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Accounting Concepts Practice 2

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Standard costs

A. May show past cost experience
B. Help establish expected future costs
C. Are the budgeted cost per unit in the present
D. All of these

Ideal standards

A. Are rigorous but attainable
B. Are the standards generally used in a master budget
C. Reflect optimal performance under perfect operating conditions
D. Will always motivate employees to achieve the maximum output

Nance Company is considering buying a machine for $90,000 with an estimated life of ten years and no salvage value. The straight-line method of depreciation will be used. The machine is expected to generate net income of $6,000 each year. The cash payback on this investment is read more

Accounting Concepts Practice

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A company projects an increase in net income of $225,000 each year for the next five years if it invests $900,000 in new equipment. The equipment has a five-year life and an estimated salvage value of $300,000. What is the annual rate of return on this investment?

A. 25.0%
B. 37.5%
C. 50.0%
D. 57.5%

Martin Company incurred the following costs for 50,000 units

Variable costs $180,000

Fixed costs 240,000

Martin has received a special order from a foreign company for 5,000 units. There is sufficient capacity to fill the order without jeopardizing regular sales. Filling the order will require spending an additional $8,500 for shipping. If Martin wants to earn $8,000 on the order, what should the unit price be? read more

Accounting Study 2

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A static budget is appropriate for

A Variable overhead costs
B Direct materials costs
C Fixed overhead costs
D None of these

Neal Merchandising Company expects to purchase $90,000 of materials in July and $105,000 of materials in August. Three-quarters of all purchases are paid for in the month of purchase, and the other one-fourth are paid for in the month following the month of purchase. How much will August’s cash disbursements for materials purchases be?

A $67,500
B $78,750
C $101,250
D $105,000 read more

Accounting Study – WileyPlus

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Meyerhoff Company has the following budgeted sales: July $100,000, August $150,000, and September $125,000. 40% of the sales are for cash and 60% are on credit. For the credit sales, 50% are collected in the month of sale, and 50% the next month. The total expected cash receipts during September are

A $140,000
B $132,500
C $131,250
D $125,000

Ashcroft Inc. prepared a 2010 budget for 60,000 units of product. Actual production in 2010 was 65,000 units. To be most useful, what amounts should a performance report for this company compare? read more

Exam Study Guide

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When 10,000 units are produced, fixed costs are $14 per unit. Therefore, when 20,000 units are produced fixed costs will

A remain at $14 per unit

B increase to $28 per unit

C total $280,000

D decrease to $7 per unit

ANSWER – D decrease to $7 per unit

If the Manufacturing Overhead account has a debit balance at the end of a period, it means that

A Actual overhead costs were less than overhead costs applied to jobs

B Actual overhead costs were greater than overhead costs applied to jobs read more

Study Practice

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A $140,000

B $132,500

C $131,250

D $125,000

ANSWER – B $132,500

The total direct labor hours required in preparing a direct labor budget are calculated using the

A Sales forecast

B Production budget read more

Exam Practice

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An increase in the level of activity will have the following effects on unit costs for variable and fixed costs

Exam-2

A. A

B. B

C. C

D. D

ANSWER – D

Walker Manufacturing Company reported the following year-end information

Exam-2

How much is Walker Manufacturing’s cost of goods manufactured for the year?

A. $734,000

B. $1,074,000

C. $1,070,000

D. $1,078,000

ANSWER – C. $1,070,000

Chmelar Manufacturing Company developed the following data

exam-2

How much are total manufacturing costs for the period?

A $1,185,000

B $945,000

C $825,000

D $915,000

ANSWER – B $945,000

Costas Company has beginning and ending raw materials inventories of $64,000 and $80,000, respectively. If direct materials used were $260,000, what was the cost of raw materials purchased? read more

Study Questions

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If the cost of goods sold is greater than the cost of goods manufactured, then:

a. work in process inventory has decreased during the period.
b. finished goods inventory has increased during the period.
c. total manufacturing costs must be greater than cost of goods manufactured.
d. finished goods inventory has decreased during the period.

Wages paid to the factory supply shop foreman are considered an example of:

Direct Labor Period Cost
A) Yes Yes
B) Yes No
C) No Yes
D) No No read more

Practice Questions

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When 10,000 units are produced, fixed costs are $14 per unit. Therefore, when 20,000 units are produced fixed costs will
A. remain at $14 per unit
B. increase to $28 per unit
C. total $280,000
D. decrease to $7 per unit

If the Manufacturing Overhead account has a debit balance at the end of a period, it means that

A. Actual overhead costs were less than overhead costs applied to jobs
B. Actual overhead costs were greater than overhead costs applied to jobs
C. Actual overhead costs were equal to overhead costs applied to jobs
D. No jobs have been completed read more

WileyPlus Accounting Solutions

Complete testbank solutions for WileyPlus solutions online learning environment. Suitable for Accounting 1 and 2 in most colleges.

This is digital download – Official solutions manual accompanying Accounting Principles, 12th edition. WileyPlus Accounting answers, myaccountinglab.

This is not a textbook download!! It is the solutions manual for excercises in WileyPlus all exercises – including BE – DI – EX – P(#)A – BYP – and practice quizzes. read more