BUS 475 Final Exam 6
1) As Plant Controller, you are trying to determine which costs over which you have the most control on a day to day basis. Your goal is to achieve better profitability. The Plant Operations Manager suggests that overhead is the easiest area to directly reduce costs. Which of the following items would be classified as manufacturing overhead?
A. General corporate liability insurance
B. Cost of landscaping the corporate office
C. The western division’s vice president’s salary
D. Factory janitor
2) Balance sheet accounts are considered to be __________.
A. permanent accounts
B. capital accounts
C. nominal accounts
D. temporary stockholders’ accounts
3) A company just starting in business purchased three merchandise inventory items at the following prices. First purchase $80; Second purchase $95; Third purchase $85. If the company sold two units for a total of $240 and used FIFO costing, the gross profit for the period would be _____.
4) The major reporting standard for management accounts is __________.
A. the Sarbanes-Oxley Act of 2002
B. the Standards of Ethical Conduct for Practitioners of Management Accounting and Financial Management
C. generally accepted accounting principles
D. relevance to decisions
5) The standards and rules that are recognized as a general guide for financial reporting are called __________.
A. generally accepted accounting principles
B. generally accepted accounting standards
C. standards of financial reporting
D. operating guidelines
6) Managerial accounting __________.
A. is governed by generally accepted accounting principles
B. is concerned with costing products
C. places emphasis on special-purpose information
D. pertains to the entity as a whole and is highly aggregated
7) Hess, Inc. sells a single product with a contribution margin of $12 per unit and fixed costs of $74,400 and sales for the current year of $100,000. How much is Hess’s break even point?
B. 4,600 units
C. 2,133 units
D. 6,200 units
8) These are selected account balances on December 31, 2008.
What is the net amount of property, plant, and equipment that will appear on the balance sheet?
9) Which one of the following is a product cost?
A. Office salaries
B. Indirect labor
C. Advertising costs
D. Sales person’s salaries
10) One of Astro Company’s activity cost pools is machine setups, with estimated overhead of $150,000. Astro produces sparklers (400 setups) and lighters (600 setups). How much of the machine setup cost pool should be assigned to sparklers?
11) The income statement and balance sheet columns of Pine Company’s worksheet reflects the following totals:
Income Statement Balance Sheet
Dr. Cr .Dr .Cr.
$58,000 $48,000 $34,000 $44,000
The net income (or loss) for the period is __________.
A. $10,000 income
B. $48,000 income
C. not determinable
D. $10,000 loss
12) Multinational corporations __________.
A. are U.S. companies that sell goods and services in other countries
B. are U.S. companies that trade their securities on the exchanges in other countries
C. are required to use international accounting standards
D. are firms that conduct their operations in more than one country through subsidiaries, divisions, or branches in foreign countries
13) What exists when budgeted costs exceed actual results?
A. A favorable difference
B. An excess profit
C. A budgeting error
D. An unfavorable difference
14) The primary purpose of the statement of cash flows is to __________.
A. prove that revenues exceed expenses if there is a net income
B. facilitate banking relationships
C. provide information about the investing and financing activities during a period
D. provide information about the cash receipts and cash payments during a period
15) A logical starting point from which the study of international trade begins is __________.
A. the recognition that government intervention in markets sometimes enhances the economic welfare of the society
B. the principle of comparative advantage
C. the recognition that not all markets are competitive
D. the principle of absolute advantage
16) Resources are __________.
A. plentiful for households but scarce for economies
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