solve managerial accounting problems, accounting homework help

Hello there are 25 questions and I need all the answers within an hour and half.

Questions are:

1. Select the incorrect statement regarding costs and expenses.
A. Some costs are initially recorded as expenses while others are initially
recorded as assets.
B. Expenses are incurred when assets are used to generate revenue.
C. Manufacturing-related costs are initially recorded as expenses.
D. Non-manufacturing costs should be expenses in the period in which they
are incurred.
2. During its first year of operations, the Bloomington Cornbelters Corporation
(BCC) paid $4,000 for direct materials and $8,500 for production workers’
wages. Lease payments and utilities on the production facilities amounted to
$7,500 while general, selling, and administrative expenses totaled $3,000. The
company produced 5,000 units and sold 4,000 units at a price of $7.50 a unit.
What was BCC’s net income for the first year in operation?
A. $11,000
B. $7,000
C. $14,000
D. $20,000
3. Toews’ Jersey and Associates incurred $30,000 of fixed cost and $40,000 of
variable cost when 1,000 units of product were made and sold. If the company’s
volume doubles, the cost per unit will
A. Stay the same
B. Double as well
C. Increase but will not double
D. Decrease
4. For 2014, Bob’s Machine Shack sold 100,000 units of its product for $20 each.
The variable cost per unit was $12, and Bob’s margin of safety was 30,000 units.
What was the amount of Bob’s total fixed costs?
A. $560,000
B. $800,000
C. $1,200,000
D. $360,000
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5. Here is some information about the Keith and Crowford Corporation’s (SCC)
operations.
Shaw and Crowford Corporation
Direct raw materials used $17,000
Direct labor wages and salaries $33,000
Sales salaries $25,000
Depreciation on manufacturing equipment $3,000
Rent on manufacturing facilities $4,000
Administrative supplies and utilities $5,000
Sales revenue $105,000
Units produced 4,000
Units sold 4,000
SCC’s work in process inventory at the beginning of 2014 was $12,000, and work
in process inventory at the end of 2014 was $10,000. SCC’s cost of goods
manufactured in 2014 equals
A. $77,000
B. $89,000
C. $59,000
D. $52,000
6. Here is some information from the internal records of Laxter Pharmaceutical
Corporation.
Item Value
Total contribution margin at break even $550,000
Break even Value 105,000 units
Sales revenue per unit $51
What is the leverage ratio at the breakeven point if the leverage ratio is defined
as total fixed costs divided by total variable costs?
A. 0.1145
B. 0.1375
C. 0.2157
D. 0.2750
E. None of these
7. Select the incorrect statement from the following:
A. The cost object determines whether a cost is classified as direct or
indirect
B. The same cost cannot be classified as both direct and indirect
C. Relevant costs can include direct and indirect costs
D. Direct costs can display a fixed or variable behavior pattern
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8. At the beginning of 2014, Barksdale Corporation estimated that its total annual
fixed overhead costs amount to $50,000. Further, Barksdale estimated that its
volume of production would be 2,000 units of product. Based on these
estimates, Barksdale computed a predetermined overhead rate that was used to
allocate overhead costs to the products made in 2014. As predicted, actual fixed
overhead costs did amount to $50,000. However, actual volume of production
was only 1,800 units of product. Based on this information alone,
A. Product costs used for decision-making in 2014 were accurate
B. Product costs used for decision-making in 2014 overstated the costs
C. Product costs used for decision-making in 2014 understated the costs
D. The answer cannot be determined from the information provided
9. Which of the following statements is true?
A. Any cost connected to a cost object is a direct cost, regardless of what
the cost is
B. Costs that do not have a strong cause-and-effect relationship with a
cost driver are called direct costs
C. A cost driver is used to allocate a direct cost when there is a causeand-effect
relationship between the cost and the cost object
D. Fixed costs that do not have a definitive cost driver are allocated using
an allocation base that distributes a rational share of the cost to each
product
E. None of these
10. Dr. Meredith Gray, chief of outpatient clinics at Lexington Hospital System (LHS),
has received an offer from an HMO which wishes to use available capacity at
LHS’s Otter Peak Clinic. Here is some information about the clinic’s current costs
and billings and the offer.
At present, the average cost per visit at the clinic is $65 at a
projected volume of 10,000 visits. The variable cost per visit is
$30. The clinic bills and receives an average of $60/visit.
The HMO guarantees 5,000 visits and is willing to pay $50 per
visit. Accepting the offer will increase the clinic’s variable costs
by $2/HMO visit (no change in variable cost for current patients);
the fixed costs will increase by $120,000.
Dr. Gray asks for an answer to two questions:
If it accepts the offer, will LHS have a net incremental B-Benefit or L-Loss? Circle
one: B/L [you’ll be able to enter B or L in Balckboard]
What is the $ amount of the incremental benefit or loss? Answer: _______________
[enter as a positive number, no dollar sign, no commas]
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Use the following project quarterly amounts at Universal Uniforms Corporation
(UUC) for the next three questions. UUC stocks inventory of uniforms which it
buys from suppliers. UUC customers buy uniforms for their employees.
Uniform Uniforms Corporation (UUC) Budget Information
Q1 Q2 Q3 Q4
Estimated Revenue ($) 2,317,500 2,832,500 3,090,000 2,060,000
Cost of Goods sold ($) 1,509,545 1,845,000 2,008,500 1,339,000
Ending inventory ($) 1,200,000 1,110,000 1,340,000 1,150,000
11. The receivables collection policy at UUC is to collect 60% of current sales in the
current period and the remaining 40% in the next period. Beginning receivables
in Q1 is $450,000. Which of the following statements is true?
A. Q3 ending receivables were $1,236,000
B. Q3 ending receivables were $1,133,000
C. Q3 ending receivables were $3,090,000
D. Q3 ending receivables were $2,987,000
12. UUC estimates its quarterly selling, general, and admin (SGA) costs to have two
components – a fixed component of $30,000 and a variable component with a
rate of 15% of revenue. The company pays 90% of its SGA costs in the quarter
incurred and the remaining 10% in the next quarter. What should be the SGA
expense budget in Q2?
A. $261,750
B. $409,388
C. $454,875
D. $686,625
13. UUC’s policy is to pay 80% of its total accounts payable to suppliers (beginning
accounts payables + cost of inventory purchased) each quarter. The Q2
beginning accounts payable to suppliers was $280,000. Which of the following
statements regarding Q2’s pro forma financial information is true?
A. The estimated cost of purchases = $1,755,000;
ending accounts payable = $407,000
B. The estimated cost of purchases = $645,000;
ending accounts payable = $185,000
C. The estimated cost of purchases = $1,800,000;
ending accounts payable = $407,000
D. The estimated cost of purchases = $1,755,000;
ending accounts payable = $185,000
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14. The Scooby Doo Corporation has budgeted the following information for June:
Cash Budgeting Parameters
Cash receipts $542,000
Beginning cash balance $10,000
Cash payments $560,000
Desired ending cash balance $50,000
If there is a cash shortage, the company borrows money from the bank. All cash
is borrowed at the beginning of the month in $1,000 increments and interest is
paid monthly at 1% on the first day of the following month. The company had no
debt before June 1st. The amount of interest paid on July 1 would be
A. $800
B. $580
C. $500
D. $442
15. My Back Aches Corporation expects to begin operating on January 1. On that
day, it plans to purchase $25,000 of depreciable equipment, with salvage value
of $1,000 and estimated life of 4 years. The company’s master budget contained
the following operating expense budget:
Expenses Budget
January February March
Salary Expense $18,000 $18,000 $18,000
Sales commissions, 5% of sales $15,000 $16,000 $12,000
Utilities $1,400 $1,400 $1,400
Depreciation Expense $500 $500 $500
Rent $3,600 $3,600 $3,600
Miscellaneous $900 $900 $900
Total operating expenses $39,400 $40,400 $36,400
All expense items requiring cash payment are paid in the month in which they
are recognized. The amount of net depreciable assets appearing on the
company’s March 31 pro forma balance sheet is
A. $6,000
B. $19,000
C. $23,500
D. $22,500
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16. The Please Don’t Break’Em Company manufactures and sells two lines of china.
During the most recent accounting period, the Faux line and the Traditional Line
sold 15,000 and 2,000 units, respectively. The company’s most recent financial
statements are shown below:
Faux Traditional
Sales $800,000 $200,000
Less: costs of goods sold (all direct costs of each line) $620,000 $140,000
Gross Profit $180,000 $60,000
Less: Operating expenses
SG&A (all direct costs of each line) $30,000 $35,000
Corporate level facility expenses (fixed allocated
costs)
$26,000 $26,000
Net Income (loss) $124,000 ($1,000)
Based on this information, the company should
A. Eliminate the Traditional line because it is operating at a loss
B. Keep the Traditional line because it contributes $25,000 to total
profitability
C. Keep the Traditional line because it contributes $55,000 to total
profitability
D. Keep the Traditional line because it contributes $50,000 to total
profitability
17. Kifer and Kifer has been using the same machines to make its name brand
clothing for the last five years. A cost efficiency consultant has suggested that
production costs may be reduced by purchasing more technologically advanced
machinery. The old machines cost the company $200,000. The old machines
presently have a book value of $120,000 and a market value of $12,000. The are
expected to have a five-year remaining life and zero salvage value. The new
machines would cost the company $100,000 and have operating expenses of
$18,000 a year. The new machines are expected to have a five-year useful life
and no salvage value. The operating expenses associated with the old machines
are $30,000 a year. The new machines are expected to increase quality,
justifying a price increase, and thereby increasing sales revenue by $10,000 a
year. Select the true statement.
A. The company will be $28,000 better off over the 5-year period if it
keeps the old equipment
B. The company will be $40,000 better off over the 5-year period if it
keeps the old equipment
C. The company will be $22,000 better off over the 5-year period if it
replaces the old equipment
D. The company will be $12,000 better off over the 5-year period if it
replaces the old equipment
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18. Contribution margin would be one of the most important measurements used in
evaluating the performance of a(an)
A. Cost center
B. Profit center
C. Investment center
D. Organizational center
19. Here is Chicago Cricket Corporation’s (CCC) static budget prepared for a volume
of sales of 20,000 units.
Static Budget 20X1
Sales Revenue $200,000
Less variable costs
Manufacturing costs $70,000
SG&A costs $40,000
Less: fixed costs
Manufacturing costs $22,000
SG&A costs $17,000
Operating Income $51,000
What is the volume variance of operating income if CCC produces and sells
18,000 units in 20X1? Answer: _______________ [Enter a positive number (whether
the variance is favorable or unfavorable), no $ signs, no commas]
Is the volume variance F=Favorable or U=Unfavorable. Circle one: F/U [you’ll be
able to enter F or U in Blackboard]
20. The I Am Running Out of Creative Names Company’s static budget is based on a
planned activity level of 25,000 units. Later, the company’s management
accountant prepared a budget based on 30,000 units. The company actually
produced and sold 29,000 units. In evaluating its performance, management
should compare the company’s actual revenues and costs which of the following
budgets?
A. A budget based on 29,000 units
B. A budget based on 30,000 units
C. A budget based on 25,000 units
D. Either A or C
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21. Select the correct statement concerning the human factor of performance
evaluation.
A. Variances should not be used to single out managers for punishment
B. Variances must be analyzed carefully to ensure that they are fully
understood
C. Just because a cost variance is labeled as favorable doesn’t necessarily
mean that the manager should be commended for a job well done.
D. All of these
Use the values of the following parameters used at Harman Hospital’s Pediatric
Section for the next two questions.
Harman Hospital: Schedule of Pediatric Section Nursing Costs – June 20X1
Item Budgeted Actual
Patient days 600 624
RN hours per patient day 6 8
Hourly pay rate RNs $40 $45
22. What is the flexible budget variance for nursing labor at Harman Hospital’s
pediatric section?
A. $74,880U
B. $5,750U
C. $80,640F
D. $74,880F
E. $5,760F
23. What is the per unit usage variance of nursing labor at Harman’s pediatric
section?
A. $30U
B. $40U
C. $80U
D. $30F
E. $40F
24. Desired Products provided the following selected information about its
consumer products division for 2012:
Desired ROI 10%
Net Income $150,000
Residual Income $50,000
Based on this information, the division’s investment amount (amount of
operating assets) was
A. $700,000
B. $1,000,000
C. $4,000,000
D. $20,000,000
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25. Watch More Movie Chains has invested in Italian snack bars for their stores,
where individual pizzas are prepared and sold. The investment cost the
company $45,000. The company expects a sales volume for the new product to
be 12,000 pizzas a year. Variable materials, preparation, and marketing costs
are expected to be $1.50 a unit and fixed costs are estimated at $15,000 a year.
Based on a desired 12% ROI, what should Watch More Movies charge as the
selling price per pizza?
A. $4.50
B. $2.75
C. $3.20
D. $5.20