Reference no: EM132750056

Questions -

Q1) Sheridan Company incurs the following costs to produce 11700 units of a subcomponent:

An outside supplier has offered to sell Sheridan the subcomponent for $2.85 a unit.

If Sheridan accepts the offer, it could use the production capacity to produce another product that would generate additional income of $3600. The increase (decrease) in net income from accepting the offer would be

a. $846.

b. $8046.

c. $(846).

d. $(3600).

Q2) Crane Company produces 5000 units of part A12E. The following costs were incurred for that level of production:

If Crane buys the part from an outside supplier, $10000 of the fixed overhead is avoidable.

If the outside supplier offers a unit price of $58, net income will increase (decrease) by

a. $(20000).

b. $(30000).

c. $105000.

d. $85000.

Q3) Sheridan Company manufactures widgets. Embree Company has approached Sheridan with a proposal to sell the company widgets at a price of $120000 for 100000 units. Sheridan is currently making these components in its own factory. The following costs are associated with this part of the process when 100000 units are produced:

The manufacturing overhead consists of $16000 of costs that will be eliminated if the components are no longer produced by Sheridan. From Sheridan's point of view, how much is the incremental cost or savings if the widgets are bought instead of made?

a. $14000 incremental cost

b. $14000 incremental savings

c. $30000 incremental cost

d. $30000 incremental savings

Q4) A master budget consists of

a. interrelated financial budgets and operating budgets.

b. all the accounting journals and ledgers used by a company.

c. an interrelated long-term plan and operating budgets.

d. financial budgets and a long-term plan.

Q5) Coronado Industries budgets on an annual basis for its fiscal year. The following beginning and ending inventory levels are planned for the fiscal year of July 1, 2016 to June 30, 2017:

Three kilos of raw materials are needed to produce each unit of finished product. If Coronado Industries plans to produce 490000 units during the 2016-2017 fiscal year, how many kilos of materials will the company need to purchase for its production during the year?

a. 1470000

b. 1469000

c. 1474000

d. 1467000

Q6) If the required direct materials purchases are 30000 pounds, the direct materials required for production is three times the direct materials purchases, and the beginning direct materials are three and a half times the direct materials purchases, what are the desired ending direct materials in pounds?

a. 75000

b. 15000

c. 45000

d. 30000

Q7) Marigold Corp. is planning to sell 900 boxes of ceramic tile, with production estimated at 670 boxes during May. Each box of tile requires 44 pounds of clay mix and a 0.25 hour of direct labor. Clay mix costs $0.40 per pound and employees of the company are paid $22 per hour. Manufacturing overhead is applied at a rate of 110% of direct labor costs. Marigold has 4700 pounds of clay mix in beginning inventory and wants to have 3600 pounds in ending inventory.

What is the total amount to be budgeted in pounds for direct materials to be purchased for the month?

a. 30580

b. 38500

c. 28380

d. 29480

Q8) Not-for-profit entities

a. utilize responsibility accounting in trying to minimize the cost of providing services.

b. do not use responsibility accounting.

c. utilize responsibility accounting in trying to maximize net income.

d. have only noncontrollable costs.