20 questions 497814

2.In the decision to replace an old machine with a new machine, which of the following would be considered a relevant cost? (Points : 5)

3.Clarkson Industries produces an electronic calculator that sells for $75 per unit. Variable costs are $45 per unit and fixed costs are $150,000 annually. The company has been averaging an annual income of $100,000 over the past five years. The break-even point for Clarkson Industries would be: (Points : 5)

4.Contribution margin is the amount remaining after (Points : 5)

5.The Pohl Company uses a standard cost system in which manufacturing overhead is applied to units of product on the basis of machine hours. For June, the company’s manufacturing overhead flexible budget showed the following total budgeted costs at a denominator activity level of 20,000 machine hours:

During June, 17,000 machine hours were used to complete 13,000 units of product, and the following actual total overhead costs were incurred:

At standard, each unit of finished product requires 1.4 hours of machine time.

The fixed overhead budget variance for June was: (Points : 5)

6.Newmax Co. is a manufacturing business. When it pays the workers who assemble its products, the cash account should be decreased and what account should be increased? (Points : 5)

7.The Talbot Company produces wheels that are used in the production of bicycles. Talbot’s costs to produce 100,000 wheels annually are:

An outside supplier has offered to sell Talbot similar wheels for $1.25 per wheel. If the wheels were purchased from the outside supplier, $15,000 of annual fixed factory overhead could be avoided.

What is the highest price that Talbot could pay the outside supplier for the wheel and still be economically indifferent between making or buying the wheels? (Points : 5)

8.The cost of goods sold in a merchandising firm typically would be classified as a (Points : 5)

9. Questions 9 and 10 refer to the following:

Jones Co. is considering buying a machine that cost $100,000. If purchased, Jones believes the new machine will reduce its operating cost by $20,000 per year for the next 10 years. At the end of 10 years the machine will have $0 salvage value. If acquired, Jones will depreciate the machine using the straight-line method.

Jones cost of capital is 12%. From present value tables, Jones had identified that the present value factor for an amount of 1, discounted at 12%, is .322, while the present value of a 10 year annuity of 1, discounted at 12%, is 5.65.

Ignoring income taxes, what is the payback period of this project? (Points : 5)

10.Ignoring income taxes, what is the net present value of this project? (Points : 5)

11.The individual generally responsible for explaining the direct-labor efficiency variance is the: (Points : 5)

12.Allen Company collects 25% of a month’s sales in the month of sale, 70% in the month following sale, and 4% in the second month following sale. The remainder is uncollectible. Budgeted sales for the next three months are:

Cash collections in Juneare budgeted would be: (Points : 5)

13.Young Enterprises has budgeted sales in units for the next four months as follows:

Past experience has shown that the ending inventory for each month should be equal to 20% of the next month’s sales in units. Budgeted production for July should be: (Points : 5)

14.The Collins Company applies overhead to production orders on the basis of machine hours. At the beginning of 2002, the company made the following estimates:

What predetermined overhead rate should Collins Co. use? (Points : 5)

15.The purpose of a flexible budget is to: (Points : 5)

16.Following is information relating to Kew Co.’s Vale Division for 2001:

What was Vale’s residual income? (Points : 5)

17.The labor time required to assemble a product is an example of a: (Points : 5)

18.Anola Company has two products: A and B. The company uses activity- based costing to determine product costs. The estimated overhead costs and expected activity for each of the company’s three overhead activity centers are as follows:

The predetermined overhead rate under the activity-based costing system for Activity 3 is closest to: (Points : 5)

19.A standard is: (Points : 5)