Reference no: EM1359972

Emmy Company had beginning raw materials inventory of $7,000. During the period, the company purchased $47,000 of raw materials on account. If the ending balance in raw materials was $6,000, the amount of raw materials transferred to work in process inventory is:
a. $42,000.
b. $45,000.
c. $50,000.
d. $48,000.

Nubian Company employs material handling employees who move materials between production divisions at a labor cost of $160,000 a year. It is estimated that these employees move 75,000 pounds of material per year. If 6,000 pounds are moved in March, how much of the labor cost should be assigned to products made in March?
a. $12,000.
b. $12,800.
c. $26,666.
d. $75,000.

The statement of cash flows classifies cash flows into operating, investing, and financing activities.
True
False

Activity-based-costing would be most appropriate in which of the following circumstances?
a. When a company makes multiple products, all of which place an equal demand on the consumption of overhead costs.
b. When a company makes the same quantity of a single product on a monthly basis.
c. When a company produces multiple products that require the consumption of an equal amount of materials and labor, but different amounts of overhead.
d. When a company makes different quantities of single product on a monthly basis.

The three costs of producing a product include all of the following except:
a. Direct material costs.
b. Direct labor costs.
c. R&D costs.
d. Overhead costs.

The operating activities section of the cash flow statement is essentially a cash-basis income statement.
True
False

A banker may perform a financial ratio analysis to assess a firm's ability to repay debt in a timely manner.
True
False

The entry to record depreciation expense on manufacturing equipment will:
a. Decrease net assets, equity, and net income.
b. Not affect assets, decrease net income, and not affect cash flow.
c. Decrease net assets, decrease net income, and increase equity.
d. Not affect assets, net income, or cash flow.

Four purposes often claimed for budgeting involve planning, coordination, performance measurement, and corrective action.
True
False

Coley Company estimates that its production workers will work 125,000 direct labor hours during the upcoming period. If the predetermined overhead rate is $4 per direct labor hour, what is the total amount of overhead costs?
a. $4 per unit.
b. $400,000.
c. $500,000.
d. None of the above.

Target pricing begins with determining the price at which a product will sell and then focusing on developing ways to produce the product at a cost that will enable the company to achieved its desired profit margin.
True
False

Strategic planning deals with the establishment of a master budget that will direct the firm's activities over the next budget period.
True
False

The Salary and Wages Expense account is debited when production workers are paid.
True
False

A static budget is one that shows estimated revenues and costs at multiple activity levels.
True
False

HipBags Company makes two types of women's handbags. Making a standard handbag requires 2 hours of labor while making a deluxe handbag requires 5 hours of labor. During the most recent accounting period the company made 2,000 standard handbags and 500 deluxe handbags. Indirect manufacturing costs amounted to $52,000. Based on this information:
a. $8 of overhead cost should be allocated to each handbag regardless of the type of handbag made.
b. $2.08 of overhead cost should be allocated to each handbag regardless of the type of handbag made.
c. $16 of overhead cost should be assigned to each standard handbag and $40 of overhead cost should be assigned to each deluxe bag.
d. None of the above.