Financial Accounting Mastery: Assignment Aid
15. 56.Which of the following is not an example of a variable cost? A.Straight-line depreciation on a...
56.Which of the following is not an example of a variable cost?
A.Straight-line depreciation on a machine that has a five-year service life.
B.Wages of manufacturing workers whose pay is based on hours worked.
C.Tires used in the production of tractors.
D.Aluminum used to make patio furniture.
E.Commissions paid to sales personnel.
57.Fixed costs are costs that:
A.vary directly with changes in activity.
B.vary inversely with changes in activity.
C.remain constant on a per-unit basis.
D.remain constant as activity changes.
E.increase on a per-unit basis as activity increases.
58.The fixed cost per unit:
A.will increase as activity increases.
B.will increase as activity decreases.
C.will decrease as activity increases.
D.will remain constant.
E.will increase as activity decreases and will decrease as activity increases.
59.Which of the following is an example of a fixed cost?
A.Paper used in the manufacture of textbooks.
B.Property taxes paid by a firm to the City of Los Angeles.
C.The wages of part-time workers who are paid $8 per hour.
D.Gasoline consumed by salespersons' cars.
E.Surgical supplies used in a hospital's operating room.
60.The true statement about cost behavior is that:
A.variable costs are constant on a per-unit basis and change in total as activity changes.
B.fixed costs are constant on a per-unit basis and change in total as activity changes.
C.fixed costs are constant on a per-unit basis and constant in total as activity changes.
D.variable costs change on a per-unit basis and change in total as activity changes.
E.variable costs are constant on a per-unit basis and are constant in total as activity changes.
61.The true statement about cost behavior is that:
A.variable costs change on a per-unit basis and change in total as activity changes.
B.fixed costs are constant on a per-unit basis and change in total as activity changes.
C.fixed costs are constant on a per-unit basis and are constant in total as activity changes.
D.fixed costs change on a per-unit basis and are constant in total as activity changes.
E.variable costs are constant on a per-unit basis and are constant in total as activity changes.
62.The variable costs per unit are $6 when a company produces 12,000 units of product. What are the variable costs per unit when 14,000 units are produced?
A.$4.50.
B.$5.00.
C.$5.50.
D.$6.00.
E.None of the other answers are correct.
63.The fixed costs per unit are $10 when a company produces 10,000 units of product. What are the fixed costs per unit when 8,000 units are produced?
A.$12.50.
B.$10.00.
C.$8.00.
D.$6.50.
E.$5.50.
64.Total costs are $180,000 when 10,000 units are produced; of this amount, variable costs are $64,000. What are the total costs when 13,000 units are produced?
A.$199,200.
B.$214,800.
C.$234,000.
D.None of the other answers are correct.
E.Total costs cannot be calculated based on the information presented.
65.When 5,000 units are produced variable costs are $35 per unit and total costs are $200,000. What are the total costs when 8,000 units are produced?
A.$200,000.
B.$305,000.
C.$240,000.
D.None of the other answers are correct.
E.Total costs cannot be calculated based on the information presented.
16. Q1. For AEO the Par Value account is titled (_________________ / Contributed Capital) and is...
Q1. For AEO the Par Value account is titled (_________________ / Contributed Capital) and is ___________ per share, while the Additional Paid-in-Capital account is titled (Common Stock / _________________). Q2. On January 29, 2011 _______ thousand was reported as Common Stock (Par) and _________ thousand reported as Contributed Capital (APIC) for total contributions of $549,093 thousand for issued shares. Q3. During FYE January 28, 2012, AEO repurchased common stock, which (increased / _________________) total stockholders’ equity by _________________thousand and reissued treasury stock which (_________________/ decreased) total stockholders’ equity by _________________thousand. Upon incorporation, a company is _________________(by the state of incorporation) to _________________a designated number of shares to investors. Sometimes corporations buy back shares of stock that have been issued; these are referred to as _________________ are the total number of shares actually held by investors at a given time, equaling shares issued less shares of treasury stock. Q4. On January 29, 2011 for preferred stock there are (0 / _________________/ 600,000) thousand shares authorized, (_______ / 5,000 / 600,000) thousand shares issued, and (_________________ / 5,000 / 600,000) thousand shares outstanding. Whereas for common stock on January 29, 2011 there are (_________________/ 249,566 / 194,366) thousand shares authorized, (600,000 / _________________/ 194,366) thousand shares
17. Banner Company produces three products: A, B, and C. The selling price, variable costs, and...
Banner Company produces three products: A, B, and C. The selling price, variable costs, and contribution margin for one unit of each product follow: Due to a strike in the plant of one of its competitors, demand for the company’s products far exceeds its capacity to produce. Management is trying to determine which product(s) to concentrate on next week in filling its backlog of orders. The direct labor rate is $8 per hour, and only 3,000 hours of labor time are available each week. Required: 1. Compute the amount of contribution margin that will be obtained per hour of labor time spent on each product. 2. Which orders would you recommend that the company work on next week—the orders for product A, product B, or product C? Show computations. 3. By paying overtime wages, more than 3,000 hours of direct labor time can be made available next week. Up to how much should the company be willing to pay per hour in overtime wages as long as there is unfilled demand for the three products?Explain.
18. Examples of bad or good internal control Problem: Brown Company provides office services for more...
Examples of bad or good internal control
Problem: Brown Company provides office services for more than 100 small clients including:
A. Supplying temporary personnel
B. Providing monthly bookkeeping services
C. Designing and printing small brochures
D. Copying and reproduction services
E. Preparing tax reports
Some clients pay cash for these services, some have a 30-day charge account, and some have contracts with quarterly payments.
When you reviewed their operations, you noted the following:
a) Contracts were written by the account executives and then passed to the accounts receivable department where they were filed. Contracts had a limitation on the types of services and the amounts. Contracts were payable quarterly in advance.
b) Clients’ periodic payments on contracts were identified to the contract and a payment receipt was placed in the contract file.
Accounting records showed Debit: Cash; Credit: Revenue.
c) Periodically a clerk reviewed the contract files to determine their status.
d) Monthly bookkeeping services and tax services were usually paid for when the work was complete. In not paid, a copy of the invoice marked “Unpaid $____” was put into a cash pending file. It was removed when the cash was received. Accounting records showed Debit: Cash; Credit: Revenue.
e) Reproduction (copy) work was generally a cash transaction that was rung up on a cash register and balanced at the end of the day. Some reproduction work was charged to open accounts. A billing form was given to the client with the work and a copy was put in an open file. It was removed when paid. In both cases, accounting records showed Debit: Cash; Credit: Credit Revenue.
f) Cash from cash sales was deposited daily. Cash from receipts on account or quarterly payments on contracts were deposited after being matched with evidence of the receivable.
g) Bank reconciliations were performed using the deposit slips as original data for the deposits on the bank statements.
h) A cash log was maintained of all cash received in the mail. This log was retained and used for reference purposes when a payment was disputed.
i) Monthly comparisons were made of the costs and revenues of printing, design, bookkeeping, and tax service. Unusual variations between revenues and costs were investigated. However, the handling of deferred payments made this analysis difficult.
Required: Discuss at least 4 examples of poor internal control and 2 examples of good internal control.
Examples of bad or good internal control
Accounting Basics
19. As part of its acquisition of Broadvision Inc., Aircastle Corporation enters into the following a...
As part of its acquisition of Broadvision Inc., Aircastle Corporation enters into the following agreements:
1. After four years, Aircastle will pay the former shareholders of Broadvision an amount equal to 25% of the amount by which Broadvision’s total EBITDA over the four years exceeds $100 million. This payment will be made in cash. Aircastle has the following expectations regarding Broadvision’s total EBITDA over the next four years:
20. Requirement 2: Based on the balance sheets given for Just Dew It, calculate the following financi...
Part 2 Only
Requirement 2: Based on the balance sheets given for Just Dew It, calculate the following financial ratios for the year 2009. (a) Current ratio (Click to select) v b) Quick ratio (Click to select) v (c) Cash ratio (Click to select) v (d) NWC to total assets ratio (Click to select) v Debt-equity ratio and equity multiplier (e) (Click to select) () Total debt ratio and Long-term debt ratio (Click to select) v
21. Solving Problems with Statistical Analysis Tools Cho Steps To Success: Level 3 You will conduct a...
Solving Problems with Statistical Analysis Tools Cho Steps To Success: Level 3 You will conduct a cost-benefit analysis to quantify the cost of inspecting the ski bindings versus the additional costs of not inspecting bindings and having skis returned from t with bindings is the labor. The average labor rate for the binding inspectors is $39 per hour. Historical data has shown that ski bindings fail at rates between 2% and 4%. The additional costs incurred if a ski binding fails after purchase are approximately $50 to S90. Based on this information, customers. As with the ski itself, the majority of the i nspection cos complete the following: 1. Open the workbook named Binding3.xlsx located in the Chapter 2 folder, and then save it as QC Binding Data Analysis 3.xlsx. The InspectionCosts worksheet contains two hours of inspection data from the QC inspectors, detailing the amount of time spent testing the bindings for cach of the tests performed: Pressure and Tempcrature. 2. Calculate the cost to test each ski binding and the total costs for all bindings over this two-hour period. Insert the labor cost per hour above the column heading, and display the cell to include "S/hr-labor" following the valuc, centering it in the cell. If an error message regarding omitting adjacent cells is generated, instruct Excel to ignore this crror. (Hint: If the crror occurs for multiple adjacent cells, highlight all cells, and then click the error message adjacent to the first cell to apply the setting to all cells.) Format the first value using the Accounting Number Format, and format the remaining values using the Comma Style. Use similar cell outlining to the adjacent cells 3. Several rows below the labor cost data, calculate the mean, median, and standard deviation of thesc inspection costs (Pressure, Tempcrature) rounded to the nearest cent. Label the rows appropriately. Format these values in Accounting Number Format. 4. On a separate worksheet named TypeSummary, summarize these values by binding type (1 to 5). Include both a count of the number of bindings inspected of that type and the averages for bindings of that type, as listed in Table 2.13. Be sure to use formulas that will automatically update if any of the binding types, values, or cost data is later updated. The formula for average pressure should work when copied down the column to determine pressure for each corresponding binding type, and across the row to determine the average temperature and average costs for each type table appropriately. Also include a value for the total number of bindings Format the tested and the total cost of all bindings tested Table 2.13: Setup for binding cost analysis Bindings Tested Pressure Avera Costs otal 2014 Cengage Learning
22. Fuller was the owner and beneficiary of a $200,000 life insurance policy on a parent. Fuller sold...
Fuller was the owner and beneficiary of a $200,000 life insurance policy on a parent. Fuller sold the policy to Decker, for $25,000. Decker paid a total of $40,000 in premiums. Upon the death of the parent, what amount must Decker include in gross income?
- $0
- $135,000
- $160,000
- $200,000
23. Prepare a worksheet to translate Sar’s adjusted trial balance at December 31, 2011, into U.S....
Translation worksheet, parent accounting
Pel, a U.S. firm, paid $308,000 for all the common stock of Sar of Israel on January 1, 2011, when the exchange rate for sheqels was $0.35. Sar’s equity on this date consisted of 500,000 sheqels common stock and 300,000 sheqels retained earnings. The $28,000 (80,000 sheqels) excess is attributable to a patent with a 10-year amortization period. Sar’s functional currency is the sheqel. Sar’s adjusted trial balance at December 31, 2011, in sheqels is as follows:
Sheqels | Sheqels | ||
Debits | Credits | ||
Cash | 40,000 | Accounts payable | 120,000 |
Receivables—net | 50,000 | Other liabilities | 60,000 |
Inventories | 150,000 | Advance from Pel | 140,000 |
Land | 160,000 | Common stock | 500,000 |
Equipment—net | 300,000 | Retained earnings 1/1 | 300,000 |
Buildings—net | 500,000 | Sales | 600,000 |
Expenses | 400,000 | ||
Exchange loss (advance) | 20,000 | ||
Dividends | 100,000 | ||
1,720,000 | 1,720,000 |
On January 2, 2011, Pel advanced $42,000 (120,000 sheqels) to Sar. This advance was shortterm, denominated in U.S. dollars, and made when the exchange rate for sheqels was $0.35. In June 2011, Sar paid a 100,000-sheqel dividend when the exchange rate was $0.33. The average and year-end exchange rates for sheqels are $0.32 and $0.30, respectively.
REQUIRED
1. Prepare a worksheet to translate Sar’s adjusted trial balance at December 31, 2011, into U.S. dollars.
2. Prepare the necessary journal entries for Pel to account for its investment in Sar for 2011.
24. The Pear Company is applying the Miller-Orr model to their cash management. They determined that the...
The Pear Company is applying the Miller-Orr model to their cash management. They determined that the return point is $12,000, the lower limit is $5,000, and the upper limit is $26,000. Explain what this information means to Pear's cash management.