Managerial Accounting Exam 2

Question 1 (2 points) Question 1 Unsaved

If variable costs increase, fixed costs increase, and sales remain the same, what is expected to happen to the Contribution Margin (CM) and to the Break-even Point (BE) respectively?

Question 1 options:

CM: Decrease

BE: Increase

CM: Increase

BE: Decrease

CM: Decrease

BE: Decrease

CM: Decrease

BE: Can't be determined

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Question 2 (3 points) Question 2 Unsaved

The break-even pointis the point at which

Question 2 options:

fixed costs equal variable costs

fixed costs equal sales

 total contribution margin equals fixed costs

 sales equals variable costs

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Question 3 (3 points) Question 3 Unsaved

Singer Co. reported sales of $416,000, a contribution margin of $5 per unit, fixed costs of $80,000, and a net income of $24,000. Determine the selling price per unit?

Question 3 options:

$26

$20

$86.70

$5

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Question 4 (3 points) Question 4 Unsaved

Use the following information to answer questions 4 & 5

Projected cost information for a new product is as follows:

Variable manufacturing costs:$8 per unit

Variable selling costs:  $2 per unit

Fixed manufacturing costs:     $25,000

Fixed selling costs:      $45,000

The product is to be sold at$18 per unit.

Determine the break-even point for this product (in $)

Question 4 options:

$45,000

$126,000

$157,500

$8,750

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Question 5 (3 points) Question 5 Unsaved

Use the following information to answer questions 4 & 5

Projected cost information for a new product is as follows:

Variable manufacturing costs:$8 per unit

Variable selling costs:  $2 per unit

Fixed manufacturing costs:     $25,000

Fixed selling costs:      $45,000

The product is to be sold at $18 per unit.

What price would the company have to sell this product for if they wish to sell 10,000 units and realize a profit of $50,000?

Question 5 options:

$18

$22

$12

$5

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Question 6 (3 points) Question 6 Unsaved

Gastone Inc. has estimated the following forecasted sales for a 3-month period:

Month             Estimated sales $

August            33,000

September       29,000

October           30,000

On average, 60% of sales are collected in the month of sale, 39% in the following month, and the remaining 1% is never collected. Determine the budgeted cash receipts for September.

Question 6 options:

$29,000

$30, 270

$31,110

$29,100

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Question 7 (3 points) Question 7 Unsaved

Garth Inc. has gathered the following monthly budget numbers based on a budgeted production level of 2,000 units:

Direct Materials          $30,000

Factory property taxes           $10,000

Factory utilities          $3,000

The actual production level during February was 3,000 units. Based on the information provided, determine the estimated direct material & factory property taxes, respectively, for February.

Question 7 options:

$30,000 and $15,000

$30,000 and $10,000

$45,000 and and $15,000

$45,000 and $10,000

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Question 8 (3 points) Question 8 Unsaved

Use the following information to answer questions 8 & 9.

Projected sales, beginning & ending inventory for Sommers Inc. for March 2013 is as follows:

Sales    50,000 units

FG Beg. Inv.   4,000 units

FG End. Inv.   8,000 units

The selling price is $40 per unit. Each unit requires 4 pounds of material which costs $6 per pound. The beginning inventory of raw materials is 12,000 pounds. The company wants to have 3,000 pounds of material in inventory at the end of March 2013.

Determine Sommers' budgeted production for March 2013.

Question 8 options:

54,000 units

46,000 units

62,000 units

38,000 units

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Question 9 (3 points) Question 9 Unsaved

Use the following information to answer questions 8 & 9.

Projected sales, beginning & ending inventory for Sommers Inc. for March 2013 is as follows:

Sales    50,000 units

FG Beg. Inv.   4,000 units

FG End. Inv.   8,000 units

The selling price is $40 per unit. Each unit requires 4 pounds of material which costs $6 per pound. The beginning inventory of raw materials is 12,000 pounds. The company wants to have 3,000 pounds of material in inventory at the end of March 2013.

Determine the budgeted material purchases for March 2013.

Question 9 options:

$1,350,000

$1,242,000

$1,206,000

$1,296,000

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Question 10 (3 points) Question 10 Unsaved

Polar Fans has prepared all the necessary budgets and is attempting to prepare their forecasted income statement. Given that the budgeted total manufacturing cost is $600,000, the budgeted beginning and ending WIP balances are $120,000 and $170,000 respectively, the budgeted costs of goods manufactured is $550,000, and the budgeted beginning and ending FG inventories are $60,000 and $78,000, determine the budgeted cost of goods sold for Polar Fans.

Question 10 options:

$500,000

$532,000

$482,000

$568,000

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Question 11 (3 points) Question 11 Unsaved

The following information was reported for Lake Co.

Beginning cash balance            $24,000

Cash payments           $42,000

Cash receipts  $29,000

Minimum cash balance desired           $22,000

How much cash will Lake Co. have to borrow to meet its minimum cash requirements?

Question 11 options:

$0

$9,000

$11,000

$13,550

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Question 12 (3 points) Question 12 Unsaved

Use the following information to answer questions 12 - 15

The budgeted and actual costs at Goodyear Company is as follows:

Budgeted costs            Actual costs

Materials (per tire): 12 lbs @ $1.80/lb           Total materials purchased: 840,000lbs

Labor (per tire): 4 hrs. @ $14/hr        Total cost of purchase: $1,554,000

Factory O/H (per tire): 3 hrs. @ $8/hr           Total material used: 849,600 lbs

            Labor (per tire): 4.1 hrs @ $13/hr

            Factory O/H (per tire): 2.8 hrs @ $8.50/hr

During October, Goodyear produced 72,000 tires.

The budgeted cost and actual cost, respectively, of producing one tire is (to the nearest $)

Question 12 options:

$102 and $98

$102 and $99

$102 and $95

$78 and $98

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Question 13 (3 points) Question 13 Unsaved

Use the following information to answer questions 12 - 15

The budgeted and actual costs at Goodyear Company is as follows:

Budgeted costs            Actual costs

Materials (per tire): 12 lbs @ $1.80/lb           Total materials purchased: 840,000lbs

Labor (per tire): 4hrs. @ $14/hr        Total cost of purchase: $1,554,000

Factory O/H (per tire): 3 hrs. @ $8/hr           Total material used: 849,600 lbs

            Labor (per tire): 4.1 hrs @ $13/hr

            Factory O/H (per tire): 2.8 hrs @ $8.50/hr

During October, Goodyear produced 72,000 tires.

The direct materials price variance is:

Question 13 options:

$42,480 (U)

$42,480 (F)

$42,000 (U)

$42,000 (F)

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Question 14 (3 points) Question 14 Unsaved

Use the following information to answer questions 12 - 15

The budgeted and actual costs at Goodyear Company is as follows:

Budgeted costs            Actual costs

Materials (per tire): 12 lbs @ $1.80/lb           Total materials purchased: 840,000lbs

Labor (per tire): 4 hrs. @ $14/hr        Total cost of purchase: $1,554,000

Factory O/H (per tire): 3 hrs. @ $8/hr           Total material used: 849,600 lbs

            Labor (per tire): 4.1 hrs @ $13/hr

            Factory O/H (per tire): 2.8 hrs @ $8.50/hr

During October, Goodyear produced 72,000 tires.

The direct materials quantity variance is:

Question 14 options:

$44,400 (F)

$44,400 (U)

$25,920 (F)

$25,920 (U)

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Question 15 (3 points) Question 15 Unsaved

Use the following information to answer questions 12 - 15

The budgeted and actual costs at Goodyear Company is as follows:

Budgeted costs            Actual costs

Materials (per tire): 12 lbs @ $1.80/lb           Total materials purchased: 840,000lbs

Labor (per tire): 4 hrs. @ $14/hr        Total cost of purchase: $1,554,000

Factory O/H (per tire): 3 hrs. @ $8/hr           Total material used: 849,600 lbs

            Labor (per tire): 4.1 hrs @ $13/hr

            Factory O/H (per tire): 2.8 hrs @ $8.50/hr

During October, Goodyear produced 72,000 tires.

The direct labor efficiency variance is:

Question 15 options:

$72,000 (F)

$72,000 (U)

$100,800 (F)

$100,800 (U)

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Question 16 (3 points) Question 16 Unsaved

 Excel Co. has collected the following data for April 2001:

Budgeted direct labor: 3 hours per unit at $6 per hour

Direct labor efficiency variance: $1,200 (U)

Actual direct labor cost: $28,900

Units produced:1,600

The number of direct labor hours actually worked during April is:

Question 16 options:

4,500

4,800

5,000

4,600

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Question 17 (3 points) Question 17 Unsaved

What type of direct material variances for quantity and price will arise if the actual number of pounds of material used exceeds budgeted pounds but actual cost per pound was less than budgeted cost per pound?

Question 17 options:

Qty: Unfavorable

Price: Favorable

Qty: Favorable

Price: Favorable

Qty: Favorable

Price: Unfavorable

Qty: Unfavorable

Price: Unfavorable