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##### Midterm - Managerial Accounting

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Question;hoice Answer on the Scantron provided ONLY.1. Which of the graphs in Figure 20-1 illustrates the behavior of a total fixed cost?a.Graph 2b.Graph 3c.Graph 4d.Graph 12. Which of the following describes the behavior of the fixed cost per unit?a.Decreases with increasing productionb.Decreases with decreasing productionc.Remains constant with changes in productiond.Increases with increasing production3. For purposes of analysis, mixed costs are generally:a.classified as fixed costsb.classified as variable costsc.classified as period costsd.separated into their variable and fixed cost components4. Which of the following statements is true regarding fixed and variable costs?a.Both costs are constant when considered on a per unit basis.b.Both costs are constant when considered on a total basis.c.Fixed costs are constant in total, and variable costs are constant per unit.d.Variable costs are constant in total, and fixed costs vary in total.5. Contribution margin is:a.the excess of sales revenue over variable costb.another term for volume in the "cost-volume-profit" analysisc.profitd.the same as sales revenue 6. If sales are $820,000, variable costs are 58% of sales, and operating income is $260,000, what is thecontribution margin ratio?a.53.1%b.42%c.62%d.32% 7. Variable costs as a percentage of sales for Lemon Inc. are 80%, current sales are $600,000, and fixed costs are $130,000. How much willoperating income changeif sales increase by $40,000?a.$8,000 increaseb.$8,000 decreasec.$30,000 decreased.$30,000 increase 8. If the contribution margin ratio for France Company is 45%, sales were $425,000. and fixed costs were $100,000, what was theincome from operations?a.$167,750b.$91,250c.$325,000d.$133,750 9. If fixed costs are $250,000, the unit selling price is $125, and the unit variable costs are $73, what is thebreak-even sales (units)?a.3,425 unitsb.2,381 unitsc.2,000 unitsd.4,808 units 10. If fixed costs are $750,000 and variable costs are 80% of sales, what is the break-even point in sales dollars?a.$937,500b.$525,000c.$3,750,000d.$1,275,000 11. If fixed costs are $1,400,000, the unit selling price is $240, and the unit variable costs are $110, what is the amount of sales required to realize an operating income of $200,000?a.10,769 unitsb.12,000 unitsc.12,308 unitsd.1,538 units(for #12) Safari Co. sells two products, Orks and Zins. Last year Safari sold 21,000 units of Orks and 14,000 units of Zins. Related data are:ProductUnit SellingPriceUnit VariableCostUnit ContributionMarginOrks$120$80$40Zins 80 60 20____ 12. What was Safari Co.'s sales mix last year?a.60% Orks, 40% Zinsb.30% Orks, 70% Zinsc.70% Orks, 30% Zinsd.40% Orks, 60% Zins____ 13. If a business had a capacity of $8,000,000 of sales, actual sales of $5,000,000, break-even sales of $3,500,000, fixed costs of $1,400,000, and variable costs of 60% of sales, what is the margin of safety expressed as a percentage of sales?a.25%b.18%c.28%d.30%____ 14. Selling price = $80 per unitVariable cost = $30 per unitUnits = 20,000Fixed costs = $240,000This company is considering a 20% drop in selling price that they believe will raise units sold by 20%. All other costs stay the same. How much will income go up or down if they make this change?a.$184,000 less incomeb.$320,000 less incomec.$20,000 more incomed.$40,000 more income____ 15. Another name for variable costing is:a.indirect costingb.process costingc.direct costingd.differential costing____ 16. Under variable costing, which of the following costs would be included in finished goods inventory?a.Selling costsb.Salary of vice-president of financec.Variable factory overhead costd.Fixed factory overhead cost____ 17. On the variable costing income statement, the figure representing the difference between manufacturing margin and contribution margin is the:a.fixed manufacturing costsb.variable cost of goods soldc.fixed selling and administrative expensesd.variable selling and administrative expenses(for #18) A business operated at 100% of capacity during its first month, with the following results:Sales (90 units)$90,000Production costs(100 units): Direct materials$40,000 Direct labor20,000 Variable factory overhead2,000 Fixed factory overhead 5,00067,000Operating expenses: Variable operating expenses$ 8,000 Fixed operating expenses 1,0009,000____ 18. What is the amount of the income from operations that would be reported on theabsorption costingincome statement?a.$21,000b.$20,700c.$22,000d.$28,000____ 19. Which of the following budgets allow for adjustments in activity levels?a.Static Budgetb.Continuous Budgetc.Zero-Based Budgetd.Flexible Budget____ 20. Scott Manufacturing Co.'s static budget at 10,000 units of production includes $40,000 for direct labor and $4,000 for electric power. Total fixed costs are $23,000. At 12,000 units of production, a flexible budget would show:a.variable costs of $52,800 and $27,600 of fixed costsb.variable costs of $44,000 and $23,000 of fixed costsc.variable costs of $52,800 and $23,000 of fixed costsd.variable and fixed costs totaling $67,000____ 21. At the beginning of the period, the Assembly Department budgeted direct labor of $110,000, direct material of $170,000 and fixed factory overhead of $28,000 for 8,000 hours of production. The department actually completed 10,000 hours of production. What is the appropriate total budget for the department, assuming it uses flexible budgeting?a.$288,000b.$305,000c.$350,000d.$378,000____ 22. The production budgets are used to prepare which of the following budgets?a.Operating expensesb.Direct materials purchases, direct labor cost, factory overhead costc.Sales in dollarsd.Sales in units____ 23. Motorcycle Manufacturers, Inc. projected sales of 76,000 machines for 2010. The estimated January 1, 2010, inventory is 6,500 units, and the desired December 31, 2010, inventory is 7,000 units. What is the budgeted production (in units) for 2010?a.75,500b.66,000c.76,500d.65,000____ 24. Production and sales estimates for April are as follows:Estimated inventory (units), April 19,000Desired inventory (units), April 308,000Expected sales volume (units): Area A3,500 Area B4,750 Area C4,250Unit sales price$20The budgeted total sales for April are:a.$200,000b.$230,000c.$270,000d.$250,000The Cardinal Company had a finished goods inventory of 55,000 units on January 1. Its projected sales for the next four months were: January - 200,000 units, February - 180,000 units, March - 210,000 units, and April - 230,000 units. The Cardinal Company wishes to maintain a desired ending finished goods inventory of 20% of the following months sales.____ 25. What should thebudgeted production be for January?a.236,000b.181,000c.200,000d.219,000____ 26. Woodpecker Co. has $296,000 in accounts receivable on January 1. Budgeted sales for January are $860,000. Woodpecker Co. expects to sell 20% of its merchandise for cash. Of the remaining credit sales, 75% are expected to be collected in the month of sale, and 25% collected the following month. The January cash collections are:a.$812,000b.$688,000c.$468,000d.$984,000Nuthatch Corporation began its operations on September 1 of the current year. Budgeted sales for the first three months of business are $260,000, $350,000, and $400,000, respectively, for September, October, and November. The company expects to sell30% of its merchandise for cash. Of sales on account,80% are expected to be collected in the month of the sale, and 20% in the month following the sale.____ 27. The cash collections in September fromaccounts receivableare:a.$223,600b.$145,600c.$192,000d.$168,000____ 28. The cash collections in October fromaccounts receivableare:a.$232,400b.$240,000c.$210,000d.$337,400____ 29. As of January 1 of the current year, the Grackle Company had accounts receivables of $50,000. The sales for January, February, and March of 2009 were as follows: $120,000, $140,000 and $150,000.20% of each month?s sales are for cash. Of the remaining sales (on account),60% are collected in the month of sale, with remaining 40% collected in the following month.What is the cash collected (both from accounts receivable and for cash sales) in the month of January?a.$$74,000b.$110,000c.$71,600d.$131,600____ 30. As of January 1 of the current year, the Grackle Company had accounts receivables of $50,000. The sales for January, February, and March were as follows: $120,000, $140,000 and $150,000.20% of each month?s sales are for cash. Of the remaining sales (on account),60% are collected in the month of sale, with remaining 40% collected in the following month.What is the total cash collected (both from accounts receivable and for cash sales) in the month of February?a.$129,600b.$62,400c.$133,600d.$91,200____ 31. Standards that represent levels of operation that can be attained with reasonable effort are called:a.theoretical standardsb.ideal standardsc.variable standardsd.normal standards____ 32. A favorable cost variance occurs whena.Actual costs are more than standard costs.b.Standard costs are more than actual costs.c.Standard costs are less than actual costs.d.None of the above.The following data relate to direct materials costs for November:Actual costs4,700 pounds at $5.40Standard costs4,500 pounds at $6.00____ 33. What is thedirect materials price variance?a.$2,700 favorableb.$120 favorablec.$2,820 favorabled.$1,700 unfavorable____ 34. What is thedirect materials quantity variance?a.$2,700 favorableb.$1,200 favorablec.$2,700 favorabled.$1,200 unfavorable____ 35. If the wage rate paid per hour differs from the standard wage rate per hour for direct labor, the variance is termed(do notover thinkthis question):a.variable varianceb.rate variancec.quantity varianced.volume variance____ 36. The following data relate to direct labor costs for the current period:Standard costs7,500 hours at $11.50Actual costs6,000 hours at $12.00What is the direct labor time variance?a.$3,000 favorableb.$15,000 unfavorablec.$2,400 favorabled.$17,250 favorableStandardActualRate$12.00$12.25Hours18,50017,955Units of Production9,450____ 37. Calculate the Direct Labor Variance using the above informationa.$2,051.25 Favorableb.$2,051.25 Unfavorablec.$2,362.50 Unfavorabled.$2,362.50 Favorable____ 38. Calculate the Direct Labor Rate Variance using the above informationa.$4,488.75 Unfavorableb.$6,851.25 Favorablec.$4,488.75 Favorabled.$6,851.25 UnfavorableRusty Co. sells two products, X and Y. Last year Rusty sold 5,000 units of X?s and 35,000 units of Y?s. Related data are:Unit Selling PriceUnit VariableUnit contributionProductPriceCostMarginX$110$70$40Y 70 50$20 39. Assuming fixed costs totaled $675,000.What was Rusty Co.?s break-even point (in units)?a.16,875 unitsb.30,100 unitsc.30,000 unitsd.11,250 units 40. When units manufactured exceed units sold:a.variable costing income equals absorption costing incomeb.variable costing income is less than absorption costing incomec.variable costing income is greater than absorption costing incomed.variable costing income is greater by the number of units produced multiplied by the variable cost ratio. 41. The amount of income under absorption costing will be less than the amount of income under variable costing when units manufactured:a.exceed units soldb.equal units soldc.are less than units soldd.are equal to or greater than units sold

Paper#45306 | Written in 18-Jul-2015

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