)XY Company sells;its unique product at $30.00. Variable costs per unit are $20.00. Total fixed;sales salaries per month $40,000.00. Other fixed costs per month $60,000.00.;Assume that the company wants to change the sales salaries as follows: Total;fixed sales salaries per month 25,000. Sales commission of 10% of sales.?Find;at what sale-level is the company indifferent between the two alternatives;a.;$5,000;b.;5,000 units;c.;10,000;d.;7,500 units;4) AJ Company makes three;products.;?;?;?;Current selling price per;unit, variable cost per unit, and machine hours required are as follows;?;?;Products;?;?;X;Y;Z;Current selling price per;unit;$20;$30;$20;Variable cost per unit;10;18;12;Machine hours required for;each unit;2;3;4;The company has a maximum of;1000 machine hours available per month.;Assume;the company produces all products, find the total contribution margin per hour.;a.;$13.50;b.;$12;c.;$9;d.;$4;5);TC Company makes several printing works using two machines (X and Y).;Data on the two;machines for June 2010 are as follows;X;Y;Direct;material;10;15;Time;required for each unit (TR);2;3;Expected;volume during the month (EV);2,000;500;Expected;labor cost per hour;50;Budgeted;overhead costs;660,000;Determine;The;overhead rate per labor hour;1.;FOAR = $120.00 per hour worked;2.;FOAR = 120.00 per dollar;3.;FOAR = $60.00 per hour worked;4.;FOAR = $120.00 per overhead costs;6) Assume the cost structure is as follows: TC = 25,000 + 5q;where TC = total costs, q = quantities sold. Under relevant range of sales;selling price per unit is $8.00. Total fixed costs are;$100,000;$50,000;$25,000;More;information is needed;7) The income statements;of Tahany Company for June and July 2005 are as follows;June;July;Sales;610;650;Cost;of goods sold;420;460;Gross;margin;190;190;Selling;and administrative expenses;185;195;Income;before tax;5;-5;Using;High Low Method, the variable component of cost of goods sold is;a.;1.00;b.;.25;c.;1.25;d.;0;8) Non;value added activities are;a.;Direct;material (only);b.;Direct;labor (only);c.;Overhead;(only);d.;Not;essential costs to make/manufacture a product;9) Tany Corporation;is a small table manufacturing company operating in the north of Puerto;Rico.;Managers estimate the following costs per unit (one table);Direct material (DM);$6.00;Direct labor (DL);$4.00;Variable manufacturing overhead (VMO);$3.00;Variable administrative expenses (VAE);$1.00;The estimated contribution margin is;30%;Monthly fixed costs are;Manufacturing;$10,000.00;Administrative;$5,000.00;a.;2,000;b.;2,200;c.;2,500;d.;2,750;10) Tany Corporation is a;small table manufacturing company operating in the north of Puerto Rico.;Managers estimate the;following costs per unit (one table);Direct material (DM);$6.00;Direct labor (DL);$4.00;Variable manufacturing;overhead (VMO);$3.00;Variable administrative;expenses (VAE);$1.00;The estimated;contribution margin is;30%;Monthly fixed costs are;Manufacturing;$10,000.00;Administrative;$5,000.00;Total;unit sold during last month is 2525, what is the total operating income.;a.;between;$100 and $120;b.;between;$120 and $140;c.;between;$140 and $160;d.;between;$160 and $180;11);BC Company estimates the following data for the coming month: total variable;costs $60,000.00, income tax rate 30%, contribution margin percentage 60%. Find;the estimated total sales for the coming month.;a.;$100,000;b.;$60,000;/ 40%;c.;$60,000;/ 60%;d.;$60,000;X 60%;12);If a company raises its required net income;a.;the;tax rate will decrease;b.;break;even point is negative;c.;required;contribution margin increases;d.;required;contribution margin decreases;13)If;a company raises its required operating profit;a.;break even point is negative;b.;break even point is zero;c.;required contribution margin increases;d.;required contribution margin decreases;14) Copy of;XYZ has three products X, Y and Z.;The following information pertains to these products X, Y, and Z. Contribution;margin percentages are 40%, 50%, and 40% respectively. Sales mix percentages;are 20%, 30%, and 50% respectively. Monthly fixed costs are estimated to be;$100.00. The weighted average contribution margin percentage is;a.;43%;b.;40%;c.;30%;d.;0;15) Which of the following examples;is a short term decision?;a.;Make or buy decision;b.;Purchase of land;c.;Issuing bonds;d.;Joint venture;e.;Purchase of building;16);Sales (in units);60,000;Selling;price per unit;25;Manufacturing;costs per unit;Materials;5;Direct;labor;4;Overhead;Variable;4;Fixed;6;Total;19;Gross;margin;6;Selling;and admin. Expenses per unit;2;Operating;income;4;A;company in a foreign market offer to buy and the offer specifies the;following data;units;to be sold;10000;price;per unit;20;If;the Company accepts the special offer, the incremental profit would be;a.;$70,000.00;b.;($70,000.00);c.;$10,000.00;d.;($10,000.00);17) Total Costs;Unit Cost;Direct materials;20,000;2.00;Direct labor;25,000;2.50;Variable overhead;15,000;1.50;Fixed overhead;(non-avoidable);24000;2.40;Fixed overhead (avoidable);26,000;2.60;Purchase cost;85,999;Should the company produce the;product internally?;a.;Yes;b.;No;c.;Indifferent to to make or to buy;d.;Yes if the market price per unit covers the fixed cost per unit.;18) Sales (in units);60,000;Selling price per unit;25;Manufacturing costs per unit;Materials;5;Direct labor;4;Overhead;Variable;4;Fixed;6;Total;19;Gross margin;6;Selling and admin. Expenses;per unit (fixed);2;Operating income;4;A company in a foreign market;offer to buy and the offer specifies the following data;units to be sold;10,000;price per unit;13.1;Should the company sell this;special order?;a.;Yes, accept;b.;No, reject;c.;Indifferent to reject or not;d.;Always reject;Which;of the following costs should be considered in short term decisions?


Paper#38246 | Written in 18-Jul-2015

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