QUESTION 1

1. The cost of milk used to manufacture ice cream would most likely be classified as a(n):

   		Variable cost
   		Indirect cost
   		Sunk cost
   		Differential cost

QUESTION 2

1. Which of the following would not usually be considered a fixed cost?

   		Insurance
   		Executive salaries
   		Plant depreciation
   		Needles used in a hospital

QUESTION 3

1. The product costs of a software development company would NOT include:

   		Computer lease
   		Salary of the CEO
   		Supplies used by programmers
   		Computer programmers's salaries

QUESTION 4

1. Which of the following would NOT be included in manufacturing overhead?

   		Indirect materials
   		Factory utilities
   		Factory fire insurance
   		Direct labor

QUESTION 5

1. Mackie Co. manufactures hunting clothing. The standard variable costs to produce on batch of the Big Mac vests are as follows: direct material average cost is $6 per yard; average yards per batch is 30; direct labor average per hour is $8; average hours per batch is 4. The standard monthly fixed costs are as follows: manufacturing overhead is $3,200; selling and administrative costs are $1,900. Mackie produces 100 batches per month. (Ten vests are produced in each batch). What is th manufacturing cost per vest?

   		$5.10
   		$12.00
   		$23.20
   		$25.10

QUESTION 6

1. You currently work as a machinist for a factory. Your salary is $28,000 per year. You are thinking about quitting your job and going back to college. It will take you tow year to obtain your college degree. Tuition and other costs of the education will total $24,000. You also intend to keep your car by making $250 per month payments out of your savings. How much is the opportunity cost of going to college.

   		$28,000
   		$56,000
   		$52,000
   		$62.000

QUESTION 7

1. The scattergraph is a useful tool for:

   		Analyzing abrupt changes in cost behavior
   		Determining actual variable costs
   		Determining the break-even point
   		Working outside the relevant range

QUESTION 8

1. Which type of business organization allows the business to be a separate, distinct entity away from its owners?

   		Partnership
   		Proprietorship
   		Corporation
   		All of the above

QUESTION 9

1. Compared with preferred stock, common stock usually has a favorable prefence in terms of:

   		Dividends
   		Voting rights
   		Liquidated assets
   		Resale value

QUESTION 10

1. On January 1, 2013, Georgi Company was authorized to issue 10,000 share of $2 par value common stock and 5,000 shares of $5 preferred stock. Given this information, if Georgi Company issued 3,000 shares of common stock for $7 per share on January 10, 2013, the entry to record the issuance of the stock would include a

   		Debit to Cash of $6,000
   		Credit to Premium on Common Stock of $6,000
   		Credit to Common Stock of $6,000
   		Debit to Cash of $15,000

QUESTION 11

1. Moomey Corporation had 20,000 shares of $4 par value common stock outstanding on January 1, 2013. On January 10, 2013, the firm purchased 2,000 of its outstanding shares for $18 per share. On July 22, 2013, it reissued 1,000 shares at $22 per share. Given this information, the entry to record the reissuance of the stock on July 22 would include a credit to:

   		Treasury stock of $4,000
   		Common stock of $4,000
   		Paid-In Capital of $18,000
   		Gain on Sale of Treasury Stock of $4,000

QUESTION 12

1. Reiser Co. has 8,000 shares of no-par common stock with a $50 stated value and 3,000 shares of $40 par, 5 percent noncumulative preferred stock outstanding. if the company declares a cash dividend of $22,000, the amount of the dividend paid to preferred stockholders is:

   		$5,000
   		$6,000
   		$11,00
   		$5,500

QUESTION 13

1. Which of the following would be reported as cash flow from financing activities

   		Cash receipts from the sale of equipment
   		Cash receipts from interest on notes receivable
   		Cash receipts from the issuance of long-term debt
   		Cash receipts from dividends on long-term investments

QUESTION 14

1. Which of the following would be classified as an investing activity on a statement of cash flows

   		Cash recevied from dividends
   		Cash paid for interest
   		Cash received from the sale of land
   		Cash used to repay principal amounts borrowed

QUESTION 15

1. Chen Corporation use the direct method of preparing a statement of cash flows. Based on the following cash flows during 2012, what is the net inflow (outflow) from investing activities:

   Cash receipts from issuance of stock	20,000
   Cash received from customers	10,000
   Dividends received on long term investments	5,000
   Cash paid for wages	6,000
   Cash paid for insurance	500
   Cash paid for dividends	3,000
   Cash paid to purchase building	30,000
   Loan made to another company	10,000

   		($10,000)
   		($30,000)
   		($40,000)
   		($43,000)

QUESTION 16

1. Based on the following information and using the direct method of preparing a statement of cash flows, what would be the net cash inflow (outflow) from financing activities?

   Cash receipts from issuance of stock	20,000
   Cash received from customers	10,000
   Dividends received on long term investments	5,000
   Cash paid for wages	6,000
   Cash paid for insurance	500
   Cash paid for dividends	3,000
   Cash paid to purchase builidng	30,000
   Loan made to another company	10,000

   		$20,000
   		$17,000
   		($3,000)
   		($13,000)

QUESTION 17

1. If a company is to succeed voer the long-term, positive cash flows are necessary from

   		Operating activities
   		Investing activities
   		Financing activities
   		Both investing and financing activities

QUESTION 18

1. Given the following data and using the high-low method of analysis, total fixed costs are approximately:

   Month	Overhead Cost	Direct Labor Hours
   July	$32,000	4,200
   August	$28,500	3,400
   September	$24,000	2,000
   October	$38,500	6,000
   November	$45,000	9,000
   December	$41,000	7,500

   		$8,000
   		$12,000
   		$10,000
   		$18,000

QUESTION 19

1. Using the following partial income statement, what is the company's contribution margin?

   Sales revenue (4,500 at $75)		$337,500
   Variable expenses:
   Production Expenses	$62,000
   Selling Expenses	$35,000
   Administrative Expenses	$38,000
   Total variable expenses		$135,000
   		$202,500
   		$90,000
   Net Income		$112,500

   		$20
   		$30
   		$45
   		$75

QUESTION 20

1. Using the information below, determine the cost of good manufactured for the year.

   Beginning work-in-process inventory	$130,000
   Beginning raw materials inventory	$47,500
   Ending work-in-process inventory	$112,500
   Ending raw materials inventory	$60,000
   Raw materials purchased	$97,500
   Direct labor	$93,000
   Manufacturing overhead	$60,000

   		$238,000
   		$255,500
   		$373,000
   		$485,500