1. Since overhead costs are indirect costs, _______. (Points : 1)

1. Since overhead costs are indirect costs, _______. (Points : 1)

2. An actual cost system differs from a normal cost system in that an actual cost system ______. (Points : 1)

3. One reason annual overhead application rates are used is ______. (Points : 1)

4. When a manufacturing company has a highly automated manufacturing plant producing many different products, which of the following is the more appropriate basis of applying manufacturing overhead costs to work in process? (Points : 1)

5. In the formula y = a + bX, y represents _______. (Points : 1)

6. If the level of activity increases, _______. (Points : 1)

7. An item or event that has a cause-effect relationship with the incurrence of a variable cost is called a _______. (Points : 1)

8. Reno Corporation uses a predetermined overhead application rate of $.30 per direct labor hour. During the year it incurred $345,000 dollars of actual overhead, but it planned to incur $360,000 of overhead. The company applied $363,000 of overhead during the year. How many direct labor hours did the company plan to incur? (Points : 1)

9. Gary Corporation has developed the following flexible budget formula for monthly overhead:
For output of less than 200,000 units: $36,600 + $.80(units)
For output of 200,000 units or more: $43,000 + $.80(units)

How much overhead should Gary expect if the firm plans to produce 200,000 units? (Points : 1)

10. Aztec Company is relocating its facilities. The company estimates that it will take three trucks to move office contents. If the per truck rental charge is $1,000 plus 25 cents per mile, what is the expected cost to move 800 miles? (Points : 1)

11. Aquatic Motor Company is exploring different prediction models that can be used to forecast indirect labor costs. One independent variable under consideration is machine hours. Following are matching observations on indirect labor costs and machine hours for the past six months:
Month Machine hours Indirect labor costs
1 300 $20,000
2 400 $24,000
3 240 $17,000
4 370 $22,000
5 200 $13,000
6 225 $14,000

In a high-low model, which months' observations would be used to compute the model's parameters? (Points : 1)

12. If a firm produces more units than it sells, absorption costing, relative to variable costing, will result in _______. (Points : 1)

13. Under absorption costing, fixed manufacturing overhead could be found in all of the following except the _______. (Points : 1)

14. The FASB requires which of the following to be used in preparation of external financial statements? (Points : 1)

15. An ending inventory valuation on an absorption costing balance sheet would _______. (Points : 1)

16. Profit under absorption costing may differ from profit determined under variable costing. How is this difference calculated? (Points : 1)

17. The costing system that classifies costs by functional group only is _______. (Points : 1)

18. The costing system that classifies costs by both functional group and behavior is _______. (Points : 1)

19. Another name for variable costing is _______. (Points : 1)

20. If a firm uses variable costing, fixed manufacturing overhead will be included _______. (Points : 1)

Click here for the solution: 1. Since overhead costs are indirect costs, _______. (Points : 1)

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

The following is a summary of all relevant transactions of Vicario Corporation since it was organized in 2010

The following is a summary of all relevant transactions of Vicario Corporation since it was organized in 2010.

In 2010, 15,000 shares were authorized and 7,000 shares of common stock ($50 par value) were is- sued at a price of $57. In 2011, 1,000 shares were issued as a stock dividend when the stock was selling for $60. Three hundred shares of common stock were bought in 2012 at a cost of $64 per share. These 300 shares are still in the company treasury.

In 2011, 10,000 preferred shares were authorized and the company issued 5,000 of them ($100 par value) at $113. Some of the preferred stock was reacquired by the company and later reissued for $4,700 more than it cost the company.

The corporation has earned a total of $610,000 in net income after income taxes and paid out a total of $312,600 in cash dividends since incorporation.

Instructions
Prepare the stockholders equity section of the balance sheet in proper form for Vicario Corporation as of December 31, 2012. Account for treasury stock using the cost method.


Click here for the solution: The following is a summary of all relevant transactions of Vicario Corporation since it was organized in 2010

Conda Products Company implemented a JIT work environment in its trowel division eight months ago, and the division has been operating at near capacity since then

E 12. Conda Products Company implemented a JIT work environment in its trowel division eight months ago, and the division has been operating at near capacity since then. At the beginning of May, Work in Process Inventory and Finished Goods Inventory had zero balances. The following transactions took place last week:

May 28 Ordered, received, and used handles and sheet metal costing $11,340.
29 Direct labor costs incurred, $5,400.
29 Overhead costs incurred, $8,100.
30 Completed trowels costing $24,800.
31 Sold trowels costing $24,000.

Using backflush costing, calculate the ending balance in the Work in Process Inventory and Finished Goods Inventory accounts


Click here for the solution: Conda Products Company implemented a JIT work environment in its trowel division eight months ago, and the division has been operating at near capacity since then

In late 2010, you purchased the common stock of a company that has reported earnings increase in nearly every quarter since your purchase

In late 2010, you purchased the common stock of a company that has reported earnings increase in nearly every quarter since your purchase. The price of the stock increased from $12 a share at the time of purchase to a current level of $45. Notwithstanding the success of the company, competitors are gaining much strength. Further, your analysis indicates that the stock may be over-priced based on your projection of future earnings growth. Your analysis, however, was the same one year ago and the earnings have continued to increase. Actions that you might take range from an outright sale of the stock (and the payment of capital gains tax) to doing nothing and continuing to hold the shares. You reflect on these choices as well as other actions that could be taken. Describe the various actions that you might take and their implications.

Click here for the solution: In late 2010, you purchased the common stock of a company that has reported earnings increase in nearly every quarter since your purchase