Reference no: EM13949903

Part A-

1. Horizontal analysis examines how an account, like cash for example, changes over time.
A) True
B) False

2. Principles of vertical analysis are used to prepare common size financial statements.
A) True
B) False

3. Factors such as industry trends and economic conditions should not be ignored when analyzing a company.
A) True
B) False

4. A common size income statement would report inventory as a percentage rate, not as a dollar amount.
A) True
B) False

5. The ability of a business to pay its debt is called liquidity.
A) True
B) False

6. Assets and earnings are reported on balance sheets.
A) True
B) False

7. Working capital measures the abilty of a business to pay off its short term debt.
A) True
B) False

8. Current ratios are used to analyze profitability.
A) True
B) False

9. Quick ratio calculations analyze earnings.
A) True
B) False

10. Liquidity, solvency, and profitability are interrelated.
A) True
B) False

11. All else being equal, turning receivables over more often improves liquidity.
A) True
B) False

12. All else being equal, the lower the inventory turnover the more days sales in inventory.
A) True
B) False

13. Research suggests that salaries paid to CFO's are linked to meeting earnings forecasts made by financial analysts.
A) True
B) False

14. GAAP requires CPA's to express unqualified opinions when auditing financial statements.
A) True
B) False

15. By definition, all extraordinary items must be both unusual in nature and infrequent in occurence.
A) True
B) False

16. GAAP requires separate earnings per share calculations for income from continuing operations, discountinued operations, and extraordinary items.
A) True
B) False

17. In many cases, GAAP is irrelevant to the decison making needs of management.
A) True
B) False

18. For manufacturers, cost objects may be products, departments, territories, or activities.
A) True
B) False

19. Not all direct manufacturing costs can be can be traced to specific cost objects.
A) True
B) False

20. Factory overhead is a prime cost.
A) True
B) False

21. Direct labor is both a prime and converison cost.
A) True
B) False

22. Product costs are initially reported on income statements as expenses.
A) True
B) False

23. Manufacturers typically report three types of inventory on their balance sheets.
A) True
B) False

24. The difference between total manufacturing costs and cost of goods manufactured is ending work in process.
A) True
B) False

25. Total manufacturing costs add up to the sum of beginning work in process and total manufacturing costs incurred.
A) True
B) False

26. Depreciation on factory equipment is a prime cost.
A) True
B) False

27. Factory overhead is reported as a separate product cost on the balance sheets of manufacturers.
A) True
B) False

28. Operating expenses are conversion costs.
A) True
B) False

29. In EX 18-16 on page 876, Crouching Alligator Manufacturing's gross profit would be $453,800.
A) True
B) False

30. On a Statement of Cost of Goods Manufactured prepared for Bahadir Company in Ex 18-17 on page 876, the cost of direct material Bahadir purchased would be the same as the cost of direct materailBahadir actually used.
A) True
B) False

Part B-

1. The following information is available for Crouching Alligator Manufacturing Company for the month ending October 31, 2016:

Cost of goods manufactured	$450,000
Selling expenses	144,500
Administrative expenses	75,900
Sales	911,250
Finished goods inventory, July 1	101,250
Finished goods inventory, July 31	93,800

For the month ended October 31, 2016, determine Crouching Alligator's (a) cost of goods sold, (b) gross profit, and (c) net income.

2. The following information is available for the first month of operations of Bahadir Company, a manufacturer of mechanical pencils:

Sales	$792,000
Gross profit	462,000
Cost of goods manufactured	396,000
Indirect labor	171,600
Factory depreciation	26,400
Materials purcheased	244,200
Total manufacturing costs for the period	455,400
Materials inventory, ending	33,000

Using the information given, determine the following missing amounts:

a. Cost of goods sold
b. Finished goods inventory at the end of the month
c. Direct material cost
d. Direct labor cost
e. Work in process inventory at the end of the month

3. Priceline.com allows customers to bid on hotel rooms by "naming their price." This "name your price" process allows customers to obtain a better rate on a hotel room than they might be able to obtain by reserving their room directly from the hotel. The hotel can also benefit from this transaction by filling empty hotel rooms during periods of low occupancy.

Natalie Mooney bids $85 for a night's stay at the Hotel Monaco in Seattle on Saturday August 10. The Hotel Monaco is not fully booked that evening and would likely accept any reasonable bids. How might the Hotel Monaco use managerial accounting information to decide whether or not to accept Natalie's bid?

4. The following is a list of costs that were incurred in the production and sale of large commercial airplanes:

a. Salary of chief compliance officer of company
b. Power used by painting equipment
c. Instrument panel installed in the airplane cockpit
d. Annual bonus paid to the chief operating officer of the company
e. Turbo-charged airplane engine
f. Interior trim material used throughout the airplane cabin.