1. Which cost accumulation procedure is most applicable in continuous mass-production manufacturing environments? (Points : 1)
2. Process costing is used in companies that _______. (Points : 1)
3. A producer of ____ would not use a process costing system. (Points : 1)
4. Equivalent units of production are equal to the _______. (Points : 1)
5. In a process costing system using the weighted average method, cost per equivalent unit for a given cost component is found by dividing which of the following by EUP? (Points : 1)
6. The difference between EUP calculated using FIFO and EUP calculated using weighted average is the equivalent units _______. (Points : 1)
7. In a FIFO process costing system, which of the following are assumed to be completed first in the current period? (Points : 1)
8. The primary difference between the FIFO and weighted average methods of process costing is _______. (Points : 1)
9. In a cost of production report using process costing, transferred-in costs are similar to the ______. (Points : 1)
10. In a process costing system, the journal entry to record the transfer of goods from Department #2 to Finished Goods Inventory is a _______. (Points : 1)
11. Transferred-in cost represents the cost from _______. (Points : 1)
12. A hybrid costing system combines characteristics of _______. (Points : 1)
13. When standard costs are used in process costing, _______. (Points : 1)
14. The cost of abnormal continuous losses is _______. (Points : 1)
15. Normal spoilage units resulting from a continuous process _______. (Points : 1)
16. Listed below are the steps to assign costs to ending inventory using the weighted average method process costing method.
A. Assign the costs to the inventory accounts
B. Calculate the physical units accounted for
C. Calculate the physical units to account for
D. Calculate the equivalent units of production
E. Calculate the total costs to account for
F. Calculate the cost per equivalent units
(Points : 1)
17. Units started and completed during the period equals (Points : 1)
18. In process costing systems, unit costs are found by dividing total costs incurred by (Points : 1)
19. Equivalent units of production using the weighted average method of costing are found using which of the following formulas: (Points : 1)
20. Total costs to account for is: (Points : 1)
Click here for the solution: Which cost accumulation procedure is most applicable in continuous mass-production manufacturing environments
Showing posts with label most. Show all posts
Showing posts with label most. Show all posts
Thursday, November 26, 2015
Friday, October 9, 2015
American Movieplex, a large movie theater chain, leases most of its theater facilities
Ethics Case 15-4 Leasehold improvements
American Movieplex, a large movie theater chain, leases most of its theater facilities. In conjunction with recent operating leases, the company spent $28 million for seats and carpeting. The question being discussed over breakfast on Wednesday morning was the length of the depreciation period for these leasehold improvements. The company controller, Sarah Keene, was surprised by the suggestion of Larry Person, her new assistant.
Keene: Why 25 years? We've never depreciated leasehold improvements for such a long period.
Person: I noticed that in my review of back records. But during our expansion to the Midwest, we don't need expenses to be any higher than necessary.
Keene: But isn't that a pretty rosy estimate of these assets' actual life? Trade publications show an average depreciation period of 12 years.
Required:
1. How would increasing the depreciation period affect American Movieplex's income?
2. Does revising the estimate pose an ethical dilemma?
3. Who would be affected if Person's suggestion is followed?
Click here for the solution: American Movieplex, a large movie theater chain, leases most of its theater facilities
American Movieplex, a large movie theater chain, leases most of its theater facilities. In conjunction with recent operating leases, the company spent $28 million for seats and carpeting. The question being discussed over breakfast on Wednesday morning was the length of the depreciation period for these leasehold improvements. The company controller, Sarah Keene, was surprised by the suggestion of Larry Person, her new assistant.
Keene: Why 25 years? We've never depreciated leasehold improvements for such a long period.
Person: I noticed that in my review of back records. But during our expansion to the Midwest, we don't need expenses to be any higher than necessary.
Keene: But isn't that a pretty rosy estimate of these assets' actual life? Trade publications show an average depreciation period of 12 years.
Required:
1. How would increasing the depreciation period affect American Movieplex's income?
2. Does revising the estimate pose an ethical dilemma?
3. Who would be affected if Person's suggestion is followed?
Click here for the solution: American Movieplex, a large movie theater chain, leases most of its theater facilities
Sunday, October 4, 2015
The Cycle Division of TravelVelocity Company has the following per unit data related to its most recent cycle called Roadbuster
ACC 560 Week 5 Assignment
E8-12 The Cycle Division of TravelVelocity Company has the following per unit data related to its most recent cycle called Roadbuster.
Selling price $2,200
Variable cost of goods sold
Body frame $300
Other variable costs 900 1,200
Contribution margin $1,000
Presently, the Cycle Division buys its body frames from an outside supplier. However TravelVelocity has another division, FrameBody, that makes body frames for other cycle companies. The Cycle Division believes that FrameBody's product is suitable for its new Roadbuster cycle. Presently, FrameBody sells its frames for $350 per frame.The variable cost for FrameBody is $250. The Cycle Division is willing to pay $275 to purchase the frames from FrameBody.
Instructions:
a) Assume that FrameBody has excess capacity and is able to meet all of the Cycle Division's needs. If the Cycle Division buys 1,000 frames from FrameBody, determine the following: (1) effect on the income of the Cycle Division; (2) effect on the income of FrameBody; and (3) effect on the income of TravelVelocity.
b)Assume that FrameBody does not have excess capacity and therefore would lose sales if the frames were sold to the Cycle Division. If the Cycle Division buys 1,000 frames from FrameBody, determine the following: (1) effect on the income of the Cycle Division; (2) effect on the income of FrameBody; and (3) effect on the income of TravelVelocity.
Click here for the solution: The Cycle Division of TravelVelocity Company has the following per unit data related to its most recent cycle called Roadbuster
E8-12 The Cycle Division of TravelVelocity Company has the following per unit data related to its most recent cycle called Roadbuster.
Selling price $2,200
Variable cost of goods sold
Body frame $300
Other variable costs 900 1,200
Contribution margin $1,000
Presently, the Cycle Division buys its body frames from an outside supplier. However TravelVelocity has another division, FrameBody, that makes body frames for other cycle companies. The Cycle Division believes that FrameBody's product is suitable for its new Roadbuster cycle. Presently, FrameBody sells its frames for $350 per frame.The variable cost for FrameBody is $250. The Cycle Division is willing to pay $275 to purchase the frames from FrameBody.
Instructions:
a) Assume that FrameBody has excess capacity and is able to meet all of the Cycle Division's needs. If the Cycle Division buys 1,000 frames from FrameBody, determine the following: (1) effect on the income of the Cycle Division; (2) effect on the income of FrameBody; and (3) effect on the income of TravelVelocity.
b)Assume that FrameBody does not have excess capacity and therefore would lose sales if the frames were sold to the Cycle Division. If the Cycle Division buys 1,000 frames from FrameBody, determine the following: (1) effect on the income of the Cycle Division; (2) effect on the income of FrameBody; and (3) effect on the income of TravelVelocity.
Click here for the solution: The Cycle Division of TravelVelocity Company has the following per unit data related to its most recent cycle called Roadbuster
Sunday, September 27, 2015
Eastman Company lost most of its inventory in a fire in December just before the year-end physical inventory was taken
P9-4 (Gross Profit Method) Eastman Company lost most of its inventory in a fire in December just before the year-end physical inventory was taken. Corporate records disclose the following.
Inventory (beginning) $ 80,000 Sales $415,000
Purchases 290,000 Sales returns 21,000
Purchase returns 28,000 Gross profit % based on net selling price 35%
Merchandise with a selling price of $30,000 remained undamaged after the fire, and damaged merchandise has a salvage value of $8,150. The company does not carry fire insurance on its inventory.
Instructions
Prepare a formal labeled schedule computing the fire loss incurred. (Do not use the retail inventory method.)
Click here for the solution: Eastman Company lost most of its inventory in a fire in December just before the year-end physical inventory was taken
Inventory (beginning) $ 80,000 Sales $415,000
Purchases 290,000 Sales returns 21,000
Purchase returns 28,000 Gross profit % based on net selling price 35%
Merchandise with a selling price of $30,000 remained undamaged after the fire, and damaged merchandise has a salvage value of $8,150. The company does not carry fire insurance on its inventory.
Instructions
Prepare a formal labeled schedule computing the fire loss incurred. (Do not use the retail inventory method.)
Click here for the solution: Eastman Company lost most of its inventory in a fire in December just before the year-end physical inventory was taken
Wednesday, September 23, 2015
For each of the following costs incurred in a manufacturing firm, indicate whether the costs are most likely fixed (f) or variable (v)
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)
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)
Sunday, September 13, 2015
The Sarbanes-Oxley Act of 2002 has been described as the most far-reaching legislation affecting business since the passage of the 1933 Securities Act
2-53. (Sarbanes-Oxley Act of 2002, LO 3) The Sarbanes-Oxley Act of 2002 has been described as the most far-reaching legislation affecting business since the passage of the 1933 Securities Act.
Required:
a. Identify the portions of the legislation that specifically affect the external audit profession and discuss how they affect the profession.
b. How does the legislation affect the internal audit profession? Identify activities that are implied in the legislation as well as activities that will likely emerge as companies implement various provisions of the Act.
c. Do you believe the legislation enhances the power and prestige of the audit profession or, alternatively, that it decreases both the power and prestige of the profession?
Click here for the solution: The Sarbanes-Oxley Act of 2002 has been described as the most far-reaching legislation affecting business since the passage of the 1933 Securities Act
Required:
a. Identify the portions of the legislation that specifically affect the external audit profession and discuss how they affect the profession.
b. How does the legislation affect the internal audit profession? Identify activities that are implied in the legislation as well as activities that will likely emerge as companies implement various provisions of the Act.
c. Do you believe the legislation enhances the power and prestige of the audit profession or, alternatively, that it decreases both the power and prestige of the profession?
Click here for the solution: The Sarbanes-Oxley Act of 2002 has been described as the most far-reaching legislation affecting business since the passage of the 1933 Securities Act
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, August 4, 2015
Match each of the following six terms with the phrase that most closely describes it
Match each of the following six terms with the phrase that most closely describes it. Each answer below may be used only once.
______ 1. activity-based costing
______ 2. cost of goods available for sale
______ 3. period costs
______ 4. process costing system
______ 5. just-in-time system
______ 6. work in process
(A) Costs assigned to the goods produced; also known as manufacturing costs
(B) Materials costs that are not traced directly to products produced
(C) System that seeks to minimize Raw Materials Inventory and Work in Process Inventory
(D) Cost of items that are completed and transferred from Work in Process Inventory to Finished Goods Inventory
(E) Costs that are identified with accounting periods rather than with goods produced
(F) Actual overhead is greater than overhead that has been applied to products
(G) Method of assigning overhead costs that uses multiple allocation bases
(H) System that uses job-order sheets to collect costs for each individual job
(I) Cost of all materials and parts that are directly traced to the items produced
(J) Beginning balance in the Finished Goods Inventory plus cost of goods manufactured
(K) Overhead applied to products is greater than the actual overhead costs incurred
(L) Used by companies that produce large quantities of identical items
(M) Cost of all manufacturing activities other than direct material and direct labor
(N) Inventory account that contains the cost of goods that are only partially completed
Click here for the solution: Match each of the following six terms with the phrase that most closely describes it
______ 1. activity-based costing
______ 2. cost of goods available for sale
______ 3. period costs
______ 4. process costing system
______ 5. just-in-time system
______ 6. work in process
(A) Costs assigned to the goods produced; also known as manufacturing costs
(B) Materials costs that are not traced directly to products produced
(C) System that seeks to minimize Raw Materials Inventory and Work in Process Inventory
(D) Cost of items that are completed and transferred from Work in Process Inventory to Finished Goods Inventory
(E) Costs that are identified with accounting periods rather than with goods produced
(F) Actual overhead is greater than overhead that has been applied to products
(G) Method of assigning overhead costs that uses multiple allocation bases
(H) System that uses job-order sheets to collect costs for each individual job
(I) Cost of all materials and parts that are directly traced to the items produced
(J) Beginning balance in the Finished Goods Inventory plus cost of goods manufactured
(K) Overhead applied to products is greater than the actual overhead costs incurred
(L) Used by companies that produce large quantities of identical items
(M) Cost of all manufacturing activities other than direct material and direct labor
(N) Inventory account that contains the cost of goods that are only partially completed
Click here for the solution: Match each of the following six terms with the phrase that most closely describes it
Monday, August 3, 2015
Match the statement with the term most directly associated with it
DO IT! 9-4 Match the statement with the term most directly associated with it.
Goodwill Amortization
Intangible assets Franchise
Research and development costs
1. Rights, privileges, and competitive advantages that result from the ownership of long-lived assets that do not possess physical substance.
2. The allocation of the cost of an intangible asset to expense in a rational and systematic manner.
3. A right to sell certain products or services, or use certain trademarks or trade names within a designated geographic area.
4. Costs incurred by a company that often lead to patents or new products. These costs must be expensed as incurred.
5. The excess of the cost of a company over the fair market value of the net assets acquired.
Click here for the solution: Match the statement with the term most directly associated with it
Goodwill Amortization
Intangible assets Franchise
Research and development costs
1. Rights, privileges, and competitive advantages that result from the ownership of long-lived assets that do not possess physical substance.
2. The allocation of the cost of an intangible asset to expense in a rational and systematic manner.
3. A right to sell certain products or services, or use certain trademarks or trade names within a designated geographic area.
4. Costs incurred by a company that often lead to patents or new products. These costs must be expensed as incurred.
5. The excess of the cost of a company over the fair market value of the net assets acquired.
Click here for the solution: Match the statement with the term most directly associated with it
Saturday, July 25, 2015
Springsteen Co. had the following activity in its most recent year of operations
E23-1 (Classification of Transactions) Springsteen Co. had the following activity in its most recent year of operations.
(a) Pension expense exceeds amount funded. (e) Exchange of equipment for furniture.
(b) Redemption of bonds payable. (f) Issuance of capital stock.
(c) Sale of building at book value. (g) Amortization of intangible assets.
(d) Depreciation. (h) Purchase of treasury stock. (i) Issuance of bonds for land. (k) Increase in interest receivable on notes receivable. (j) Payment of dividends. (l) Purchase of equipment.
Instructions
Classify the items as (1) operating—add to net income; (2) operating—deduct from net income; (3) investing; (4) financing; or (5) significant noncash investing and financing activities. Use the indirect method.
Click here for the solution: Springsteen Co. had the following activity in its most recent year of operations
(a) Pension expense exceeds amount funded. (e) Exchange of equipment for furniture.
(b) Redemption of bonds payable. (f) Issuance of capital stock.
(c) Sale of building at book value. (g) Amortization of intangible assets.
(d) Depreciation. (h) Purchase of treasury stock. (i) Issuance of bonds for land. (k) Increase in interest receivable on notes receivable. (j) Payment of dividends. (l) Purchase of equipment.
Instructions
Classify the items as (1) operating—add to net income; (2) operating—deduct from net income; (3) investing; (4) financing; or (5) significant noncash investing and financing activities. Use the indirect method.
Click here for the solution: Springsteen Co. had the following activity in its most recent year of operations
Sunday, July 19, 2015
We record and report most changes in accounting principle retrospectively, but sometimes report the changes prospectively
We record and report most changes in accounting principle retrospectively, but sometimes report the changes prospectively. Explain when it is appropriate to report the changes prospectively. Provide examples.
Click here for the solution: We record and report most changes in accounting principle retrospectively, but sometimes report the changes prospectively
Click here for the solution: We record and report most changes in accounting principle retrospectively, but sometimes report the changes prospectively
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
Monday, June 29, 2015
The most recent financial information for Golf Pro Inc. are shown here
The most recent financial information for Golf Pro Inc. are shown here:
Income Statement
Sales $3,400
Costs 2,800
Taxable Income 600
Taxes @ 34% 204
Net Income $ 396
Balance Sheet
Current Assets $4,400 Current Liabilities $880
Fixed Assets 5,700 Long Term Debt 3,580
Equity 5,640
Total 10,100 Total $10,100
Assets, costs and current liabilities are proportional to sales. Long–term debt and equity are not. The company maintains a constant 50% dividend payout ratio. As with every other firm in its industry, the next year’s sales are projected to increase by exactly 15%. What is the external financing needed?
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