ACC 240 : FINAL EXAM. QUESTIONS. 2 of 35
Contribution margin per unit is best described by which of the following?
| Sales price per unit minus fixed cost per unit | |
| Sales price per unit minus variable cost unit | |
| Sales price per unit minus fixed and variable costs per unit | |
| Units sold time contribution margin ratio |
Question
7 of 35
Blue Technologies manufactures and sells DVD players. Great Products Company has offered Blue Technologies $22 per DVD player for 10,000 DVD players. Blue Technologies’ normal selling price is $30 per DVD player. The total manufacturing cost per DVD player is $12 and consists of variable costs of $14 per DVD player and fixed overhead costs of $4 per DVD player. (NOTE: Assume excess capacity and no effect on regular sales.)
How much are the expected increase (decrease) in revenues and expenses from the special sales order?
| Expected increase in revenues $220,000; expected increase in expenses $140,000 | |
| Expected increase in revenues $220,000; expected increase in expenses $40,000 | |
| Expected increase in revenues $300,000; expected increase in expenses $140,000 | |
| Expected increase in revenues $220,000; expected increase in expenses $120,000 |
Question
12 of 35
Which of the following budgets projects cash inflows and outflows and the budgeted balance sheet?
| Purchases budget | |
| Capital expenditures budget | |
| Financial budget | |
| Cash budget |
Question
13 of 35
Romona Company expects its November sales to be 20% higher than its October sales of $165,000. All sales are on credit and are collected as follows: 35% in the month of the sale and 60% in the following month. Purchases were $110,000 in October and are expected to be $140,000 in November. Purchases are paid 40% in the month of purchase and 60% in the following month. The cash balance on November 1 is $13,500. The cash balance on November 30 will be
| $46,300. | |
| $59,800. | |
| $2,050. | |
| $32,800. |
Question
14 of 35
June sales were $5,000 while projected sales for July and August were $6,500 and $7,000, respectively. Sales are 35% cash and 65% credit. All credit sales are collected in the month following the sale. What are the expected collections for July?
| $7,975 | |
| $5,525 | |
| $6,825 | |
| $5,975 |
Question
16 of 35
Honda’s East Liberty Auto Plant which builds Honda cars is most likely treated as a(n)
| cost center. | |
| investment center. | |
| profit center. | |
| revenue center. |
Question
17 of 35
A product line at PepsiCo (such as the Pepsi Max product line) is most likely treated as a(n)
| cost center. | |
| profit center. | |
| investment center. | |
| revenue center. |
Question
18 of 35
The CEO of Banana Republic, a division of The Gap, Inc., would be in charge of a(n)
| cost center. | |
| investment center. | |
| profit center. | |
| revenue center. |
Question
19 of 35
The manager of a local CVS drugstore would be in charge of a(n)
| cost center. | |
| investment center. | |
| revenue center. | |
| profit center. |
Question
20 of 35
The store manager for the Dick’s Sporting Goods location in Columbus, Ohio, is in charge of a(n)
| cost center. | |
| investment center. | |
| profit center. | |
| revenue center. |
Question
21 of 35
The manager of the accounting department at Adidas would be in charge of a(n)
| investment center. | |
| cost center. | |
| profit center. | |
| revenue center. |
Question
22 of 35
Sole Purpose manufactures beach shoes that use a canvas as the main raw material. Data related to the shoes for June follows:
| Standard quantity per unit of output (yards) | 4.5 |
| Standard price per yard | $10.50 |
| Actual materials purchased in yards | 16,500 |
| Actual cost of materials purchased | $90,450 |
| Actual materials used in production (yards) | 16,000 |
| Actual outputs in units | 3,600 |
What is the materials quantity variance for canvas for June?
| $1,645 favorable | |
| $2,100 favorable | |
| $1,645 unfavorable | |
| $2,100 unfavorable |
Question
23 of 35
Madden Corporation manufactures t-shirts, which is its only product. The standards for t-shirts are as follows:
| Standard direct materials cost per yard | $ 8 |
| Standard direct materials quantity per t-shirt (yards) | 1.5 |
During the month of May, the company produced 1,250 t-shirts. Related production data for the month follows:
| Actual yards of direct material purchased | 1,400 |
| Actual direct materials total cost | $ 15,500 |
What is the direct materials price variance for the month?
| $4,300 unfavorable | |
| $4,300 favorable | |
| $3,800 favorable | |
| $3,800 unfavorable |
Question
24 of 35
Michael Corporation manufactures railroad cars, which is its only product. The standards for the railroad cars are as follows:
| Standard tons of direct material (steel) per car | 4 |
| Standard cost per ton of steel | $ 17.00 |
During the month of March, the company produced 1,650 cars. Related production data for the month follows:
| Actual materials purchased and used (tons) | 6,650 |
| Actual direct materials total cost | $ 115,000 |
What is the direct materials quantity variance for the month?
| $ 850 favorable | |
| $ 850 unfavorable | |
| $ 1,950 favorable | |
| $ 1,950 unfavorable |
Question
25 of 35
How is the direct labor rate variance calculated?
| The difference between the standard labor rate and the actual labor rate multiplied by the actual labor hours used | |
| The difference between the standard labor rate and the actual labor rate multiplied by the standard allowable hours | |
| The difference between the standard labor hours and the allowable labor hours | |
| The difference between the standard labor rate and the actual labor rate |
Question
26 of 35
A favorable direct labor efficiency variance might indicate that
| higher skilled workers were used that performed the task slower than expected. | |
| higher skilled workers were used that performed the task faster than expected. | |
| lower skilled workers were paid a higher wage than expected. | |
| lower skilled workers were paid a lower wage than expected. |
Question
27 of 35
An unfavorable direct labor rate variance indicates which of the following?
| Both actual quantity and actual cost of direct labor hours exceeded standard quantity and standard cost of hours for actual output. | |
| The actual quantity of direct labor hours worked exceeded the standard quantity of hours for actual output. | |
| The actual direct labor cost per hour exceeded the standard direct labor cost per hour for actual quantity of direct labor hours. | |
| The actual cost of direct labor per hour was less than the standard cost of direct labor per hour. |
Question
28 of 35
A favorable direct labor efficiency variance and an unfavorable direct labor rate variance might indicate which of the following?
| Unskilled workers using more actual hours than standard, paid at a higher rate per hour than the standard rate | |
| Unskilled workers using less actual hours than standard, paid a lesser rate per hour than the standard rate | |
| Skilled workers using less actual hours than standard, paid at a higher rate per hour than the standard rate | |
| Skilled workers using more actual hours than standard, paid at a higher rate per hour than the standard rate |
Question
32 of 35
How does depreciation affect the calculation of a project’s payback period?
| Depreciation is deducted from the annual cash inflows. | |
| Depreciation is added to the annual cash inflows. | |
| Depreciation is only deducted if the payback period exceeds five years. | |
| Depreciation does not affect the payback calculation. |
Question
33 of 35
Gomez Corporation is considering two alternative investment proposals with the following data:
| Proposal X | Proposal Y | |
| Investment | $ 850,000 | $ 468,000 |
| Useful life | 8 years | 8 years |
| Estimated annual net cash inflows for eight years | $ 125,000 | $ 78,000 |
| Residual value | $ 40,000 | $ – |
| Depreciation method | Straight-line | Straight-line |
| Required rate of return | 14% | 10% |
What is the accounting rate of return for Proposal X?
| 2.88 % | |
| 14.71 % | |
| 26.62 % | |
| 2.79% |
Question
34 of 35
(Use present value tables in textbook.) Vino Winery is considering the purchase of a state-of-the-art bottling machine. The new machine will cost $28,250 and will have a useful life of 10 years. The new machine will provide net cash savings of $5,000 per year. What is the internal rate of return (IRR) for the new bottling machine?
