During its first year of operations, Teddy Company paid $4,000 for direct materials and $8,500 for production workers' wages Lease payments and utilities on the production facilities amounted to $500 and on the administrative building amounted to $1000 General, selling, and administrative expenses totaled $3,000 The Company owns $30,000 of manufacturing equipment The equipment has a 4 year useful life and a $2,000 salvage value and uses straight line depreciation The company produced 5,000 units and sold 4,000 units at a price of $7 50 a unit The average cost per unit is which of the following amounts a $4 60 b $4 00 c $5 00 d $5 75 During its first year of operations, Teddy Company paid $4,000 for direct materials and $8,500 for production workers' wages Lease payments and utilities on the production facilities amounted to $500 and on the administrative building amounted to $1000 General, selling, and administrative expenses totaled $3,000 The Company owns $30,000 of manufacturing equipment The equipment has a 4 year useful life and a $2,000 salvage value and uses straight line depreciation The company produced 5,000 units and sold 4,000 units at a price of $7 50 a unit What is the amount of cost of goods sold for the first year a $16,000 b $20,000 c $28,000 d $23,200 During its first year of operations, Teddy Company paid $4,000 for direct materials and $8,500 for production workers' wages Lease payments and utilities on the production facilities amounted to $500 and on the administrative building amounted to $1000 General, selling, and administrative expenses totaled $3,000 The Company owns $30,000 of manufacturing equipment The equipment has a 4 year useful life and a $2,000 salvage value and uses straight line depreciation The company produced 5,000 units and sold 4,000 units at a price of $7 50 a unit What is the amount of ending finished goods inventory for the first year a $14,000 b $16,000 c $ 5,000 d $ 4,000 Based on the income statements of the three following retail businesses, which company is the most highly leveraged a They all have same operating leverage b Company Cleveland c Company Atlanta d Company Boston BONUS Question (2 Points) Manicure Mania and Nails R Us are competing nail salons Both companies have the same number of customers Both charge the same price for a manicure The only difference is that Manicure Mania pays its manicurists on a salary basis (i e , fixed cost structure) while Nails R Us pays its manicurists on the basis of the number of customers they serve (i e , variable cost structure) Both companies currently make the same amount of net income If sales of both salons increase by an equal amount, Manicure Mania a will earn a lower profit than Nails R Us b will earn a higher profit than Nails R Us c The answer cannot be determined from the information provided d will earn the same amount of profit as Nails R Us BONUS Question (2 Points) The following information is provided for Beck Company Select the correct statement regarding the financial statement impact of misclassifying the $5,000 in material costs as general (period) costs a Net income will be overstated b Net income will be correct c Ending inventory will be overstated d Ending inventory will be understated Which of the following statements regarding internal controls is INCORRECT a An effective set of internal controls addresses the opportunity element of the fraud triangle b Most people are able to resist pressure and the tendency to rationalize ethical or legal misconduct which materially reduces the need for physical controls to protect assets c Internal controls are policies and procedures designed to ensure that a firm's objectives will be accomplished d The separation of duties is a widespread basic internal control practice

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During its first year of operations, Teddy Company paid $4,000 for direct materials and $8,500 for production workers' wages. Lease payments and utilities on the

During its first year of operations, Teddy Company paid $4,000 for direct materials and $8,500 for production workers' wages. Lease payments and utilities on the production facilities amounted to $500 and on the administrative building amounted to $1000. General, selling, and administrative expenses totaled $3,000. The Company owns $30,000 of manufacturing equipment. The equipment has a 4-year useful life and a $2,000 salvage value and uses straight-line depreciation. The company produced 5,000 units and sold 4,000 units at a price of $7.50 a unit. The average cost per unit is which of the following amounts?

a.
$4.60

b.
$4.00

c.
$5.00

d.
$5.75

During its first year of operations, Teddy Company paid $4,000 for direct materials and $8,500 for production workers' wages. Lease payments and utilities on the production facilities amounted to $500 and on the administrative building amounted to $1000. General, selling, and administrative expenses totaled $3,000. The Company owns $30,000 of manufacturing equipment. The equipment has a 4-year useful life and a $2,000 salvage value and uses straight-line depreciation. The company produced 5,000 units and sold 4,000 units at a price of $7.50 a unit. What is the amount of cost of goods sold for the first year?

a.
$16,000

b.
$20,000

c.
$28,000

d.
$23,200

During its first year of operations, Teddy Company paid $4,000 for direct materials and $8,500 for production workers' wages. Lease payments and utilities on the production facilities amounted to $500 and on the administrative building amounted to $1000. General, selling, and administrative expenses totaled $3,000. The Company owns $30,000 of manufacturing equipment. The equipment has a 4-year useful life and a $2,000 salvage value and uses straight-line depreciation. The company produced 5,000 units and sold 4,000 units at a price of $7.50 a unit. What is the amount of ending finished goods inventory for the first year?

a.
$14,000

b.
$16,000

c.
$ 5,000

d.
$ 4,000

Based on the income statements of the three following retail businesses, which company is the most highly leveraged?

image text in transcribed

	a.	They all have same operating leverage
	b.	Company Cleveland
	c.	Company Atlanta
	d.	Company Boston

BONUS Question (2 Points): Manicure Mania and Nails-R-Us are competing nail salons. Both companies have the same number of customers. Both charge the same price for a manicure. The only difference is that Manicure Mania pays its manicurists on a salary basis (i.e., fixed cost structure) while Nails-R-Us pays its manicurists on the basis of the number of customers they serve (i.e., variable cost structure). Both companies currently make the same amount of net income. If sales of both salons increase by an equal amount, Manicure Mania

	a.	will earn a lower profit than Nails-R-Us.
	b.	will earn a higher profit than Nails-R-Us.
	c.	The answer cannot be determined from the information provided.
	d.	will earn the same amount of profit as Nails-R-Us.

BONUS Question (2 Points): The following information is provided for Beck Company. Select the correct statement regarding the financial statement impact of misclassifying the $5,000 in material costs as general (period) costs.

a.
Net income will be overstated.

b.
Net income will be correct.

c.
Ending inventory will be overstated.

d.
Ending inventory will be understated.

Which of the following statements regarding internal controls is INCORRECT?

	a.	An effective set of internal controls addresses the "opportunity" element of the "fraud triangle".
	b.	Most people are able to resist pressure and the tendency to rationalize ethical or legal misconduct which materially reduces the need for "physical controls" to protect assets.
	c.	Internal controls are "policies and procedures" designed to ensure that a firm's objectives will be accomplished.
	d.	The "separation of duties" is a widespread basic internal control practice.