Accounting Questions

During its first year of operations, Farmer Company paid $28,810 for direct materials and $49,900 in wages for p- +roduction workers. Lease payments, utility costs, and depreciation on factory equipment totaled $13,900. General, selling, and administrative expenses were $19,900. The average cost to produce one unit was $4.90. How many units were produced during the period? 20,124 18,900 22,961 None of these. During its first year of operations, Silverman Company paid $19,000 for direct materials and $10,500 for production workers' wages. Lease payments and utilities on the production facilities amounted to $9,500 while general, selling, and administrative expenses totaled $5,000. The company produced 6,500 units and sold 4,000 units at a price of $8.50 a unit. What is the amount of gross margin for the first year? (Do not round intermediate calculations.) $15,000 $34,000 $4,500 $10,000 Royce Company manufactures chocolate bars. The following were among Royce's 2013 manufacturing costs: Wages Machine operators $ 290,000 Selling and administrative personnel $ 74,000 Materials used Lubricant for oiling machinery $ 24,000 Cocoa, sugar and other raw materials $ 240,000 Packaging materials $ 180,000 Royce's 2013 direct materials amounted to: $420,000 $463,000 $24,000 $240,000 2 The following information relates to Mystic Manufacturing's 2013 accounting period: Raw materials used $16,400 Direct labor wages 32,400 Sales salaries and commissions 24,400 Depreciation on production equipment 2,940 Rent on manufacturing facilities 3,940 Administrative supplies and utilities 4,400 Sales revenue 99,000 Units produced 3,400 Units of sold 3,400 Based on this information, what is the company's net income for 2013? $14,520 $32,120 $14,940 $17,460 Abby believes her company's overhead costs are driven (affected) by the number of machine hours because the production process is heavily automated. During the period, the company produced 3,800 units of Product A requiring a total of 360 machine hours and 2,800 units of Product B requiring a total of 90 machine hours. What allocation rate should be used if the company incurs overhead costs of $21,600? $3.27 per machine hour $48 per machine hour $3.27 per unit $48 per unit During its first year of operations, Silverman Company paid $10,385 for direct materials and $11,400 for production workers' wages. Lease payments and utilities on the production facilities amounted to $10,400 while general, selling, and administrative expenses totaled $3,100. The company produced 7,850 units and sold 4,900 units at a price of $6.60 a unit. What is the amount of finished goods inventory on the balance sheet at year-end? (Do not round intermediate calculations.) $6,048 $12,095 $12,250 $2,950 The following information relates to Betty's Manufacturing for 2013: Raw materials used $ 9,500 Direct labor wages 29,500 Sales salaries and commissions 24,500 Depreciation on production equipment 1,950 Rent on manufacturing facilities 14,500 Packaging and shipping supplies 2,950 Sales revenue 133,000 Units produced and sold 9,500 Selling price per unit $ 14.00 Based on this information, what is the company's cost of goods sold for 2013? (Do not round intermediate calculations.) $91,050 $82,900 $41,950 $58,400 During its first year of operations, Beta Company paid $53,310 for direct materials and $19,900 in wages for production workers. Lease payments and utilities on the production facilities amounted to $8,900. General, selling, and administrative expenses were $9,900. The company produced 6,900 units and sold 5,900 units for $16.90 a unit. The average cost to produce one unit is which of the following amounts? (Round your final answer to 2 decimal places.) $11.90 $13.33 $13.92 $10.54 During its first year of operations, Silverman Company paid $12,240 for direct materials and $10,700 for production workers' wages. Lease payments and utilities on the production facilities amounted to $9,700 while general, selling, and administrative expenses totaled $3,800. The company produced 6,800 units and sold 4,200 units at a price of $7.30 a unit. What is Silverman's cost of goods sold for the year? (Do not round intermediate calculations.) $16,516 $26,740 $32,640 $20,160 Royce Company manufactures chocolate bars. The following were among Royce's 2013 manufacturing costs: Gross margin 37,400 26,500 General, selling and administrative expenses 10,600 8,800 Net income $26,800 $17,700 Assuming that cost behavior did not change over the two year period, what is the amount of the company's variable cost of goods sold per unit? (Round your answer to 2 decimal places.) $3.00 per unit $8.80 per unit $4.00 per unit None of these The following income statement is provided for Ramirez Company in 2013: Sales revenue (3,300 units × $20.80 per unit) $68,640 Cost of goods sold (variable; 3,300 units × $8.80 per unit) (29,040) Cost of goods sold (fixed) (4,800) Gross margin 34,800 Administrative salaries (6,800) Depreciation (4,800) Supplies (3,300 units × $2.80 per unit) (9,240) Net income $13,960 What amount was the company's contribution margin? (Do not round intermediate calculations.) $34,800 $39,600 $30,360 $13,960 The following income statements are provided for Li Company's last two years of operation: 2012 2013 Number of units produced and sold 4,600 4,200 Sales revenue $71,760 $65,520 Cost of goods sold 39,760 36,460 Gross margin 32,000 29,060 General, selling and administrative expenses 18,820 17,540 Net income $13,180 $11,520 Assuming that cost behavior did not change over the two year period, what is the company's annual fixed general, selling, and administrative cost? (Do not round intermediate calculations.) $3,600 $17,540 $4,100 $18,820 The following income statement is provided for Vargas, Inc. Sales revenue (3,100 units × $20.60 per unit) $ 63,860 Cost of goods sold (variable; 3,100 units × $10.60 per unit) (32,860) Cost of goods sold (fixed) (4,600) Gross margin 26,400 Administrative salaries (6,600) Depreciation (5,600) Supplies (3,100 units × $2.60 per unit) (8,060) Net income $ 6,140 What is this company's magnitude of operating leverage? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) 0.24 3.74 4.30 0.23 The magnitude of operating leverage for Blue Ridge Corporation is 4.1 when sales are $290,000 and net income is $45,000. If sales decrease by 6%, net income is expected to decrease by what amount? $2,700 $4,380 $1,882 $11,070 Wu Company incurred $154,000 of fixed cost and $171,600 of variable cost when 3,900 units of product were made and sold. If the company's volume increases to 4,400 units, the total cost per unit will be: $39. $79. $74. $35. The following income statements are provided for Li Company's last two years of operation: 2012 2013 Number of units produced and sold 4,500 4,100 Sales revenue $69,750 $63,550 Cost of goods sold 41,700 38,000 Gross margin 28,050 25,550 General, selling and administrative expenses 17,500 16,300 Net income $10,550 $9,250 Assuming that cost behavior did not change over the two year period, what is the annual amount of the company's fixed manufacturing overhead? $75 $16,800 $17,600 None of these The following information is provided for Southall Company: Sales revenue $292,000 Variable manufacturing costs 99,000 Fixed manufacturing costs 61,000 Variable selling and administrative costs 44,000 Fixed selling and administrative costs 39,000 What is this company's contribution margin? $49,000 $132,000 $88,000 $149,000 The following are Atlantic's production costs for the quarter ended September 30th: Direct materials $ 230,000 Direct labor $ 180,000 Factory overhead $ 33,000 What amount of costs should be traced to specific products in the process? $263,000 $230,000 $410,000 $443,000 Paul's Department Store has three departments: Men's, Women's and Children's. The store incurred $45,200 of store rental costs in 2013. The departments identified the following cost drivers for 2013: Men's Women's Children's Labor dollars $524,000 $769,000 $234,000 Number of employees 26 36 20 Square footage 2,400 7,400 1,500 Number of sales transactions 294,000 894,000 84,000 Using the most appropriate cost driver, how much rental cost (rounded to the nearest dollar) should be allocated to the Women's Department? (Do not round intermediate calculations.) $34,655 $19,844 $29,600 $31,768 GJG Company paid its annual property tax of $12,700 on its manufacturing facility in January. The company expects to make 4,000 units of product during the year. During January, 1,000 units of product were produced. Based on this information (Do not round intermediate calculations.): $1,058 of the property tax cost should be allocated to the January production. $3,275 of the property tax cost should be allocated to the January production. $12,700 of the property tax cost should be assigned to the January production. $3,175 of the property tax cost should be allocated to the January production. At the beginning of the year, Roach Company expected to incur $58,000 of overhead costs in producing 5,800 units of product. The direct material cost is $24 per unit of product. Direct labor cost is $34 per unit. During January, 540 units were produced. The total cost of the units made in January was: $36,720 $31,320 $5,400 None of these answers is correct. Mickey & Co. expects overhead costs of $36,000 per month and direct production costs of $20 per unit. The estimated production activity for the 2013 accounting period is as follows: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Units produced 12,300 9,800 8,650 17,250 The predetermined overhead rate based on units produced is (rounded to the nearest penny) is: $1.33 per unit. $29.00 per unit. $9.00 per unit. $0.73 per unit. Hamby Company expects to incur overhead costs of $13,000 per month and direct production costs of $128 per unit. The estimated production activity for the upcoming year is 1,000 units. If the company desires to earn a gross profit of $53 per unit, the sales price per unit would be which of the following amounts? $181 $133 $337 $189 The East and West Railroad has two divisions, the East Division and the West Division. The company recently invested $790,000 to maintain its railroad track. Pertinent data for the two divisions are as follows (Round intermediate calculations to 2 decimal places and final answer to nearest whole dollar amount.): Total Miles Traveled: East Division 790,000 miles West Division 1,190,000 miles The amount of track improvement cost that should be allocated to the East Division is: $495,000. $395,000. $474,798. $316,000. Franklin Community College operates four departments. The square footage used by each department is shown below. Department Square Footage Accounting 7,000 Marketing 8,000 Technology 10,000 Sciences 7,000 Total 32,000 Franklin's annual building rental cost is $600,000. What amount of rent expense that should be allocated to the Technology Department? (Do not round intermediate calculations.) $131,250 $150,000 $187,500 $32,000 Milton Company has three departments occupying the following amount of floor space: Department 1 18,000 sq. ft. Department 2 10,300 sq. ft. Department 3 28,000 sq. ft. How much store rent should be allocated to Department 3 if total rent is equal to $174,530? (Do not round intermediate calculations and round your final answer to nearest whole dollar amount.) $58,177 $43,400 $86,800 None of these answers is correct. 30. During its first year of operations, Farmer Company paid $42,250 for direct materials and $50,500 in wages for production workers. Lease payments, utility costs, and depreciation on factory equipment totaled $14,500. General, selling, and administrative expenses were $20,500. The average cost to produce one unit was $5.50. How many units were produced during the period? 20,591 19,500 23,227 None of these. 31. During its first year of operations, Silverman Company paid $16,360 for direct materials and $10,300 for production workers' wages. Lease payments and utilities on the production facilities amounted to $9,300 while general, selling, and administrative expenses totaled $4,800. The company produced 6,200 units and sold 3,800 units at a price of $8.30 a unit. What is the amount of gross margin for the first year? (Do not round intermediate calculations.) $9,500 $4,880 $31,540 $13,920 32. Royce Company manufactures chocolate bars. The following were among Royce's 2013 manufacturing costs: Wages Machine operators $ 230,000 Selling and administrative personnel $ 68,000 Materials used Lubricant for oiling machinery $ 18,000 Cocoa, sugar and other raw materials $ 180,000 Packaging materials $ 120,000 Royce's 2013 direct materials amounted to: $391,000 $18,000 $300,000 $180,000 33. The following information relates to Mystic Manufacturing's 2013 accounting period: Raw materials used $16,000 Direct labor wages 32,000 Sales salaries and commissions 24,000 Depreciation on production equipment 2,900 Rent on manufacturing facilities 3,900 Administrative supplies and utilities 4,000 Sales revenue 95,000 Units produced 3,000 Units of sold 3,000 Based on this information, what is the company's net income for 2013? $15,100 $30,200 $14,900 $12,200 34. Abby believes her company's overhead costs are driven (affected) by the number of machine hours because the production process is heavily automated. During the period, the company produced 3,400 units of Product A requiring a total of 280 machine hours and 2,400 units of Product B requiring a total of 70 machine hours. What allocation rate should be used if the company incurs overhead costs of $15,400? $44 per unit $2.66 per unit $44 per machine hour $2.66 per machine hour 35. During its first year of operations, Silverman Company paid $12,385 for direct materials and $10,600 for production workers' wages. Lease payments and utilities on the production facilities amounted to $9,600 while general, selling, and administrative expenses totaled $3,900. The company produced 6,650 units and sold 4,100 units at a price of $7.40 a unit. What is the amount of finished goods inventory on the balance sheet at year-end? (Do not round intermediate calculations.) $10,250 $6,248 $2,550 $12,495 36. The following information relates to Betty's Manufacturing for 2013: Raw materials used $ 10,000 Direct labor wages 30,000 Sales salaries and commissions 25,000 Depreciation on production equipment 2,000 Rent on manufacturing facilities 15,000 Packaging and shipping supplies 3,000 Sales revenue 100,000 Units produced and sold 10,000 Selling price per unit $ 10.00 Based on this information, what is the company's cost of goods sold for 2013? (Do not round intermediate calculations.) $43,000 $85,000 $60,000 $57,000 37. During its first year of operations, Beta Company paid $25,000 for direct materials and $18,000 in wages for production workers. Lease payments and utilities on the production facilities amounted to $7,000. General, selling, and administrative expenses were $8,000. The company produced 5,000 units and sold 4,000 units for $15.00 a unit. The average cost to produce one unit is which of the following amounts? (Round your final answer to 2 decimal places.) $10.00 $11.60 $8.00 $12.50 38. During its first year of operations, Silverman Company paid $10,285 for direct materials and $9,800 for production workers' wages. Lease payments and utilities on the production facilities amounted to $8,800 while general, selling, and administrative expenses totaled $4,300. The company produced 5,450 units and sold 3,300 units at a price of $7.80 a unit. What is Silverman's cost of goods sold for the year? (Do not round intermediate calculations.) $17,490 $24,385 $28,885 $14,765 39. Royce Company manufactures chocolate bars. The following were among Royce's 2013 manufacturing costs: Wages Machine operators $ 260,000 Selling and administrative personnel $ 71,000 Materials used Lubricant for oiling machinery $ 21,000 Cocoa, sugar and other raw materials $ 210,000 Packaging materials $ 150,000 Royce's 2013 direct labor costs amounted to: $260,000 $427,000 $356,000 $167,000 40. Pickard Company pays its sales staff a base salary of $6,000 a month plus a $2.00 commission for each product sold. If a salesperson sells 500 units of product in January, the employee would be paid: $5,000 $6,000 $7,000 $1,000 41. Production in 2013 for California Manufacturing, a producer of high security bank vaults, was at its highest point in the month of June when 46 units were produced at a total cost of $500,000. The lowest point in production was in January when only 21 units were produced at a cost of $346,000. The company is preparing a budget for 2013 and needs to project expected fixed cost for the budget year. Using the high/low method, the projected amount of fixed cost per month is: $206,640 $154,000 $134,000 $216,640 42. The following income statements are provided for Li Company's last two years of operation: 2012 2013 Number of units produced and sold 3,500 3,000 Sales revenue $50,750 $43,500 Cost of goods sold 34,000 30,000 Gross margin 16,750 13,500 General, selling and administrative expenses 6,500 6,000 Net income $10,250 $7,500 Assuming that cost behavior did not change over the two year period, what is the amount of the company's variable cost of goods sold per unit? (Round your answer to 2 decimal places.) $6.00 per unit $11.00 per unit $8.00 per unit None of these 43. The following income statement is provided for Ramirez Company in 2013: Sales revenue (3,300 units × $20.80 per unit) $68,640 Cost of goods sold (variable; 3,300 units × $8.80 per unit) (29,040) Cost of goods sold (fixed) (4,800) Gross margin 34,800 Administrative salaries (6,800) Depreciation (4,800) Supplies (3,300 units × $2.80 per unit) (9,240) Net income $13,960 What amount was the company's contribution margin? (Do not round intermediate calculations.) $39,600 $34,800 $30,360 $13,960 44. The following income statements are provided for Li Company's last two years of operation: 2012 2013 Number of units produced and sold 4,600 4,200 Sales revenue $71,760 $65,520 Cost of goods sold 39,760 36,460 Gross margin 32,000 29,060 General, selling and administrative expenses 18,820 17,540 Net income $13,180 $11,520 Assuming that cost behavior did not change over the two year period, what is the company's annual fixed general, selling, and administrative cost? (Do not round intermediate calculations.) $4,100 $17,540 $3,600 $18,820 45. The following income statement is provided for Vargas, Inc. Sales revenue (3,500 units × $21.00 per unit) $ 73,500 Cost of goods sold (variable; 3,500 units × $11.00 per unit) (38,500) Cost of goods sold (fixed) (5,000) Gross margin 30,000 Administrative salaries (7,000) Depreciation (6,000) Supplies (3,500 units × $3.00 per unit) (10,500) Net income $ 6,500 What is this company's magnitude of operating leverage? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) 0.22 3.77 0.24 4.62 46. The magnitude of operating leverage for Blue Ridge Corporation is 2.9 when sales are $170,000 and net income is $33,000. If sales decrease by 6%, net income is expected to decrease by what amount? $1,980 $3,660 $976 $5,742 47. Wu Company incurred $162,000 of fixed cost and $180,000 of variable cost when 4,000 units of product were made and sold. If the company's volume increases to 4,500 units, the total cost per unit will be: $76. $36. $81. $40. 48. The following income statements are provided for Li Company's last two years of operation: 2012 2013 Number of units produced and sold 3,500 3,000 Sales revenue $50,750 $43,500 Cost of goods sold 34,000 30,000 Gross margin 16,750 13,500 General, selling and administrative expenses 6,500 6,000 Net income $10,250 $7,500 Assuming that cost behavior did not change over the two year period, what is the annual amount of the company's fixed manufacturing overhead? $6,000 $12,000 $13,000 None of these 49. The following information is provided for Southall Company: Sales revenue $301,000 Variable manufacturing costs 102,000 Fixed manufacturing costs 58,000 Variable selling and administrative costs 47,000 Fixed selling and administrative costs 42,000 What is this company's contribution margin? $52,000 $94,000 $152,000 $141,000 50. The following are Atlantic's production costs for the quarter ended September 30th: Direct materials $ 100,000 Direct labor $ 190,000 Factory overhead $ 50,000 What amount of costs should be traced to specific products in the process? $150,000 $100,000 $340,000 $290,000 51. Paul's Department Store has three departments: Men's, Women's and Children's. The store incurred $41,400 of store rental costs in 2013. The departments identified the following cost drivers for 2013: Men's Women's Children's Labor dollars $536,000 $781,000 $246,000 Number of employees 16 26 10 Square footage 3,600 8,600 1,600 Number of sales transactions 306,000 906,000 96,000 Using the most appropriate cost driver, how much rental cost (rounded to the nearest dollar) should be allocated to the Women's Department? (Do not round intermediate calculations.) $25,800 $28,676 $31,483 $20,700 52. GJG Company paid its annual property tax of $17,800 on its manufacturing facility in January. The company expects to make 3,000 units of product during the year. During January, 900 units of product were produced. Based on this information (Do not round intermediate calculations.): $1,483 of the property tax cost should be allocated to the January production. $4,450 of the property tax cost should be allocated to the January production. $17,800 of the property tax cost should be assigned to the January production. $5,340 of the property tax cost should be allocated to the January production. 53. At the beginning of the year, Roach Company expected to incur $52,000 of overhead costs in producing 6,400 units of product. The direct material cost is $21 per unit of product. Direct labor cost is $31 per unit. During January, 480 units were produced. The total cost of the units made in January was: $28,860 $24,960 $3,900 None of these answers is correct 54. Mickey & Co. expects overhead costs of $30,000 per month and direct production costs of $26 per unit. The estimated production activity for the 2013 accounting period is as follows: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Units produced 10,100 8,500 7,400 10,000 The predetermined overhead rate based on units produced is (rounded to the nearest penny) is: $10.00 per unit. $36.00 per unit. $1.20 per unit. $0.69 per unit. 55. Hamby Company expects to incur overhead costs of $19,000 per month and direct production costs of $134 per unit. The estimated production activity for the upcoming year is 1,200 units. If the company desires to earn a gross profit of $59 per unit, the sales price per unit would be which of the following amounts? $201 $193 $383 $139 The East and West Railroad has two divisions, the East Division and the West Division. The company recently invested $820,000 to maintain its railroad track. Pertinent data for the two divisions are as follows (Round intermediate calculations to 2 decimal places and final answer to nearest whole dollar amount.): Total Miles Traveled: East Division 820,000 miles West Division 1,220,000 miles The amount of track improvement cost that should be allocated to the East Division is: $328,000. $490,392. 20 $510,000. $410,000. 57. Franklin Community College operates four departments. The square footage used by each department is shown below. Department Square Footage Accounting 4,000 Marketing 5,000 Technology 7,000 Sciences 4,000 Total 20,000 Franklin's annual building rental cost is $260,000. What amount of rent expense that should be allocated to the Technology Department? (Do not round intermediate calculations.) $65,000 $20,000 $52,000 $91,000 58. Milton Company has three departments occupying the following amount of floor space: Department 1 17,000 sq. ft. Department 2 10,200 sq. ft. Department 3 27,000 sq. ft. How much store rent should be allocated to Department 3 if total rent is equal to $162,600? (Do not round intermediate calculations and round your final answer to nearest whole dollar amount.) $54,200 $40,500 $81,000 None of these answers is correct