Mastering Management Accounting: Expert Assignment Support

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Mastering Management Accounting: Expert Assignment Support

1. 31) Preston Racquets manufactures tennis racquets. The following data are available for last month..

31) Preston Racquets manufactures tennis racquets. The following data are available for last month.

Using variable costing, what is the contribution margin for last month?

A) $200,000

B) $110,000

C) $320,000

D) $80,000

32) Preston Racquets manufactures tennis racquets. The following data are available for last month.

Using variable costing, what is the operating income for last month?

A) $200,000

B) $80,000

C) $20,000

D) $140,000

33) Preston Racquets manufactures tennis racquets. The following data are available for last month.

Using absorption costing, what is cost of goods available for sale for last month?

A) $180,000

B) $150,000

C) $200,000

D) $48,000

34) Preston Racquets manufactures tennis racquets. The following data are available for last month.

Using absorption costing, what is cost of goods sold for last month?

A) $200,000

B) $150,000

C) $40,000

D) $180,000

35) Preston Racquets manufactures tennis racquets. The following data are available for last month.

Using absorption costing, what is gross profit for last month?

A) $90,000

B) $200,000

C) $350,000

D) $50,000

36) Preston Racquets manufactures tennis racquets. The following data are available for last month.

Using absorption costing, what is operating income for last month?

A) $200,000

B) $72,000

C) $28,000

D) $328,000

37) Bryon Catering produces box lunches, which it sells for $20 each. During the current month, Seattle produced 2,800 meals, but only sold 2,700 meals. The variable cost per meal was $12 and the sales commissions per meal were $1. Total fixed manufacturing costs were $1,400 and total fixed marketing and administrative costs were $1,200. What is the product cost per meal under absorption costing?

A) $14.00

B) $12.50

C) $20.50

D) $12.00

38) During the current period, 10,000 units were produced and 12,000 units were sold. Fixed manufacturing costs incurred amounted to $120,000. An absorption costing income statement would report fixed manufacturing costs as which of the following?

A) Costs of $144,000 as a deduction from gross profit to obtain operating income

B) Overhead of $120,000 as a deduction from sales revenue to obtain gross profit

C) Overhead of $144,000 as a deduction from sales revenue to obtain gross profit

D) Costs of $120,000 as a deduction from sales revenue to obtain contribution margin

39) Jeppson Company manufactures computer hard drives. The following data is related to sales and production of the computer hard drives for last year.

Using variable costing, what is the variable cost of goods available for sale for last month?

A) $67,500

B) $9,000

C) $54,000

D) $150,000

40) Jeppson Company manufactures computer hard drives. The following data is related to sales and production of the computer hard drives for last year.

Using variable costing, what is variable cost of goods sold for last month?

A) $13,500

B) $7,200

C) $67,500

D) $54,000

2. Susan Huang began the practice of law October 1, 2014, with an initial investment of $10,500 in...

Susan Huang began the practice of law October 1, 2014, with an initial investment of $10,500 in cash. She made no withdrawals during the month. After completing the first month of practice, the financial statements were prepared by Ryan Player, the secretary/bookkeeper Ms. Huang had hired. Ms. Huang al-most burst out laughing when she saw them. She had completed a course in legal accounting in law school and knew the statements prepared by Mr. Player left much to be desired. Consequently, she asked you to revise the statements. The Player version is presented as follows: Required Prepare the corrected financial statements for Susan Huang.

3. PBB is a toy manufacturer and retailer. PBB sells toys to consumers through its largenetwork of reta

PBB is a toy manufacturer and retailer. PBB sells toys to consumers through its largenetwork of retail outlets in its home country and via the company’s website.PBB purchases the materials and components that it needs to manufacture toys from anumber of different suppliers. All of the purchases are delivered to PBB’s raw material store atits factory and are held there until they are needed for production.Finished toys are transported from the factory to PBB’s retail outlets by PBB’s fleet ofvehicles. The vehicles follow the same schedule each week irrespective of the load they arecarrying. Finished toys that are destined for sale via the company’s website are transported toPBB’s distribution centre.PBB has recently won the contract to manufacture and sell a new toy. The new toy, Toy Z, isa doll based on a character from a very popular international children’s film. PBB is free to setthe selling price of Toy Z as it sees fit, but must pay a royalty fee of 15% of the selling price tothe film company. PBB intends to sell Toy Z through its network of retail outlets.PBB plans to adopt a target costing approach for Toy Z. Market research has determinedthat the selling price will be $25 per Toy Z. PBB requires a profit margin of 25% of the sellingprice of Toy Z.The forecast costs per Toy Z are:$Component A 2.15Component B 1.75Other materials see note below for additional informationLabour (0.4 hours at $15 per hour) 6.00Product-specific production overhead cost 1.89Product-specific selling and distribution cost 2.38Note: Each Toy Z requires 0.6kg of ‘other materials’. These ‘other materials’ are purchasedfrom a supplier at a cost of $4 per kg and 4% of all materials purchased are found to besubstandard.Required:(a) Calculate the cost gap that exists between the forecast total cost per unit andthe target cost per unit of Toy Z.(3 marks)(b) Discuss how PBB could reduce costs in THREE primary activities in its valuechain.(7 marks)

4. 61.Most companies will not take a purchases discount, because 1% or 2% discounts are insignificant..

61.Most companies will not take a purchases discount, because 1% or 2% discounts are insignificant.

62.The seller may prepay the freight costs even though the terms are FOB shipping point.

63.The seller records the sales tax as part of the sales amount.

64.The buyer will include the sales tax as part of the cost of items purchased for use.

65.A business using the perpetual inventory system, with its detailed subsidiary records, does not need to take a physical inventory.

66.Title to merchandise shipped FOB shipping point passes to the buyer upon delivery of the merchandise to the buyer's place of business.

67.Purchased goods in transit should be included in the ending inventory of the buyer if the goods were shipped FOB shipping point.

68.Purchased goods in transit, shipped FOB destination, should be excluded from ending inventory of the buyer.

69.If the perpetual inventory system is used, an account entitled Cost of Merchandise Sold is included in the general ledger.

70.The adjusting entry to record inventory shrinkage would generally include a debit to Cost of Merchandise Sold.

5. 11.Striving for flexibility in the number of products that can be produced in a short period of time

11.Striving for flexibility in the number of products that can be produced in a short period of time is characteristic of

a.EOQ systems.

b.push systems in general.

c.JIT.

d.pull systems in general.

12.Just-in-time (JIT) inventory systems

a.result in a greater number of suppliers for each production process.

b.focus on a “push” type of production system.

c.can only be used with automated production processes.

d.result in inventories being either greatly reduced or eliminated.

13.The JIT philosophy does not focus on

a.standardizing parts used in products.

b.eliminating waste in the production process.

c.finding the absolute lowest price for purchased parts.

d.improving quality of output.

14.In a JIT manufacturing environment, product costing information is least important for use in

a.work in process inventory valuation.

b.pricing decisions.

c.product profitability analysis.

d.make-or-buy decisions.

15.With JIT manufacturing, which of the following costs would be considered an indirect product cost?

a.cost of specific-purpose equipment

b.cost of equipment maintenance

c.property taxes on the plant

d.salary of a manufacturing cell worker

16.With JIT manufacturing, which of the following costs would be considered a direct product cost?

a.insurance on the plant

b.repair parts for machinery

c.janitors’ salaries

d.salary of the plant supervisor

17.Which of the following statements is not true?

a.JIT manufacturing strives for zero inventories.

b.JIT manufacturing strives for zero defects.

c.JIT manufacturing uses manufacturing cells.

d.JIT manufacturing utilizes long lead time and few deliveries.

18.The JIT environment has caused a reassessment of product costing techniques. Which of the following statements is true with respect to this reassessment?

a.Traditional cost allocations based on direct labor are being questioned and criticized.

b.The federal government, through the SEC, is responsible for the reassessment.

c.The reassessment is caused by the replacement of machine hours with labor hours.

d.None of the above is true.

19.When a firm adopts the just-in-time method of management,

a.employees are retrained on different equipment, but the plant layout generally remains unchanged.

b.new machinery and equipment must be purchased from franchised JIT dealers.

c.machinery and equipment are moved into small autonomous production lines called islands or cells.

d.new, more efficient machinery and equipment are purchased and installed in the original plant layout.

20.Which of the following describes the effect on direct labor when management adopts the JIT philosophy?

a.Each direct labor person performs a single task, thereby allowing that person to reach his or her theoretical potential.

b.Because each person runs a single machine in a JIT environment, there are more employees classified as direct labor.

c.The environment becomes more labor-intensive.

d.Machine operators are expected to run several different types of machines, help set up for production runs, and identify and repair machinery needing maintenance.

6. Early in 2017, while the 2016 books are still open, you are informed that 2016 Advertising Expense i

Early in 2017, while the 2016 books are still open, you are informed that 2016 Advertising Expense includes $90,000 for printing catalogs for a campaign to begin in January, 2017 and that a $50,000 invoice for television commercials shown in December, 2016 was debited to 2017 Advertising Expense.The correcting entry to record as of December 31, 2016 is:A) a net debit to Advertising Expense of $50,000B) a net credit to Advertising Expense of $40,000C) a net credit to Advertising Expense of $90,000D) a net credit to Advertising Expense of $140,000

7. 122. The algebraic method a. considers all interrelationships of the departments and reflects these.

122. The

algebraic method

a. considers all interrelationships of the departments and reflects

these relationships in equations.

b. does not consider interrelationships of the departments nor reflect

these relationships in equations.

c. is also referred to as the “benefits-provided” ranking

method.

d. is not a service department cost allocation method.

123. Which

service department cost allocation method considers all interrelationships of

the departments and reflects these relationships in equations?

a. step method

b. indirect method

c. algebraic method

d. direct method

124. An

automotive company has three divisions. One division manufactures new

replacements parts for automobiles, another rebuilds engines, and the third

does repair and overhaul work on a line of trucks. All three divisions use the

services of a central payroll department. The best method of allocating the

cost of the payroll department to the various operating divisions is

a. total labor hours incurred in the divisions.

b. value of production in the divisions.

c. direct labor costs incurred in the divisions.

d. machine hours used in the divisions.

125. The

allocation of general overhead control costs to operating departments can be leastjustified in determining

a. income of a product or functional unit.

b. costs for making management’s decisions.

c. costs of products sold.

d. costs for government’s “cost-plus” contracts.

126. Carson Corporation

Carson Corporation has three production departments A, B, and C. Carson

Corporation also has two service departments, Administration and Personnel.

Administration costs are allocated based on value of assets employed, and

Personnel costs are allocated based on number of employees. Assume that

Administration provides more service to the other departments than does the

Personnel Department.

Dept.

Direct Costs

Employees

Asset Value

Admin.

$900,000

25

$450,000

Personnel

350,000

10

600,000

A

700,000

15

300,000

B

200,000

5

150,000

C

250,000

10

800,000

Refer to Carson Corporation. Using the direct method, what amount of

Administration costs is allocated to A (round to the nearest dollar)?

a. $216,000

b. $150,000

c. $288,000

d. $54,000

127. Carson Corporation

Carson Corporation has three production departments A, B, and C. Carson

Corporation also has two service departments, Administration and Personnel.

Administration costs are allocated based on value of assets employed, and

Personnel costs are allocated based on number of employees. Assume that

Administration provides more service to the other departments than does the

Personnel Department.

Dept.

Direct Costs

Employees

Asset Value

Admin.

$900,000

25

$450,000

Personnel

350,000

10

600,000

A

700,000

15

300,000

B

200,000

5

150,000

C

250,000

10

800,000

Refer to Carson Corporation. Using the direct method, what amount of Personnel

costs is allocated to B (round to the nearest dollar)?

a. $50,000

b. $43,750

c. $26,923

d. $58,333

128. Carson Corporation

Carson Corporation has three production departments A, B, and C. Carson

Corporation also has two service departments, Administration and Personnel.

Administration costs are allocated based on value of assets employed, and

Personnel costs are allocated based on number of employees. Assume that

Administration provides more service to the other departments than does the

Personnel Department.

Dept.

Direct Costs

Employees

Asset Value

Admin.

$900,000

25

$450,000

Personnel

350,000

10

600,000

A

700,000

15

300,000

B

200,000

5

150,000

C

250,000

10

800,000

Refer to Carson Corporation. Using the direct method, what amount of

Administration costs is allocated to C (round to the nearest dollar)?

a. $576,000

b. $ 54,000

c. $108,000

d. $150,000

129. Carson Corporation

Carson Corporation has three production departments A, B, and C. Carson

Corporation also has two service departments, Administration and Personnel.

Administration costs are allocated based on value of assets employed, and

Personnel costs are allocated based on number of employees. Assume that

Administration provides more service to the other departments than does the

Personnel Department.

Dept.

Direct Costs

Employees

Asset Value

Admin.

$900,000

25

$450,000

Personnel

350,000

10

600,000

A

700,000

15

300,000

B

200,000

5

150,000

C

250,000

10

800,000

Refer to Carson Corporation. Using the step method, what amount of

Administration costs is allocated to Personnel (round to the nearest dollar)?

a. $72,973

b. $291,892

c. $145,946

d. $389,189

130. Carson Corporation

Carson Corporation has three production departments A, B, and C. Carson

Corporation also has two service departments, Administration and Personnel.

Administration costs are allocated based on value of assets employed, and

Personnel costs are allocated based on number of employees. Assume that

Administration provides more service to the other departments than does the

Personnel Department.

Dept.

Direct Costs

Employees

Asset Value

Admin.

$900,000

25

$450,000

Personnel

350,000

10

600,000

A

700,000

15

300,000

B

200,000

5

150,000

C

250,000

10

800,000

Refer to Carson Corporation. Using the step method, what amount of

Administration costs is allocated to A (round to the nearest dollar)?

a. $72,973

b. $291,892

c. $145,946

d. $389,189

131. Carson Corporation

Carson Corporation has three production departments A, B, and C. Carson

Corporation also has two service departments, Administration and Personnel.

Administration costs are allocated based on value of assets employed, and

Personnel costs are allocated based on number of employees. Assume that

Administration provides more service to the other departments than does the

Personnel Department.

Dept.

Direct Costs

Employees

Asset Value

Admin.

$900,000

25

$450,000

Personnel

350,000

10

600,000

A

700,000

15

300,000

B

200,000

5

150,000

C

250,000

10

800,000

Refer to Carson Corporation. Using the step method, what amount of

Administration costs is allocated to B (round to the nearest dollar)?

a. $72,973

b. $291,892

c. $145,946

d. $389,189

8. The following events were completed by Chan’s Imports in September 2012. Sept. 1 Acquired $60,000...

The following events were completed by Chan’s Imports in September 2012. Sept. 1 Acquired $60,000 cash from the issue of common stock. 1 Purchased $36,000 of merchandise on account with terms 2/10, n/30. 5 Paid $800 cash for freight to obtain merchandise purchased on September 1. 8 Sold merchandise that cost $20,000 to customers for $38,000 on account, with terms 2/10, n/30. 8 Returned $1,500 of defective merchandise from the September 1 purchase to the supplier. 10 Paid cash for the balance due on the merchandise purchased on September 1. 20 Received cash from customers of September 8 sale in settlement of the account balances, but not within the discount period. 30 Paid $4,900 cash for selling expenses. Required a. Record each event in a statements model like the following one. The first event is recorded as an example.  b. Prepare an income statement for the month ending September 30. c. Prepare a statement of cash flows for the month ending September 30. d. Explain why there is a difference between net income and cash flow from operatingactivities.