DeVry ACCT 505 Final Exam Answers

Avril Firm makes collections on gross sales in line with the next schedule:

30% within the month of sale

60% within the month following sale

eight% within the second month following sale

The next gross sales are anticipated:

Anticipated Gross sales

January $100,000

February 120,000

March 110,000

Money collections in March needs to be budgeted to be:

A) $110,000.

B) $110,800.

C) $105,000.

D) $113,000.

A labor effectivity variance ensuing from the usage of poor high quality supplies needs to be charged to:

A) the manufacturing supervisor.

B) the buying agent.

C) manufacturing overhead.

D) the engineering division.

An unfavorable labor effectivity variance signifies that:

A) The precise labor fee was greater than thBe normal labor fee.

B) The labor fee variance should even be unfavorable.

C) Precise labor hours labored exceeded normal labor hours for the manufacturing stage achieved.

D) Additional time labor was used in the course of the interval.
Reply: C

A positive labor fee variance signifies that

A) precise hours exceed normal hours.

B) normal hours exceed precise hours.

C) the precise fee exceeds the usual fee.

D) the usual fee exceeds the precise fee.

Use the next to reply questions 22-25:

Cole laboratories makes and sells a garden fertilizer referred to as Fastgro. The corporate has developed normal prices for one bag of Fastgro as follows:

Normal

Normal Amount Value per Bag

Direct materials 20 kilos $eight.00

Direct labor Zero.1 hours 1.10

Variable manuf. overhead Zero.1 hours .40

The corporate had no starting inventories of any form on Jan. 1. Variable manufacturing overhead is utilized to manufacturing on the premise of direct labor hours. Throughout January, the next exercise was recorded by the corporate:

Manufacturing of Fastgro: four,000 luggage

Direct supplies bought: 85,000 kilos at a price of $32,300

Direct labor labored: 390 hours at a price of $four,875

Variable manufacturing overhead incurred: $1,475

Stock of direct supplies on Jan. 31: three,000 kilos

The supplies value variance for January is:

A) $1,640 F.

B) $1,640 U.

C) $1,700 F.

D) $1,300 U.

The supplies amount variance for January is:

A) $800 U.

B) $300 U.

C) $300 F.

D) $750 F.

The labor fee variance for January is:

A) $475 F.

B) $475 U.

C) $585 F.

D) $585 U.

The labor effectivity variance for January is:

A) $475 F.

B) $350 U.

C) $130 U.

D) $110 F.

Use the next to reply questions 26-27:

The next chosen information pertain to Beck Co.’s Beam Division for final 12 months:

Gross sales $400,000

Variable bills $100,000

Traceable mounted bills $250,000

Common working belongings $200,000

Minimal required fee of return 20%

How a lot is the residual revenue?

A) $40,000

B) $50,000

C) $10,000

D) $80,000

How a lot is the return on the funding?

A) 25%

B) 20%

C) 12.5%

D) 40%

One of many risks of allocating widespread mounted prices to a product line is that such allocations could make the road seem much less worthwhile than it truly is.

A) True

B) False

In duty accounting, every phase in a company needs to be charged with the prices for which it’s accountable and over which it has management plus its share of widespread organizational prices.

A) True

B) False

Some managers imagine that residual revenue is superior to return on funding as a way of measuring efficiency, because it encourages the supervisor to make funding selections which can be extra in line with the pursuits of the corporate as a complete.

A) True

B) False

The efficiency of the supervisor of Division A is measured by residual revenue. Which of the next would enhance the supervisor’s efficiency measure?

A) Improve in common working belongings.

B) Lower in common working belongings.

C) Improve in minimal required return.

D) Lower in internet working revenue.

A phase of a enterprise liable for each revenues and bills can be referred to as:

A) a price middle.
B) an funding middle.

C) a revenue middle.

D) residual revenue.

The Northern Division of the Smith Firm had common working belongings totaling $150,000 final 12 months. If the minimal required fee of return is 12%, and if final 12 months’s internet working revenue at Northern was $20,000, then the residual revenue for Northern final 12 months was:

A) $20,000.
B) $l8,000.

C) $5,000.

D) $2,000.

Use the next to reply questions 34 – 35:

The next info is on the market on Firm A:

Gross sales $900,000

Web working revenue 36,000

Stockholders’ fairness 100,000

Common working belongings 180,000

Minimal required fee of return 15%

Firm A’s residual revenue is:

A) $9,000.

B) $21,000.

C) $45,000.

D) $24,000.

Residual Revenue 9,00035. Firm A’s return on funding (ROI) is:

A) four%.

B) 15%.

C) 20%.

D) 36%.

Gata Co. plans to discontinue a division that has a $48,000 contribution margin and $96,000 of mounted prices. Of those mounted prices, $42,000 can’t be averted. What can be the impact of this discontinuance on Gata’s general internet working revenue?

A) Improve of $48,000

B) Lower of $48,000

C) Improve of $6,000

D) Lower of $6,000

Pitkin Firm produces an element used within the manufacture of one in all its merchandise. The unit product value of the half is $33, computed as follows:

Direct supplies $12

Direct labor eight

Variable manufacturing overhead three

Mounted manufacturing overhead . 10

Unit product value $33

An outdoor provider has provided to offer the annual requirement of 10,000 of the elements for less than $27 every. The corporate estimates that 30% of the mounted manufacturing overhead prices above will proceed if the elements are bought from the surface provider. Assume that direct labor is an avoidable value on this determination. Based mostly on these information, the per unit greenback benefit or drawback of buying the elements from the surface provider can be:

A) $three benefit.
B) $1 benefit.

C) $1 drawback.

D) $four drawback.

Some funding initiatives require that an organization develop its working capital to service the better quantity of enterprise that will likely be generated. Underneath the online current worth methodology, the funding of working capital needs to be handled as:

A) an preliminary money outflow for which no discounting is important.

B) a future money influx for which discounting is important.

C) each an preliminary money outflow for which no discounting is important and a future money influx for which discounting is important.

D) irrelevant to the online current worth Assessment.

Which of the next capital budgeting strategies contemplate(s) money circulate over your complete lifetime of the challenge?

Inside fee of return Payback

A) Sure Sure

B) Sure No

C) No Sure

D) No No

Use the next to reply Question Assignment 40:

(Ignore revenue taxes on this downside.) Treads Company is contemplating the alternative of an previous machine that’s at the moment getting used. The previous machine is totally depreciated however can be utilized by the company for 5 extra years. If Treads decides to interchange the previous machine, Picco Firm has provided to buy the previous machine for $60,000. The previous machine would don’t have any salvage worth in 5 years.

The brand new machine can be acquired from Hillcrest Industries for $1,000,000 in money. The brand new machine has an anticipated helpful life of 5 years with no salvage worth. Because of the elevated effectivity of the brand new machine, estimated annual money financial savings of $300,000 can be generated.

Treads Company makes use of a reduction fee of 12%.

The web current worth of the challenge is closest to:
A) $171,000.
B) $136,400.
C) $141,500.
D) $560,000.

Use the next to reply questions 41-42:

(Ignore revenue taxes on this downside.) Oriental Firm has gathered the next information on a proposed funding challenge:

Funding in depreciable gear $200,000

Annual internet money flows $ 50,000

Lifetime of the gear 10 years

Salvage worth -Zero-

Low cost fee 10%

The corporate makes use of straight-line depreciation on all gear.

The payback interval for the funding can be:
A) 2.41 years.
B) Zero.25 years.
C) 10 years.
D) four years.

The web current worth of this funding can be:

A) ($14,350).
B) $107,250.
C) $77,200.
D) $200,000.
The Tse Manufacturing Firm makes use of a job-order costing system and applies overhead to jobs utilizing a predetermined overhead fee. The corporate closes any stability within the Manufacturing Overhead account to Value of Items Bought. Through the 12 months the corporate’s Completed Items stock account was debited for $125,000 and credited for $110,000. The ending stability within the Completed Items stock account was $28,000. On the finish of the 12 months, manufacturing overhead was overapplied by $four,500. The stability within the Completed Items stock account in the beginning of the 12 months was:

$28,000
$13,000
$17,500
$eight,500

Matthias Company has offered information in regards to the firm’s Manufacturing Overhead account for the month of Might. Previous to the closing of the overapplied or underapplied stability to Value of Items Bought, the overall of the debits to the Manufacturing Overhead account was $53,000 and the overall of the credit to the account was $69,000. Which of the next statements is true?

Manufacturing overhead utilized to Work in Course of for the month was $69,000.
Manufacturing overhead for the month was underapplied by $16,000.
Manufacturing overhead transferred from Completed Items to Value of Items Bought in the course of the month was $53,000.
Precise manufacturing overhead incurred in the course of the month was $69,000.

Yoder Firm makes use of the weighted-average methodology in its course of costing system. The next information pertain to operations within the first processing division for a current month:
What was the fee per equal unit for supplies in the course of the month?

$Zero.30
$Zero.25
$Zero.20