Cost-volume-profit analysis is used to predict future costs to be incurred, volumes of activity, sales to be made, and profit to be earned.

a. True

b. False

Which of the following statements about budgeting is false?

a. Budgeting is an aid to planning and control.

b. Budgets create standards for performance evaluation.

c. Budgets help coordinate the activities of the entire organization.

d. Budgeting forces managers to think ahead and formalize future objectives.

e. The master budget should only be prepared by top management.

All of the following are true of the financial statement analysis report, except it:

a. contains ambiguities and qualifications.

b. forces preparers to organize their reasoning and to verify the logic of analysis.

c. serves as a method of communication to users.

d. helps users and preparers to refine conclusions based on evidence from key building blocks.

e. enables readers to see the process and rationale of analysis.

A company issued 70 shares of $30 par value preferred stock for $4,000 cash. The journal entry to record the issuance is:

a. Debit Cash $2,100; credit Preferred Stock $2,100.

b. Debit Investment in Preferred Stock $2,100; credit Cash $2,100.

c. Debit Cash $4,000; credit Preferred Stock $4,000.

d. Debit Preferred Stock $2,100, debit Investment in Preferred Stock $1,900; credit Cash $4,000.

e. Debit Cash $4,000; credit Paid-in Capital in Excess of Par Value, Preferred Stock $1,900, credit Preferred Stock $2,100.

A company had net income of $2,660,000, net sales of $25,000,000, and average total assets of $8,000,000. Its return on total assets equals:

a. 3.01%.

b. 10.64%.

c. 32.00%.

d. 33.25%.

e. 300.75%.

Copy Center pays an average wage of $12 per hour to employees for printing and copying jobs, and allocates $18 of overhead for each employee hour worked. Materials are assigned to each job according to actual cost. Jobs are marked up 20% above cost to determine the selling price. If Job M-47 used $350 of materials and took 20 hours of labor to complete, what is the selling price that should be assigned to the job?

a. $852

b. $1,140

c. $456

d. $720

e. $708

A company has earnings per share of $9.60. Its dividend per share is $0.50, its market price per share is $110, and its book value per share is $96. Its price-earnings ratio equals:

a. 1.15.

b. 0.87.

c. 19.2.

d. 10.0.

e. 11.46.

A company issued 8%, 15-year bonds with a par value of $550,000 that pay interest semi-annually. The current market rate is 8%. The journal entry to record each semiannual interest payment is:

a. Debit Bond Interest Expense $22,000; credit Cash $22,000.

b. Debit Bond Interest Expense $44,000; credit Cash $44,000.

c. Debit Bond Interest Payable $22,000; credit Cash $22,000.

d. Debit Bond Interest Expense $550,000; credit Cash $550,000.

e. No entry is needed, since no interest is paid until the bond is due.

Mayan Company had net income of $132,000. The weighted-average common shares outstanding were 80,000. The company declared a $27,000 dividend on its noncumulative, nonparticipating preferred stock. There were no other stock transactions. The company's earnings per share is:

a. $1.65.

b. $1.99.

c. $1.31.

d. $0.34.

e. $4.89.