Mid Term Accounting

Question1
1/1point
Renting a scooter and paying $30 per day plus $.20 per mile driven is an example of what type of
cost?
A) Mixed cost
B) Variable cost
C) Conversion cost
D) Fixed cost
Question2
1/1point
Total fixed costs for Randolph Manufacturing are $754,000. Total costs, including both fixed and
variable, are $1,000,000 if 150,000 units are produced. The fixed cost per unit at 188,500 units
would be closest to
A) $4.00/unit.
B) $5.31/unit.
C) $5.03/unit.
D) $1.31/unit.
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Question3
0/1point
Total costs for Locke & Company at 120,000 units are $289,000, while total fixed costs are $145,000.
The total variable costs at a level of 250,000 units would be
A) $602,083.
B) $138,720.
C) $302,083.
D) $300,000.
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Cost
Equation y
= vx + f
$289,000 =
120,000x +
$145,000
X = 1.20
Then $1.20
250,000 =
$300,000
Question4
1/1point
Ifproductionincreasesby30%,howwilltotalvariablecostslikelyreact?
A) Increase by 15%
B) Decrease by 30%
C) Increase by 30%
D) Remain the same

Question
5
Ifacompany'soverheadcostequationisy=$8.80x+$120,020.The"x"is
A) the variable costs.
1/1
point
B) total fixed costs.

C) the cost driver in units.
D) total overhead costs.
Question
6
Intheequationy=$11.75x+$550,
A) $550 are the total variable costs.
1/1
point
B) $550 are the total step costs.

C) $550 are the total overhead costs.
D) $550 are the total fixed costs.
Question
1/1
point
7
BestBirdiesproducesornatebirdcages.Thecompany'saveragecostperunitis$18.00ataproductionlevel
of2,200birdcages.Whatisthetotalcostofproducing2,200birdcages?
A) $122
B) $2,218
C) $18.00
D) $39,600
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$18
2,200 =
$39,600
$18
2,200 =
$39,600
Question8
1/1point
The Akron Slugger Company produces various types of wooden baseball bats. It has calculated
the average cost per unit of a production level of 7,500 bats to be $10.00. If $22,500 of the total
costs are fixed, what is the variable cost of producing each bat?
A) $7.00
B) $3.00
C) $52,500
D) $10.00
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Total cost = $10 7,500 = $75,000

$75,000 = Variable cost per unit (7,500 ) + $22,500
$7.00 = Variable cost per unit
Total cost = $10 7,500 = $75,000
$75,000 = Variable cost per unit (7,500 ) + $22,500
$7.00 = Variable cost per unit
Question9
0/1point
Sea Side Enterprises is trying to predict the cost associated with producing its anchors. At a
production level of 5,000 anchors, Sea Side Enterprises average cost per anchor is $52.00. If
$15,000 of the costs are fixed, and the plant manager uses the average cost per unit to predict total
costs, her forecast for 6,000 anchors will be
A) $312,000.
B) $260,000.
C) $309,000.
D) $52,000.
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$52
6,000 =
$312,000
Question10
1/1point
Tasty Treats is a snow cone stand near the local park. To plan for the future, Tasty Treats wants to
determine its cost behavior patterns. It has the following information available about its operating
costs and the number of snow cones served.
Month
Number of snow cones
Total operating costs
January
6,400
$5,980
February
7,000
$6,400
March
6,200
$5,840
April
6,900
$6,330
May
7,600
$6,820
June
7,250
$6,575
Thevariablecostpersnowconeusingthehighlowmethodis
A) $0.90.
B) $0.94.
C) $0.70.
D) $1.43.
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Highest cost$6,820Highest activity7,600

Lowest cost $5,840Lowest activity6,200
Difference$9801,400
NOW divide the difference in the cost by the difference in the activity equals Variable cost per
unit. $980/1,400 = $ .70
Lowest cost $5,840Lowest activity6,200
Difference$9801,400
unit. $980/1,400 = $ .70
Question11
0/1point
Jones Ice Cream Stand is operated by Mr. Jones and experiences different sales patterns
throughout the year. To plan for the future, Mr. Jones wants to determine its cost behavior
patterns. He has the following information available about the ice cream stand's operating costs
and the number of soft serve cones served.
Month
Number of ice cream cones
Total operating costs
April
800
$950
May
825
$975
June
1,125
$1,000
July
2,000
$1,250
August
1,500
$1,875
900
$1,500
September
Usingthehighlowmethod,themonthlyoperatingcostsifMr.Jonessells1,436icecreamconesina
monthare
A) $859.
B) $750.
C) $359.
D) $1,109.
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Lowest cost$950 Lowest activity800
Difference$3001,200
unit. $300/1,200 = $ .25
Put the numbers into the Cost Equation: $1,250 = $ .25 (2000) + f
$750 = f
Finish the equation: y = $ .25 (1,436) + 750

y = $1,109
Question12
0/1point
To follow is information about the units produced and total manufacturing costs for Pine
Enterprises for the past six months.
Month
Number of units produced
Total manufacturing costs
January
7,800
$8,150
February
7,500
$8,000
March
6,600
$7,550
April
6,800
$7,650
May
4,500
$6,500
June
7,000
$7,750
Usingthehighlowmethod,whatwillthetotalmonthlymanufacturingcostsbeifthecompanyproduces
9,000units?
A) $8,400
B) $4,500
C) $4,250
D) $8,750
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Lowest cost$6,500Lowest activity4,500
Difference$1,6503,300
unit. $1,650/3,300 = $ .50
Put the numbers into the Cost Equation: $8,150 = $.50 (7,800) + f
$4,250 = f
Finally y = $ .50 (9,000) + $4,250
y = $8,750
Question13
0/1point
The managerial accountant at Flat Screen Manufacturing reported that the organization contains
an automated production line to manufacture and produce its products for consumers to enjoy in
the marketplace. The managerial accountant reported that the company uses the highlow
method to estimate the costs in the new budget. The managerial accountant reported the
following information:
Month
Total MachineHours
Total Costs
January
250,000
$5,500,000
February
248,000
$5,260,000
March
249,000
$5,400,000
April
248,000
$5,220,000
May
238,000
$5,180,000
June
230,000
$5,130,000
a.Compute the slope of the mixed cost, or the variable cost per unit of activity.
b.Compute the vertical intercept, or the fixed cost component of the mixed cost.
c.What is the mixed cost equation?
(<fontface="PalatinoLinotype">Slopeofthemixedcost,variablecostperunit:
 <fontface="PalatinoLinotype">$5,500,000$5,130,000=<fontface="PalatinoLinotype">
$370,000 <fontface="PalatinoLinotype">250,000230,000=<fontface="PalatinoLinotype">
20,000 <fontface="PalatinoLinotype">$370,000/20,000=$18.50variablecostperunit(slopeofthemixed
cost) <fontface="PalatinoLinotype">y=vx+<fontface="PalatinoLinotype">
f <fontface="PalatinoLinotype">$5,500,000=($18.50<fontface="PalatinoLinotype">
250,000)+<fontface="PalatinoLinotype">f f=<fontface="PalatinoLinotype">
$875,000 <fontface="PalatinoLinotype">y=$18.50x+<fontface="Palatino
Linotype">$875,000)
Question
0/1
point
14
Yourclient'scompanywantstodeterminetherelationshipbetweenitsmonthlyoperatingcostsanda
potentialcostdriver.Theoutputofregressionanalysisshowedthefollowinginformation:
InterceptCoefficient=89,500
XVariable1Coefficient=62.50
Rsquare=0.9855
Whatisthecompany'smonthlycostequation?
A) y = $98.55x + $89,500
B) y = $89,500x + $98.55
C) y = $62.50x + $89,500
D) y = $89,500x + $62.98
Question
0/1
point
15
ChecakIncorporatedwantedtodeterminetherelationshipbetweenitsmonthlyoperatingcostsanda
potentialcostdriver,machinehours.Theoutputofaregressionanalysisshowedthefollowinginformation
(note:onlyaportionoftheregressionanalysisresultsispresentedhere):
Whatisclosesttothetotalcostifthefirmuses6,000machinehours?
A) $1,365.59
B) $14,729,732.60
C) $7,257.49
D) $6,538.90
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y = .71859
(6,000) +
$2,945.95
y=
$7,257.49
Question16
0/1point
The managerial accountant at the Bookcase Factory prefers regression analysis to the highlow
method because it is a more accurate method. The managerial accountant uses regression output
and analyzes the following data to predict future costs:
y =$250x + $625
where,
y = total monthly utility cost

x = number of guests
Whatistheinterceptcoefficient,ortheverticalinterceptofthefixedcostline,intheequationlistedabove?
A) $250x + $625
B) $625
C) y
D) $250x
Question
0/1
point
17
How is operating income affected if the number of units sold exceeds the number of units
produced?
A) Operating income would be higher under a variable costing income statement.
B)
Operating income would be the same under both a variable costing and
absorption costing income statement.
C)
Operating income would be higher under an absorption costing income

statement.
D) Operating income would be lower under a variable costing income statement.

Question
0/1
point
18
ItcostsHomer'sManufacturing$0.75toproducebaseballsandHomersellsthemfor$4.00apiece.Homer
paysasalescommissionof5%ofsalesrevenuetohissalesstaff.Homeralsopays$12,000amonthrent
forhisfactoryandstore,andalsopays$75,000amonthtohisstaffinadditiontothecommissions.Homer
sold67,500baseballsinJune.IfHomerpreparesacontributionmarginincomestatementforthemonthof
June,whatwouldbehiscontributionmargin?
A) $334,125
B) $205,875
C) $270,000
D) $64,125
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Sales$4 67,500 = $270,000

Less: Variable costs$ 0.75 67,500 = $ 50,625
Commission$275,000 5% = $ 13,500
Contribution Margin $ 205,875
Question19
0/1point
Jeans's Fitness Club provides monthly memberships as well as personal training sessions. The
personal trainers earn 50% of the revenue for all personal training sessions. The Fitness Club also
sells nutrition products. Jeans's general ledger accounts indicate the following for the year. The
front desk staff wages expense remains the same throughout the year.
Account
Amount
Account
Amount
Membership revenue
$140,000
Personal trainer wages expense
Personal training revenue
$75,000
Space rental expense
$11,000
Product sales
$65,000
Straight line depreciation

expense
$6,000
Cost of product sold
$35,000
Rental insurance expense
$3,000
Front desk staff wages expense $12,000

Ifacontributionmarginincomestatementispreparedfortheyear,whatisthecontributionmargin?
A) $72,500
B) $352,500
C) $207,500
D) $280,000
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Membership$140,000
Personal Training75,000
Product Sales65,000
Total Revenue280,000
LESS:
Variable expense35,000
Personal Trainer commissions $60,000 50% 37,500
Contribution Margin $207,500
Question20
0/1point
Neon Company manufactures widgets. The following data is related to sales and production of
the widgets for last year.
Selling price per unit
Variable manufacturing costs per unit
Variable selling and administrative expenses per unit
Fixed manufacturing overhead (in total)
Fixed selling and administrative expenses (in total)
$130.00
$62.00
$5.00
$30,000
$8,000
Units produced during the year
1,500
Units sold during year
1,100
Usingabsorptioncosting,whatisgrossprofitforlastmonth?
A) $233,200
B) $143,000
C) $104,800
D) $52,800
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Fixed MOH $30,000 divided by units produced 1,500 = $20 Fixed MOH
Add Variable manufacturing cost 62
= Total Manufacturing cost $82
1,100 sales
= $90,200 Cost of goods sold
So: Sales $130 1100 =$143,000
Less Cost of Goods Sold 90,200
Equals Gross Profit $52,800
Question21
0/1point
The HF Corporation manufactures and sells toy gyroscopes. The following data is related to sales
and production of the toy gyroscopes for last year.
$8.00
Variable manufacturing costs per unit
$1.83
Variable selling and administrative expenses per unit
$4.45
Fixed manufacturing overhead (in total)
$75,000
Fixed selling and administrative expenses (in total)
$80,000
Units produced during the year
500,000
Units sold during the year
150,000
Usingabsorptioncosting,whatisoperatingincomeforlastyear?
A) $1,650,500
B) $155,500
C) $1,200,000
D) $749,500
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Fixed MOH $75,000 divided by units produced 500,000 = $0.15 Fixed MOH
Add Variable manufacturing cost 1.83
= Total Manufacturing cost 1.98
150,000 sales
= $297,000 Cost of goods sold
So: Sales $8 150,000 =$1,200,000
Less Cost of Goods Sold 297,000
Equals Gross Profit $903,000
Less Variable selling667,500
Less fixed selling 80,000
Operating Income $155,500
Question22
0/1point
MomandPop'sIceCreamShoppesellsicecreamconesfor$5.00percustomer.Variablecostsare$2.25
percone.Fixedcostsare$3,000permonth.Whatisthecompany'scontributionmarginpericecream
cone?
A) $0.55
B) $1.82
C) $2.25
D) $2.75
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Sales$5.00
Less Variable
costs 2.25
= Contribution
Margin2.75
Question23
0/1point
TheSettler'sChuckWagonsellsticketsfordinnerandashowfor$50each.Thecostofprovidingdinneris
$23perticketandthefixedcostofoperatingthetheateris$115,000permonth.Thecompanycan
accommodate13,500patronseachmonth.Whatistheprojectedmonthlyincomeif5,500patronsvisitthe
theatereachmonth?
A) $263,500
B) $33,500
C) $148,500
D) $249,500
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Sales $50
Less Variable costs 23
= Contribution Margin 27 5,500 = $148,500
Less fixed = 115,000
Operating Income $33,500
Question24
0/1point
The following selected data relates to Ivory Corporation:
Total fixed costs
$25,000
$22
Variable costs per unit
$15
If sales revenue per unit increases to $27 and 8,500 units are sold, what is the contribution
margin?
A) $102,000
B) $59,500
C) $357,000
D) $77,000
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Sales $27
Less Variable costs 15
= Contribution Margin 12 8,500 = $102,000
Question25
DJ's TShirt Factory Contribution Margin
0/1point
Sales price per TShirt
$24
Less: Variable cost per TShirt
$15
Unit contribution margin per TShirt
$________
ThemanagerialaccountantatDJ'sTShirtFactoryreportedthepricepershirtis$24.Theonlyvariablecost
is$15pershirt.Themanagerialaccountantalsoreportedthatthesalesgoalswereincreasedto1,000shirts
duringthenextquarter.First,computetheunitcontributionmarginpershirt.Iffixedexpensesare$8,000,
whatistheforecastedoperatingincomeif1,000shirtsaresoldinthenextquarter?
A) 6; $700
B) 8; $900
C) 7; $800
D) 9; $1,000
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Unit contribution margin: $24 $15 = $9

Operating Income: 1,000 9 = $9,000 $8,000 = $1,000
Question26
0/1point
Ifthesellingpriceperunitis$10,theunitcontributionmarginis$5,andtotalfixedexpensesare$15,000,
whatarethebreakevensalesinunits?
A) 1,500
B) 75,000
C) 150,000
D) 3,000
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Fixed Expenses $15,000 divided by Contribution Margin $5 = 3,000 Breakeven

Question27
0/1point
Martin Enterprises provides the following information about its single product.
Targeted operating income
$50,830
$6.55
Variable cost per unit
$4.25
Total fixed cost
$94,070
How many units must be sold to earn the targeted operating income?
A) 63,000
B) 22,100
C) 40,900
D) 13,417
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Sales$6.55
Less Variable costs4.25
= Contribution Margin$2.30
Fixed expenses $94,070 + Target Income $50,830 = $144,900 divided by Contribution Margin
$2.30 = 63,000 BE units
Question28
0/1point
Cedar Mills Incorporated desires an operating income of $72,000. Its variable expenses are
$20,000 and its total fixed expenses have increased from $32,000 to $60,000. Its unit contribution
margin is $10. Its sales in units to achieve the target profit is
A) 13,200.
B) 15,200.
C) 11,200.
D) 1,200.
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Fixed expenses $60,000 + Target Income $72,000 = $132,000 divided by

Contribution Margin $10 = 13,200 BE units
Question29
0/1point
ThesellingpriceofaRoadKingbicycleis$700,unitvariablecostsare$350,andtotalfixedcostsare
$12,600.HowmanybicycleswillRoadKingneedtoselltobreakeven?
A) 18
B) 12
C) 25,200
D) 36
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Sales $700
Less Variable costs350
= Contribution Margin$350
Fixed expenses $12,600 divided by Contribution Margin $350 = 36 BE units
Question30
0/1point
The managerial accountant at Boone Furriers reported the following contribution margin
statement information:
Sales Revenue
Variable Expenses =
Fixed Expenses
= $850 per unit
$205 per unit number
= $340,000
number of units sold of units sold.
Operating Income
=$0
Sales price per unit Variable cost per unit

= $850
= $645 units sold
Fixed expenses
= $340,000
Operating Income
= $0
NA
Variable cost per unit

$645 units sold
NA
Operating Income
= Fixed expenses
= $645
NA
Units Sold
NA
Fixed Expenses / Variable

cost per unit
NA
X number of units
necessary to reach the
breakeven point.
NA
Sales in Units
Use the data listed above to compute the following:

a.Compute the sales in units.
b.Compute the breakeven point in sales revenue.
A) 528 units; $448,800
B) 650 units; $525,000
C) 1,659 units; $338,900
D) 323 units; $512,000
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Sales per unit: = $850 $205 = $645; $340,000 / $645 = 527.13 ~ 528 units
Breakeven point: Fixed Expenses = 528 units $850 = $448,800 is the breakeven point in sales
revenue
Question31
0/1point
Monroe Manufacturing produces and sells a product with a price of $100/unit. The following
data has been prepared for its estimated upper and lower levels of activity.
Production Category
Lower Limit
Upper Limit
4,000 units
6,000 units
Direct Materials
$60,000
$90,000
Direct Labor
$80,000
$120,000
Indirect materials
$25,000
$37,500
Indirect labor
$40,000
$50,000
Depreciation
$20,000
$20,000
Units of Production
Manufacturing Overhead:
Selling and Admin. Expenses:

Sales salaries
$50,000
$65,000
Office salaries
$30,000
$30,000
Advertising
$45,000
$45,000
Other
$15,000
$20,000
Totals
$365,000
$477,500
Thefixedexpensesforthiscompanyare
A) indirect materials, indirect labor, and depreciation.
B) sales salaries, office salaries, and advertising.
C) direct materials, direct labor, and depreciation.
D) depreciation, office salaries, and advertising.
Question
0/1
point
32
Ifthesellingpriceperunitis$32,thevariableexpenseperunitis$19.50,andthebreakevensalesin
dollarsis$44,800,whataretotalfixedexpenses?
A) $112
B) $17,500
C) $1,400
D) $28,718
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Sales$32.00
Less Variable expenses19.50
Contribution Margin$12.50
Breakeven Sales 44,800 divided by Sales $32 Contribution Margin $12.50 = $17,500
Question33
0/1point
Claudia Enterprises has budgeted the following amounts for its next fiscal year:
Total fixed expenses
$48,200
$60
Variable expenses per unit
$30
If Claudia Enterprises can reduce fixed expenses by $12,000, how will breakeven sales in units be
affected?
A) Decrease by 400 units
B) Increase by 133 units
C) Increase by 400 units
D) Decrease by 133 units
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Sales$60.00
12,000 / $30 CM = 400 decrease in Break Even units
Question34
0/1point
FranklinProducerssellsitscoreproductfor$8perunitandhasvariablecostsof$6perunit.Totalfixed
costsare$28,000.Supposevariablecostsincreaseby20%duetoanincreaseinthecostofdirectmaterials.
Whatwillbetheeffectonthebreakevenpointinunits?
A) Decrease from 4,667 units to 3,889 units
B) Decrease from 14,000 units to 4,118 units
C) Increase from 14,000 units to 35,000 units
D) Decrease from 2,000 units to 1,842 units
HideFeedback
Sales$8.00
Fixed expense$28,000/ $2.00 CM = 14,000 BE units
Sales$8.00
Contribution Margin$ 0.80
Fixed expense $28,000/ $0.80 CM = 35,000 BE units
Question35
0/1point
GabeIndustriessellstwoproducts,BasicmodelsandDeluxemodels.Basicmodelssellfor$42perunit
withvariablecostsof$30perunit.Deluxemodelssellfor$50perunitwithvariablecostsof$40perunit.
Totalfixedcostsforthecompanyare$75,400.GabeIndustriestypicallysellsfourBasicmodelsforevery
Deluxemodel.Whatisthebreakevenpointintotalunits?
A) 3,900 units
B) 9,921 units
C) 5,953 units
D) 6,500 units
HideFeedback
BasicDeluxeTotal
Sales$42$50
Variable Costs3040
Contribution Margin1210
Sales Mix415
Contribution margin$48$10$58
Contribution Margin$58 / 5 Sales Mix = $11.60 Weighted CM
Fixed costs $75,400 / 11.60 = 6,500 BE units

Question36
0/1point
Jackie's Creamery sells fudge, cookies, and popcorn to patrons in the local community. The
manager at the creamery sold 12,000 total boxes of merchandise last year. The popcorn outsold
fudge by a margin of 2 to 1. The sales of caramels equaled the sales of popcorn. Total fixed costs
for Jackie's Creamery total $14,000. The managerial accountant at Jackie's Creamery reported the
following information:
Product
Unit Sales Prices
Unit Variable Cost
Fudge
$5.00
$4.00
Caramels
$8.00
$5.00
Popcorn
$6.00
$4.00
Whichformulashouldthemanagerialaccountantusetodeterminethenumberofboxesofeachdifferent
snacksold?
A) 3x + 2x + x = 12,000
B) x + y + z = 12,000
C) x + 2x + 2x = 12,000
D) none of the above
Question
0/1
point
37
IScreamForIceCreamsellsspecialtyicecreaminthreeflavors:RockyRoad,PeanutButter,andFruity
Tooty.Itsold15,000gallonslastyear.Foreveryfivegallonsoficecreamsold,onepoundisFruityTooty
andtheremainderissplitevenlybetweenPeanutButterandRockyRoad.FixedcostsforIScreamForIce
Creamare$27,000andadditionalinformationfollows:
Rocky Road
Peanut Butter
Fruity Tooty
Sales price per pound
$5.50
$4.00
$3.50
Variable cost per pound
$3.00
$2.00
$2.50
ThesalesmixpercentageofFruityTootybaseduponpoundsis
A) 40%.
B) 75%.
C) 71%.
D) 20%.
Hide
Feedback
Rocky
Road2
Peanut
Butter2
Fruity
Tooty1
Total5
Sales mix
Peanuts
1/5 = 20%
Question38
0/1point
Matthew'sFishFryhasamonthlytargetoperatingincomeof$7,200.Variableexpensesare60%ofsales
andmonthlyfixedexpensesare$1,800.Whatisthemonthlymarginofsafetyindollarsifthebusiness
achievesitsoperatingincomegoal?
A) $27,000
B) $22,500
C) $13,500
D) $18,000
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Monthly fixed expense$1,800

Targeted operating income7,200
Contribution margin9,000 divided by
Contribution margin %40%(1 variable expense of 60%)
Targeted income= 22,500(11,200 / 40%)
Less Breakeven4,500(fixed expense 1,800 / 40% CM)
Margin Safety dollars18,000
Question39
0/1point
Tom'sTaxidermyhasamonthlytargetoperatingincomeof$25,000.Variableexpensesare75%ofsales
andmonthlyfixedexpensesare$15,000.WhatisTom'soperatingleveragefactoratthetargetlevelof
operatingincome?
A) 2.67
B) 0.63
C) 0.40
D) 1.60
Hide
Feedback
Target
income
25,000
+ Fixed
expense
15,000
40,000
Divided by
target Inc.
25,000
Operating
leverage=
1.60
Question40
0/1point
FancyFurniturehasvariableexpensesof40%ofsalesandmonthlyfixedexpensesof$240,000.The
monthlytargetoperatingincomeis$60,000.WhatisthemonthlymarginofsafetyindollarsifFancy
Furnitureachievesitsoperatingincomegoal?
A) $500,000
B) $100,000
C) $900,000
D) $(300,000)
HideFeedback
Fixed expenses240,000
Target income60,000
300,000
Contribution margin60%(Variable expense of 40%)
Target sales500,000
Fixed expense240,000
Contribution margin60%
Breakeven sales400,000(240,000 / .60)
Target sales500,000
Breakeven sales400,000
Margin safety100,000
Question41
0/1point
Garfield Corporation is considering building a new plant in Canada. It predicts sales at the new
plant to be 50,000 units at $5.00/unit. Below is a listing of estimated expenses:
Category
Total Annual Expenses
% of Annual Expense
that are Fixed
Materials
$50,000
10%
Labor
$90,000
20%
Overhead
$40,000
30%
Marketing/Admin
$20,000
50%
ACanadianfirmwascontractedtoselltheproductandwillreceiveacommissionof10%ofthesales
price.NoU.S.homeofficeexpenseswillbeallocatedtothenewfacility.
TheunitvariablecostforGarfieldCorporationis
A) $4.50.
B) $3.60.
C) $1.40.
D) $3.10.
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Question42
0/1point
Comfort Cloud manufactures seats for airplanes. The company has the capacity to produce
100,000 seats per year, but is currently produces and sells 75,000 seats per year. The following
information relates to current production of seats:
Sale price per unit
$400
Variable costs per unit:

Manufacturing
Marketing and administrative
$220
$50
Total fixed costs:

Manufacturing
$750,000
Marketing and administrative
$200,000
Ifaspecialsalesorderisacceptedfor6,500seatsatapriceof$325perunit,andfixedcostsremain
unchanged,howwouldoperatingincomebeaffected?(NOTE:Assumeregularsalesarenotaffectedbythe
specialorder.)
A) Increase by $5,500,000
B) Increase by $2,112,500
C) Increase by $357,500
D) Decrease by $357,500
Hide
Feedback

Variable Mfg.
Cost$220
Variable
Marketing$50
Total Variable
$270
NOWSales
Price$325
Less Total
Variable Cost
270
= Contribution
Margin$55
Times units
sold 6,500
= Additional
Profit$357,500
Question43
0/1point
Samson Incorporated provided the following information regarding its only product:
Sale price per unit
$50.00
Direct materials used
$160,000
Direct labor incurred
$185,000
Variable manufacturing overhead
$120,000
Variable selling and administrative expenses
$70,000
Fixed manufacturing overhead
$65,000
Fixed selling and administrative expenses
$12,000
Units produced and sold
20,000
Assume no beginning inventory

Assumingthereisexcesscapacity,whatwouldbetheeffectonoperatingincomeofacceptingaspecial
orderfor3,000unitsatasalepriceof$45perproductassumingadditionalfixedmanufacturingoverhead
costsof$5,000isincurred?(NOTE:Assumeregularsalesarenotaffectedbythespecialorder.)
A) Increase by $54,750
B) Increase by $135,000
C) Decrease by $49,750
D) Increase by $49,750
HideFeedback
Direct Materials$160,000
Direct Labor 185,000
Variable Mfg. O/H 120,000
Variable Selling 70,000
Total Mfg. Cost $535,000 / units produced 20,000 = $26.75 Mfg. cost per unit
Then
Sales Price $45.00
Less Mfg. cost per Unit26.75
= Contribution Margin$18.25
Times units sold 3,000
Total Contribution Margin=$54,750
Less Add'l Fixed cost 5,000
Add'l Profit49,750
Question44
0/1point
Pluto Incorporated provided the following information regarding its single product:
Direct materials used
$240,000
Direct labor incurred
$420,000
$160,000
$100,000
Variable selling and administrative expenses
$60,000
Fixed selling and administrative expenses
$20,000
The regular selling price for the product is $80. The annual quantity of units produced and sold is
40,000 units (the costs above relate to the 40,000 units production level). The company has excess
capacity and regular sales will not be affected by this special order. There was no beginning
inventory.
What would be the effect on operating income of accepting a special order for 3,500 units at a sale
price of $55 per product?
A) Increase by $115,500
B) Decrease by $115,500
C) Decrease by $269,500
D) Increase by $269,500
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Direct Materials
$240,000
Direct Labor
420,000
Variable Overhead
160,000
Variable Selling
60,000
Total
$880,000
Total
$880,000
Divided by production
40,000
Cost per unit
$22.00
Selling Price
$55.00
Less cost per unit

Contribution Margin
units sold
Operating Income
22.00
$33.00
3,500
$115,500
Question45
0/1point
Elite Office Furniture received a special order for 1,200 units of its executive chairs at a selling
price of $90 per chair. Elite Office Furniture has enough capacity to accept the order. No
additional selling costs will be incurred. Unit costs to make and sell this product are as follows:
Direct Materials $45; Direct Labor $19; Variable Manufacturing Overhead $6; Fixed
Manufacturing Overhead $12; and Variable Selling Costs $5.
What will be Elite Office Furniture's change in operating income if they accept the special order?
Should Elite Office Furniture accept the order? Explain why or why not.
Notextentered
Thisquestionhasnotbeengraded.
ThecorrectanswerisnotdisplayedforLongAnswertypequestions.
Question46
0/1point
PhiladelphiaSwimClubisplanningforthecomingyear.Investorswouldliketoearna10%returnonthe
company's$30millionofassets.Thecompanyprimarilyincursfixedcoststomaintaintheswimming
pools.Fixedcostsareprojectedtobe$12,500,000fortheyear.About500,000membersareexpectedto
swimeachyear.Variablecostsareabout$10perswimmer.PhiladelphiaSwimClubisapricetakerand
won'tbeabletochargemorethanitscompetitorswhocharge$37.00foramembership.Whatprofitwillit
earnintermsofdollars?
A) $11,000,000
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B) $1,000,000
C) $(1,000,000)
D)
$(12,500,000
)
Question47
0/1point
Green Pastures golf course is planning for the coming season. Investors would like to earn a 12%
return on the company's $40 million of assets. The company primarily incurs fixed costs to groom
the greens and fairways. Fixed costs are projected to be $20 million for the golfing season. About
500,000 golfers are expected each year. Variable costs are about $12 per golfer. Green Pastures golf
course is a pricetaker and won't be able to charge more than $60 per round because of local
competition.
What will Green Pasture's expected profit shortfall be if it charges $60/round?
Notextentered
Thisquestionhasnotbeengraded.
ThecorrectanswerisnotdisplayedforLongAnswertypequestions.
Question48
0/1point
Contributionmarginincomestatementdataforthemostrecentyearfollow:
Total
Cat Food
Dog Food
Sales revenue
$385,000
$300,000
$85,000
Variable expenses
$205,000
$165,000
$40,000
Contribution margin
$180,000
$135,000
$45,000
Fixed expenses
$102,000
$50,000
$52,000
$78,000
$85,000
$(7,000)
Operating income (loss)
AssumingtheDogfoodisdiscontinued,totalfixedcostsremainunchanged,andthespaceformerlyusedto
producethelineisrentedfor$25,000peryear,howwilloperatingincomebeaffected?
A)
Increase
$184,000
B)
Increase
$20,000
C)
Decrease
$20,000
D)
Increase
$58,000
HideFeedback
Question49
0/1point
Mama'sFavoriteAppliancesmanufacturestwoproducts:FoodProcessorsandEspressoMakers.The
followingdataareavailable:
Sales price
Variable costs
Food Processors
Espresso Makers
$125
$225
$50
$150
Thecompanycanmanufacturetwofoodprocessorspermachinehourandthreeespressomachinesper
machinehour.Thecompany'sproductioncapacityis1,200machinehourspermonth.
Whatisthecontributionmarginratioforfoodprocessors?
A) 150.00%
B) 33.33%
C) 140.00%
D) 60.00%
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Question50
0/1point
BrittanyFurnituremanufacturestwoproducts:CouchesandBeds.Thefollowingdataareavailable:
Couches
Beds
Sales price
$500.00
$700.00
Variable costs
$350.00
$375.00
Thecompanycanmanufacturetwocouchespermachinehourandonebedpermachinehour.The
company'sproductioncapacityis900machinehourspermonth.
WhatisthecontributionmarginratioforCouches?
HideFeedback
A) 42.86%
B) 170.00%
C) 30.0%
D) 23.08%
Question51
0/1point
BrittanyFurnituremanufacturestwoproducts:FutonsandRecliners.Thefollowingdataareavailable:
Futons
Recliners
Sales price
$500.00
$480.00
Variable costs
$325.00
$120.00
Thecompanycanmanufacturetwofutonspermachinehourandonereclinerpermachinehour.The
company'sproductioncapacityis900machinehourspermonth.
Whatisthecontributionmarginpermachinehourforrecliners?
A) $600
B) $720
C) $360
D) $1,080
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Question52
0/1point
Cuyahoga Valley Bicycles uses a standard part in the manufacture of several of its bikes. The cost
of producing 40,000 parts is $138,000, which includes fixed costs of $68,000 and variable costs of
$70,000. By outsourcing the part, the company can avoid 30% of the fixed costs.
If Cuyahoga Valley Bicycles buys the part, what is the most Cuyahoga Valley Bicycles can spend
per unit so that operating income equals the operating income from making the part?
A) $2.26
B) $2.33
C) $4.64
D) $1.33
HideFeedback
Cost to Build
Variable Costs$70,000
Fixed Costs68,000
Total$138,000
Less Unavoidable Fixed Cost47,600
Adjusted Cost of part90,400 Divided by 40,000 = $2.26
Question53
0/1point
Moon Appliance manufactures a variety of appliances which all use Part B89. Currently, Moon
Appliance manufactures Part B89 itself. It has been producing 9,000 units of Part B89 annually.
The annual costs of producing Part B89 at the level of 9,000 units include:
Direct materials
$3.00
Direct labor
$8.00
$4.00
$3.00
Total cost
$18.00
AllofthefixedmanufacturingoverheadcostswouldcontinuewhetherPartB89ismadeinternallyor
purchasedfromanoutsidesupplier.MoonAppliancehasnoalternativeuseforitsmanufacturingfacilities.
NadalPartsCompanyhasofferedtosell9,000unitsofPartB89toMoonAppliancefor$20.00perunit.
WhatisthehighestpriceperunitthatMoonApplianceshouldbewillingtopayforthepart?
A) $11
B) $18
C) $15
D) $7
Hide
Feedback
Direct
Materials
$3.00
Direct
Labor8.00
Variable
MOH4.00
Total
Variable
Cost$15.00
Question54
0/1point
Zach has the following information to evaluatehis current salary of $75,000 versus total
revenues of $100,000 and expenses of $67,000 from starting a new business. How much is the
opportunity cost associated with staying at his current job?
A) $33,000
B) $(8,000)
C) $167,000
D) $75,000
Hide
Feedback
Revenues
$100,000
Expenses
67,000
Potential
income
$33,000
Question55
0/1point
StoogeEnterprisesmanufacturesceilingfansthatnormallysellfor$90each.Thereare300defectivefans
ininventory,whichcost$55eachtomanufacture.Thesedefectiveunitscanbesoldasisfor$20each,or
theycanbeprocessedfurtherforacostof$40eachandthensoldforthenormalsellingprice.Stooge
Enterpriseswouldbebetteroffbya
$9,000
net
increase
in
operatin
A) g income
if the
ceiling
fans are
sold as
is.
$21,000
net
increase
in
operatin
B)
g income
if the
ceiling
fans are
repaired.
C) $21,000
net
increase
in
operatin
g income
if the
ceiling
fans are
sold as
is.
$9,000
net
increase
in
operatin
D)
g income
if the
ceiling
fans are
repaired.
HideFeedback
Question56
0/1point
CatNapCompanyhastwoproducts:KittyzandKatz.AMarchsalesforecastprojects20,000unitsof
Kittyzand15,000unitsofKatzaregoingtobesoldatpricesof$15and$12,respectively.Thedesired
endinginventoryofKittyzis20%higherthanthebeginninginventory,whichwas2,000units.Howmuch
aretotalMarchsalesforKittyzanticipatedtobe?
A) $100,000
B) $180,000
C) $240,000
D) $300,000
Hide
Feedback

20,000
$15 =
$300,000
Question57
0/1point
RubinoCorporationdesiresaDecember31endinginventoryof900units.BudgetedsalesforDecember
are2,650units.TheNovember30inventorywas850units.Whatarebudgetedpurchasesinunits?
A) 4,400
B) 2,600
C) 2,700
D) 3,550
Hide
Feedback
Sales2,650
Less: BI850
= Need to
produce
1,800
+ desired EI
900
= Total
Production
2,700
Question58
0/1point
Fosnight Enterprises prepared the following sales budget:
Month
Budgeted Sales
March
$6,000
April
$13,000
May
$12,000
June
$14,000
Theexpectedgrossprofitrateis30%andtheinventoryattheendofFebruarywas$10,000.Desired
inventorylevelsattheendofthemonthare20%ofthenextmonth'scostofgoodssold.
WhatisthedesiredbeginninginventoryonJune1?
A) $1,680
B) $9,800
C) $1,960
D) $840
HideFeedback
Sales = 100% 30% Gross Profit = 70% Cost of Goods Sold (CGS)
Now: June Sales $14,000 70% = 9,800 (CGS) 20% = $1,960
Question59
0/1point
Alampstorepurchased$3,800oflampsinSeptember.Thestorehad$1,600oflampsonhandatthe
beginningofSeptember,andexpectedtohave$1,300oflampsattheendofSeptembertocoverpartof
anticipatedOctobersales.WhatisthebudgetedcostofgoodssoldforSeptember?
A) $3,500
B) $5,400
C) $6,700
D) $4,100
Hide
Feedback
BI$1,600
+ Purchases
3,800
= Goods
Available
5,400
Less: EI
1,300
= Cost of
Goods Sold
$4,100
Question60
0/1point
Victoria Corporation manufactures quality vases. Budgeted sales and production data for the
vases are as follows:
Month 1 budgeted unit sales
2,000
2,500
3,200
Month 1 budgeted unit production
2,400
2,700
3,400
Raw material required for each finished unit (in pounds)
Theendinginventoryforeachmonthshouldbeequalto20%ofthenextmonth'sproductionneeds.Each
vaserequiresonepoundofclayinitsmanufacture.VictoriaCorporationhasapolicythattheinventoryof
clayattheendofeachmonthneedstobeequalto20%oftheproductionneedsforthefollowingmonth.At
thebeginningofJanuary,480poundsofclaywereininventory.HowmanypoundsofclaywouldVictoria
CorporationneedtopurchaseinFebruary(Month2?
A) 2,660
B) 2,840
C) 2,940
D) 3,620
Hide
Feedback
Production
Month 2
2,700
Less BI
(2,700
20%) 540
Plus EI
(3,400
20%)+
680
Equals
Purchases
2,840
Question61
0/1point
Natcher Corporation collects 30% of a month's sales in the month of sale, 55% in the month
following sale, and 10% in the second month following sale. The company has found that 5% of
their sales are uncollectible. Budgeted sales for the upcoming four months are:
August budgeted sales
$300,000
September budgeted sales
$280,000
October budgeted sales
$330,000
November budgeted sales
$260,000
The amount of cash that will be collected in November is budgeted to be

A) $287,500.
B) $78,000.
C) $291,500.
D) $283,000.
Hide
Feedback
Sept. Sales
$280,000
10% =
$28,000
Oct. Sales
330,000
55% =
181,500
Nov. Sales
260,000
30% =
78,000
Total
$287,500
Question62
0/1point
PurchasesinMaywere$60,000,whileexpectedpurchasesforJuneandJulyare$75,000and$92,000,
respectively.Allpurchasesarepaid35%inthemonthofpurchaseand65%inthefollowingmonth.At
whatamountareJunepaymentsforpurchasesbudgeted?
A) $69,750
B) $65,250
C) $97,450
D) $86,050
Hide
Feedback
May
$60,000
65% =
$39,000
June
75,000
35%=
26,250
Total
$65,250
Question63
0/1point
Two Brothers Moving prepared the following sales budget:
Month
Cash Sales
Credit Sales
March
$20,000
$10,000
April
$36,000
$16,000
May
$42,000
$40,000
June
$54,000
$48,000
Creditcollectionsare25%inthemonthofsale,60%inthemonthfollowingthesale,and10%twomonths
followingthesale.Theremaining5%isexpectedtobeuncollectible.
WhatarethetotalcashcollectionsinJuneatTwoBrothersMoving?
A) $37,600
B) $86,800
C) $91,600
D) $96,300
HideFeedback
June credit sales
$48,000
Credit collections month of sale
25%
Collections from June credit sales
$12,000
May credit sales
$40,000
Credit collections month after sale
60%
Collections from May credit sales
$24,000
April credit sales
$16,000
Credit collections 2 months after sale
10%
Collections from April credit sales
$1,600
June cash sales
$54,000
Collections from June credit sales
$12,000
Collections from May credit sales
$24,000
Collections from April credit sales
$1,600
Total June cash collections
$91,600
Question64
0/1point
Goliath Company prepared the following purchases budget:
Month
Budgeted Purchases
June
$35,600
July
$42,500
August
$39,600
September
$45,800
October
$49,400
Allpurchasesarepaidforasfollows:30%inthemonthofpurchase,45%inthefollowingmonth,and25%
twomonthsafterpurchase.
WhatarethecashdisbursementsinAugusttoaccountfortheJunepurchasesatGoliathCompany?
A) $20,610
B) $8,900
C) $16,020
D) $10,680
Hide
Feedback
$35,600
25% =
$8,900
Question65
0/1point
Assume the Air Conditioning division of the General Appliance Corporation had the following
results last year (in thousands). Management's target rate of return is 15% and the weighted
average cost of capital is 10%. Its effective tax rate is 35%.
Sales
$10,000,000
Operating income
2,000,000
Total assets
2,500000
Current liabilities
820,000
Whatisthedivision'scapitalturnover?
A) 5.00
B) 4.00
C) 1.25
D) 3.05
HideFeedback
Sales $10,000,000/Total assets 2,500,000 = 4.00

Question66
0/1point
The Box Manufacturing Division of the Allied Paper Company reported the following results
from the past year. Shareholders require a return of 7%. Management calculated a weighted
average cost of capital (WACC) of 5%. Allied's corporate tax rate is 30%.
Sales
$700,000
Operating income
$175,000
Total assets
Current liabilities
Whatisthedivision'scapitalturnover?
A) 8.57
B) 0.47
C) 4.00
D) 2,50
HideFeedback
$1,500000
600,000

Sales $700,000 / Total assets 1,500,000 = 0.47
Question67
0/1point
CamdenCorporationhasoperatingincomeof$87,000,asalesmarginof15%,andcapitalturnoverof2.5.
Thereturnoninvestment(ROI)forCamdenCorporationmaybeclosestto
A) 2%.
B) 107%.
C) 38%.
D) 6%.
Hide
Feedback
Operating
income/Sales
Margin = Sales
87,000/15% =
580,000
Sales/Capital
Turnover =
Total Assets
580,000/2.5 =
232,000
Operating
income/Total
Assets = ROI
87,000/232,000
= 38%
Question68
0/1point
DoveIncorporatedhasoperatingincomeof$650,000,asalesmarginof10%,andacapitalturnoverrateof
2.0.WhatamountwouldDovereportforsales?
A) $1,300,000
B) $6,500,000
C) $325,000
D) $65,000
HideFeedback
Question69
0/1point
The Top Hat Division of Blandon's Fine Menswear had the following results last year (in
thousands).
Sales
$4,500,000
Operating income
Total assets
Current liabilities
$675,000
$3,000,000
$250,000
Management's target rate of return is 12% and the weighted average cost of capital is 9%.
What is the Top Hat Division's Residual Income (RI)?
A) $315,000
B) $225,000
C) $405,000
D) $135,000
HideFeedback
Target Return = Total Assets Required Return

360,000 = 3,000,000 12%
Residual Income = Operating Income Target Return
315,000 = 675,000 360,000
Question70
0/1point
Selected financial data for The Portland Porcelain Works Coffee Mug Division is as follows:
Sales
$2,300,000
Operating income
$414,000
Total assets
$718,750
Current liabilities
$180,000
Target rate of return
10%
Weighted average cost of capital

WhatisThePortlandPorcelainWorksCoffeeMugDivisionresidualincome?
A) $71,875
B) $342,125
C) $396,000
D) $356,500
HideFeedback
Residual income = Operating income (Target rate of return Total assets)

= 414,000 (10% 718,750)
8%
= 414,000 71,875
= 342,125
Question71
0/1point
The Southern Division of Amelia Corporation had sales of $6,500,000 and operating income of
$1,200,000 last year. The total assets of the Southern Division were $3,000,000, while current
liabilities were $450,000. Amelia Corporation's target rate of return is 10%, while its weighted
average cost of capital is 6%. The effective tax rate for the company is 30%.
What is the Southern Division's Return on Investment (ROI)?
A) 40.00%
B) 6.00%
C) 25.00%
D) 200.00%
HideFeedback
Return on investment = Operating income/Total assets

= 1,200,000/3,000,000 = 40%
Question72
1/1point
Agraphofaflexiblebudgetformulareflectsfixedcostsof$45,000permonthandtotalcostsof$100,000
atavolumeof5,000units.Assumingtherelevantrangeis1,000to20,000units,thegraphwouldreflect
totalmonthlycostsat15,000unitsofwhatdollaramount?
A) $345,000
B) $165,000
C) $210,000
D) $100,000
HideFeedback
Total costs$100,000
Fixed costs$(45,000)
Variable costs$55,000
Initial volume5,000
Variable cost per unit $11 = 55,000 / 5,000
Variable cost per unit $11
Target units15,000
Variable costs at target volume$165,000 = 15,000 11
Fixed costs+
45,000
Total costs at target volume$210,000
Total costs$100,000
Fixed costs$(45,000)
Variable costs$55,000
Initial volume5,000
Variable cost per unit $11 = 55,000 / 5,000
Variable cost per unit $11

Target units15,000
Variable costs at target volume$165,000 = 15,000 11
Fixed costs+
45,000
Total costs at target volume$210,000
AttemptScore:
OverallGrade(highestattempt):
9/
72
12.5
%
9/
72
12.5
%

Mid Term Accounting

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Question1

D) Remain the same

B) total fixed costs.

B) $550 are the total step costs.

Total cost = $10 7,500 = $75,000

Number of snow cones

Total operating costs

Highest cost$6,820Highest activity7,600

Number of ice cream cones

Total operating costs

Highest cost$1,250Highest activity2,000

Finish the equation: y = $ .25 (1,436) + 750

Number of units produced

Total manufacturing costs

Highest cost$8,150Highest activity7,800

y = total monthly utility cost

Operating income would be higher under an absorption costing income

D) Operating income would be lower under a variable costing income statement.

Sales$4 67,500 = $270,000

Personal trainer wages expense

Personal training revenue

Space rental expense

Straight line depreciation

Cost of product sold

Rental insurance expense

Front desk staff wages expense $12,000

Units produced during the year

Units sold during year

Variable manufacturing costs per unit

Variable selling and administrative expenses per unit

Fixed manufacturing overhead (in total)

Fixed selling and administrative expenses (in total)

Units produced during the year

Units sold during the year

Selling price per unit

Variable costs per unit

Sales price per TShirt

Less: Variable cost per TShirt

Unit contribution margin per TShirt

Unit contribution margin: $24 $15 = $9

Fixed Expenses $15,000 divided by Contribution Margin $5 = 3,000 Breakeven

Selling price per unit

Variable cost per unit

Total fixed cost

Fixed expenses $60,000 + Target Income $72,000 = $132,000 divided by

Sales price per unit Variable cost per unit

Variable cost per unit

Fixed Expenses / Variable

Use the data listed above to compute the following:

Selling and Admin. Expenses:

Selling price per unit

Variable expenses per unit

Fixed costs $75,400 / 11.60 = 6,500 BE units

Unit Sales Prices

Unit Variable Cost

Sales price per pound

Variable cost per pound

Monthly fixed expense$1,800

Total Annual Expenses