Answer the following multiple choice questions:

1) Kitchens Sales Inc. is approached by Mr. Louis Cifer, a new customer, to fulfill a large one ? time ? only special order for a product similar to one offered to regular customers. The following per unit data apply for sales to regular customers:

Direct materials $546

Direct labor 366

Variable manufacturing support 54

Fixed manufacturing support 128

Total manufacturing costs 1,094

Markup (50%) 547

Targeted selling price $1,641

Kitchens Sales Inc. has excess capacity. Mr. Cifer wants the cabinets in cherry rather than oak, so direct material costs will increase by $66 per unit. The average marketing cost of Kitchens Sales product is $172 per order. For Kitchens, what is the full cost of the one ? time ? only special order?

A. $1,332

B. $1,160

C. $1,028

D. $1,094

2) The order to follow when preparing the operating budget is ________.

A. revenues budget, manufacturing overhead costs budget, and production budget ?

B. revenues costs of goods sold budget, production budget, and cash budget ?

C. cash expenditures budget, revenues budget, and production budget ?

D. revenues budget, production budget, direct manufacturing labor costs budget , and cost of goods sold ?

3) Jalbert Incorporated planned to use materials of $8 per unit but actually used materials of $13 per unit, and planned to make 1,520 units but actually made 1,760 units.

The flexible ? budget amount for materials is ________.

A. $14,080

B. $22,880

C. $12,160

D. $19,760

4) For revenue items, a favorable variance means that actual revenues are less than expected.

True

False

5) Budgets should ________.

A. only be developed for short periods of time such as quarters

B. not be so rigid that if conditions change, adjustments in spending can be made ?

C. include only variable costs ?

D. be administered rigidly ?

6) Which of the following methods utilizes discounted cash flows when analyzing potential capital expenditures?

Methods:?

1. Accrual accounting rate ? of ? return

2. Internal Rate of Return (IRR)?

3. Payback Period?

4. Net Present Value (NPV)

A. 2 and 4 ?

B. 1 only ?

C. 1 and 3 ?

D. 1 and 2 ?

7) Assume your goal in life is to retire with three million dollars. How much would you need to save at the end of each year if interest rates average 9% and you have a 15 ? year work life?

A. $823,614

B. $400,000

C. $102,176

D. $18,000

8) Fixed overhead costs include ________.

A. indirect materials

B. energy costs?

C. the cost of sales commissions?

D. leasing of machinery used in a factory

9) The actual information pertains to the month of June. As part of the budgeting process, Colonial Fencing Company developed the following static budget for September. Colonial is in the process of preparing the flexible budget and understanding the results.

The flexible budget for sales revenues will be?

A. $573,500

B. $610,000

C. $558,000

D. $612,000

Sales volume (in units) Sales revenues Variable costs Contribution margin Fixed costs Operating profit Actual Results Flexible Budget Static Budget 15,500 $558,000 300,000 $258,000 236,000 $22,000 17,000 $610,000 $ 256,000 $ $354,000 $ 243,000 $ $111,000 $