Joe’s Shoes manufactures athletic shoes. During 2016, the company had the following costs: Direct materials used $25,000 Direct labor $10,000 Factory rent $5,000 Equipment depreciation – factory $5,000 Equipment depreciation – office $1,500 Marketing expense $1,800 Administrative expenses $30,000 9,000 units produced were in 2016. What is the product cost per unit?

 Which best describes the role of managerial accounting?

Managerial accounting’s main role is to prepare the financial statements

Managerial accounting’s main role is to make sure the company abides by GAAP

Managerial accounting’s main role is to provide information for external decision making

Managerial accounting’s main role is to provide information for internal decision making

Question 2

When no units are produced, this cost totals $0:

Mixed cost

Rent cost

Variable cost

Fixed cost

Question 3

Joe’s Shoes manufactures athletic shoes. During 2016, the company had the following costs: Direct materials used $25,000 Direct labor $10,000 Factory rent $5,000 Equipment depreciation – factory $5,000 Equipment depreciation – office $1,500 Marketing expense $1,800 Administrative expenses $30,000 9,000 units produced were in 2016. What is the product cost per unit?

$5

$8.70

Approximately $3.89

Cannot be determined from the information provided

Question 4

Tennis Shoes, Inc. uses a periodic inventory system. The beginning balance of inventory and purchases are shown below: Date Description Units Unit Cost Jan 1 Beginning Inventory 400 $19 Jan 12 Inventory Purchased 850 $23 Jan 21 Inventory Purchased 750 $25 1500 units were sold in the month of January. Using the Average Cost Method, what would be the Cost of Goods Sold and Ending Inventory values:

$34,425 ; $18,275

$11,475 ; $34,425

$18,275 ; $34,425

$34,425 ; $11,475

Question 5

Tennis Shoes, Inc. uses a periodic inventory system. The beginning balance of inventory and purchases are shown below: Date Description Units Unit Cost Jan 1 Beginning Inventory 400 $19 Jan 12 Inventory Purchased 850 $23 Jan 21 Inventory Purchased 750 $25 1500 units were sold in the month of January. Using the First In First Out method, what would be the Cost of Goods Sold and Ending Inventory values:

$33,400 ; $12,500

$12,500 ; $33,400

$36,000 ; $9,900

$9,900 ; $36,000

Question 6

Tennis Shoes, Inc. uses a periodic inventory system. The beginning balance of inventory and purchases are shown below: Date Description Units Unit Cost Jan 1 Beginning Inventory 400 $19 Jan 12 Inventory Purchased 850 $23 Jan 21 Inventory Purchased 750 $25 1500 units were sold in the month of January. Using the Last In First Out method, what would be the Cost of Goods Sold and Ending Inventory values:

$33,400 ; $12,500

$12,500 ; $33,400

$36,000 ; $9,900

$9,900 ; $36,000

Question 7

The Dallas Cookie Company had the following information available regarding last year's operations: Sales volume 10,000 units Revenue $40,000 Variable costs $18,000 Fixed costs $6,000 Net Income $16,000 If sales were to increase by 500 units, what would be the effect on net income?

Net Income would decrease by $1,100

Net Income would increase by $1,100

Net Income would increase by $17,100

Net Income would not change

Question 8

Which of the following is an irrelevant cost?

Sunk cost

Differential cost

Fixed cost

Unavoidable cost

Question 10

A project should be accepted if the Net Present Value is:

10% higher than the cost of the project

20% higher than the cost of the project

Negative

Positive

Question 11

You are considering purchasing a machine today that costs $100,000. Your company’s cost of capital is 6%. The machine will provide the following free cash flows: Year 1 $40,000 Year 2 $28,000 Year 3 $27,000 Year 4 $25,000 What is the Net Present Value and Internal Rate of Return of this project?

$20,000 ; 6%

$4,567.25 ; 7.4%

$5,127.81 ; 8.4%

$20,000 ; 8.4%

Question 12

If actual manufacturing overhead is greater than the predetermined manufacturing overhead, then manufacturing overhead has been:

Underused

Underapplied

Overused

Overapplied

Question 13

The following occurred this year: Proceeds from sale of plant equipment $1,000,000 Common stock issued $500,000 Dividends paid $4,000 Purchase of plant equipment $200,000 What is the Net Cash Provided by Investing Activities?

$496,000

$800,000

$1,200,000

$500,000

Question 14

In a job order cost system, indirect labor costs would be recorded as a debit to:

Finished goods

Manufacturing overhead

Cash

Raw materials

Question 15

In a job order cost system, the usage of direct materials would be recorded as a debit to:

Cash

Finished goods

Work in process

Materials expense

Question 16

The salary of the Chief Executive Officer would be recorded as:

Direct labor

Manufacturing overhead

Selling cost

Administrative cost

Question 17

If a company is operating within the relevant range, then:

Fixed cost per unit will fluctuate, and variable cost per unit will remain constant

Variable cost per unit will fluctuate, and fixed cost per unit will remain constant

Total variable cost and total fixed cost will fluctuate

Total variable cost and total fixed cost will remain constant

Question 18

Which budget provides input data for the direct materials budget:

Accounts receivable budget

Accounts payable budget

Production budget

Indirect materials budget

Question 19

Company ABC has a sales forecast of 12,000 units for the month. Beginning inventory is 2,500 units. They plan to have an ending inventory of 2,000 units. How many units must be produced during the month?

5,000

2,500

12,500

11,500

Question 20

If Mosaic, Inc. has fixed costs of $300,000, a sales price per unit of $5, and variable cost per unit of $3, then the breakeven point in units would be:

15,000

150,000

250,000

Not enough information is given to solve