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Final Exam_V1_MCQs

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Question;Identify the letter of the choice that best completes the;statement or answers the question.;1.;Bexley Company produces;retractable pens. November budgeted;production costs are given below;Pens to be produced;100,000;Direct material;(variable);$30,000;Direct Labor;(variable);$50,000;Supplies (variable);$25,000;Supervision (fixed);$40,000;Depreciation (fixed);$30,000;Other (fixed);$10,000;In December, Bexley expects;to produce 120,000 pens. Assuming no;structural changes, what is Bexley?s budgeted production cost per pen for;December?;A);$1.54;B);$1.72;C);$1.85;D);$1.93;2.;Use the cost;information in (1) above. In October;the actual direct labor costs were $46,000 and Bexley produced and sold;90,000 pens. The direct material;performance variance (difference) is;A);$5,000 unfavorable.;B);$5,000 favorable.;C);$1,000 unfavorable.;D);$1,000 favorable.;3.;A typical use of;managerial accounting is to;A);Help investors and;creditors to assess the financial position of the company.;B);Help management get a;clean audit report.;C);Help the SEC decide;whether management is in compliance with its policies.;D);Help the marketing;manager decide which product promotion to implement.;4.;A manufacturing company;produces 80,000 units of product A at a total cost of $2.4 million. Total fixed costs are $1million. If the company increases production by 25%;and uses a 40% markup the price per unit will be;A);$30.80;B);$31.54;C);$37.10;D);$38.50;Use the following to answer;questions 5-6;RNO Company's market for the;Model 55 has changed significantly, and RNO has had to drop the price per unit;from $285 to $200. There are some units;in the work in process inventory that have costs of $280 per unit associated;with them. RNO could sell these units in;their current state for $160 each. It;will cost RNO $35 per unit to complete these units so that they can be sold for;$200 each.;5.;A new employee looks at;the analysis and exclaims, ?We'll lose money with either of these;alternatives! Let's just throw these units in the trash!? Suppose the;alternative to trashing is choosing the more profitable of the two;alternatives (that the new employee looked at and did not like). What effect;will the trashing option (that the new employee;wants) have on net;income?;A);Net income will;increase by $35 per unit for each unit discarded.;B);Net income will;decrease by $115 per unit for each unit discarded.;C);It will have no effect;on net income.;D);Net income will;decrease by $165 per unit for each unit discarded.;6.;When the incremental;revenues and expenses are analyzed, the company is better off by;A);$5 per unit if they;complete the units.;B);$15 per unit if they;sell the units in their current state.;C);$25 per unit if they;sell the units in their current state.;D);$35 per unit if they;complete the units.;7.;A company using;activity based pricing marks up the direct cost of goods by 39% plus charges;customers for indirect costs based on the activities utilized by the;customer. Indirect costs are charged;as follows: $6.00 per order placed, $3.00;per separate item ordered, $28.00 per return.;A customer places 10 orders with a total direct cost of $2,210, orders;312 separate items, and makes 8 returns. What will the customer be charged?;A);$3,000;B);$4,292;C);$5,330;D);$5,755;8.;Manufacturing overhead;is allocated to products based on the number of machine hours required. In a year when 20,000 machine hours were;anticipated, costs were budgeted at $125,000.;If a product requires 7,000 machine hours, how much manufacturing;overhead will be allocated to this product?;A);$41,667;B);$43,750;C);$1,120;D);$50,000;Use the following information to;answer questions 9-10;The Sunrise Hotel has 200 rooms.;Each room rents at $160 per night and variable costs total $35 per room per;night of occupancy. Fixed costs total $80,000 per month.;9.;If the hotel spends an;additional $10,000 in the month of February on advertising they feel that;they can expect occupancy rate to increase by 10%. What would be the;financial impact of spending this additional money on advertising for the;month of February (28 days)?;A);Total fixed costs will;increase by $10,500.;B);Net income will;increase by $50,000.;C);Net income will;increase by $26,320.;D);Total fixed costs will;remain the same.;10.;If 70% of the rooms are;occupied each night in the month of February (28 days) what will total costs;be for the month?;A);$118,560.;B);$173,600.;C);$217,200.;D);$155,680.;11.;A company believes it;can sell 6,000,000 of its proposed optical mouse for $14 each. There will be $7,500,000 in fixed costs;associated with the mouse. If the;company desires to make a profit of $3,000,000 on the mouse, what is the;target variable cost per mouse?;A);$10.60;B);$11.00;C);$12.25;D);$9.00;12. Below is;a performance report that compares budgeted and actual profit of Boyles Beer;for the month;of April;Budget;Actual;Difference;Sales;$200,000;$202,000;$2,000;Less;Cost of;ingredients;$162,000;$166,000;$4,000;Salaries;$31,000;$31,200;$200;Controllable Profit;$47,000;$44,800;-$2,200;In evaluating the department in terms of its increase;in sales and expenses, what will be;most important;to investigate?;A);Sales;B);Cost of ingredients;C);Salaries;D);All three components have equal importance.;13.;K-Henry's Dull Diner;has a contribution margin ratio of 16%.;If fixed costs are $148,952, how many dollars of revenue must;K-Henry's generate in order to reach the break-even point?;A);$930,950;B);$1,060,800;C);$208,476;D);$1,105,000;14.;A company has a total;cost of $50.00 per unit at a volume of 100,000 units. The variable cost per unit is $20.00. What would the price be if the company;expected a volume of 120,000 units and used a markup of 50%?;A);$75.00;B);$62.50;C);There is not enough;information in the problem to answer;D);$67.50;15.;Max?s Pizza produced;and sold 1,000 pizzas last month and had total variable ingredients that cost;$4,575. If production and sales are;expected to increase by 17% next month, which of the following statements is;true?;A);Total variable;materials costs are expected to be $4,779.50;B);Variable material cost;per unit is expected to be $4.99.;C);Total variable;materials costs are expected to be $4,345;D);Total variable;materials costs are expected to be $5,352.75;16. FarnsworthCompany?s break-even point is;14,377. Each unit generates variable costs;Of $3.2, and is sold for;$4.90. What are the fixed costs?;A);$26,845.;B);$59,780.;C);$24,441.;D);$32,940.;17. One Small Grill Company is a;start up with the following profile;Unit selling price = $230;Variable cost per unit = $130, Fixed Costs = $36,000;Tax;rate = 40%. How many units should Small;Grill sell to achieve an after-tax target;income of $6,000?;A);200;B);460;C);230;D);300;18.;Western Apparel Company;owns two stores and management is considering eliminating the East store due;to declining sales. Segmented;contribution income statements are as follows and common fixed costs are;allocated on the basis of sales.;West;East;Total;Sales;$500,500;90,000;$590,500;Variable costs;262,500;45,000;307,500;Direct fixed costs;62,500;25,000;87,500;Segment margin;175,500;20,000;195,500;Allocated fixed costs;137,500;35,000;172,500;Net Income;$38,000;($15,000);$23,000;Western feels that if;they eliminate the East store that sales in the West store will decline by 15%. If they close the East store, overall;company net income will;A);decline by $90,000.;B);decline by $62,000.;C);decline by $85,625.;D);decline by $55,700.;19.;JungleGym, a;best-selling toy has a selling price of $15.;If the contribution margin ratio is 40% and if the fixed costs are;$60,000, how many JungleGyms must the company sell to realize a profit of;$450,000?;A);100,000;B);30,000;C);34,000;D);85,000;20.;After a good year in 2012;JungleGym decides it needs to increase sales by 12% in 2013. Which of the following is most likely to;stay the same in 2013?;A);Total sales revenue.;B);Total variable costs;C);Total fixed costs;D);Total contribution;margin;Information for Questions 21-22;Anderson Manufacturing makes a;single product. Budget information;regarding the current period is given below;Revenue (100,000 units;at $8.00);$800,000;Direct materials;150,000;Direct labor;125,000;Variable manufacturing;overhead;235,000;Fixed manufacturing;overhead;110,000;Net income;$180,000;Dye Company approaches Anderson with a special;order for 15,000 units at a price of $7.50 per unit. Variable costs will be the;same as the current production and accepting the special order will not have;any impact on the rest of the company's orders.;However, Anderson;is operating at capacity and will incur an additional $50,000 in fixed;manufacturing overhead if the order is accepted.;21.;What is the incremental;income (loss) associated with accepting the special order?;A);($14,000);B);$36,000;C);($23,500);D);$27,000;22.;What is the incremental;revenue associated with accepting the special order?;A);$170,000;B);$112,500;C);$70,000;D);$120,000;23.;On July 26, 2012, radio;Shack announced disappointing 2nd quarter earnings that caused the;stock to fall 29% to all time lows.;Although sales were up 1.2% to $953.2 million gross profit fell 16.6%;to $360.3 million. Assuming Radio Shack?s;store count and fixed costs were the same in the 2nd quarter of;2011 and 2012, which of the following statements is the best explanation for;the decrease in the firm?s profitability?;A);Opportunity costs;decreased.;B);Margin of safety;decreased.;C);Contribution margin;decreased.;D);Selling price decreased.;24.;Innovations, Inc is;looking to achieve a net income of 15 percent of sales. Unit sales price is $10, variable cost per;unit is $6, total fixed costs are $50,000 what is the level of sales (in;units) required to achieve a net income of 15 percent of sales?;A);12,000 units.;B);21,000 units.;C);16,000 units.;D);20,000 units.;25.;Anthony?s Bakery sold 2,000;muffins last month and had fixed costs of $6,000. If production and sales are expected to;increase by 10% next month, which of the following statements is true?;A);Total fixed costs will;decrease.;B);Fixed cost per unit;will decrease.;C);Total fixed costs will;increase.;D);Fixed cost per unit;will increase.;26.;The Dynamaco Company;uses cost-plus pricing with a 50% mark-up.;The company is currently selling 100,000 units at $12 per unit. Each unit has a variable cost of $6. In addition, the company incurs $200,000 in;fixed costs annually. If demand falls;to 80,000 units and the company wants to continue to earn a 50% return, what;price should the company charge?;A);$12.75;B);$14.55;C);$13.50;D);$10.95;27. An auto executive is considering how to price;a 2014 hybrid in order to maximize profits for;the company. Manufacturing each hybrid involves $9,500 of;materials, $12,500 of labor;$3,800 of shipping and $4,000 of other;supplies. The facility where the car is;manufactured;has $12.5 million of fixed costs. The marketing department says that adding a;Bose sound;system would boost demand, but it would;add an additional $750 per car.;The quantity demanded at each unit price;is as follows;Price;Quantity;Demanded (No Bose);Quantity;Demanded (with Bose);$31,000;8,960;10,752;$32,000;7,168;8,602;$33,000;5,734;6,881;$34,000;4,588;5,505;$35,000;3,670;4,404;$36,000;2,936;3,523;$37,000;2,349;2,819;$38,000;1,879;2,255;$39,000;1,503;1,804;What profit maximizing;price should the executive choose?;A);$34,000 without Bose;sound system.;B);$39,000 with Bose sound;system.;C);$36,000 without Bose;sound system.;D);$35,000 with Bose sound;system;Use the following to answer;question 28;The Wall Street Journal has the;following monthly data for newspapers sold and total cost.;Month;Issues Sold;Total Cost;January;1,000,000;$20,000,000;February;950,000;$19,100,000;March;1,050,000;$21,060,000;April;1,200,000;$23,000,000;May;1,060,000;$21,075,000;June;800,000;$18,000,000;28.;Using the high-low;method, what is the total cost that the Wall Street Journal will incur if it;is expecting to sell 750,000 newspapers in July?;A);$17,625,000;B);$17,500,000;C);$17,375,000;D);$17,250,000;29.;During 2011, Bonzai;Corporation reported revenues of $891,640 and profits of $91,486. Fixed costs were $332,043 and 44,582 units;were sold. If costs and prices are;expected to stay the same in 2012, and Bonzai expects to sell 45,000 units;what will be the company?s budgeted profit?;A);$95,457;B);$142,957;C);$525,000;D);$667,957;30.;Visit finance.yahoo.com;and determine which of the following statements is incorrect;A);The market cap of Microsoft;is more than double that of Google.;B);Revenues of Microsoft;for 2011 were more than double revenues of Google.;C);The Price per share of;Google is more than ten times that of Microsoft.;D);Assets of Microsoft at;the end of 2011 were more than that of Google.

 

Paper#43970 | Written in 18-Jul-2015

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