2-19 Basic Concepts
For each of the following costs incurred in a manufacturing firm,
indicate whether the costs are most likely fixed (f) or variable (v) and
whether they are most likely period costs (p) or product cost (m) and
under full absorption costing.
1. Energy to run machines producing units of output in the factory.
2. Depreciation on the building for administrative staff offices.
3. Bonuses of top executives in the company.
4. Overtime pay for assembly workers.
5. Transportation-in costs on materials purchased.
6. Assembly line workers’ wages.
7. Sales commissions for sales personnel.
8. Administrative support for sales supervisors.
9. Controller’s office rental.
10. Cafeteria costs for the factory.
Click here for the solution: For each of the following costs incurred in a manufacturing firm, indicate whether the costs are most likely fixed (f) or variable (v)
Showing posts with label likely. Show all posts
Showing posts with label likely. Show all posts
Wednesday, September 23, 2015
Wednesday, September 2, 2015
In a decision analysis situation, which one of the following costs is not likely to contain a variable cost component?
MULTIPLE CHOICE
1) In a decision analysis situation, which one of the following costs is not likely to contain a variable cost component? (CMA adapted, 6/96)
2) You have been asked to help a student health center determine which costs will vary with the number of students who come to the health center. The health center employs one doctor, three nurses, and several other employees. How would you classify (1) the nurse's salary and (2) film and other materials used in radiology to give X-rays to students? The nurse’s salary would be considered a ______, while the film and other materials would be considered a ______.
3) Given the following information:
Sales $5,000
Fixed Expenses 2,000
Variable Expenses 1,750
What would expected net income be if the company experienced a 10 percent increase in fixed costs and 10 percent increase in sales volume?
4) Pete's Pizza Place wishes to determine which of its costs will vary with the number of pizzas made. The Pizza Place has four pizza makers and ten other employees who take orders from customers and perform other tasks. The four pizza makers and the other employees are paid an hourly wage. How would one classify (1) the wages paid to the pizza makers and other employees and (2) materials (e.g., cheeses, sauce, etc.) used to make the pizza? The employees’ wages would be considered a ______, while the materials to make the pizza are a ______.
5) Which of the following statements is (are) true?
(1). An asset is a cost that will be matched with revenues in a future accounting period.
(2). Opportunity costs are recorded as intangible assets in the current accounting period.
6) If the fixed costs for a product decrease and the variable costs (as a percentage of sales dollars) decrease, what will be the effect on the contribution margin ratio and the breakeven point respectively? The contribution margin ratio will _____ and the breakeven point will _____.
7) Which of the following activities would not be considered a value-added activity?
8) The development of just-in-time (JIT) methods of production focused on
9) The field of accounting that depends on generally accepted accounting principles (GAAP) is called
10) Inventoriable costs:
Click here for the solution: In a decision analysis situation, which one of the following costs is not likely to contain a variable cost component?
1) In a decision analysis situation, which one of the following costs is not likely to contain a variable cost component? (CMA adapted, 6/96)
2) You have been asked to help a student health center determine which costs will vary with the number of students who come to the health center. The health center employs one doctor, three nurses, and several other employees. How would you classify (1) the nurse's salary and (2) film and other materials used in radiology to give X-rays to students? The nurse’s salary would be considered a ______, while the film and other materials would be considered a ______.
3) Given the following information:
Sales $5,000
Fixed Expenses 2,000
Variable Expenses 1,750
What would expected net income be if the company experienced a 10 percent increase in fixed costs and 10 percent increase in sales volume?
4) Pete's Pizza Place wishes to determine which of its costs will vary with the number of pizzas made. The Pizza Place has four pizza makers and ten other employees who take orders from customers and perform other tasks. The four pizza makers and the other employees are paid an hourly wage. How would one classify (1) the wages paid to the pizza makers and other employees and (2) materials (e.g., cheeses, sauce, etc.) used to make the pizza? The employees’ wages would be considered a ______, while the materials to make the pizza are a ______.
5) Which of the following statements is (are) true?
(1). An asset is a cost that will be matched with revenues in a future accounting period.
(2). Opportunity costs are recorded as intangible assets in the current accounting period.
6) If the fixed costs for a product decrease and the variable costs (as a percentage of sales dollars) decrease, what will be the effect on the contribution margin ratio and the breakeven point respectively? The contribution margin ratio will _____ and the breakeven point will _____.
7) Which of the following activities would not be considered a value-added activity?
8) The development of just-in-time (JIT) methods of production focused on
9) The field of accounting that depends on generally accepted accounting principles (GAAP) is called
10) Inventoriable costs:
Click here for the solution: In a decision analysis situation, which one of the following costs is not likely to contain a variable cost component?
Friday, August 21, 2015
Which of the following companies would be MOST likely to have an operating cycle longer than one year
MULTIPLE CHOICE
1. Which of the following companies would be MOST likely to have an operating cycle longer than one year? (Points : 2)
2. Which of the following investments is NOT reported on the balance sheet at current market value? (Points : 2)
3. Marbella Company has an investment in stock, classified as available-for-sale, with the following information at December 31, 2007:
Cost = $240,000
Market value = $280,000
How would Marbella report this information? (Points : 2)
4. Cash received from the sale of long-term assets is reported as (Points : 2)
5. Emergent Markets Corporation purchased a machine for $200,000 on January 1, 2007. The estimated life is 10 years. What is the book value on the December 31, 2009 balance sheet assuming straight-line depreciation is used and estimated residual value is zero?(Points : 2)
6. The excess of cost over the fair market value of net assets acquired when one company purchases another company should be reported as a(n) (Points : 2)
7. Purple Company owns 25% of the common stock of Marroon after purchasing 45,000 shares of Marroon's stock at a price of $30 per share on January 1, 2007. At the end of the year, Marroon reported net income of $100,000 and paid dividends of $40,000. What is the book value of Purple Company's investment at year-end? (Points : 2)
8. Which statement below is true about a company's operating cycle? (Points : 2)
9. Investments in tangible assets by a company that are intended to be used in the future to manufacture and/or sell products are recorded in the books as (Points : 2)
10. The term "current assets" is usually used to refer to assets that (Points : 2)
11. Meteorite Company sells its Available-For-Sale stock investment at a price of $61 per share. It had originally been purchased at $20 per share and its most recent adjustment had been to a market value of $32 per share. What was the per share realized gain or loss on sale? (Points : 2)
12. Trading and available-for-sale securities are reported on the balance sheet at(Points : 2)
13. Which of the following is NOT an intangible asset? (Points : 2)
14. GAAP requires that intangibles other than goodwill be amortized over a period of: (Points : 2)
15. The "using-up" process or utilization of intangible assets is referred to as (Points : 2)
16. An expenditure that extends the life of an asset or enhances its value is a(n) (Points : 2)
17. The systematic allocation of the cost of a patent to the periods that benefit from its use is (Points : 2)
18. Machinery with a cost of $150,000 and a book value of $52,500 was sold for $15,000 cash plus a note receivable of $27,500. What was the net effect of this sale on the financial statement items listed below?
Assets Net Income (Points : 2)
19. A bond is purchased at a discount. What will happen to the net carrying value of the bond on the balance sheet as its maturity date approaches? (Points : 2)
20. When companies have a temporary surplus of cash, they often invest it in (Points : 2)
Click here for the solution: Which of the following companies would be MOST likely to have an operating cycle longer than one year
1. Which of the following companies would be MOST likely to have an operating cycle longer than one year? (Points : 2)
2. Which of the following investments is NOT reported on the balance sheet at current market value? (Points : 2)
3. Marbella Company has an investment in stock, classified as available-for-sale, with the following information at December 31, 2007:
Cost = $240,000
Market value = $280,000
How would Marbella report this information? (Points : 2)
4. Cash received from the sale of long-term assets is reported as (Points : 2)
5. Emergent Markets Corporation purchased a machine for $200,000 on January 1, 2007. The estimated life is 10 years. What is the book value on the December 31, 2009 balance sheet assuming straight-line depreciation is used and estimated residual value is zero?(Points : 2)
6. The excess of cost over the fair market value of net assets acquired when one company purchases another company should be reported as a(n) (Points : 2)
7. Purple Company owns 25% of the common stock of Marroon after purchasing 45,000 shares of Marroon's stock at a price of $30 per share on January 1, 2007. At the end of the year, Marroon reported net income of $100,000 and paid dividends of $40,000. What is the book value of Purple Company's investment at year-end? (Points : 2)
8. Which statement below is true about a company's operating cycle? (Points : 2)
9. Investments in tangible assets by a company that are intended to be used in the future to manufacture and/or sell products are recorded in the books as (Points : 2)
10. The term "current assets" is usually used to refer to assets that (Points : 2)
11. Meteorite Company sells its Available-For-Sale stock investment at a price of $61 per share. It had originally been purchased at $20 per share and its most recent adjustment had been to a market value of $32 per share. What was the per share realized gain or loss on sale? (Points : 2)
12. Trading and available-for-sale securities are reported on the balance sheet at(Points : 2)
13. Which of the following is NOT an intangible asset? (Points : 2)
14. GAAP requires that intangibles other than goodwill be amortized over a period of: (Points : 2)
15. The "using-up" process or utilization of intangible assets is referred to as (Points : 2)
16. An expenditure that extends the life of an asset or enhances its value is a(n) (Points : 2)
17. The systematic allocation of the cost of a patent to the periods that benefit from its use is (Points : 2)
18. Machinery with a cost of $150,000 and a book value of $52,500 was sold for $15,000 cash plus a note receivable of $27,500. What was the net effect of this sale on the financial statement items listed below?
Assets Net Income (Points : 2)
19. A bond is purchased at a discount. What will happen to the net carrying value of the bond on the balance sheet as its maturity date approaches? (Points : 2)
20. When companies have a temporary surplus of cash, they often invest it in (Points : 2)
Click here for the solution: Which of the following companies would be MOST likely to have an operating cycle longer than one year
Tuesday, July 7, 2015
Which of the following securities is likely to be the most liquid according to this data? Explain
P11-3 Which of the following securities is likely to be the most liquid according to this data? Explain.
STOCK BID ASK
R $39.43 $39.55
S 13.67 13.77
T 116.02 116.25
Click here for the solution: Which of the following securities is likely to be the most liquid according to this data? Explain
STOCK BID ASK
R $39.43 $39.55
S 13.67 13.77
T 116.02 116.25
Click here for the solution: Which of the following securities is likely to be the most liquid according to this data? Explain
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