# Myers Corporation has the following data related

Myers Corporation has the following data related to direct materials costs for November: actual costs for 5,000 pounds of material, \$4.50? And standard costs for 4,800 pounds of material at \$5.10 per pound. What is the direct materials price variance?” “\$3,000 favorable” “\$3,000 unfavorable” “\$2,880 favorable” “\$2,880 unfavorable” Question 5 The standard costs and actual costs for direct materials for the manufacture of 2,500 actual units of product are Standard Costs Direct materials 2,500 kilograms @ \$8.50 Actual Costs Direct materials The amount of the direct materials quantity variance is \$875 favorable variance \$850 unfavorable variance \$850 favorable variance \$875 unfavorable variance 2,600 kilograms @ \$8.75 Question 6 The following data relate to direct labor costs for the current period: Standard costs 36,000 hours at \$22.00 Actual costs 35,000 hours at \$23.00 What is the direct labor time variance? \$36,000 unfavorable \$35,000 unfavorable \$23,000 favorable \$22,000 favorable Question 7 The formula to compute the direct labor rate variance is to calculate the difference between Actual costs + (Actual hours × Standard rate) Actual costs Standard cost (Actual hours × Standard rate) Standard costs Actual costs (Actual hours × Standard rate) Question 8 “A company records its inventory purchases at standard cost but also records purchase price variances. The company purchased 5,000 widgets at \$8.00 each, and the standard cost for the widgets is \$7.60. Which of the following would be included in the journal entry?” “debit Accounts Payable, \$38,000” “credit Direct Materials Price Variance, \$2,000” “debit Direct Materials Price Variance, \$2,000” “debit Accounts Payable, \$2,000” Question 9 Which of the following is a disadvantage of decentralization? Decisions made by one manager may negatively affect the profitability of the entire company. Decentralization helps retain quality managers. Managers closest to the operations make decisions. Managers are able to acquire expertise in their areas of responsibility. Question 10 A responsibility center in which the department manager has responsibility for and authority over costs and revenues is called a(n) investment center profit center volume center cost center Question 11 “Income from operations for Division L is \$250,000, total service department charges are \$400,000 and operating expenses are \$2,750,000. What are the revenues for Division L?” “\$650,000” “\$3,000,000” “\$3,400,000” “\$2,750,000” Question 12 The following data are taken from the management accounting reports of Dulcimer Co.: Div. A Div. B Div. C Income from operations \$1,900,000 \$1,450,000 \$1,450,000 Total service department charges 1,700,000 1,050,000 1,100,000 If an incentive bonus is paid to the manager who achieved the highest income from operations before service department charges, it follows that Division A’s manager is given the bonus Division B’s manager is given the bonus Division C’s manager is given the bonus Divisions B and C’s managers divide the bonus Question 13 The term used to describe expenses that are incurred by a specific department is indirect expenses margin expenses departmental expenses direct expenses Question 14 The following financial information was summarized from the accounting records of Train Corporation for the current year ended December 31: Rails Division Locomotive Division Cost of goods sold \$ 47,200 \$30,720 Direct operating expenses 27,200 20,040 Sales 108,000 Corporate Total 78,000 Interest expense \$ 2,040 General overhead 18,160 Income tax 4,700 The income from operations for the Rails Division is \$60,800 \$33,600 \$8,700 \$21,150 Question 15 The profit margin for Central Division is 20% and the investment turnover is 2.8. What is the rate of return on investment for Central Division? 20% 56% 14% 7.1% Question 16 “Tom’s Tool Factory is an investment center and is responsible for all of its net income and the use of its assets. This year, the invested assets totaled \$475,000, and net income was \$275,000. What is the rate of return on assets?” 57.9% 172.3% 5.0% 115.0\$ Question 17 The amount of increase or decrease in cost that is expected from a particular course of action as compared with an alternative is period cost product cost differential cost discretionary cost Question 18 The condensed income statement for a Fletcher Inc. for the past year is as follows: Product F Sales G H Total \$300,000 \$210,000 \$340,000 \$850,000 Costs: Variable costs \$180,000 \$180,000 \$220,000 \$590,000 Fixed costs 50,000 50,000 40,000 140,000 Total costs \$230,000 \$230,000 \$260,000 \$730,000 Income (loss) \$ 70,000 \$ (20,000) \$ 80,000 \$120,000 Management is considering the discontinuance of the manufacture and sale of Product G at the beginning of the current year. The discontinuance would have no effect on the total fixed costs and expenses or on the sales of Products F and H. What is the amount of change in net income for the current year that will result from the discontinuance of Product G? \$20,000 increase \$30,000 increase \$20,000 decrease \$30,000 decrease Question 19 “Sage Company is operating at 90% of capacity and is currently purchasing a part used in its manufacturing operations for \$15 per unit. The unit cost for the business to make the part is \$20, including fixed costs, and \$11, not including fixed costs. If 30,000 units of the part are normally purchased during the year but could be manufactured using unused capacity, what would be the amount of differential cost increase or decrease from making the part rather than purchasing it?” “\$150,000 cost increase” “\$120,000 cost decrease” “\$150,000 cost increase” “\$120,000 cost increase” Question 20 Yasmin Co. can further process Product B to produce Product C. Product B is currently selling for \$30 per pound and costs \$28 per pound to produce. Product C would sell for \$55 per pound and would require an additional cost of \$31 per pound to produce. What is the differential cost of producing Product C? \$30 per pound \$55 per pound \$28 per pound \$31 per pound Question 21 “Delaney Company is considering replacing equipment which originally cost \$600,000 and which has \$420,000 accumulated depreciation to date. A new machine will cost \$790,000 and the old equipment can be sold for \$8,000. What is the sunk cost in this situation?” “\$172,000” “\$180,000” “\$188,000” “\$290,000” Question 22 “Lara Technologies is considering a cash outlay of \$250,000 for the purchase of land, which it could lease out for \$35,000 per year. If alternative investments are available that yield a 12% return, the opportunity cost of the purchase of the land is” “\$35,000” “\$30,000” “\$250,000” “\$4,200” Question 23 “Heston and Burton, CPA’s, currently work a five-day week. They estimate that net income for the firm would increase by \$75,000 annually if they worked an additional day each month. The cost associated with the decision to continue the practice of a five-day work week is an example of a(n)” differential revenue sunk cost differential income opportunity cost Question 24 “Nighthawk Inc. is considering disposing of a machine with a book value of \$22,500 and an estimated remaining life of three years. The old machine can be sold for \$6,250. A new machine with a purchase price of \$68,750 is being considered as a replacement. It will have a useful life of three years and no residual value. It is estimated that the annual variable manufacturing costs will be reduced from \$43,750 to \$20,000 if the new machine is purchased. The net differential increase or decrease in cost for the entire three years for the new equipment is” “\$8,750 increase” “\$31,250 decrease” “\$8,750 decrease” “\$2,925 decrease” Question 25 “Rowan Quinn Company manufactures kitchen appliances. Currently, it is manufacturing one of its components at a variable cost of \$40 and fixed costs of \$15 per unit. An outside provider of this component has offered to sell Rowan Quinn the component for \$45. Determine the best plan and calculate the savings.” \$5 savings per unit if manufactured \$5 savings per unit if purchased \$10 savings per unit if manufactured \$15 savings per unit if purchased Save and Submit Click Save and Submit to save and submit. Click Save All Answers to save all answers. Save and Submit 1 Bottom of Form _3447894_1 _3447894_1

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