Keys to Success in Accounting Quiz Preparation

Published: 7 months ago

Keys to Success in Accounting Quiz Preparation

40. Conversion cost excludes a. direct material cost b. direct Labour cost c. direct expenses d. all...

Conversion cost excludes

a. direct material cost

b. direct Labour cost

c. direct expenses

d. all the above

41. Problem 4-43 Multiple-Product Analysis, Changes in Sales Mix, Sales to Earn Target Operating...

Problem 4-43 Multiple-Product Analysis, Changes in Sales Mix, Sales to Earn Target Operating Income

Basu Company produces two types of sleds for playing in the snow: basic sled and aerosled. The projected income for the coming year, segmented by product line, follows:

The selling prices are $30 for the basic sled and $60 for the aerosled.

Required:

1.       Compute the number of units of each product that must be sold for Basu to break even.

2.       Assume that the marketing manager changes the sales mix of the two products so that the ratio is five basic sleds to three aerosleds. Repeat Requirement 1.

3.       CONCEPTUAL CONNECTION Refer to the original data. Suppose that Basu can increase the sales of aerosleds with increased advertising. The extra advertising would cost an addi- tional $195,000, and some of the potential purchasers of basic sleds would switch to aero- sleds. In total, sales of aerosleds would increase by 12,000 units, and sales of basic sleds would decrease by 5,000 units. Would Basu be better off with this strategy?

42. 1 A machine originally had an estimated useful life of 6 years, but after 2 complete years, it was..

1 A machine originally had an estimated useful life of 6 years, but after 2 complete years, it was decided that the original estimate of useful life should have been 11 years. At that point the remaining cost to be depreciated should be allocated over the remaining: 2. Peavey Enterprises purchased a depreciable asset for $28,000 on April 1, Year 1. The asset will be depreciated using the straight-line method over its four-year useful life. Assuming the asset's salvage value is $3,200, Peavey Enterprises should recognize depreciation expense in Year 2 in the amount of: 3. Wickland Company installs a manufacturing machine in its production facility at the beginning of the year at a cost of $108,000. The machine's useful life is estimated to be 4 years, or 140,000 units of product, with a $2,000 salvage value. During its second year, the machine produces 28,000 units of product. Determine the machines' second year depreciation under the units-of-production method. (Do not round intermediate calculations.) $21,200. $26,500. $27,000. $21,600. $27,500. 4. Gaston owns equipment that cost $13,500 with accumulated depreciation of $2,700. Gaston asks $12,700 for the equipment but sells the equipment for $9,700. Which of the following would not be part of the journal entry to record the disposal of the equipment? Debit Accumulated Depreciation $2,700. Credit Equipment $13,500. Debit Loss on Disposal of Equipment $1,100. Credit Gain on Disposal of Equipment $1,100. Debit Cash $9,700.

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1 A machine originally had an estimated useful life of 6 years, but after 2 complete years, it was decided that the original estimate of useful life should have been 11 years. At that point the remaining cost to be depreciated should be allocated over the remaining: 2. Peavey Enterprises purchased a depreciable asset for $28,000 on April 1, Year 1. The asset will be depreciated using the straight-line method over its four-year useful life. Assuming the asset's salvage value is $3,200, Peavey Enterprises should recognize depreciation expense in Year 2 in the amount of:3. Wickland Company installs a manufacturing machine in its production facility at the beginning of the year at a cost of $108,000. The machine's useful life is estimated to be 4 years, or 140,000 units of product, with a $2,000 salvage value. During its second year, the machine produces 28,000 units of product. Determine the machines' second year depreciation under the units-of-production method. (Do not round intermediate calculations.)$21,200. $26,500. $27,000. $21,600. $27,500. 4. Gaston owns equipment that cost $13,500 with accumulated depreciation of $2,700. Gaston asks $12,700 for the equipment but sells the equipment for $9,700. Which of the following would not be part of the journal entry to record the disposal of the equipment?Debit Accumulated Depreciation $2,700. Credit Equipment $13,500. Debit Loss on Disposal of Equipment $1,100. Credit Gain on Disposal of Equipment $1,100. Debit Cash $9,700.

43. Anzio, Inc., has two classes of shares. Class B has

Anzio, Inc., has two classes of shares. Class B has ten times the voting rights as Class A. If you own 10% of the class A shares and 20% of the Class B shares, what percentage of the total voting rights do you hold?

44. Delhoyo Corporation, a manufacturing company, has provided data concerning its oper

Delhoyo Corporation, a manufacturing company, has provided data concerning its operations for September. The beginning balance in the raw materials account was $37,000 and the ending balance was $29,000. Raw materials purchased during the month totaled $57,000. Manufacturing overhead cost incurred during the month was $102,000, of which $2,000 consisted of raw materials classified as indirect materials. The direct materials cost for September was: $49,000 $57,000 $63,000 $65,000

45. CVP analysis, income taxes Brooke Motors is a small car

CVP analysis, income taxes Brooke Motors is a small car dealership. On average, it sells a car for $27,000, which it purchases from the manufacturer for $23,000. Each month, Brooke Motors pays $48,200 in rent and utilities and $68,000 for salespeople’s salaries. In addition to their salaries, salespeople are paid a commission of $600 for each car they sell. Brooke Motors also spends $13,000 each month for local advertisements. Its tax rate is 40%.

Required

1. How many cars must Brooke Motors sell each month to break even?

2. Brooke Motors has a target monthly net income of $51,000. What is its target monthly operating income? How many cars must be sold each month to reach the target monthly net income of $51,000?

46. Prepare an incremental analysis showing whether the company should make or buy the electrical cords....

Juanita Company must decide whether to make or buy some of its components for the appliances it produces. The costs of producing 166,000 electrical cords for its appliances are as follows.

Instead of making the electrical cords at an average cost per unit of $1.00 ($166,000 ÷ 166,000), the company has an opportunity to buy the cords at $0.90 per unit. If the company purchases the cords, all variable costs and one-fourth of the fixed costs will be eliminated.

(a) Prepare an incremental analysis showing whether the company should make or buy the electrical cords. (b) Will your answer be different if the released productive capacity will generate additional income of $5,000?

Look for the costs that change.

Ignore the costs that do not change.

Use the format in the chapter for your answer.

Recognize that opportunity cost can make a difference.

47. Journalizing and posting adjusting and closing entries with a net loss; preparing a post-closing...

Journalizing and posting adjusting and closing entries with a net loss; preparing a post-closing trial balance Rolstad Repair Service’s partial work sheet for the month ended October 31 of the current year is given below. The general ledger accounts are given in the Working Papers. The general ledger accounts do not show all details for the fiscal period. The Balance shown in each account is the account’s balance before adjusting and closing entries are posted.

Instructions:

1. Use page 20 of a journal. Journalize and post the adjusting entries.

2. Continue to use page 20 of the journal. Journalize and post the closing entries.

3. Prepare a post-closing trial balance.

4. Ryo Morrison, owner of LawnMow, is disappointed that his business incurred a net loss for September of the current year. Mr. Morrison would have preferred not to have to reduce his capital by $440.00. He knows that you are studying accounting, so Mr. Morrison asks you to analyze his work sheet for September. Based on your analysis of the work sheet, what would you suggest might have caused the net loss for LawnMow? What steps would you suggest so that Mr. Morrison can avoid a net loss in future months?

48. 71.Most operating decisions of management focus on a narrow range of activity called the: A.relevant

71.Most operating decisions of management focus on a narrow range of activity called the:

A.relevant range of production

B.strategic level of production

C.optimal level of production

D.tactical operating level of production

72.Costs that vary in total in direct proportion to changes in an activity level are called:

A.fixed costs

B.sunk costs

C.variable costs

D.differential costs

73.Which of the following is an example of a cost that varies in total as the number of units produced changes?

A.Salary of a production supervisor

B.Direct materials cost

C.Property taxes on factory buildings

D.Straight-line depreciation on factory equipment

74.Which of the following is NOT an example of a cost that varies in total as the number of units produced changes?

A.Electricity per KWH to operate factory equipment

B.Direct materials cost

C.Straight-line depreciation on factory equipment

D.Wages of assembly worker

75.Which of the following is NOT an example of a cost that varies in total as the number of units produced changes?

A.Electricity per KWH to operate factory equipment

B.Direct materials cost

C.Insurance premiums on factory building

D.Wages of assembly worker

76.Which of the following describes the behavior of the variable cost per unit?

A.Varies in increasing proportion with changes in the activity level

B.Varies in decreasing proportion with changes in the activity level

C.Remains constant with changes in the activity level

D.Varies in direct proportion with the activity level

77.The graph of a variable cost when plotted against its related activity base appears as a:

A.circle

B.rectangle

C.straight line

D.curved line

78.A cost that has characteristics of both a variable cost and a fixed cost is called a:

A.variable/fixed cost

B.mixed cost

C.discretionary cost

D.sunk cost

79.Which of the following costs is a mixed cost?

A.Salary of a factory supervisor

B.Electricity costs of $2 per kilowatt-hour

C.Rental costs of $5,000 per month plus $.30 per machine hour of use

D.Straight-line depreciation on factory equipment

80.For purposes of analysis, mixed costs are generally:

A.classified as fixed costs

B.classified as variable costs

C.classified as period costs

D.separated into their variable and fixed cost components

49. You are required to obtain the annual reports of two ASX Top 200 companies in the same industry...

You are required to obtain the annual reports of two ASX Top 200 companies in the same

industry and write a business research report to address the following questions related to the

items included in property, plant and equipment.

(a) Review and evaluate the PPE disclosure of your selected companies which may include:

• What range of measures is used to determine amounts for these items in the reports of

the individual companies?

• Do you think it is valid to add the items, given the measures used?

• How would you interpret the total amount for property, plant and equipment in the

financial statements?

• Compare the measures used by the different companies for similar items. Are there any

inconsistencies in how similar items are measured by the different companies?

(b) Discuss the factors that accountants should consider when setting up company accounting

policy relating to PPE.

(c) Detail your view on the subsequent measurement of PPE and provide recommendations to

accounting standard setters.

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TACC302_2018S1 Group assignment information Value: 30% of overall assessment (20% for the written work and 10% for the presentation) Due date: Monday 13 May 2019 (Week 9) Word limit: 2000 words (excluding references) Assignment Requirements: 1) Group: Students are to form groups of 3 (max.4), each student’s name must be recorded on the coversheet otherwise that student will receive zero for the assignment. 2) Submission: Students must submit the group assignment online by 11:59 pm (AEDT) on Monday 13 May 2019. Late penalty will be at 10% per day. Only the group leader should submit online. 3) Structure: Use report structure which must contain the following: report cover page, table of contents, executive summary, introduction, body, conclusion, recommendations and bibliography. 4) Formatting and referencing: The assignment must be word-processed, 1.5 line spacing, and the word size should be 12 with ‘Times new roman’ font type. Harvard style reference preferred. 5) Presentation: The group presentation will be held during class time in week 10 (Monday 20 May 2019). Students will present as a group, and marks for the presentation will be awarded individually. Duration for presentation is 2-3 minutes for each student. All group members must attend and present, otherwise you will lose the 10% of presentation mark.You are required to obtain the annual reports of two ASX Top 200 companies in the same industry and write a business research report to address the following questions related to the items included in property, plant and equipment. (a) Review and evaluate the PPE disclosure of your selected companies which may include: • What range of measures is used to determine amounts for these items in the reports of the individual companies? • Do you think it is valid to add the items, given the measures used? • How would you interpret the total amount for property, plant and equipment in the...

50. EEC expects to save $500,000 per year for the next 10 years by purchasing the supplier. EEC’s cost

EEC expects to save $500,000 per year for the next 10 years by purchasing the supplier. EEC’s cost of capital is 14%. EEC believes it can purchase the supplier for $2 million. Answer the following: Based on your calculations, should EEC acquire the supplier? Why or why not? Which of the techniques (NPV, IRR, payback period) is the most useful tool to use? Why? Which of the techniques (NPV, IRR, payback period) is the least useful tool to use? Why? Would your answer be the same if EEC’s cost of capital were 25%? Why? Why not? Would your answer be the same if EEC did not save $500,000 per year as anticipated? What would be the least amount of savings that would make this investment attractive to EEC? Given this scenario, what is the most EEC would be willing to pay for the supplier? Prepare a memo to the President of EEC detailing your findings and showing the effects if: (a) EEC’s cost of capital increases (b) the expected savings are less than $500,000 per year (c) EEC must pay more than $2 million for the supplier

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The President of EEC recently called a meeting to announce that one of the firm’s largest suppliers of component parts has approached EEC about a possible purchase of the supplier. The President has requested that you and your staff analyze the feasibility of acquiring this supplier. Based on the following information, calculate net present value (NPV), internal rate of return (IRR), and payback for the investment opportunity: EEC expects to save $500,000 per year for the next 10 years by purchasing the supplier. EEC’s cost of capital is 14%. EEC believes it can purchase the supplier for $2 million. Answer the following: Based on your calculations, should EEC acquire the supplier? Why or why not? Which of the techniques (NPV, IRR, payback period) is the most useful tool to use? Why? Which of the techniques (NPV, IRR, payback period) is the least useful tool to use? Why? Would your answer be the same if EEC’s cost of capital were 25%? Why? Why not? Would your answer be the same if EEC did not save $500,000 per year as anticipated? What would be the least amount of savings that would make this investment attractive to EEC? Given this scenario, what is the most EEC would be willing to pay for the supplier? Prepare a memo to the President of EEC detailing your findings and showing the effects if: (a) EEC’s cost of capital increases

(b) the expected savings are less than $500,000 per year

(c) EEC must pay more than $2 million for the supplier