BMGT410 Government Accounting_Winter 2024

Published: 1 year ago

BMGT410 Government Accounting_Winter 2024

1. 4) As the cost-driver level increases in the relevant range, variable costs per unit of cost driver.

4) As the cost-driver level increases in the relevant range, variable costs per unit of cost driver ________ but total variable costs ________.

A) do not change; increase in direct proportion to the cost-driver activity level

B) do not change; decrease in direct proportion to the cost-driver activity level

C) increase; do not change

D) decrease; do not change

5) Which of the following costs is a variable cost?

A) rental expense for factory building for manufacturer of electronics

B) lease cost for factory machine for manufacturer of electronics

C) fuel for airplane for airline

D) depreciation expense of airplane for airline

6) What happens when the cost-driver level increases within the relevant range?

A) Total fixed costs remain unchanged.

B) Fixed costs per unit of cost driver increase.

C) Total variable costs decrease.

D) Variable costs per unit of cost driver increase.

7) What happens when the cost-driver activity level increases within the relevant range?

A) Total fixed costs increase.

B) Fixed costs per unit of cost driver decrease.

C) Total variable costs decrease.

D) Variable costs per unit of cost driver decrease.

8) What happens when the cost-driver activity level decreases within the relevant range?

A) Total fixed costs increase.

B) Fixed costs per unit of cost driver decrease.

C) Total variable costs decrease.

D) Variable costs per unit of cost driver decrease.

9) What happens when the cost-driver activity level decreases within the relevant range?

A) Total fixed costs increase.

B) Fixed costs per unit of cost driver decrease.

C) Total variable costs increase.

D) Variable costs per unit of cost driver are unchanged.

10) Which of the following costs is a fixed cost?

A) cost of dairy ingredients used to produce ice cream

B) depreciation expense on factory building

C) fuel used by delivery trucks

D) labor wages of workers who mix dairy ingredients to make ice cream

11) An increase in total variable costs usually indicates that ________.

A) the cost-driver activity level is decreasing

B) the cost-driver activity level is increasing

C) variable costs per unit is decreasing

D) fixed costs per unit is increasing

12) The relevant range applies to ________.

A) variable costs only

B) fixed costs only

C) fixed costs and variable costs

D) none of the above

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2. ACCT 212

Memofax, Inc., produces memory enhancement kits for fax machines. Sales have been very erratic, with some months showing a profit and some months showing a loss. The company's contribution format income statement for the most recent month is given below:

3. Haas Company manufactures and sells one product. The following information pertains each of the...

Haas Company manufactures and sells one product. The following information pertains each of the company’s first three years of operations:

Variable costs per unit:

Manufacturing:

Direct materials $24

Direct labor 20

Variable manufacturing overhead 5

Variable selling and administrative 1

Fixed costs per year:

Fixed manufacturing overhead 440,000

Fixed selling and administrative expense 200,000

During its first year of operations, Haas produced 40,000 units and sold 40,000 units. During its second year of operations, it produced 55,000 units and sold 30,000 units. In the third year, Haas produced 20,000 units and sold 45,000 units. The selling price of the company’s product is $6 per unit.

Required:

1. Compute the company’s break-even point in unit sales.

2. Assume the company uses variable costing:

a. Compute the unit product cost for Year 1, Year 2, and Year 3.

b. Prepare an income statement for Year 1, Year 2, and Year 3.

3. Assume the company uses absorption costing:

a. Compute the unit product cost for year 1, Year 2, and Year 3.

b. Prepare an income statement for Year 1, Year 2, and Year 3.

4. Determining Adjusting Entries and Tracing Their Effects to Financial StatementsP 4.

Determining Adjusting Entries and Tracing Their Effects to Financial Statements

P 4. Joyce Ozaki opened a small tax-preparation service. At the end of its second year of operation, Ozaki Tax Service, Inc., had the trial balance shown at the top of the next page. The following information is also available:

a. Office supplies on hand, December 31, 20x7, $227.

b. Insurance still unexpired, $120.

c. Estimated depreciation of office equipment, $770.

d. Telephone expense for December, $19; the bill was received but not recorded.

e. The services for all unearned tax fees had been performed by the end of the year.

f. Estimated federal income taxes for the year, $1,800. Required

1. Open T accounts for the accounts in the trial balance plus the following: Income Taxes Payable; Insurance Expense; Office Supplies Expense; Depreciation Expense–Office Equipment; and Income Taxes Expense. Record the balances shown in the trial balance.

2. Determine the adjusting entries and post them directly to the T accounts.

3. Prepare an adjusted trial balance, an income statement, a statement of retained earnings, and a balance sheet.

4. User insight: Why is it not necessary to show the effects of the above transactions on the statement of cash flows?

5. It is January 2nd and senior management of Digby meets to determine their investment plan for the...

6. 1. Direct materials costs and indirect materials costs are manufacturing overhead.2. All manufacturi

1. Direct materials costs and indirect materials costs are manufacturing overhead.2. All manufacturing costs that cannot be classified as direct materials or direct labor are classified as manufacturing overhead.3. The total cost of a finished product generally contains equal amounts of materials, labor, and overhead costs.4. Both direct labor cost and indirect labor cost are product costs.5. Period costs include selling and administrative expenses.6. Period costs are not inventoriable costs.7. Product costs are also called inventoriable costs.8. Direct materials become a cost of the finished goods manufactured when they are acquired, not when they are used.9. The sum of the direct materials costs, direct labor costs, and beginning work in process is the total manufacturing costs for the year.10. The work of factory employees that can be physically and directly associated with converting raw materials into finished goods isa. manufacturing overhead.b. indirect materials.c. indirect labor.d. direct labor.11. Which one of the following would not be classified as manufacturing overhead?a. Indirect laborb. Direct materialsc. Insurance on factory buildingd. Indirect materials12. Which one of the following is not a direct material?a. A tire used for a lawn mowerb. Plastic used in the covered case for a home PCc. Steel used in the manufacturing of steel-radial tiresd. Lubricant for a ball-bearing joint for a large crane13. Which one of the following is not a cost element in manufacturing a product?a. Manufacturing overheadb. Direct materialsc. Office salariesd. Direct labor14. A manufacturing process requires small amounts of glue. The glue used in the production process is classified as a(n)a. period cost.b. indirect material.c. direct material.d. miscellaneous expense.15. Which of the following is not a manufacturing cost category?a. Cost of goods soldb. Direct materialsc. Direct labord. Manufacturing overhead16. For the work of factory employees to be considered as direct labor, the work must be conveniently anda. materially associated with raw materials conversion.b. periodically associated with raw materials conversion.c. physically associated with raw materials conversion.d. promptly associated with raw materials conversion.17. Which of the following is not classified as direct labor?a. Bottlers of beer in a breweryb. Copy machine operators at a copy shopc. Wages of supervisorsd. Bakers in a bakery18. Which of the following are period costs?a. Raw materialsb. Direct materials and direct laborc. Direct labor and manufacturing overheadd. Selling expenses19. Product costs consist ofa. direct materials and direct labor only.b. direct materials, direct labor, and manufacturing overhead.c. selling and administrative expenses.d. period costs.20. For inventoriable costs to become expenses under the matching principle,a. the product must be finished and in stock.b. the product must be expensed based on its percentage-of-completion.c. the product to which they attach must be sold.d. all accounts payable must be settled.21. What is “balanced” in the balanced scorecard approach?a. The number of products producedb. The emphasis on financial and non-financial performance measurementsc. The amount of costs allocated to productsd. The number of defects found on each product22. Many companies now focus on reducing defects in finished products with the goal of zero defects. This is calleda. Activity-based costing.b. Balanced scorecard.c. Value chain.d. Total quality management.23. Which one of the following is not considered as material costs?a. Partially completed motor engines for a motorcycle plantb. Bolts used in manufacturing the compressor of an enginec. Rivets for the wings of a new commercial jet aircraftd. Lumber used to build tables24. Samson Company reported total manufacturing costs of $300,000, manufacturing overhead totaling $52,000, and direct materials totaling $64,000. How much is direct labor cost?a. Cannot be determined from the information provided.b. $416,000c. $416,000d. $184,000#16 … TRUE-FALSE STATEMENTS25. When raw materials are received, there is no effort at this point to associate the cost of materials with specific jobs.26. When raw materials are purchased, the Work in Process Inventory account is debited.27. Direct materials requisitioned from the storeroom should be charged to the Work In Process Inventory account and the job cost sheets for the individual jobs on which the materials were used.28. Actual manufacturing overhead costs are assigned to each job by tracing each overhead cost to a specific job.29. The formula for the predetermined overhead rate is estimated annual overhead costs divided by an expected annual operating activity.30. Finished Goods Inventory is charged for the cost of jobs completed during a period.

7. Jamie Lee Jackson, age 26, is in her last semester of college and is waiting for graduation day t...

Jamie Lee Jackson, age 26, is in her last semester of college and is waiting for graduation day that is just around the corner! It is the time of year again when Jamie Lee must file her annual federal income taxes. Last year, she received an increase in salary from the bakery, which brought her gross monthly earnings to $3,150, and also opened up an IRA, to which she contributed $200 last year. Her savings accounts earn 2% interest per year, and she also had received an unexpected $2,100 gift from her great aunt. Jamie was also lucky enough last year to win a raffle prize of $3,200, most of which was deposited into her regular savings account after paying off her credit card balance.

Estimate Jamie Lee's current tax liability by completing the form below. Use the 2016 values for standard deduction ($6,300) and personal exemption ($4,050). Each answer must have a value for the assignment to be complete. Enter "0" for any unused categories.

Current Financial Situation

8. The Hasting Company began operations on January 1, 2003 and uses the FIFO method in costing its raw.

The Hasting Company began operations on January 1, 2003 and uses the FIFO method in costing its raw material inventory. An analyst is wondering what net income would have been if the company had consistently followed LIFO (instead of FIFO) from the beginning, 1/1/2003. He has the following information available to him: 12/31/2003 12/31/2004

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The Hasting Company began operations on January 1, 2003 and uses the FIFO method in costing its raw material inventory. An analyst is wondering what net income would have been if the company had consistently followed LIFO (instead of FIFO) from the beginning, 1/1/2003. He has the following information available to him:

12/31/2003 12/31/2004

Final Inventory Final Inventory 

Under FIFO $240,000 Under FIFO $270,000

Under LIFO $200,000 Under LIFO $210,000



For2003 and 2004

Pretax Income under FIFO $120,000 and $170,000



What would net income have been in 2004 if Hastings had used LIFO since 1/1/2003?



$ 110,000

$ 150,000

$ 170,000

$ 230,000 Top of Form The major accounting difference between interest incurred during a period and cash dividends declared during the same period is: Top of Form Interest decreases retained earnings while dividend declared increases retained earnings Interest reduces net income while dividends declared do not affect net income Interest does not affect net income while dividends reduce net income There is no major difference. Both are treated identically for accounting purposes. Bottom of Form The following financial ratios are for Average Corp. and Superior Corp., two hardware stores. Which of the following statements is inconsistent with the above ratios? Top of Form Superior Corp has a higher return on equity primarily because it has a significantly higher net income margin Average Corp. on a relative basis uses significantly more debt financing than Superior Corp. Average Corp. utilizes its assets more effectively than Superior Corp. Superior Corp. generates more income per dollar of sales than Average Corp. FRC Inc. acquired Marketing Inc on 1/1/2004. Marketing Inc. has 10,000 shares outstanding. Each share in Marketing Inc. was exchanged for half a share in FRC, Inc. Shares of FRC Inc., were trading at $100 per share at the date of the announcement of the transaction. Marketing Inc, had the following...

9. CVP computations Garrett Manufacturing sold 410,000 units of its

CVP computations Garrett Manufacturing sold 410,000 units of its product for $68 per unit in 2011. Variable cost per unit is $60 and total fixed costs are $1,640,000.

1. Calculate (a) contribution margin and (b) operating income.

2. Garrett’s current manufacturing process is labor intensive. Kate Schoenen, Garrett’s production manager, has proposed investing in state-of-the-art manufacturing equipment, which will increase the annual fixed costs to $5,330,000. The variable costs are expected to decrease to $54 per unit. Garrett expects to maintain the same sales volume and selling price next year. How would acceptance of Schoenen’s proposal affect your answers to (a) and (b) in requirement 1?

3. Should Garrett accept Schoenen’s proposal? Explain.

10. 5.6 The manager of the commercial mortgage department of a large bank has collected data during the.

5.6 The manager of the commercial mortgage department of a large bank has collected data during the past two years concerning the number of commercial mortgages approved per week. The results from these two years (104 weeks) indicated the following:

Number of Commercial Mortgages Approved Frequeny 0 13 1 25 2 32 3 17 4 9 5 6 6 1 7 1

va. Compute the expected number of mortgages approved per week. b. Compute the standard deviation