Details of this Paper

Kaplan Gb519 final exam (June 17, 2014)

Description

solution


Question

Question;Which of;the following is considered to be an advantage of using both nonfinancial;and financial information in the balanced scorecard? (Points: 2);Nonfinancial information is;most helpful in analyzing a company's past performance, while financial;information is most useful in evaluating potential future performance. Nonfinancial;information provides the short-term perspective while financial information;provides the long-term perspective of performance. Nonfinancial;information reflects the company's current and potential competitive;advantage, while financial information tends to focus on a firm's achieved;financial performance. Nonfinancial;information should be included with financial information because it is more;reliable than financial information.;Question 2.2.Which;of the following tend to be non-differential in the short term since they;cannot be changed, but are more likely to be differential in the long term?;(Points: 2);Fixed costs. Variable;costs. Mixed;costs. Semi-variable;costs.;Question 3.3.When;managers produce value for the customer, their orientation consists of all;the following except: (Points: 2);Quality;and Service. Timeliness;of delivery. The;ability to respond to the customer's desire for specific features. State of the art manufacturing;facilities.;Question 4.4.Target;costing determines the desired cost for a product upon the basis of a given;competitive price such that the product will: (Points: 2);Earn;at least a small profit. Earn a desired profit. Earn;the maximum profit. Break even.;Question 5.5.Over;the past several years it has become increasingly important for firms to;improve achievement towards their social and environmental;responsibilities. What is the best way the management accountant can help;the firm improve on sustainability? (Points: 2);Participate;in programs of environmental organizations. Develop and;implement a legal staff and public relations staff for dealing with;sustainability issues that may affect the firm. Develop and implement a;sustainability scorecard. Risk;management.;Question 6.6.Factory;overhead costs for a given period were 2 times as much as the direct;material costs. Prime costs totaled $8,000. Conversion costs totaled;$11,350. What are the direct labor costs for the period? (Points: 2);$4,650. $3,560. $4,200. $3,860.;Question 7.7.Tierney;Construction, Inc. recently lost a portion of its financial records in an;office theft. The following accounting information remained in the office files;COGS = $80,000;WIP Inventory ? January 1. = $18,500;WIP Inventory ? December 31 = $14,500;Selling & Administrative Expenses = $16,000;Net Income = $30,000;Factory O/H = $20,000;Direct Materials Inventory, January 1= $26,000;Direct Materials Inventory, December 31= $14,000;COGM = $98,000;Finished Goods Inventory, January 1 = 31,000;Direct labor cost incurred during the period amounted to 2.5 times the;factory overhead. The CFO of Tierney Construction, Inc. has asked you to;recalculate the following accounts and to report to him by the end of;tomorrow.;What should be the amount in the finished goods inventory at December 31;2013? (Points: 2);$55,500. $35,000. $43,000. $49,000.;Question 8.8.The;journal entry to record requisitioned and usage of direct materials would;include a credit to: (Points: 2);Work-in-Process;Inventory. Accrued;Payroll. Factory Overhead. Materials;Inventory. Finished;Goods Inventory.;Question 9.9.Abnormal;spoilage: (Points: 2);Is;considered part of good production. Arises under;efficient operating conditions. Is controllable;in the short run. Is unacceptable spoilage that;should not occur under efficient operating conditions. Is;part of inventory product cost.;Question;10.10.Which of the following is most likely to be the cost;driver for the packaging and shipping activity? (Points: 2);Number;of setups. Number;of components. Number of orders. Hours;of testing. Number;of production runs.;Question;11.11.The ideal criterion for choosing an allocation base for;overhead is: (Points: 2);Ease;of calculation. A cause-and-effect;relationship. Ease;of use. Its;preciseness.;Question;12.12.An activity that is performed to support the production;of a new custom-order product is a(n): (Points: 2);Product-level activity. Facility-level;activity. Unit-level;activity. Customer-support;activity. Batch-level;activity.;Question;13.13.The objectives of cost allocation are to: (Points: 2);Motivate, provide incentives;and determine fair rewards. Accurately;define, divide and spread direct costs. Value;measure, and interpret cost data. Connect;communicate, and discern information. Define;refine, and re-define indirect costs.;Question;14.14.ABC Company uses a Materials Inventory account to record;both direct and indirect materials. ABC charges direct materials to WIP;while indirect materials are charged to the Factory Overhead account.;During the month of April, the company has the following cost information;Total Materials (Direct and Indirect) Purchased;= $ 90,000;Indirect Materials Issued to;Production;=;30,000;Total Materials Issued to;Production;=;110,000;Beginning Materials Inventory;=;50,000;The debit to Work-in-Process Inventory account for materials is: (Points;2);$110,000. $30,000. $90,000. $80,000.;Question;15.15.The cost allocation method most widely used because of;its accuracy and ability to provide a detailed level of analysis is;(Points: 2);Departmental;approach. Activity-based approach. Direct;approach. Accounting;approach. Joint;product costing.;Question;16.16.Firm X has a production process that has a total joint;cost of $15,000. At the split-off point, there are 2,000 pounds of Product;1 and 3,000 pounds of Product 2. What is the cost per pound of Product 1;using the physical measure method? (Points: 2);$2.50. $3.00. $3.50. $4.00.;Question;17.17.Which one of the following methods uses units of output;to allocate joint costs to joint products? (Points: 2);Net;realizable value method. Physical units method. Net;sales value method. Sales;value at split-off method.;Question;18.18.Cost-volume-profit (CVP) relationships that are;curvilinear may be analyzed linearly by considering only: (Points: 2);Fixed;and semi-variable costs. Relevant;fixed costs. Relevant;variable costs. A relevant range of volume. The;multi-product/multi-service context.;Question;19.19.The point in a joint production process at which;individual products can be identified for the first time is called the;(Points: 2);Separable;point. By-pass;point. Split-off point. Joint;identification point.;Question;20.20.Cleaning Care Inc. expects to sell 10,000 mops. Fixed;costs (for the year) are expected to be $10,000, unit sales price is;expected to be $12, and unit variable costs are budgeted at $7.;Cleaning Care's margin of safety (MOS) in units is: (Points: 2);1,000. 2,000. 4,000. 8,000. 9,000.;Question;21.21.Variable costs will generally be relevant for decision;making because they: (Points: 2);Differ;between options. Are;volume-based. Have not been committed and differ;between options. Differ;between options and have been committed. Measure;opportunity cost.;Question;22.22.When the net present value (NPV) of a project is calculated;based on the assumption that the after-tax cash inflows occur at the end of;the year when they actually occur uniformly throughout each year, the NPV;will: (Points: 2);Not;be in error. Be;slightly overstated. Be;unusable for actual decision-making. Be slightly understated but;probably usable.;Question;23.23.Value streams are useful in decision-making because;(Points: 2);They;identify all value-added products and services. They;help to highlight the improved efficiency in the plant. Special orders can be;evaluated within the context of the value stream. Irrelevant;costs are identified. Lean;thinking produces better decision making.;Question;24.24.Which of the following statements regarding;opportunity costs" is TRUE? (Points: 2);These;costs are recorded routinely by cost accounting systems. These costs relate to the;benefit lost or foregone when a chosen option (course of action) precludes;the benefits from an alternative option. These;costs are generally deductible for federal income tax purposes. In;terms of most short-run decisions, they are irrelevant.;Question;25.25.Which of the following is not true regarding the;appropriate discount rate to be used in conjunction with discounted cash;flow (DCF) decision models? (Points: 2);For;projects of "above average" risk, the appropriate discount rate is;the weighted-average cost of capital (WACC) It;includes an estimate of;the after-tax cost of debt. It;can differ across investment projects, according to perceived risk. It;is also sometimes referred to as the "hurdle rate" for capital;budgeting purposes.;Question;26.26.In deciding whether to drop or keep a product line, all;of the following are relevant to the decision EXCEPT: (Points: 2);The level of unavoidable fixed;costs. The;segment margin generated by the product line. Demand;interdependencies across product lines of the company. Effect;of the decision on overall company morale.;Question;27.27.Pique Corporation wants to purchase a new machine for;$300,000. Management predicts that the machine can produce sales of;$200,000 each year for the next 5 years. Expenses are expected to include;direct materials, direct labor, and factory overhead (excluding;depreciation) totaling $80,000 per year. The firm uses straight-line;depreciation with no residual value for all depreciable assets. Pique's;combined income tax rate is 40%. Management requires a minimum after-tax;rate of return of 10% on all investments.;What is the payback period for the new machine (rounded to nearest;one-tenth of a year)? (Assume that the cash inflows occur evenly throughout;the year.) (Points: 2);2.5;years. 2.7;years. 3.1 years. 3.6;years.;Question;28.28.Pique Corporation wants to purchase a new machine for;$300,000. Management predicts that the machine can produce sales of;$200,000 each year for the next 5 years. Expenses are expected to include;direct materials, direct labor, and factory overhead (excluding;depreciation) totaling $80,000 per year. The firm uses straight-line;depreciation with no residual value for all depreciable assets. Pique's;combined income tax rate is 40%. Management requires a minimum after-tax;rate of return of 10% on all investments.;What is the present value payback period, rounded to one-tenth of a year?;(Points: 2);2.5;years. 3.0;years. 3.3;years. 3.6;years. 4.0 years.;Question;29.29.A total variable cost variance (such as for direct;materials) can be broken down into separate variances that evaluate;(Points: 2);Price and efficiency. Units;and cost. Volume;and productivity. Sales-volume;versus sales-mix effects. Efforts;and results.;Question;30.30.The difference between the total actual sales revenue of;a period and the total flexible-budget sales revenue for the units sold;during the period is the: (Points: 2);Total;flexible-budget variance. Sales;volume variance. Selling price variance. Operating;income flexible-budget variance.;Question;31.31.Traditional financial control systems have recently been;criticized because: (Points: 2);They;use flexible, not;static, budgets. They;generally lead to goal-congruent behavior on the part of managers. They;focus more in improving basic business processes than short-term financial;results. They;fail to incorporate nonfinancial performance indicators into the evaluation;process.;Question;32.32.The "flexible budget" can best be described as;a budget that adjusts: (Points: 2);Revenues;for sales-dollar changes. Revenues and expenses for;changes in output (such as sales volume). Expenses;for changes in budgeted output between two periods. For;efficiency, but not selling price and cost variances. For;selling price and cost variances, but not efficiency variances.;Question;33.33.A flexible-budget variance measures the impact on;short-term operating profit of: (Points: 2);Changes;in sales volume. Changes;in output during the period. Differences;in sales mix?budgeted versus actual. Selling price and cost;differences?actual versus budgeted. Selling;price, but not cost differences?actual versus budgeted.;Question;34.34.Matinna Co. maintains no inventories and has the;following data pertaining to one of its direct materials in July;Standard Quantity of DM for the Units Manufactured;= 30,000;DM Purchased ? Actual Cost = $63,000;Standard Price per Unit of DM (SP) = $2.00;Direct Material Efficiency Variance = $4,500 (F);All materials purchased during the month were issued to production.;What was the company's direct materials flexible-budget (FB) variance for;July? (Points: 2);$1,500;favorable. $3,000 unfavorable. $3,000;favorable. $7,500;unfavorable. $7,500;favorable.;Question;35.35.Lucky Company's direct labor information for the month;of February is as follows;Actual DL Hours Word (AQ);= 61,500;Standard DL Hours Allowed (SQ) = 63,000;Total Payroll for;DL;= $774,900;DL Efficiency;Variance;= $18,000;The actual direct labor rate per hour (AP) is: (Points: 2);$12.00. $12.30. $12.60. $13.20. $13.50.;Question;36.36.Which one of the following is a drawback of;decentralization? (Points: 2);Uses;local knowledge only. May;hinder coordination among independent SBUs. Provides less effective;operational control. May;affect goal congruence. Offers;an inefficient method of performance evaluation.;Question;37.37.What costs are treated as product costs under variable;costing? (Points: 2);Only;variable costs. Only variable production;costs. All;variable costs. All;variable and fixed manufacturing costs.;Question;38.38.Of the three basic forms of management compensation;(salary, bonus, benefits), the fastest growing part of total compensation;is: (Points: 2);Salary. Bonus. Benefits. Salary;and bonus.;Question;39.39.SBU is the acronym for: (Points: 2);Small;Business Unit. Sustainable;Business Unit. Standard;Business Unit. Strategic Business Unit.;Question;40.40.The need for coordination between the production and the;selling function will impact the choice of: (Points: 2);Profit;cost or revenue center. Manager;for the firm. Formal or informal control;systems. Profitability;goal for the firm. Control;measures to prevent fraud.;Question;41.41.The balanced scorecard measures the SBU's performance in;all of the following areas except: (Points: 2);Learning;and growth. Managerial;performance. Customer;satisfaction. Internal;business processes. Accounting and tax compliance.;Question;42.42.A company had income of $50,000 using variable costing;for a given period. Beginning and ending inventories for that period were;80,000 units and 90,000 units, respectively. If the fixed overhead;application rate were $10.00 per unit, what would operating income have;been using full costing? (Points: 2);$(50,000). $170,000. $150,000. $0. Cannot;be determined from the information given.;Question;43.43.Which one of the following items is not a measure of a;company's liquidity? (Points: 2);Accounts;receivable turnover. Return on equity. Quick;ratio. Cash;flow ratio. Day's;sales in inventory.;Question;44.44.Which one of the following has been the most common;payment option for bonus compensation in recent years? (Points: 2);Vacation;time. Stock options. Increased;benefits. Salary;increase.;Question;45.45.The objectives of management compensation, when compared;to the objectives used to develop performance measurement systems, are;(Points: 2);More;numerous. Less;specific. Consistent in their;objectives. Significantly;broader in scope. More;specific.;Question;46.46.EVA is calculated as: (Points: 2);EVA Net Income - (Cost of;Capital x EVA Invested Capital). Total;Net Income - (Cost of Capital x Invested Capital). Gross;Income - Cost of Capital. Total;Net Income - EVA Net Income. Accounting;earnings adjusted for EVA.;Question;47.47.Which one of the following refers to the firm's ability;to pay its current operating expenses and maturing debt? (Points: 2);Discounted;cash flow. Liquidity. Earnings;base. Profitability. Purchasing;power.;Question;48.48.During October, Rover Industries produced 35,000 units;of product with costs as follows;DM;= $ 84,000;DL;= 43,000;Variable O/H = 13,000;Fixed O/H = 147,000;Total =$ 287,000;What is Rover's unit cost for October, calculated on the variable costing;basis? (Points: 2);$3.25. $3.75. $4.00. $4.50. $5.00.;Question;49.49.The King Mattress Company had the following operating;results for 2012-2013. In addition, the company paid dividends in both 2012;and 2013 of $60,000 per year and made capital expenditures in both years of;$30,000 per year. The company's stock price in 2012 was $8 and $7 in 2013.;The industry average earnings multiple for the mattress industry was 9 in;2013 and the free cash flow and sales multiples were 18 and 1.5;respectively. The company is publicly owned and has 1,200,000 shares of;outstanding stock at the end of 2013.Balance Sheet, December 312013 2012;Cash;$;340,000;$ 100,000;Accounts;Receivable;350,000;400,000;Inventory 250,000 300,000;Total Current;Assets;$;940,000;$ 800,000;Long Lived;Assets 1,080,000 1,100,000;Total;Assets;$ 2,020,000 $;1,900,000;Current;Liabilities;$ 200,000;$ 300,000;Long-Term;Liabilities;600,000;500,000;Stockholder?s;Equity 1,220,000 1,100,000;Total Liabilities;Equity;$ 2,020,000 $;1,900,000Income Statement for the Year Ended December 31;Sales;$ 4,750,000;$ 4,500,000;Cost of;Sales;4,100,000 4,000,000;Gross;Margin;$ 650,000;$ 500,000;Operating;Expenses 350,000 400,000;Operating;Income;$ 300,000;$ 100,000;Taxes 120,000 40,000;Net Income;$ 180,000;$;60,000 Cash Flow from Operations;Net;Income;$;180,000;$ 60,000;Plus Depreciation;Expense;50,000;50,000;+Decrease (-Inc) in A/T and Inventory;100,000;- 0 -;+Increase (-Dec) in Current Liabilities;(100,000) -;0 ?;Cash Flow from;Operations;$;230,000;$ 110,000;The inventory turnover ratio for 2013 is (rounded): (Points: 2);11.2 12.7 13.7 14.9;Question;50.50.The King Mattress Company had the following operating;results for 2012-2013. In addition, the company paid dividends in both 2012;and 2013 of $60,000 per year and made capital expenditures in both years of;$30,000 per year. The company's stock price in 2012 was $8 and $7 in 2013.;The industry average earnings multiple for the mattress industry was 9 in;2013 and the free cash flow and sales multiples were 18 and 1.5;respectively. The company is publicly owned and has 1,200,000 shares of;outstanding stock at the end of 2013.Balance Sheet, December 312013 2012;Cash;$ 340,000;$ 100,000;Accounts;Receivable;350,000;400,000;Inventory;250,000 300,000;Total Current;Assets;$ 940,000;$ 800,000;Long Lived;Assets 1,080,000 1,100,000;Total Assets;$;2,020,000 $ 1,900,000;Current;Liabilities;$ 200,000;$ 300,000;Long-Term;Liabilities;600,000;500,000;Stockholder?s;Equity 1,220,000 1,100,000;Total Liabilities;Equity;$ 2,020,000 $;1,900,000Income Statement for the Year Ended December 31;Sales;$;4,750,000;$ 4,500,000;Cost of;Sales 4,100,000 4,000,000;Gross;Margin;$ 650,000;$ 500,000;Operating;Expenses 350,000 400,000;Operating;Income;$ 300,000;$ 100,000;Taxes 120,000 40,000;Net;Income;$;180,000;$ 60,000 Cash Flow from Operations;Net Income;$ 180,000;$ 60,000;Plus Depreciation;Expense;50,000;50,000;+Decrease (-Inc) in A/T and Inventory;100,000;- 0 -;+Increase (-Dec) in Current Liabilities;(100,000) -;0 ?;Cash Flow from;Operations;$;230,000;$ 110,000;The current ratio for 2013 is: (Points: 2);1.8 2.0 3.9 4.7

 

Paper#49522 | Written in 18-Jul-2015

Price : $47
SiteLock