ACC 240 : FINAL EXAM. QUESTIONS

2  of 35Contribution margin per unit is best described by which of the following? Sales price per unit minus fixed cost per unit Sales price per unit minus variable cost unit Sales price per unit minus fixed and variable costs per unit Units sold time contribution margin ratioQuestion7  of 35Blue Technologies manufactures and sells DVD players. Great Products Company has offered Blue Technologies $22 per DVD player for 10,000 DVD players. Blue Technologies’ normal selling price is $30 per DVD player. The total manufacturing cost per DVD player is $12 and consists of variable costs of $14 per DVD player and fixed overhead costs of $4 per DVD player. (NOTE: Assume excess capacity and no effect on regular sales.)How much are the expected increase (decrease) in revenues and expenses from the special sales order? Expected increase in revenues $220,000; expected increase in expenses $140,000 Expected increase in revenues $220,000; expected increase in expenses $40,000 Expected increase in revenues $300,000; expected increase in expenses $140,000 Expected increase in revenues $220,000; expected increase in expenses $120,000Question12  of 35Which of the following budgets projects cash inflows and outflows and the budgeted balance sheet? Purchases budget Capital expenditures budget Financial budget Cash budgetQuestion13  of 35Romona Company expects its November sales to be 20% higher than its October sales of $165,000. All sales are on credit and are collected as follows: 35% in the month of the sale and 60% in the following month. Purchases were $110,000 in October and are expected to be $140,000 in November. Purchases are paid 40% in the month of purchase and 60% in the following month. The cash balance on November 1 is $13,500. The cash balance on November 30 will be $46,300. $59,800. $2,050. $32,800.Question14  of 35June sales were $5,000 while projected sales for July and August were $6,500 and $7,000, respectively. Sales are 35% cash and 65% credit. All credit sales are collected in the month following the sale. What are the expected collections for July? $7,975 $5,525 $6,825 $5,975Question16  of 35Honda’s East Liberty Auto Plant which builds Honda cars is most likely treated as a(n) cost center. investment center. profit center. revenue center.Question17  of 35A product line at PepsiCo (such as the Pepsi Max product line) is most likely treated as a(n) cost center. profit center. investment center. revenue center.Question18  of 35The CEO of Banana Republic, a division of The Gap, Inc., would be in charge of a(n) cost center. investment center. profit center. revenue center.Question19  of 35The manager of a local CVS drugstore would be in charge of a(n) cost center. investment center. revenue center. profit center.Question20  of 35The store manager for the Dick’s Sporting Goods location in Columbus, Ohio, is in charge of a(n) cost center. investment center. profit center. revenue center.Question21  of 35The manager of the accounting department at Adidas would be in charge of a(n) investment center. cost center. profit center. revenue center.Question22  of 35Sole Purpose manufactures beach shoes that use a canvas as the main raw material. Data related to the shoes for June follows:Standard quantity per unit of output (yards)4.5Standard price per yard$10.50Actual materials purchased in yards16,500Actual cost of materials purchased$90,450Actual materials used in production (yards)16,000Actual outputs in units3,600What is the materials quantity variance for canvas for June? $1,645 favorable $2,100 favorable $1,645 unfavorable $2,100 unfavorableQuestion23  of 35Madden Corporation manufactures t-shirts, which is its only product. The standards for t-shirts are as follows:Standard direct materials cost per yard$ 8Standard direct materials quantity per t-shirt (yards)1.5During the month of May, the company produced 1,250 t-shirts. Related production data for the month follows:Actual yards of direct material purchased1,400Actual direct materials total cost$ 15,500What is the direct materials price variance for the month? $4,300 unfavorable $4,300 favorable $3,800 favorable $3,800 unfavorableQuestion24  of 35Michael Corporation manufactures railroad cars, which is its only product. The standards for the railroad cars are as follows:Standard tons of direct material (steel) per car4Standard cost per ton of steel$ 17.00During the month of March, the company produced 1,650 cars. Related production data for the month follows:Actual materials purchased and used (tons)6,650Actual direct materials total cost$ 115,000What is the direct materials quantity variance for the month? $ 850 favorable $ 850 unfavorable $ 1,950 favorable $ 1,950 unfavorableQuestion25  of 35How is the direct labor rate variance calculated? The difference between the standard labor rate and the actual labor rate multiplied by the actual labor hours used The difference between the standard labor rate and the actual labor rate multiplied by the standard allowable hours The difference between the standard labor hours and the allowable labor hours The difference between the standard labor rate and the actual labor rateQuestion26  of 35A favorable direct labor efficiency variance might indicate that higher skilled workers were used that performed the task slower than expected. higher skilled workers were used that performed the task faster than expected. lower skilled workers were paid a higher wage than expected. lower skilled workers were paid a lower wage than expected.Question27  of 35An unfavorable direct labor rate variance indicates which of the following? Both actual quantity and actual cost of direct labor hours exceeded standard quantity and standard cost of hours for actual output. The actual quantity of direct labor hours worked exceeded the standard quantity of hours for actual output. The actual direct labor cost per hour exceeded the standard direct labor cost per hour for actual quantity of direct labor hours. The actual cost of direct labor per hour was less than the standard cost of direct labor per hour.Question28  of 35A favorable direct labor efficiency variance and an unfavorable direct labor rate variance might indicate which of the following? Unskilled workers using more actual hours than standard, paid at a higher rate per hour than the standard rate Unskilled workers using less actual hours than standard, paid a lesser rate per hour than the standard rate Skilled workers using less actual hours than standard, paid at a higher rate per hour than the standard rate Skilled workers using more actual hours than standard, paid at a higher rate per hour than the standard rateQuestion32  of 35How does depreciation affect the calculation of a project’s payback period? Depreciation is deducted from the annual cash inflows. Depreciation is added to the annual cash inflows. Depreciation is only deducted if the payback period exceeds five years. Depreciation does not affect the payback calculation.Question33  of 35Gomez Corporation is considering two alternative investment proposals with the following data: Proposal XProposal YInvestment$ 850,000$ 468,000Useful life8 years8 yearsEstimated annual net cash inflows for eight years$ 125,000$ 78,000Residual value$ 40,000$ -Depreciation methodStraight-lineStraight-lineRequired rate of return14%10%What is the accounting rate of return for Proposal X? 2.88 % 14.71 % 26.62 % 2.79%Question34  of 35(Use present value tables in textbook.) Vino Winery is considering the purchase of a state-of-the-art bottling machine. The new machine will cost $28,250 and will have a useful life of 10 years. The new machine will provide net cash savings of $5,000 per year. What is the internal rate of return (IRR) for the new bottling machine?