ending belance in the M uat 8. Rather than peeparing a plansing budpct in the bepianing of a sime period wing an esimate of buniness activiny which can ofien he wrong, it makes moe sese to wait till the end of the period and hrodpet using acteal levels of activity 9. A compumy with a degree of operaing leverage of o wold expect net operting income to increase by 6s i sales increased from $100,000 1o $200,000 Accouning Principles have to be followed for both Financial and Manaperial Accounting purposes. 11. Activity based cost systems give more accurate usit product cost information but also uswally costs mone to implement considering a number of investment projects, the project that has the shortest payback period does not necessanily have the highest net present value 13. The amount you have to save and invest every year to reach a retirement goal of 1 Million dollarms at the timne you retire is a lot less if you start in your twenties than if you start in your thirties 14. All future costs are relevant in decision making. waist, ompu", e.pen..ale.. espected unit sales. Due so excessive production duning Manch,on Manch 3 he wew 25 0 aits of in the ending eventry Given this iaormation, Walsh Company's geoluction of Producs W for the should be mosah of A. 60,000 units B. 65,00) units C73 u D. 66,000 units 2. When the activity level declines within the relevant rango, what should happen with respect to the following? Flxed cost per itVariable cost per unit Increase No change A) Increase Increase B) No change Increase C) D) No change No change Sioux Corporation is estimating the fotowing sales for the fest four monthys of nest year February Aprii Sales nre normaty collected 60% n te month of sale, 35% n "e month towing the sak. Md he remaining 5% being uncollectible. Based on this inform ion how much CNh shold collect during the month of April? A $286.500 B S320.000 C. $192.000 D. $94,500 4. The amount by which a company's sales can decine before losses are incurred is called the: A. contribution margin. B. degree of operating leverage C. margin of safety. D. contribution margin ratio. s. Hettich Corporation uses an activity-based costing system with the following tree activity cost ocis Aotivity Cost Pool Total Activity 20.000 machine-hours Not applicable The Other activity cost pool is used to accumulate costs of idie capacity and orgisnizstion-sustaining costs. The company has provided the following data concerning its costs Wages and salaries $480,000 120,000 200 Occupancy $800,000 Total The distribution of resource consumption across activity cost pools is given below Activity Cost Pools Order |Other|Total Fabrication |25%|100% Wages and | 20% 55% salaries | 45%| 100% 45% 10% Depreciation |35%|100% 40% 25% Occupancy The activity rate for the Order Processing activity cost pool is closest to: A. $1,400 per order B. $1,600 per order C. $1,150 per order D. $800 per order Folloning ieforrnalicn .sed for questions 6 and 7 The controlker of Ferrence Company estimates the amoust of materials handling eed co alkoated ) the company's two products usang the dina shin arc given blow : heatos Wall Mirmors Specialty Windows Total expected units prodacesd Total expected material moves Expected direct labor-hours paer unit The total materials handling cost for the year is espected so be $16,486.40 ts. ir the msiterials handling cost is allocated cn the basis of direct labor-hours, hw mach of the soeal waterials handling cost would be allocated to the wall mirrors? Round off your amswer to the ncarest whole dollar) (Hint: Need to compate the total nember of DI.H first) A. $13,220 B. $15,053 C $9.892 D, $8.243 7. If the materials handling cost is allocated on the basis of material moves, how much of the total materials handlin cost would be allocated to the specialty windows? Round off your answer to the nearest dollar whole dollar. Hint: Need to compute the total number of material moves first) A. S3.266 B. $9,274 C.$8,243 D. $6,595 tion currently has two divisions which ad the following operating reswdts fo last year: Rubber Division 0,000 5500.000 Variable costs 210000 Contribution margin 290000 10000 Traceable fixed costs Segment margin|160,000 Allocated common corporate fived costs 20,000 Net operating income (loss) s 700 0,000 Because the Rubber Division sustained a loss, the president of Vanikoro is considering the elimination of this division. All of the division's traceable fixed costs could be avoided if the division was dropped. None of the allocated common corporate fixed costs could be avokded. the Rubber Division was dropped at the beginning of last year, how much higher or lower would Vanikoro's total net opcrating income have been for the year? A) $20,000 higher B) $50,000 higher C) $50,000 lower D) $30,000 lower 11. Maintenance costs at a Whetsel Corporation factory are listed below 3,135 $48,340 3.095 $47 May 3,133 $48,345 June 3,157 48.548 3.066 47.733 3,076 $47 830 Soptomber 3,084 $47 880 $48,247 3,125 3,098 $48.014 November Management believes that maintenance cost is a mixed cost thet depands on machine-hours Use the high-low method to eatimate the variable and fxed components of this cost. Compute the component first and round off to the nearest whole cent Compute the fixed component second and off to the nearest whole dollar. These estimates would be closest to. variabie round A. $8.86 per machine-hour; $20,577 per month B. $0.11 per machine-hour: $48,192 per month C. $15.48 per machine-hour: $48,103 per month D. $8.81 per machine-hour, $20,718 per month 10 works as 14. Hal currently nesi semvesics. Which the ol the following would be considered un opprenuen,.ca.d umaalagulwgc? B. the cost of the cola thas Hal will consume during class C. Hat's lost wages at Barger Haves D. the cost of commuting to the Burper Haven job 1S, Suppose the spending varince for office supplics for 120 U. Whst cnad be pe for this variance A. Prices for office supplies decreased since ihe planning budge' was prepared. B. No office supplies were wasted C. Both a. and b. are comect. D. Both a. and b. are incornect 16. The net present value and internal rate of return methods of capitai budgeting are superior to the payback method because they: A. are easier to implement. B. consider the time value of money. C. require less data. D. reflect the effects of depreciation and income taxes. 12 ending belance in the M uat 8. Rather than peeparing a plansing budpct in the bepianing of a sime period wing an esimate of buniness activiny which can ofien he wrong, it makes moe sese to wait till the end of the period and hrodpet using acteal levels of activity 9. A compumy with a degree of operaing leverage of o wold expect net operting income to increase by 6s i sales increased from $100,000 1o $200,000 Accouning Principles have to be followed for both Financial and Manaperial Accounting purposes. 11. Activity based cost systems give more accurate usit product cost information but also uswally costs mone to implement considering a number of investment projects, the project that has the shortest payback period does not necessanily have the highest net present value 13. The amount you have to save and invest every year to reach a retirement goal of 1 Million dollarms at the timne you retire is a lot less if you start in your twenties than if you start in your thirties 14. All future costs are relevant in decision making. waist, ompu", e.pen..ale.. espected unit sales. Due so excessive production duning Manch,on Manch 3 he wew 25 0 aits of in the ending eventry Given this iaormation, Walsh Company's geoluction of Producs W for the should be mosah of A. 60,000 units B. 65,00) units C73 u D. 66,000 units 2. When the activity level declines within the relevant rango, what should happen with respect to the following? Flxed cost per itVariable cost per unit Increase No change A) Increase Increase B) No change Increase C) D) No change No change Sioux Corporation is estimating the fotowing sales for the fest four monthys of nest year February Aprii Sales nre normaty collected 60% n te month of sale, 35% n "e month towing the sak. Md he remaining 5% being uncollectible. Based on this inform ion how much CNh shold collect during the month of April? A $286.500 B S320.000 C. $192.000 D. $94,500 4. The amount by which a company's sales can decine before losses are incurred is called the: A. contribution margin. B. degree of operating leverage C. margin of safety. D. contribution margin ratio. s. Hettich Corporation uses an activity-based costing system with the following tree activity cost ocis Aotivity Cost Pool Total Activity 20.000 machine-hours Not applicable The Other activity cost pool is used to accumulate costs of idie capacity and orgisnizstion-sustaining costs. The company has provided the following data concerning its costs Wages and salaries $480,000 120,000 200 Occupancy $800,000 Total The distribution of resource consumption across activity cost pools is given below Activity Cost Pools Order |Other|Total Fabrication |25%|100% Wages and | 20% 55% salaries | 45%| 100% 45% 10% Depreciation |35%|100% 40% 25% Occupancy The activity rate for the Order Processing activity cost pool is closest to: A. $1,400 per order B. $1,600 per order C. $1,150 per order D. $800 per order Folloning ieforrnalicn .sed for questions 6 and 7 The controlker of Ferrence Company estimates the amoust of materials handling eed co alkoated ) the company's two products usang the dina shin arc given blow : heatos Wall Mirmors Specialty Windows Total expected units prodacesd Total expected material moves Expected direct labor-hours paer unit The total materials handling cost for the year is espected so be $16,486.40 ts. ir the msiterials handling cost is allocated cn the basis of direct labor-hours, hw mach of the soeal waterials handling cost would be allocated to the wall mirrors? Round off your amswer to the ncarest whole dollar) (Hint: Need to compate the total nember of DI.H first) A. $13,220 B. $15,053 C $9.892 D, $8.243 7. If the materials handling cost is allocated on the basis of material moves, how much of the total materials handlin cost would be allocated to the specialty windows? Round off your answer to the nearest dollar whole dollar. Hint: Need to compute the total number of material moves first) A. S3.266 B. $9,274 C.$8,243 D. $6,595 tion currently has two divisions which ad the following operating reswdts fo last year: Rubber Division 0,000 5500.000 Variable costs 210000 Contribution margin 290000 10000 Traceable fixed costs Segment margin|160,000 Allocated common corporate fived costs 20,000 Net operating income (loss) s 700 0,000 Because the Rubber Division sustained a loss, the president of Vanikoro is considering the elimination of this division. All of the division's traceable fixed costs could be avoided if the division was dropped. None of the allocated common corporate fixed costs could be avokded. the Rubber Division was dropped at the beginning of last year, how much higher or lower would Vanikoro's total net opcrating income have been for the year? A) $20,000 higher B) $50,000 higher C) $50,000 lower D) $30,000 lower 11. Maintenance costs at a Whetsel Corporation factory are listed below 3,135 $48,340 3.095 $47 May 3,133 $48,345 June 3,157 48.548 3.066 47.733 3,076 $47 830 Soptomber 3,084 $47 880 $48,247 3,125 3,098 $48.014 November Management believes that maintenance cost is a mixed cost thet depands on machine-hours Use the high-low method to eatimate the variable and fxed components of this cost. Compute the component first and round off to the nearest whole cent Compute the fixed component second and off to the nearest whole dollar. These estimates would be closest to. variabie round A. $8.86 per machine-hour; $20,577 per month B. $0.11 per machine-hour: $48,192 per month C. $15.48 per machine-hour: $48,103 per month D. $8.81 per machine-hour, $20,718 per month 10 works as 14. Hal currently nesi semvesics. Which the ol the following would be considered un opprenuen,.ca.d umaalagulwgc? B. the cost of the cola thas Hal will consume during class C. Hat's lost wages at Barger Haves D. the cost of commuting to the Burper Haven job 1S, Suppose the spending varince for office supplics for 120 U. Whst cnad be pe for this variance A. Prices for office supplies decreased since ihe planning budge' was prepared. B. No office supplies were wasted C. Both a. and b. are comect. D. Both a. and b. are incornect 16. The net present value and internal rate of return methods of capitai budgeting are superior to the payback method because they: A. are easier to implement. B. consider the time value of money. C. require less data. D. reflect the effects of depreciation and income taxes. 12