Chapter 11

1. In a standard cost accounting system, a company purchased raw materials on account for $46,500 when the standard cost was $44,000. The journal entry would not include a

a. debit to Raw Materials Inventory for $44,000.

b. debit to Materials Price Variance for $2,500.

c. credit to Materials Price Variance for $2,500.

d. credit to Accounts Payable for $46,500.

2. The formula for the labor quantity (or efficiency) variance is

a. (Actual Hours X Actual Rate) (Actual Hours X Standard Rate).

b. (Actual Hours X Standard Rate) (Standard Hours X Standard Rate).

c. (Standard Hours X Actual Rate) (Standard Hours X Standard Rate).

d. none of the above.

Chapter 12

3. The cash payback period is computed by dividing the

a. cost of the capital investment by the annual net income.

b. cost of the capital investment by the present value of the cash flows.

c. cost of the capital investment by the net annual cash flow.

d. present value of the cash flows by the cost of the capital investment.

4. Which of the following is a true statement with regard to cash payback technique?

a. The longer the payback period, the more attractive the investment

b. The shorter the payback period, the more attractive the investment

c. The payback investment is attractive when the payback period equals the age of the investment

d. The payback period is not a factor in determining if an investment is beneficial to a company.

Chapter 13

5. A company has credit sales of $900,000 and cash sales of $540,000 during the same year that the Accounts Receivable account decreased by $120,000. What was the total of cash receipts from sales?

a. $1,320,000.

b. $1,560,000.

c. $1,020,000.

d. $780,000.