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A Quiz On Accounting For Pros

Question 1 of 3

Q1 . The . budget is a major part of the master budget and focuses on the income statement and it's supporting schedules.

Q2 . Strategic planning involves:

Q3 . Stiller Company expects cash sales for July of $15000, and a 20% monthly increase during August and September. What are budgeted cash sales and budgeted credit sales for September respectively?

Q4 . A company's purchasing department negotiates all of the purchasing contracts for raw materials. Which variance is most useful in assessing the performance of the purchasing department?

Q5 . Which capital budgeting method uses accrual accounting, rather than net cash flows, as a basis for calculations?

Q6 . Thomario's Powder Coatings makes payments on its inventory purchases as follows: 25% in the month of purchase, 60% in the following month, and 15% in the second month following purchase. Budgeted inventory purchases for June, July, and August are $15,000, $19,000 and $24,000, respectively. At what amount are cash payments for inventory in August budgeted?

Q7 . If a worker drops the raw material during production and the raw material must be discarded, which variance is directly impacted?

Q8 . Which term below is best paired with "a budget for a single unit"?

Q9 . Use the following information for the next three questions. Zany Brainy projected current year sales of 50,000 units at a unit sale price of $20.00. Actual current year sales were 55,000 units at $22.00 per unit. Actual variable costs, budgeted at $14.00 per unit, totaled $15.00 per unit. Budgeted fixed costs totaled $400,000, while actual fixed costs amounted to $420,000. What is the flexible budget variance for total expenses?

Q10 . How does depreciation affect the calcultion of a project's accounting rate of return (ARR)?

Q11 . You win the lottery and must decide how to take the payout. Use an 8% discount rate. What is the present value of $10,000 a year received at the end of each of the next six years?

Q12 . Latimer Corporation collects 35% of a month's sales in the month of sale, 50% 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:

Q13 . Brackett Corporation is adding a new product line that will require an investment of $120,000. The product line is estimated to generate cash inflows of $25,000 the first year, $23,000 the second year, and $18,000 each year thereafter for ten more years. What is the payback period?

Q14 . Use the following information to answer the next four questions. Dazzle Toy Company gathered the following actual results for the current month: Actual amounts: Units produced 4,000 Direct materials purchased and used (5,000 lbs.) $22,500 Direct labor cost (4,500 hours) $51,750 Manufacturing overhead costs incurred $24,000 Budgeted production and standard costs were: Budgeted production 3,500 units Direct materials 2 lbs./unit at $4.25/lb. Direct labor 1.5 hrs./unit at $12.00/hr. Variable manufacturing overhead $5 per unit Fixed manufacturing overhead $21,000 What is the direct materials price variance?

Q15 . Use the following information to answer the next four questions. Dazzle Toy Company gathered the following actual results for the current month: Actual amounts: Units produced 4,000 Direct materials purchased and used (5,000 lbs.) $22,500 Direct labor cost (4,500 hours) $51,750 Manufacturing overhead costs incurred $24,000 Budgeted production and standard costs were: Budgeted production 3,500 units Direct materials 2 lbs./unit at $4.25/lb. Direct labor 1.5 hrs./unit at $12.00/hr. Variable manufacturing overhead $5 per unit Fixed manufacturing overhead $21,000 What is the direct labor efficiency variance?

Q16 . Newton Company is preparing its cash budget for the upcoming month. The beginning cash balance for the month is expected to be $12,000. Budgeted cash receipts are $84,000, while budgeted cash disbursements are $72,000. Newton Company wants to have an ending cash balance of $40,000. The excess (deficiency) of cash available over disbursements for the month would be:

Q17 . Whicih of the following budgets is part of the financial budgets?

Q18 . The Cost of Goods Sold, Inventory, and Purchases Budget would most likely be used by

Q19 . A rolling budget is a budget that:

Q20 . Use the following information for the next two questions: (Present value tables are needed.) Miami Marine Enterprises is evaluating the purchase of an elaborate hydraulic lift system for all of its locations to use for the boats brought in for repair. The company has narrowed their choices down to two—the B14 Model and the F54 Model. Financial data about the two choices follows. B14 Model F54 Model Investment $ 320,000 $ 240,000 Useful life (years) 8 8 Estimated annual net cash inflows for useful life $ 75,000 $ 40,000 Residual value $ 30,000 $ 10,000 Depreciation method Straight-line Straight-line Required rate of return 14% 10% What is the net present value of the F45 Model?

Q21 . A capital asset has which of the following characteristics?

Q22 . Which of the following affects the present value of an investment?

Q23 . Blaney Lumber's forecasted sales for April; May; June; and July are $200,000; $230,000; $190,000; and $240,000; respectively. Sales are 60% cash and 40% credit with all accounts receivables collected in the month following the sale. Cost of goods sold is 75% of sales and ending inventory is maintained at $60,000 plus 10% of the following month's cost of goods sold. All inventory purchases are paid 20% in the month of purchase and 80% in the following month. What is the balance of accounts payable on the June 30 budgeted balance sheet?

Q24 . Mahtomedi Corporation is considering investing in specialized equipment costing $240,000. The equipment has a useful life of 5 years and a residual value of $20,000. Depreciation is calculated using the straight-line method. The expected net cash inflows from the investment are: Year 1 $ 60,000 Year 2 $ 90,000 Year 3 $110,000 Year 4 $ 40,000 Year 5 $ 25,000 Total cash inflows $325,000 Mahtomedi Corporation's required rate of return on investments is 14%. What is the accounting rate of return on the investment?

Q25 . A flexible budget variance is the difference between:

Q26 . Use the following information for the next two questions: (Present value tables are needed.) Miami Marine Enterprises is evaluating the purchase of an elaborate hydraulic lift system for all of its locations to use for the boats brought in for repair. The company has narrowed their choices down to two—the B14 Model and the F54 Model. Financial data about the two choices follows. B14 Model F54 Model Investment $ 320,000 $ 240,000 Useful life (years) 8 8 Estimated annual net cash inflows for useful life $ 75,000 $ 40,000 Residual value $ 30,000 $ 10,000 Depreciation method Straight-line Straight-line Required rate of return 14% 10% What is the net present value of the B14 Model

Q27 . The Teddy Bear Company manufactures stuffed bears. The number of bears to be produced in the upcoming three months follows: Number of teddy bears to be produced in July 12,000 Number of teddy bears to be produced in August 15,000 Number of teddy bears to be produced in September 10,000 Each bear requires 2 pounds of the plastic pellets used as stuffing. The company has a policy that the ending inventory of plastic pellets each month must be equal to 20% of the following month's expected production needs. How many pounds of plastic pellets does The Teddy Bear Company need to purchase in August?

Q28 . If the discount rate is decreased from 9% to 7%, what will happen to the internal rate of return (IRR) of a project?

Q29 . Which of the following is another name for the minimum desired rate of return?

Q30 . The budget committee does all fo the following EXCEPT:

Q31 . Use the following information for the next three questions. Zany Brainy projected current year sales of 50,000 units at a unit sale price of $20.00. Actual current year sales were 55,000 units at $22.00 per unit. Actual variable costs, budgeted at $14.00 per unit, totaled $15.00 per unit. Budgeted fixed costs totaled $400,000, while actual fixed costs amounted to $420,000. What is the flexible budget variance for variable expenses

Q32 . Which of the following statements regarding static budgets is TRUE?

Q33 . Webber Company is preparing its cash budget for the upcoming month. The budgeted beginning cash balance is expected to be $30,000. Budgeted cash receipts are $101,000, while budgeted cash disbursements are $123,000. Webber Company wants to have an ending cash balance of $45,000. How much would Webber Company need to borrow to achieve its desired ending cash balance?

Q34 . Which of the following is the starting place for budgeting?

Q35 . If the NPV is of an investment is greater than zero,

Q36 . Sunny Dayz sells bottles of sunscreen lotion for $8.00 each. Variable costs are $4.50 per bottle, while fixed costs are $42,000 per month for volumes up to 20,000 bottles of lotion and $52,000 per month for volumes above 20,000 bottles of lotion. The flexible budget would reflect monthly operating income for 18,000 bottles of lotion and 23,000 bottles of lotion of what dollar amounts?

Q37 . Use the following information to answer the next four questions. Dazzle Toy Company gathered the following actual results for the current month: Actual amounts: Units produced 4,000 Direct materials purchased and used (5,000 lbs.) $22,500 Direct labor cost (4,500 hours) $51,750 Manufacturing overhead costs incurred $24,000 Budgeted production and standard costs were: Budgeted production 3,500 units Direct materials 2 lbs./unit at $4.25/lb. Direct labor 1.5 hrs./unit at $12.00/hr. Variable manufacturing overhead $5 per unit Fixed manufacturing overhead $21,000 What is the direct materials efficiency variance?

Q38 . 13. Williams Department Stores is considering two possible expansion plans. One proposal involves opening 5 stores in Indiana at the cost of $1,800,000. Under the other proposal, the company would focus on Kentucky and open 6 stores at a cost of $2,400,000. The following information is available: Indiana proposal Kentucky proposal Required investment $1,800,000 $2,400,000 Estimated life 10 years 10 years Estimated annual cash inflows over the next 10 years $400,000 $500,000 Required rate of return 10% 10% The internal rate of return for the Indiana Proposal is closest to

Q39 . Use the following information to answer the next four questions. Dazzle Toy Company gathered the following actual results for the current month: Actual amounts: Units produced 4,000 Direct materials purchased and used (5,000 lbs.) $22,500 Direct labor cost (4,500 hours) $51,750 Manufacturing overhead costs incurred $24,000 Budgeted production and standard costs were: Budgeted production 3,500 units Direct materials 2 lbs./unit at $4.25/lb. Direct labor 1.5 hrs./unit at $12.00/hr. Variable manufacturing overhead $5 per unit Fixed manufacturing overhead $21,000 What is the direct labor price variance

Q40 . If you invest $1,000 at the end of every year for five years at an interest rate of 10%, the balance of your investment in 5 years will be closest to:

Q41 . Brawny Corporation manufactures benches. Each bench requires .50 direct labor hours in its production. Brawny Corporation has a direct labor rate of $15 per direct labor hour. The production budget shows that Brawny Corporation plans to produce 1,000 benches in March and 1,200 benches in April. What is the total combined direct labor cost that should be budgeted for March and April?

Q42 . An unfavorable direct labor price variance and a favorable direct labor efficiency variance might indicate which of the following?

Q43 . Use the following information for the next three questions. Zany Brainy projected current year sales of 50,000 units at a unit sale price of $20.00. Actual current year sales were 55,000 units at $22.00 per unit. Actual variable costs, budgeted at $14.00 per unit, totaled $15.00 per unit. Budgeted fixed costs totaled $400,000, while actual fixed costs amounted to $420,000. 5. What is the sales volume variance for total revenue?

Q44 . Kayla's Toys budgeted sales of $300,000 for the month of November and cost of goods sold to equal of 70% of sales. Beginning inventory for November was $50,000 and ending inventory for November is estimated at $55,000. How much are the budgeted purchases for November?