ACCT 2302 Module 4 Exam - exam with questions and answers PDF

Preview

Summary

ACCT 2302 MODULE 4 EXAMStandard cost systems depend on which two types of standards? QUANTITY AND PRICE STANDARDS How do managers and companies set price and quantity standards? BASED ON HISTORICAL DATA, INDUSTRY AVERAGES, AND THE RESULTS OF PROCESS STUDIES A quantity standard is: THE AMOUNT OF INPU...

Description

ACCT 2302 MODULE 4 EXAM Standard cost systems depend on which two types of standards? QUANTITY AND PRICE STANDARDS How do managers and companies set price and quantity standards? BASED ON HISTORICAL DATA, INDUSTRY AVERAGES, AND THE RESULTS OF PROCESS STUDIES A quantity standard is: THE AMOUNT OF INPUT THAT SHOULD BE USED IN EACH UNIT OF PRODUCT OR SERVICE When completing a variance analysis, we describe variances as __________ or __________. FAVORABLE; UNFAVORABLE Comparing the master budget with the flexible budget creates a: VOLUME VARIANCE Delaware Corp. prepared a master budget that included $18,630 for direct materials; $28,200 for direct labor; $15,000 for variable overhead; and $39,000 for fixed overhead. Delaware Corp. planned to sell 4,050 units during the period, but actually sold 4,340 units. What would Delaware’s direct materials cost be if it used a flexible budget for the period based on actual sales? $19,964 Delaware Corp. prepared a master budget that included $20,300 for direct materials, $28,100 for direct labor, $20,300 for variable overhead, and $38,800 for fixed overhead. Delaware Corp. planned to sell 4,060 units during the period but actually sold 4,380 units. What would Delaware’s fixed overhead cost be if it used a flexible budget for the period based on actual sales? $38,800 Exeter has a materials standard of 1 pound per unit of output. Each pound has a standard price of $25 per pound. During July, Exeter paid $139,000 for 4,950 pounds, which it used to produce 4,740 units. What is the direct materials price variance? $15,250 UNFAVORABLE

Whitman has a direct labor standard of 2 hours per unit of output. Each employee has a standard wage rate of $25.50 per hour. During July, Whitman paid $115,596 to employees for 4,680 hours worked. 2,590 units were produced during July. What is the flexible budget amount for direct labor? $132,090 Which of the following statements is correct about capital assets? FOR MANAGERIAL ACCOUNTING PURPOSES, “CAPITAL ASSETS” ARE DEFINED MORE BROADLY THAN FOR FINANCIAL ACCOUNTING PURPOSES Projects that are unrelated to one another, so that investing in one project does not preclude or affect the choice about investing in the other alternatives, are: INDEPENDENT PROJECTS Which of the following capital budgeting methods does not use the discounted cash flows? PAYBACK PERIOD The accounting rate of return is calculated as: ANNUAL NET INCOME DIVIDED BY INITIAL INVESTMENT The accounting rate of return is also called all of the following except: REQUIRED RATE OF RETURN Which of the following is the formula for accounting rate of return? ANNUAL NET INCOME / INITIAL INVESTMENT Palmer Corp. is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in net income after tax of $144,200. The equipment will have an initial cost of $515,000 and have a 7 year life. If the salvage value of the equipment is estimated to be $11,000, what is the accounting rate of return? 28.00% Nelson Corp. is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in cash flow of $102,000. The equipment will have an initial cost of $204,000 and

have a 3 year life. If the salvage value of the equipment is estimated to be $77,000, what is the payback period? Ignore income taxes. 2.00 YEARS Newport Corp. is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in cash flow of $200,000. The equipment will have an initial cost of $1,400,000 and have a 10 year life. There is no salvage value for the equipment. What is the payback period? 7.00 YEARS...