Accounting Multiple Choice Questions -
Q1. An example of variable costs would be:
a. Direct materials b. Depreciation c. Interest d. None of the above
Q2. Typically a manufacturing company has--------- inventories:
a. 1 b. 2 c.3 d. 4
Q3. A merchandising firm's balance sheet reflects inventory of:
a. raw materials b. work in process c. merchandise for resale d. none of the above
Q4. Which of the following account differs on the balance sheet of a manufacturing firm versus a merchandising firm?
a. cash b. inventory c. Accounts receivable d. None of the above
Q5. Which of the following deals with managing the money of the company?
a. Controller b. Treasurer c. Auditor d. None of the above
Q6. As a production level increases, variable costs:
a. increase b. decrease c. Remain the same
Q7. How many equivalent units of conversion cost are in 20,000 physical units of product 10% complete?
a. 200 b. 2000 c. 20,000 d. cannot be determined from data given
Q8. If total cost is $600 and prime cost is $400. How much is direct labor?
a. 20 b. 100 c. unable to tell from data given
Q9. There are--------physical units if there are 800 equivalent units that are physical units that are 50% complete.
a. 1200 b. 1400 c. 1600 d. None of the above
Q10. If applied overhead is $400,000 and is $40,000 under applied, actual overhead is:
a. $360,000 b. $400,000 c. $440,000 d. None of the above
Q11. In the manufacturing of a canoe, plywood is a:
a. Direct cost b. Indirect cost c. Overhead d. None of the above
Q12. Direct material cost per equivalent unit is $1.10 and there are 2000 physical units 100% complete with respect to materials. What are the total costs if these 2000 physical units are 50% complete with respect to conversion and conversion costs are $3.65 per equivalent unit?
a. $5850 b. $5860 c. $5870 d. None of the above
Q13. Thomas LLC sells inexpensive toolkits. Thomas sells 2 models, model A and model B. Model A's selling price is $20 and has a variable cost of $14. Model B has a selling price of $30 and has a variable cost of $20. Typically Thomas sells three times as many model Bs as model As. Fixed costs are $360,000. How many units are required to breakeven?
a. $30,000 b. $40,000 c. $50,000 c. None of the above
Q14. Copper LLC sells cars and trucks. The unit sales for trucks were 100,000 and the contribution margin was $200,000. For cars the unit sales were 120,000 and the contribution margin was $240,000. If fixed costs are $160,000, how many trucks are needed to breakeven:
a. 32,000 b. 34,000 c. 36,000 d. None of the above
Q15. The breakeven is 2000 units, the selling price is $15 per unit and the fixed costs are $20,000. What is the variable cost per unit?
a. $5 b. $6 c. $7 d. None of the above
Q16. Todd LLc sells cars and trucks. The unit sales for trucks were 100,000 and the contribution margin was $200,000. The car unit sales were 120,000 and the contribution margin was $240,000. If fixed costs are $220,000 how many trucks are needed to breakeven?
a. 48,500 b. 49,500 c. 50,500 d. None of the above
Q17. Which of the following is a part of the direct materials purchases budget?
a. Units to be sold b. Selling price c. Beginning inventory d. None of the above
Q18. The production budget is completed after the:
a. Direct materials purchases budget b. Direct labor budget c. Sales budget d. None of the above
Q19. Which of the following is not a part of the selling and administrative budget?
a. Selling salaries b. Administrative salaries c. Factory supervisor salaries d. None of the above
Q20. A company has determined that the standard for labor is 2 hours per unit at $10 per hour. If a process produces 1000 units and uses 2.6 hours at $9 per hour, the labor efficiency variance is:
a. $5000 unfavorable b. $6000 unfavorable c. $2100 favorable d. $2100 unfavorable
Q21. Kelvin LLC produces kayaks. Overhead information is gathered with respect to a computer driven saw setups, number of setups, quality control, number of quality control inspections. Total overhead costs for the operation of the computer driven saw are $150,000. $120, 000 in set up and $30,000 in quality control. There were 3000 inspectors. There were 300 kayaks produced. The quality control overhead applied was:
a. $3000 b. $3600 c. Neither A nor B
Q22. Gemstone LLC produces kayaks and has recently adopted activity based costing. Information on the following topics was gathered concerning the purchasing department: writing purchase orders for plywood, ordering key parts, number of plywood purchase orders written, number of key parts orders placed. The total overhead costs in purchasing is $600,000 of which $400,000 is associated with writing purchase orders for plywood. If these are 40,000 purchase orders written for plywood, the overhead application rate for writing plywood purchase orders is:
a. $10 b. $15 c. Neither A nor B
Q23. When calculating the materials quantity variance which of the following is used?
a. The actual materials used b. The standard materials used c. The standard price d. All of the above
Q24. In year four, Carson LLC had EBIT of 100. Taxes were 40% and depreciation was 20. What was cash flow in year four?
a. 20 b. 60 c. 80 d. 100
Q25. Ellis is saving for a new machine that costs $100,000. How many dollars should be set aside now to have $100,000 in 10 years assuming that money compounds at 6% annually?
a. 55,830 b. 55,840 c. 55,940 d. 56, 940
Q26. In year four, Smith LLC had EBIT of 100. Taxes were 30% and depreciation was 15. Cash flow in year four was:
a. 75 b. 85 c. 95 d. 105
Q27. Ellison LLC uses variable costing and absorption costing. In the absorption costing income statement variable manufacturing overhead is a part of:
a. Cost of goods sold b. period cost c. Both A and B
Q28. Charles LLC sells cars and trucks. The unit sales for trucks were 100,000 and the contribution margin was $200,000. For cars the unit sales were 120,000 and the contribution margin was $240,000. If fixed costs are $180,000 how many cars are needed to breakeven?
a. 47,500 b. 48,500 c. 49,500 d. None of the above
Q29. Indirect materials are in the:
a. Direct materials purchases budget b. Manufacturing overhead budget c. Direct labor budget d. None of the above
Q30. The direct materials purchases budget contains:
a standards b. Ending inventory c. Both A and B d. Neither A nor B
Q31. The capital expenditures budget is tied closely to the:
a. Sales budget b. Purchases budget c. Cash receipts budget c. Cash expenditures budget
Q32. Selling salaries are in the:
a. Manufacturing overhead budget b. Selling and administrative budget c. Direct labor budget d. None of the above
Q33. Lines Inc. applies overhead at the standard rate of $20/unit, based on anticipated production of 2000 units. If Lines actual overhead is $41,000, the overhead volume variance is:
a. 1,000 favorable b. 1,000 unfavorable c. cannot tell from data given d. none of the above
Q34. Hooks produces a product that requires 10 standard sq. ft./unit at a standard price of $6 per sq. ft. The actual cost per unit is:
a. $60 b. $50 c. unable to tell from the data d. none of the above
Q35. A company has determined that the standard for materials is 10 ft. at $5 per square foot. If a process produces 1000 units and uses 11 ft. per unit at $5.30 per square foot, the materials price variance is:
a. $3300 unfavorable b. 3300 favorable c. $3000 unfavorable d. None of the above
Q36. Tom Jones is saving for new tractor that costs $60,000. How many dollars should he set aside now to receive $60,000 in 8 years assuming that money compounds at 4% annually?
a. 43,842 b. 44,842 c. 45,842 d. 46,842
Q37. Reflex LLC is investing in a new printer that costs $100,000. The new printer would generate cash flow savings of $100,000 for each of the next three years. Reflex uses a 15% discount rate. What is the present value index?
a. 2.15 b. 2.8 c. 2.37 d. 2.44
Q38. Reflex LLC is investing in a new printer that costs $100,000. The new printer would generate cash flow savings of $100,000 for each of the next three years. Reflex uses a 15% discount rate. What is the benefit cost ratio?
a. 1 b. 2 c. 3 d. 4
Q39. Radstone LLC is investing in a new printer that costs $100,000. The new printer will generate cash flow savings of $100,000 for each of the next three years. Radston uses a 15% discount rate. What is the payback in years?
a. 1 b. 1.5 c. 1.75 d. 2