100% confident answers for your comparison The figures are shown in the attached answer file Swisher, Incorporated reports the following annual cost data for its single product. This product is normally sold for $48 per unit. If Swisher increases its production to 50,000 units, while sales remain at the current 30,000 unit level, by how much would the company’s gross margin increase or decrease under variable costing? $90,000 decrease. There is no change in gross margin. $60,000 decrease. $90,000 increase. $60,000 increase. Dent Corporation had net income of $182,000 based on variable costing. Beginning and ending inventories were 5,000 units and 8,000 units, respectively. Assume the fixed overhead per unit was $3 for both the beginning and ending inventory. What is net income under absorption costing? $221,000 $191,000 $185,000 $173,000 $143,000 Branwin Corporation sold 7,200 units of its product at a price of $35.60 per unit. Total variable cost per unit is $17.55, consisting of $10.50 in variable production cost and $7.05 in variable selling and administrative cost. Compute contribution margin for the company. $50,760 $126,360 $180,720 $129,960 $256,320 When evaluating a special order, management should Only accept the order if the incremental revenue exceeds full absorption product costs. Only accept the order if the incremental revenue exceeds all product costs. Only accept the order if the incremental revenue exceeds total variable product costs. Only accept the order if the incremental revenue exceeds fixed product costs. Only accept the order if the incremental revenue exceeds regular sales revenue. Bentels Co. desires a December 31 ending inventory of 2,840 units. Budgeted sales for December are 4,000 units. The November 30 inventory was 1,800 units. Budgeted purchases are: 4,000 units. 1,240 units. 5,040 units. 5,800 units. 6,840 units. Actual fixed overhead for a company during March was $97,612. The flexible budget for fixed overhead this period is $88,000 based on a production level of 5,500 units. If the company actually produced 4,300 units, what is the fixed overhead spending variance for March? $1,200 unfavorable. $28,812 favorable. $9,612 favorable. $28,812 unfavorable. $9,612 unfavorable. Sales analysis is useful for: Planning and budgeting purposes. Control purposes only. Planning and control purposes. Budgeting purposes only. Planning purposes only. A company had a $56,000 unfavorable direct material efficiency variance during a time period when the standard rate per pound of direct material was $7 and the actual rate per pound of direct material was $7.50. If the standard quantity of direct material allowed for production was 52,000 pounds, how many pounds of direct material were actually used during this period? 364,000 pounds. 44,000 pounds. 60,000 pounds. 56,000 pounds. 420,000 pounds. A company had a $22,000 favorable direct labor efficiency variance during a time period when the standard rate per direct labor hour was $22 and the actual rate per direct labor hour was $21. If the standard direct labor hours allowed for production were 5,000 what is the amount of actual direct labor cost during this period? $110,000 $100,000 $88,000 $84,000 $105,000 Pact Company had net income of $972,000 based on variable costing. Beginning and ending inventories were 7,800 units and 5,200 units, respectively. Assume the fixed overhead per unit was $3.61 for both the beginning and ending inventory. What is net income under absorption costing? $969,400 $981,379 $962,614 $925,077 $1,018,923 Swisher, Incorporated reports the following annual cost data for its single product. This product is normally sold for $48 per unit. If Swisher increases its production to 50,000 units, while sales remain at the current 30,000 unit level, by how much would the company’s gross margin increase or decrease under absorption costing? $60,000 decrease. $90,000 decrease. $90,000 increase. There is no change in gross margin. $60,000 increase. A company reports the following information for its first year of operations. If the company’s cost per unit of finished goods using absorption costing is $27, how many units were produced? 2,000 units. 3,600 units. 1,846 units. 4,000 units. 2,667 units. Cloudy Company reports the following information for the current year. If the company’s cost per unit of finished goods using absorption costing is $18, what is total fixed overhead? $213,690 $212,000 $222,070 $459,000 $204,000 Aces, Inc., a manufacturer of tennis rackets, began operations this year. The company produced 6,000 rackets and sold 4,900. At year-end, the company reported the following income statement using absorption costing. Production costs per tennis racket total $38, which consists of $25 in variable production costs and $13 in fixed production costs (based on the 6,000 units produced). Ten percent of total selling and administrative expenses are variable. Compute net income under variable costing. $240,500 $194,100 $311,000 $165,500 $233,000 A company reports the following information for its first year of operations. If the company’s cost per unit of finished goods using variable costing is $2.02, what is the amount of total fixed overhead? Some other amount. Cannot be determined from the given data. $35,690. $26,660. $24,510. Decko Industries reported the following monthly data. What is the company’s contribution margin for this month if 50,000 units were sold? $1,450,000 $1,275,000 $1,650,000 $1,326,000 $1,716,000 Romtech Company sold 43,000 units of its product at a price of $300 per unit. Total variable cost per unit is $175, consisting of $168 in variable production cost and $7 in variable selling and administrative cost. Compute the manufacturing margin for the company under variable costing. $7,525,000 $12,900,000 $5,676,000 $12,599,000 $5,375,000 Shore Company reports the following information regarding its production cost. Compute production cost per unit under absorption costing. $60.39 $24.00 $47.00 $57.00 $23.00 Which of the following factors is least likely to be considered in preparing a sales budget? General economic and industry conditions. The capital expenditures budget. Proposed selling expenses, such as advertising. Past sales volume. Plant capacity. A plan showing the units of goods to be sold and the revenue to be derived from sales, that is the usual starting point in the budgeting process, is called the: Sales budget. Operating budget. Business plan. Merchandise purchases budget. Income statement budget. A company reports the following information from its sales account and sales budget: Cash sales are normally 30% of total sales and all credit sales are expected to be collected in the month following the date of sale. The total amount of cash expected to be received from customers in September is: $58,500 $56,500 $55,000 $80,500 $60,000 Long-term liability data for the budgeted balance sheet is derived from: The cash budget and budgeted income statement. The cash budget and capital expenditures budget. The cash budget and sales budget. The sales budget and production budget. The asset budget and debt budget. Which of the following is not a benefit of following a well-designed budgeting process? Improved coordination of business activities. Improved commitment to meet expected performance by those affected. Assurance of future profits. Improved performance evaluations. Improved decision-making processes. A Company forecasts sales of $91,500 for the quarter ended December 31. Its gross profit rate is 18% of sales, and its September 30 inventory is $25,000. If the December 31 inventory is targeted at $7,500, budgeted purchases for the fourth quarter should be: $0 $91,000 $82,530 $57,530 $107,530 Kabuki Company’s policy is to have 16% of the next month’s sales as desired ending inventory. Estimated sales are shown in the table below. Given this data, what is Kabuki’s estimated purchases for March? 9,400 8,900 9,320 8,820 8,644 – The following company information is available for January: The direct material price variance is: $5,000 favorable. $5,300 favorable. $5,000 unfavorable. $300 favorable. $5,300 unfavorable. Adams Co. uses the following standard to produce a single unit of its product: Variable overhead (2 hrs. @ $3/hr.) = $6 Actual data for the month show variable overhead costs of $150,000 based on 24,000 units of production. The total variable overhead variance is: $78,000U $78,000F $6,000F $6,000U $0. The standard materials cost to produce one unit of Product K is 7 pounds of material at a standard price of $32 per pound. In manufacturing 8,000 units, 54,000 pounds of material were used at a cost of $30 per pound. What is the total direct material cost variance? $64,000 favorable. $108,000 favorable. $44,000 favorable. $104,000 favorable. $172,000 favorable. A company established a direct material standard of 2 pounds of material at a cost of $6 per pound for unit produced. During August the company produced 6,000 units of product. 10,000 pounds of direct material which cost $6.50 per pound were used in the production process. Compute the direct material price variance for August. $5,000 favorable. $12,000 unfavorable. $12,000 favorable. $5,000 unfavorable. $7,000 favorable. The following company information is available for January: The direct material quantity variance is: $5,000 favorable. $5,000 unfavorable. $5,300 favorable. $5,300 unfavorable. $300 favorable. A company established a direct material standard of 2 pounds of material at a cost of $6 per pound for unit produced. During August the company produced 6,000 units of product. 10,000 pounds of direct material which cost $6.50 per pound were used in the production process. Compute the direct material quantity variance for August. $12,000 favorable. $5,000 favorable. $7,000 favorable. $12,000 unfavorable. $5,000 unfavorable. 33. Lesson 2 Planning and Leadership EXAMINATION NUMBER 06042500 1. Which one of the following is a defensive strategy? A. Diversification C. Concentration B. Vertical integration D. Divestiture 2. Negative power is primarily associated with A. voluntary exchange relationships. B. situations in which an individual is forced to change. C. situations in which both parties to an exchange feel good about it. D. exchange relationships in which involuntary compliance is viewed positively. 3. Which one of the following situations is an example of overall cost leadership? A. A dress manufacturer wants to make its product unique in its category. B. A company that manufactures school desks is looking for ways to make its desks less expensive than its competition. C. A restaurant is seeking to reverse a negative trend to get themselves back to profitability. D. A large corporation has determined to liquidate parts of its business. 4. Graham maintains that formulation and implementation are phases in the strategic management process. Yolanda maintains that evaluation and estimation are also part of this process. Who is correct? A. Yolanda is correct. B. Both Graham and Yolanda are correct. C. Graham is correct. D. Neither Graham nor Yolanda is correct. 5. What is the typical time span for long-range plans? A. More than 1 year C. 3–5 years B. 2–3 years D. About 25 years 6. Which one of the following leadership styles could be best characterized by the statement “Let George do it”? A. Contingent C. Democratic B. Laissez-faire D. Autocratic 7. According to the Managerial Grid, which basic style of management has a high concern for people and a low concern for production? A. Country club management B. Authority-obedience management C. Organization man management D. Team management 8. Tactical planning focuses on the formulation of _______ plans. A. long-range C. functional B. contingency D. strategic 9. Which one of the following characteristics is associated with charismatic leaders? A. Following management by the book B. Lacking confidence in employees’ abilities C. Promoting their beliefs with boundless energy. D. Controlling the behavior of others. 10. Leadership is best defined as the A. ability to influence people to willingly follow one’s guidance or adhere to one’s decisions. B. ability to influence, command, or apply force. C. ability to avoid being forced by others to do what he or she doesn’t want to do. D. right to issue directives and expend resources. 11. What tool was developed as a result of the Ohio State Studies? A. Managerial grid B. Least preferred coworker scale C. Continuum of leader behavior D. Leader Behavior Description Questionnaire 12. Management by objectives works best when the objectives of each organizational unit are derived from A. the social environment. B. the objectives of a competitor. C. the objectives of the next higher unit in the organization. D. a functional or general manager. 13. Which one of the following quotes suggests a leader with an attitude consistent with Theory Y? A. “These people hate work. If possible, they would never come in.” B. “My advice to you as a new manager is to be firm with your people. Otherwise, they won’t put out any effort to achieve our goals.” C. “My employees have very little ambition. All they want is to know their jobs are secure.” D. “My people are committed to our organization’s objectives because they know what’s in it for them.” 14. At the office, Jacob knows from his boss that his needs will be met as long as Jacob performs his duties successfully. What theory of leadership does Jacob’s boss follow? A. Situational leadership theory B. Transformational leadership theory C. Path-goal theory D. Fiedler’s contingency theory 15. Which one of the following elements is part of an organization’s broad environment? A. Stockholders C. Competitors B. Political trends D. Labor unions 16. Basically speaking, a contingency plan is a _______ plan. A. backup C. crisis management B. primary D. tactical 17. According to Peter Drucker, who determines an organization’s purpose, or mission? A. Company executives C. Stockholders B. Customers D. Supervisors 18. Which one of the following is a personal source of power? A. Coercive power C. Referent power B. Reward power D. Legitimate power 19. Process culture emphasizes A. the way things are to be done rather than the outcomes. B. taking few risks and attaining rapid feedback. C. making decisions that involve big stakes. D. taking high risks while getting quick feedback. 20. Which one of the following employees would be most likely to develop a plan for scheduling the completion of a production job? A. Chief executive officer C. Lower-level manager B. Senior vice president D. Production employees 34. 1 .A seller of goods or services, which is usually a manufacturer or wholesaler is known as a: Creditor Payee Debtor Vendor Vendee 2. The entry to record reimbursement of the petty cash fund for postage expense should include: A debit to Petty Cash A debit to Cash Short and Over A debit to Postage Expense A debit to Supplies A debit to Cash 3. Two important limitations of internal control systems are (1) human error or human fraud and (2) cost-benefit. True False 4. Receiving and paying for merchandise should be performed by one individual or department to streamline a voucher system and simplify the procedures for purchasing. True False 5. When evaluating the days’ sales uncollected ratio, generally the less time that money is tied up in receivables often translates into increased profitability. True False 6. Cash receipts by mail require only two people: One to open the mail and a second person to deposit the cash in the bank and record the cash receipt in the accounting records. True False 7. For good internal controls over cash, all payments should be made from the petty cash, except for very large payments. True False 8. Outstanding checks are checks the bank has paid and deducted from the customer’s account during the month. True False 9. Triple Company’s accountant made an entry that included the following items: debit postage expense $12.42; debit office supplies expense $27.33, debit to cash over/short $2.19. If the original amount in petty cash is $320, how much was the credit to cash for the reimbursement? $41.94 $320.00 $39.75 $37.56 $202.44 10. A check: Involves the writer, the signers, the cashier and the bank Involves the maker and the payee Involves the signer, the cashier and the company Involves the bookkeeper, the payee and the bank Involves the maker, the payee and the bank 11. The days’ sales uncollected ratio is calculated by dividing accounts receivable by net sales and multiplying this quotient by 365. True False 12. In reimbursing the petty cash fund: Appropriate expense accounts are debited No expenses are recorded Petty Cash is debited Cash is debited Petty Cash is credited 13. The number of days’ sales uncollected is calculated by: Dividing accounts receivable by net sales and then multiplying by 365 Dividing net sales by accounts receivable Dividing net sales by accounts receivable and then multiplying by 365 Multiplying net sales by accounts receivable and dividing the result by 365 Dividing accounts receivable by net sales 14. Internal control devices for banking activities include signature cards, deposit tickets, checks and bank statements. True False 15. The days’ sales uncollected ratio reflects on the liquidity of accounts receivable. True False 16. Bonding does not discourage employees from stealing from the company as employees know that bonding is an insurance policy against loss from theft. True False 17. A good voucher system includes a set of procedures and approvals designed to control cash disbursements and the acceptance of obligations. True False 18. Technology such as cash registers, check protectors, time clocks and personal identification scanners can increase the strength of internal controls. True False 19.Internal control policies and procedures are the same for all companies. True False 20.A company must have a days’ sales uncollected ratio of less than 30 days to conclude that is has sufficient liquidity. True False 21.The voucher register is a journal that is used to record all approved vouchers within the company. True False 22. Cash equivalents: A. Are short-term, highly liquid investments B. Are recorded in petty cash C. Include checking accounts D. Include money orders E. Include 6-month CDs 23. The following information is available to reconcile Sleepy Time Bedding’s book balance of cash with its bank statement cash balance as of July 31: [IMG: Picture] What is the appropriate journal entry to record the collection made by the bank? A. No adjusting entry is necessary B. Debit to cash $9,452 debit to collection expense $48 credit accounts receivable $9,500 C. Debit to cash $9,452 debit to collection expense $48 credit notes receivable $9,500 D. Debit to cash $9,500 credit to accounts receivable $9,500