Question
1) ARO Inc. sold 10,000 units during its second month of operations at an average selling price of $8 per unit. Its Accounts Receivable balance
1) ARO Inc. sold 10,000 units during its second month of operations at an average selling price of $8 per unit. Its Accounts Receivable balance at the start of the second month was $50,000. ARO collects all sales evenly over a two month period. What were ARO's collections during its second month of operations?
Multiple Choice
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$135,000
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$90,000
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$80,000
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$50,000
2) XYZ Inc. sells a single product for a budgeted selling price of $22 per unit. Budgeted direct materials costs were $5 per unit, while budgeted direct labour and variable overhead costs were $3 and $2 respectively. Budgeted fixed overhead costs amount $25,000 per month. The company has a practical production capacity of 10,000 units per month. Budgeted variable selling costs are $2 per unit. Budgeted fixed selling costs are $2,000 per month. During the company's first month of operations, the company produced 10,000 units and sold 9,500 units at an average selling price of $18 per unit. Fixed and variable costs were as budgeted. The company's static budget variance was:
Multiple Choice
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$43,000 unfavourable
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$23,000 favourable
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$44,000 unfavourable
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$44,000 favourable
3)
XLM Inc. sells a single product for a budgeted selling price of $21 per unit. Budgeted direct materials costs were $5 per unit, while budgeted direct labour and variable overhead costs were $3 and $2 respectively. Budgeted fixed overhead costs amount $25,000 per month. The company has a practical production capacity of 10,000 units per month. Budgeted variable selling costs are $2 per unit. Budgeted fixed selling costs are $2,000 per month. During the company's first month of operations, the company produced 10,000 units and sold 7,500 units at an average selling price of $18 per unit. Fixed and variable costs were as budgeted. The company's static budget variance was:
Multiple Choice
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$35,000 favourable.
-
$45,000 unfavourable.
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$44,000 unfavourable.
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$44,000 favourable.
4)
ARO Inc. sold 10,000 units during its second month of operations at an average selling price of $8 per unit. Its Accounts Receivable balance at the start of the second month was $50,000. ARO collects all sales as follows: 40% during the month of the sale and 60% in the month following the sale. What was ARO's Accounts Receivable at the end of its second month of operations?
Multiple Choice
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$98,000
-
$50,000
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$48,000
-
$82,000
5) A summary of a company's plans for which sales, production, distribution targets and financing activities are laid out is known as a master budget.
True or False
TrueFalse
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