Reference no: EM132593592
Problem 1: Miller Manufacturing's degree of operating leverage is 1.5. Warren Corporation's degree of operating leverage is 3. Warren's earnings would go up (or down) by ________ as much as Miller's with an equal increase (or decrease) in sales.?
Option 1: ?2 times
Option 2: ?1/2 times
Option 3: ?4.5 times
Option 4: ?1.5 times
Problem 2: The investigation of materials price variance usually begins in the:?
Option 1: ?first production department.
Option 2: ?controller's office.
Option 3: ?accounts payable department.
Option 4: ?purchasing department.
Problem 3: The Mac Company has four plants nationwide that cost $350 million. The current fair value of the plants is $300 million. The plants will be reported as assets at:?
Option 1: ?$600 million.
Option 2: ?$300 million.
Option 3: ?$350 million.
Option 4: ?$700 million.
Problem 4: If there are no units in process at the beginning of the period, then:?
Option 1: ?the units to be accounted for will equal the units transferred out and the units in process at the end of the period.
Option 2: ?the units started into production will equal the number of units transferred out.
Option 3: ?only one computation of equivalent units of production will be necessary.
Option 4: ?the company must be using a job order cost system.
Problem 5: Which one of the following is an example of a period cost??
Option 1: ?A box cost associated with computers.
Option 2: ?Workers' compensation insurance on factory workers' wages allocated to the factory.
?Option 3: A change in benefits for the union workers who work in the New York plant of a Fortune 1000 manufacturer.
Option 4: ?A manager's salary for work that is done in the corporate head office.
Problem 6: Which is the last step in developing the master budget??
Option 1: ?Preparing the budgeted balance sheet
?Option 2: Preparing the cash budget
Option 3: ?Preparing the cost of goods manufactured budget
Option 4: ?Preparing the budgeted income statement
Problem 7: Are advanced receipts from customers treated as revenue at the time of receipt? Why or why not??
?Option 1: Yes, they are treated as revenue at the time of receipt because the company has access to the cash.
?Option 2: Yes, the intent of the company is to perform the work and the customer is confident that the services will be completed.
Option 3: ?No, the amount of revenue cannot be adequately determined until the company completes the work.
Option 4: ?No, revenue cannot be recognized until the work is performed.
Problem 8: La More Company had the following transactions during 2016:
Sales of $9,000 on account
Collected $4,000 for services to be performed in 2017
Paid $3,750 cash in salaries for 2016
Purchased airline tickets for $500 in December for a trip to take place in 2017
What is La More's 2016 net income using accrual accounting?
Option 1: ?$9,750
?Option 2: $5,750
Option 3: ?$5,250
Option 4: ?$9,250
Problem 9: Kimble Company applies overhead on the basis of machine hours. Given the following data, compute overhead applied and the under- or overapplication of overhead for the period:
Estimated annual overhead cost $1,600,000
Actual annual overhead cost $1,575,000
Estimated machine hours 400,000
Actual machine hours 390,000 ?
Option 1: ?$1,560,000 applied and $15,000 underapplied
Option 2: ?$1,560,000 applied and $15,000 overapplied
?Option 3: $1,600,000 applied and $15,000 overapplied
?Option 4: $1,575,000 applied and neither under- nor overapplied
Problem 10: Based on the following data, what is the amount of working capital?
Accounts payable.................................................................$64,000
Accounts receivable..............................................................114,000
Cash.................................................................................. 70,000
Intangible assets..................................................................100,000
Inventory............................................................................ 138,000
Long-term investments...........................................................160,000
Long-term liabilities.................................... ...........................200,000
Short-term investments............................................................80,000
Notes payable (short-term)........................................................56,000
Property, plant, and equipment...............................................1,340,000
Prepaid insurance......................................................................2,000
Option 1: ?$284,000
Option 2: ?$332,000
Option 3: ?$326,000
Option 4: ?$370,000