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Quiz

Question 1 (1 point)

 
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Which of the following is true about the differences between financial and managerial accounting?

Question 1 options:

Managerial accounting cannot deviate from generally accepted accounting principles

Managerial accounting places more emphasis on the future

Managerial accounting presents information in a highly summarized form

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Question 2 (1 point)

 
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Elroy Rocket is entering his senior year as an accounting major and has a number of options for his summer break. His options for the 3 month break follow:
(1) Work full time at a local accounting firm making $3,950 per month.
(2) Take a summer class which will cost $800 and work half time making $1,100 per month.
(3) Take a class at a cost of $800 and not work at all during the summer.

Elroy’s incremental profit or loss if he chooses option 2 over option 1 would be

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Question 3 (1 point)

 
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Triton Company’s copy department, which does almost all of the photocopying for the sales department and the administrative department, budgets the following costs for the year, based on the expected activity of copies:

Salaries (fixed) $86,000
Employee benefits (fixed) 10,000
Depreciation of copy machines (fixed) 10,000
Utilities (fixed) 5,000
Paper (variable, 1 cent per copy) 50,000
Toner (variable, 1 cent per copy) 50,000

The costs are assigned to two cost pools, one for fixed and one for variable costs. The costs are then assigned to the sales department and the administrative department. Fixed costs are assigned on a lump-sum basis, 40 percent to sales and 60 percent to administration. The variable costs are assigned at a rate of 2 cents per copy.

Assuming the following copies were made during the year, 2,759,250 for sales and 2,373,500 for administration, calculate the copy department costs allocated to sales.

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Question 4 (1 point)

 
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Which organizational officer is directly responsible for managing a company’s cash and funds invested in various marketable securities?

Question 4 options:

Treasurer

CIO

CFO

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Question 5 (1 point)

 
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Mama Italiano Sauce is in the process of preparing a production cost budget for May.  The actual costs in April were:

Mama Italian Sauce

Production Cost Budget

April 2008

Production – Jars of sauce

20,000

Ingredient cost (variable)

$16,000

Labor cost (variable)

9,000

Rent (fixed)

4,000

Depreciation (fixed)

6,000

Other (fixed)

1,000

Total

$36,000

Using this information, prepare a budget for May stating the total amount for the May budget.  Assume the budget will increase to 23,500 jars of sauce reflecting anticipated sales increase related to a new marketing campaign

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Question 6 (1 point)

 
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Consider the production cost information for Mama Italiano Sauce given below:

Mama Italian Sauce

Production Cost Budget

April 2008

Production – Jars of sauce

20,000

Ingredient cost (variable)

$16,000

Labor cost (variable)

9,000

Rent (fixed)

4,000

Depreciation (fixed)

6,000

Other (fixed)

1,000

Total

$36,000

The company is currently producing and selling jars of sauce  The jars of sauce sell for $4 per jar.  The company is considering lowering the price to $3.70 per jar.  Suppose this action will increase sales.  What is the incremental costs associated with producing an extra 72,500 jars of sauce?

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Question 7 (1 point)

 
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Consider the production cost information for Mama Italiano Sauce given below:

Mama Italiano Sauce

Production Cost Budget

April 2008

Production – Jars of sauce

20,000

Ingredient cost (variable)

$16,000

Labor cost (variable)

9,000

Rent (fixed)

4,000

Depreciation (fixed)

6,000

Other (fixed)

1,000

Total

$36,000

The company is currently producing and selling 250,000 jars of sauce annually.  The jars of sauce sell for $4 per jar.  The company is considering lowering the price to $3.75 per jar.  Suppose this action will increase sales to 315,000 jars of sauce.  What is the incremental revenue associated with the price reduction of sauce?

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Question 8 (1 point)

 
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Ceradyne projects its factory rent to be $6,000 in August when 8,600 units are expected to be produced. If rent is a fixed cost, and if production is expected to drop to 7,000 units in September, what is the expected cost of rent in September?

Question 8 options:

$4,884

$4,900

$6,000

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