2024 – 2 of 35 Contribution margin per unit is best described by which

2024 – 2 of 35 Contribution margin per unit is best described by which.

2  of 35

Contribution margin per unit is best described by which of the following?

>  >  >  >  >	Sales price per unit minus fixed cost per unit
>  >  >  >  >	Sales price per unit minus variable cost unit
>  >  >  >  >	Sales price per unit minus fixed and variable costs per unit
>  >  >  >  >	Units sold time contribution margin ratio

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7  of 35

Blue Technologies manufactures and sells DVD players. Great Products Company has offered Blue Technologies $22 per DVD player for 10,000 DVD players. Blue Technologies’ normal selling price is $30 per DVD player. The total manufacturing cost per DVD player is $12 and consists of variable costs of $14 per DVD player and fixed overhead costs of $4 per DVD player.

(NOTE: Assume excess capacity and no effect on regular sales.

How much are the expected increase (decrease) in revenues and expenses from the special sales order?

>  >  >  >  >	Expected increase in revenues $220,000; expected increase in expenses $140,000
>  >  >  >  >	Expected increase in revenues $220,000; expected increase in expenses $40,000
>  >  >  >  >	Expected increase in revenues $300,000; expected increase in expenses $140,000
>  >  >  >  >	Expected increase in revenues $220,000; expected increase in expenses $120,000

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12  of 35

Which of the following budgets projects cash inflows and outflows and the budgeted balance sheet?

>  >  >  >  >	>purchases budget Purchases budget
>  >  >  >  >	Capital expenditures budget
>  >  >  >  >	Financial budget
>  >  >  >  >	Cash budget

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13  of 35

Romona Company expects its November sales to be 20% higher than its October sales of $165,000. All sales are on credit and are collected as follows: 35% in the month of the sale and 60% in the following month. Purchases were $110,000 in October and are expected to be $140,000 in November. Purchases are paid 40% in the month of purchase and 60% in the following month. The cash balance on November 1 is $13,500. The cash balance on November 30 will be

>  >  >  >  >	$46,300.
>  >  >  >  >	$59,800.
>  >  >  >  >	>$2 $2,050.
>  >  >  >  >	$32,800.

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14  of 35

June sales were $5,000 while projected sales for July and August were $6,500 and $7,000, respectively. Sales are 35% cash and 65% credit. All credit sales are collected in the month following the sale. What are the expected collections for July?

>  >  >  >  >	$7,975
>  >  >  >  >	$5,525
>  >  >  >  >	$6,825
>  >  >  >  >	$5,975

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16  of 35

Honda’s East Liberty Auto Plant which builds Honda cars is most likely treated as a(n)

>  >  >  >  >	cost center.
>  >  >  >  >	investment center.
>  >  >  >  >	profit center.
>  >  >  >  >	revenue center.

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17  of 35

A product line at PepsiCo (such as the Pepsi Max product line) is most likely treated as a(n)

>  >  >  >  >	cost center.
>  >  >  >  >	profit center.
>  >  >  >  >	investment center.
>  >  >  >  >	revenue center.

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18  of 35

The CEO of Banana Republic, a division of The Gap, Inc., would be in charge of a(n)

>  >  >  >  >	cost center.
>  >  >  >  >	investment center.
>  >  >  >  >	profit center.
>  >  >  >  >	revenue center.

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19  of 35

The manager of a local CVS drugstore would be in charge of a(n)

>  >  >  >  >	cost center.
>  >  >  >  >	investment center.
>  >  >  >  >	revenue center.
>  >  >  >  >	profit center.

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20  of 35

The store manager for the Dick’s Sporting Goods location in Columbus, Ohio, is in charge of a(n)

>  >  >  >  >	cost center.
>  >  >  >  >	investment center.
>  >  >  >  >	profit center.
>  >  >  >  >	revenue center.

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21  of 35

The manager of the accounting department at Adidas would be in charge of a(n)

>  >  >  >  >	investment center.
>  >  >  >  >	cost center.
>  >  >  >  >	profit center.
>  >  >  >  >	revenue center.

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22  of 35

Sole Purpose manufactures beach shoes that use a canvas as the main raw material. Data related to the shoes for June follows:

Standard quantity per unit of output (yards)	4.5
Standard price per yard	$10.50
Actual materials purchased in yards	16,500
Actual cost of materials purchased	$90,450
Actual materials used in production (yards)	16,000
Actual outputs in units	3,600

What is the materials quantity variance for canvas for June?

>  >  >  >  >	$1,645 favorable
>  >  >  >  >	$2,100 favorable
>  >  >  >  >	$1,645 unfavorable
>  >  >  >  >	$2,100 unfavorable

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23  of 35

Madden Corporation manufactures t-shirts, which is its only product. The standards for t-shirts are as follows:

Standard direct materials cost per yard	$ 8
Standard direct materials quantity per t-shirt (yards)	1.5

During the month of May, the company produced 1,250 t-shirts. Related production data for the month follows:

Actual yards of direct material purchased	1,400
Actual direct materials total cost	$ 15,500

What is the direct materials price variance for the month?

>  >  >  >  >	$4,300 unfavorable
>  >  >  >  >	$4,300 favorable
>  >  >  >  >	$3,800 favorable
>  >  >  >  >	$3,800 unfavorable

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24  of 35

Michael Corporation manufactures railroad cars, which is its only product. The standards for the railroad cars are as follows:

Standard tons of direct material (steel) per car	4
Standard cost per ton of steel	$ 17.00

During the month of March, the company produced 1,650 cars. Related production data for the month follows:

Actual materials purchased and used (tons)	6,650
Actual direct materials total cost	$ 115,000

What is the direct materials quantity variance for the month?

>  >  >  >  >	$ 850 favorable
>  >  >  >  >	$ 850 unfavorable
>  >  >  >  >	$ 1,950 favorable
>  >  >  >  >	$ 1,950 unfavorable

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25  of 35

How is the direct labor rate variance calculated?

>  >  >  >  >	The difference between the standard labor rate and the actual labor rate multiplied by the actual labor hours used
>  >  >  >  >	The difference between the standard labor rate and the actual labor rate multiplied by the standard allowable hours
>  >  >  >  >	The difference between the standard labor hours and the allowable labor hours
>  >  >  >  >	The difference between the standard labor rate and the actual labor rate

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26  of 35

A favorable direct labor efficiency variance might indicate that

>  >  >  >  >	higher skilled workers were used that performed the task slower than expected.
>  >  >  >  >	higher skilled workers were used that performed the task faster than expected.
>  >  >  >  >	lower skilled workers were paid a higher wage than expected.
>  >  >  >  >	lower skilled workers were paid a lower wage than expected.

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27  of 35

An unfavorable direct labor rate variance indicates which of the following?

>  >  >  >  >	Both actual quantity and actual cost of direct labor hours exceeded standard quantity and standard cost of hours for actual output.
>  >  >  >  >	The actual quantity of direct labor hours worked exceeded the standard quantity of hours for actual output.
>  >  >  >  >	The actual direct labor cost per hour exceeded the standard direct labor cost per hour for actual quantity of direct labor hours.
>  >  >  >  >	The actual cost of direct labor per hour was less than the standard cost of direct labor per hour.

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28  of 35

A favorable direct labor efficiency variance and an unfavorable direct labor rate variance might indicate which of the following?

>  >  >  >  >	Unskilled workers using more actual hours than standard, paid at a higher rate per hour than the standard rate
>  >  >  >  >	Unskilled workers using less actual hours than standard, paid a lesser rate per hour than the standard rate
>  >  >  >  >	Skilled workers using less actual hours than standard, paid at a higher rate per hour than the standard rate
>  >  >  >  >	Skilled workers using more actual hours than standard, paid at a higher rate per hour than the standard rate

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32  of 35

How does depreciation affect the calculation of a project’s payback period?

>  >  >  >  >	Depreciation is deducted from the annual cash inflows.
>  >  >  >  >	Depreciation is added to the annual cash inflows.
>  >  >  >  >	Depreciation is only deducted if the payback period exceeds five years.
>  >  >  >  >	Depreciation does not affect the payback calculation.

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33  of 35

Gomez Corporation is considering two alternative investment proposals with the following data:

>  >  >  >  >	Proposal X	Proposal Y
Investment	$ 850,000	$ 468,000
Useful life	8 years	8 years
Estimated annual net cash inflows for eight years	$ 125,000	$ 78,000
Residual value	$ 40,000	$ –
Depreciation method	Straight-line	Straight-line
Required rate of return	14%	10%

What is the accounting rate of return for Proposal X?

>  >  >  >  >	2.88 %
>  >  >  >  >	14.71 %
>  >  >  >  >	26.62 %
>  >  >  >  >	2.79%

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34  of 35

(Use present value tables in textbook.) Vino Winery is considering the purchase of a state-of-the-art bottling machine. The new machine will cost $28,250 and will have a useful life of 10 years. The new machine will provide net cash savings of $5,000 per year.