Taking on a responsibility you know can be better completed by someone else would violate the ethical conduct standard of: competency. confidentiality. credibility. integrity. Question 2 Which term listed below describes a system where companies purchase raw materials when needed in production and complete finished goods when needed by customers? Backflush costing Just-in-time Internal failure costs External failure costs Question 3 Schimmel Company provides the following information about its single product. Targeted operating income $35,000 Selling price per unit $7.85 Variable cost per unit $6.10 Total fixed cost $96,250 What is the breakeven point in units? 55,000 2,509 6,900 20,000 Question 4 Using account analysis, what type of cost is Satellite TV when the charge is $30.00 per month plus $3.99 for pay-per-view movies? Fixed Mixed Step Variable Question 5 Selected financial information for Sunnydale Manufacturing is presented in the following table (000s omitted). Sales revenue $ 4,000 Purchases of direct materials $ 500 Direct labor $ 450 Manufacturing overhead $ 620 Operating expenses $ 700 Beginning raw materials inventory $ 150 Ending raw materials inventory $ 170 Beginning work in process inventory $ 320 Ending work in process inventory $ 310 Beginning finished goods inventory $ 250 Ending finished goods inventory $ 200 What was direct materials used? $480 $520 $650 $500 Question 6 Durable Engines Company uses ABC to account for it manufacturing process. Activities Indirect activity budget Allocation base (cost driver) Materials handling $ 36,000 Based on number of parts Machine setup $ 19,200 Based on number of setups Assembling $ 6,000 Based on number of parts Packaging $ 12,800 Based on number of finished units Durable Engines Company expects to produce 2,000 engines. Durable Engines Company also expects to use 12,000 parts and have 16 setups. The allocation rate for materials handling will be: $3.00. $5.28. $18.00. $6.40. Question 7 The Burr Mystery Dinner Theater sells tickets for dinner and a show for $50 each. The cost of providing dinner is $30 per ticket, and the fixed cost of operating the theater is $100,000 per month. The company can accommodate 15,000 patrons each month. What is the contribution margin ratio? 60% 40% 20% 250% Question 8 Bond Industries uses departmental overhead rates to allocate its manufacturing overhead to jobs. The company has two departments: Assembly and Sanding. The Assembly Department uses a departmental overhead rate of $20 per machine hour, while the Sanding Department uses a departmental overhead rate of $15 per direct labor hour. Job 542 used the following direct labor hours and machine hours in the two departments: Actual results Assembly Department Sanding Department Direct labor hours used 4 3 Machine hours used 9 5 The cost for direct labor is $25 per direct labor hour and the cost of the direct materials used by Job 542 is $1,200. What was the total cost of Job 542 if Bond Industries used the departmental overhead rates to allocate manufacturing overhead? $1,600 $1,500 $1,375 $1,425 Question 9 Backyards, Inc., sells lawn furniture. Selected financial information for the most recent year follows. Beginning merchandise inventory on January 1 was $32,000. Ending merchandise inventory on December 31 was $37,000. Purchases during the year were $101,000. Selling and administrative expenses were $75,000. Sales for year were $257,000. What was the value of goods available for sale? $133,000 $156,000 $138,000 $96,000 Question 10 Flavio's Fitness Club provides monthly memberships as well as personal training sessions. The personal trainers earn 50% of the revenue for all personal training sessions. The Fitness Club also sells nutrition products. Flavio's general ledger accounts indicate the following for the year. The front desk staff wages expense remains the same throughout the year. Account Amount Account Amount Membership revenue $125,000 Personal trainer wages expense ? Personal training revenue $60,000 Space rental expense $12,000 Product sales $65,000 Straight line depreciation expense $6,000 Cost of product sold $40,000 Rental insurance expense $3,000 Front desk staff wages expense $12,000 If a contribution margin income statement is prepared for the year, what is the amount of total revenue? $250,000 $290,000 $185,000 $125,000 Question 11 In a department, 22,000 units are completed and transferred out and 6,200 remain in ending WIP at 55% complete. If an equivalent unit costs $8.00 for direct materials, what is the value of materials transferred out? $176,000 $49,600 $126,400 $27,280 Question 12 Chilson Company manufactures custom engines for use in the lawn and garden equipment industry. The company allocates manufacturing overhead based on machine hours. Selected data for costs incurred for Job 612 are as follows: Direct materials used $ 3,500 Direct labor hours worked 300 Machine hours used 400 Direct labor rate per hour $ 16 Predetermined overhead rate based on machine hours $ 18 What is the total manufacturing cost of Job 612? $15,500 $7,200 $4,200 $4,800 Question 13 What costs are incurred to avoid poor quality goods or services in the first place? Prevention costs External costs Appraisal costs Internal failure costs Question 14 Smith Paints allocates overhead based on machine hours. Selected data for the most recent year follow. Estimated manufacturing overhead cost $250,000 Actual manufacturing overhead cost $230,000 Estimated machine hours 20,000 Actual machine hours 21,000 The estimates were made as of the beginning of the year, while the actual results were for the entire year. The predetermined manufacturing overhead rate per machine hour is closest to: $11.90. $11.50. $10.95. $12.50. Question 15 SOX requires publicly traded companies to have ________ assessed annually. their internal control system their internal control system and financial Reporting system their financial Reporting procedures none of the above Question 16 Farm Supply plans to make 10,000 tractors at its plant. Fixed costs are $1,000,000 and variable costs are $500 per tractor. What is the average cost per tractor? $100 $500 $600 None of the above Question 17 Hinckley & Granger Company had the following activities, estimated indirect activity costs, and allocation bases: Activities Indirect Activity Costs Allocation Base Account inquiry (hours) $75,000 2,500 Account billing (lines) $45,000 30,000 Account verification (accounts) $18,000 24,000 Correspondence (letters) $40,000 4,000 Hinckley & Granger uses activity based costing. The above activities are used by Departments P and Q as follows: Department P Department Q Account inquiry (hours) 300 600 Account billing (lines) 8,000 6,000 Account verification (accounts) 5,000 4,500 Correspondence (letters) 500 600 How much of the correspondence cost will be assigned to Department P? $3,750 $5,000 $375 $6,000

Question 1 Which of the following best describes an "opportunity cost"? The distribution of all products to be sold Costs that were incurred in the past and cannot be changed Benefits foregone by not choosing an alternative course of action Expected future costs that differs among alternatives Question 2 What is the name given to choosing among different alternative investments due to limited resources? Capital rationing Resource allocation Capital investing Resource rationing Question 3 The practice of directing executive attention to important deviations from budgeted amounts is called management by: analysis. exception . objective. control. Question 4 The Mad Hatter Corporation reported the following income statement and balance sheet amounts and additional information for the end of the current year. Net sales revenue (all credit) Cost of goods sold Gross profit Selling/general expenses Interest expense Net Income Current assets Long-term assets Total assets Current liabilities Long-term liabilities Common stockholders' equity Total liabilities and stockholders' equity Inventory and prepaid expenses account for $30,000 of the current year's current assets. Average inventory for the current year is $25,000. Average net accounts receivable for the current year is $45,000. There are 40,000 shares of common stock outstanding. Total dividends paid during the current year were $37,000. The market price per share of common stock is $20. What is the earnings per share for the current year? $3.83 $4.64 $10.3 8 $5.23 Question 5 Return on investment and revenue growth would be examples of: financial perspective. customer perspective. internal business perspective. learning and growth perspective. Question 6 Glow Sticks Corporation manufactures and sells glowin-the-dark necklaces for $10 each. The company has the capacity to produce 25,000 necklaces in a year, but is currently producing and selling 20,000 necklaces per year. The company currently is incurring the following costs at its current production level of 20,000 necklaces: Variable manufacturing costs Fixed manufacturing costs Variable selling and administrative costs Fixed selling and administrative costs An amusement park is interested in purchasing the excess capacity of 5,000 necklaces if it can receive a special price. This special order would not affect Glow Sticks Corporation's regular sales or its cost structure. Glow Sticks Corporation's profits would increase from this special order if the special order price per necklace is greater than: $13.75 . $6.75. $5.40. $7.50. Question 7 Roberts Corporation has an ROI of 23%, total assets of $5,250,000, and current liabilities of $950,000. What is Roberts Corporation's operating income? $4,130,435 $218,500 $1,207,500 $22,826,08 7 Question 8 The following information relates to Bonny Unlimited for the past two years. Account Net sales (all credit) Cost of goods sold Gross profit Income from operations Interest expense Net income Cash Accounts receivable, net Inventory Prepaid expenses Total current assets Total long-term assets Total current liabilities Total long-term liabilities Common stock, no par, 2,000 shares, market value $90 per share Retained earnings What is the current ratio for the current year? 1.00 1.50 2.40 7.00 Question 9 Gutierrez Company budgeted 10,000 pounds of direct materials costing $21.50 per pound to make 5,000 units of product. The company actually used 10,200 pounds of direct materials costing $24.00 per pound to make the 5,000 units. What is the direct materials efficiency variance? $4,800 favorable $4,300 unfavorable $4,800 unfavorable $4,300 favorable Question 10 Which of the following types of analysis include common-sized financial statements? Horizontal analysis Trend analysis Vertical analysis Ratio analysis Question 11 Which of the following goals of a performance evaluation system is accomplished when a company's actual results are compared to the results of competitors? Motivating unit managers Communicating expectations Benchmarking Promoting goal congruence Question 12 Outdoor Creations sells its patio heaters for $300 each. Its variable cost is $220 per heater. Fixed costs are $40,000 per month for volumes up to 1,000 patio heaters. Above 1,000 heaters, monthly fixed costs are $62,000. What is the budgeted operating income at a level of 1,300 heaters per month? $64,000 $104,00 0 $328,00 0 $42,000 Question 13 (Present value tables are needed.) Miami Marine Enterprises is evaluating the purchase of an elaborate hydraulic lift system for all of its locations to use for the boats brought in for repair. The company has narrowed their choices down to two: the B14 Model and the F54 Model. Financial data about the two choices follows. Investment Useful life (years) Estimated annual net cash inflows for useful life Residual value Depreciation method Required rate of return What is the total present value of future cash inflows from the B14 Model? $38,455 $218,07 0 $358,45 5 $410,65 5 Question 14 Zany Brainy projected current year sales of 50,000 units at a unit sale price of $20.00. Actual current year sales were 55,000 units at $22.00 per unit. Actual variable costs, budgeted at $15.00 per unit, totaled $14.00 per unit. Budgeted fixed costs totaled $400,000, while actual fixed costs amounted to $420,000. What is the sales volume variance for total revenue? $110,000 unfavorable $100,000 favorable $110,000 favorable $100,000 unfavorable Question 15 Which department listed below would most likely be responsible for a "direct material price variance"? Marketing department Personnel department Production department Purchasing department Question 16 Green Garden Supply budgeted three hours of direct labor per unit at $10.00 per hour to produce 500 units of product. The 500 units were completed using 1,600 hours of direct labor at $10.50 per hour. What is the direct labor efficiency variance? $1,050 favorable $1,000 favorable $1,000 unfavorable $1,050 unfavorable Question 17 Which term below best describes "the comprehensive budget"? Sensitivity analysis Responsibility center Master budget Operating budget Question 18 Rong Company expects cash sales for July of $15,000, and a 20% monthly increase during August and September. Credit sales of $6,000 in July should be followed by 10% decreases during August and September. What are budgeted cash sales and budgeted credit sales for September? $12,150 and $8,640 $18,000 and $5,400 $21,600 and $4,860 $13,500 and $7,200 Question 19 Operating activities resulting from the sales of goods and services relate to: the income statement. retained earnings reported on the balance sheet. assets and liabilities reported on the balance sheet. net income on the retained earnings statement. Question 20 Vera Enterprises has in its inventory 1,000 damaged handbags that cost $20,000. The handbags can be sold in their present condition for $12,000, or repaired at a cost of $13,000 and sold for $31,000. What is the opportunity cost of selling the handbags in their present condition? $18,00 0 $25,00 0 $32,00 0 $44,00 0 Question 21 If a company decides to outsource and then has freed capacity, the decision on what to do with that freed capacity would be based upon: unavoidable fixed costs. opportunity costs. avoidable fixed costs. none of the above. Question 22 Which of the following is the correct order of the sections on a statement of cash flows? Operating, financing, investing Investing, operating, financing Financing, investing, operating Operating, investing, financing Question 23 Richol Corporation is considering an investment in new equipment costing $180,000. The equipment will be depreciated on a straightline basis over a five-year life and is expected to generate net cash inflows of $45,000 the first year, $65,000 the second year, and $90,000 every year thereafter until the fifth year. What is the payback period for this investment? The equipment has no residual value. 2.00 years 2.37 years 2.78 years 4.00 years Question 24 The Tandem division of the Great Adventures Cycles Company had the following results last year (in thousands). Sales Operating income Total assets Current liabilities Management's target rate of return is 10% and the weighted average cost of capital is 8%. Its effective tax rate is 40%. What is the Tandem division's Return on Investment (ROI)? 24.00% 7.50% 12.00% 200.00 % Question 25 Horvath Corporation had beginning inventory of 22,000 units and expects sales of 76,500 units during the year. Desired ending inventory is 19,500 units. How many units should Horvath Corporation produce? 79,000 units 35,000 units 74,000 units 118,000 units Question 1 Which of the following best describes an "opportunity cost"? The distribution of all products to be sold Costs that were incurred in the past and cannot be changed Benefits foregone by not choosing an alternative course of action Expected future costs that differs among alternatives Question 2 What is the name given to choosing among different alternative investments due to limited resources? Capital rationing Resource allocation Capital investing Resource rationing Question 3 The practice of directing executive attention to important deviations from budgeted amounts is called management by: analysis. exception . objective. control. Question 4 The Mad Hatter Corporation reported the following income statement and balance sheet amounts and additional information for the end of the current year. Net sales revenue (all credit) Cost of goods sold Gross profit Selling/general expenses Interest expense Net Income Current assets Long-term assets Total assets Current liabilities Long-term liabilities Common stockholders' equity Total liabilities and stockholders' equity Inventory and prepaid expenses account for $30,000 of the current year's current assets. Average inventory for the current year is $25,000. Average net accounts receivable for the current year is $45,000. There are 40,000 shares of common stock outstanding. Total dividends paid during the current year were $37,000. The market price per share of common stock is $20. What is the earnings per share for the current year? $3.83 $4.64 $10.3 8 $5.23 Question 5 Return on investment and revenue growth would be examples of: financial perspective. customer perspective. internal business perspective. learning and growth perspective. Question 6 Glow Sticks Corporation manufactures and sells glowin-the-dark necklaces for $10 each. The company has the capacity to produce 25,000 necklaces in a year, but is currently producing and selling 20,000 necklaces per year. The company currently is incurring the following costs at its current production level of 20,000 necklaces: Variable manufacturing costs Fixed manufacturing costs Variable selling and administrative costs Fixed selling and administrative costs An amusement park is interested in purchasing the excess capacity of 5,000 necklaces if it can receive a special price. This special order would not affect Glow Sticks Corporation's regular sales or its cost structure. Glow Sticks Corporation's profits would increase from this special order if the special order price per necklace is greater than: $13.75 . $6.75. $5.40. $7.50. Question 7 Roberts Corporation has an ROI of 23%, total assets of $5,250,000, and current liabilities of $950,000. What is Roberts Corporation's operating income? $4,130,435 $218,500 $1,207,500 $22,826,08 7 Question 8 The following information relates to Bonny Unlimited for the past two years. Account Net sales (all credit) Cost of goods sold Gross profit Income from operations Interest expense Net income Cash Accounts receivable, net Inventory Prepaid expenses Total current assets Total long-term assets Total current liabilities Total long-term liabilities Common stock, no par, 2,000 shares, market value $90 per share Retained earnings What is the current ratio for the current year? 1.00 1.50 2.40 7.00 Question 9 Gutierrez Company budgeted 10,000 pounds of direct materials costing $21.50 per pound to make 5,000 units of product. The company actually used 10,200 pounds of direct materials costing $24.00 per pound to make the 5,000 units. What is the direct materials efficiency variance? $4,800 favorable $4,300 unfavorable $4,800 unfavorable $4,300 favorable Question 10 Which of the following types of analysis include common-sized financial statements? Horizontal analysis Trend analysis Vertical analysis Ratio analysis Question 11 Which of the following goals of a performance evaluation system is accomplished when a company's actual results are compared to the results of competitors? Motivating unit managers Communicating expectations Benchmarking Promoting goal congruence Question 12 Outdoor Creations sells its patio heaters for $300 each. Its variable cost is $220 per heater. Fixed costs are $40,000 per month for volumes up to 1,000 patio heaters. Above 1,000 heaters, monthly fixed costs are $62,000. What is the budgeted operating income at a level of 1,300 heaters per month? $64,000 $104,00 0 $328,00 0 $42,000 Question 13 (Present value tables are needed.) Miami Marine Enterprises is evaluating the purchase of an elaborate hydraulic lift system for all of its locations to use for the boats brought in for repair. The company has narrowed their choices down to two: the B14 Model and the F54 Model. Financial data about the two choices follows. Investment Useful life (years) Estimated annual net cash inflows for useful life Residual value Depreciation method Required rate of return What is the total present value of future cash inflows from the B14 Model? $38,455 $218,07 0 $358,45 5 $410,65 5 Question 14 Zany Brainy projected current year sales of 50,000 units at a unit sale price of $20.00. Actual current year sales were 55,000 units at $22.00 per unit. Actual variable costs, budgeted at $15.00 per unit, totaled $14.00 per unit. Budgeted fixed costs totaled $400,000, while actual fixed costs amounted to $420,000. What is the sales volume variance for total revenue? $110,000 unfavorable $100,000 favorable $110,000 favorable $100,000 unfavorable Question 15 Which department listed below would most likely be responsible for a "direct material price variance"? Marketing department Personnel department Production department Purchasing department Question 16 Green Garden Supply budgeted three hours of direct labor per unit at $10.00 per hour to produce 500 units of product. The 500 units were completed using 1,600 hours of direct labor at $10.50 per hour. What is the direct labor efficiency variance? $1,050 favorable $1,000 favorable $1,000 unfavorable $1,050 unfavorable Question 17 Which term below best describes "the comprehensive budget"? Sensitivity analysis Responsibility center Master budget Operating budget Question 18 Rong Company expects cash sales for July of $15,000, and a 20% monthly increase during August and September. Credit sales of $6,000 in July should be followed by 10% decreases during August and September. What are budgeted cash sales and budgeted credit sales for September? $12,150 and $8,640 $18,000 and $5,400 $21,600 and $4,860 $13,500 and $7,200 Question 19 Operating activities resulting from the sales of goods and services relate to: the income statement. retained earnings reported on the balance sheet. assets and liabilities reported on the balance sheet. net income on the retained earnings statement. Question 20 Vera Enterprises has in its inventory 1,000 damaged handbags that cost $20,000. The handbags can be sold in their present condition for $12,000, or repaired at a cost of $13,000 and sold for $31,000. What is the opportunity cost of selling the handbags in their present condition? $18,00 0 $25,00 0 $32,00 0 $44,00 0 Question 21 If a company decides to outsource and then has freed capacity, the decision on what to do with that freed capacity would be based upon: unavoidable fixed costs. opportunity costs. avoidable fixed costs. none of the above. Question 22 Which of the following is the correct order of the sections on a statement of cash flows? Operating, financing, investing Investing, operating, financing Financing, investing, operating Operating, investing, financing Question 23 Richol Corporation is considering an investment in new equipment costing $180,000. The equipment will be depreciated on a straightline basis over a five-year life and is expected to generate net cash inflows of $45,000 the first year, $65,000 the second year, and $90,000 every year thereafter until the fifth year. What is the payback period for this investment? The equipment has no residual value. 2.00 years 2.37 years 2.78 years 4.00 years Question 24 The Tandem division of the Great Adventures Cycles Company had the following results last year (in thousands). Sales Operating income Total assets Current liabilities Management's target rate of return is 10% and the weighted average cost of capital is 8%. Its effective tax rate is 40%. What is the Tandem division's Return on Investment (ROI)? 24.00% 7.50% 12.00% 200.00 % Question 25 Horvath Corporation had beginning inventory of 22,000 units and expects sales of 76,500 units during the year. Desired ending inventory is 19,500 units. How many units should Horvath Corporation produce? 79,000 units 35,000 units 74,000 units 118,000 units