Misc. Accounting Questions

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62. Exhibit 17-4

The following information is provided for Fort Myers Company:

2014 2015

Cost of goods sold $ 8,000 $ 9,000

Cash collected:

On 2014 sales 4,000 5,000

On 2015 sales 2,000

Sales 10,000 12,000

Fort Myers used the installment sales method.

Refer to Exhibit 17-4. How much gross profit did Fort Myers Company report in 2014?

A. $ 800

B. $2,000

C. $3,200

D. $4,000

63. Exhibit 17-4

The following information is provided for Fort Myers Company:

2014 2015

Cost of goods sold $ 8,000 $ 9,000

Cash collected:

On 2014 sales 4,000 5,000

On 2015 sales 2,000

Sales 10,000 12,000

Fort Myers used the installment sales method.

Refer to Exhibit 17-4. How much gross profit did Fort Myers Company report in 2015?

A. $1,300

B. $1,500

C. $1,700

D. $2,000

64. Exhibit 17-4

The following information is provided for Fort Myers Company:

2014 2015

Cost of goods sold $ 8,000 $ 9,000

Cash collected:

On 2014 sales 4,000 5,000

On 2015 sales 2,000

Sales 10,000 12,000

Fort Myers used the installment sales method.

Refer to Exhibit 17-4. How much deferred gross profit is still on the books at the end of 2015?

A. $ 0

B. $2,500

C. $2,700

D. $3,000

50. Exhibit 17-2

The following information relates to a project of the Cumberland Construction Company:

2014 2015 2016

Construction costs incurred $136,000 $546,500 $200,000

Estimated costs to complete 714,000 227,500 —

The contract price was $1,000,000. Cumberland used the percentage-of-completion method of revenue recognition.

Refer to Exhibit 17-2. What amount of gross profit was recognized in 2014?

A. $150,000

B. $ 28,571

C. $ 24,000

D. $ 20,400

51. Exhibit 17-2

The following information relates to a project of the Cumberland Construction Company:

2014 2015 2016

Construction costs incurred $136,000 $546,500 $200,000

Estimated costs to complete 714,000 227,500 —

The contract price was $1,000,000. Cumberland used the percentage-of-completion method of revenue recognition.

Refer to Exhibit 17-2. What amount of gross profit was recognized in 2016?

A. $ 29,375

B. $ 50,000

C. $117,500

D. $150,000

42. Exhibit 17-1

In 2014, Omega Construction began work on a contract with a price of $850,000 and estimated costs of $595,000. Data for each year of the contract are as follows:

2014 2015 2016

Costs incurred during the year $238,000 $319,600 $105,000

Estimated costs to complete 357,000 139,400 -0-

Partial billings 260,000 210,000 380,000

Collections 240,000 200,000 410,000

Refer to Exhibit 17-1. Under the percentage-of-completion method of revenue recognition, the net amount reported for construction in progress inventory at the end of 2015 would be

A. $ 87,600

B. $189,600

C. $210,000

D. $312,000

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Misc. Accounting Questions

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1. Value-added costs equal standard quantity times
non-value-added costs
currently attainable standards
standard price
actual price

2. As a general rule, an investigation of a variance should be undertaken only if the
anticipated benefits are greater than zero
anticipated benefits are greater than the expected costs
variance is negative
variance is positive

3. Which of the following statements is true regarding a long-range quality report?
This report measures trends of quality costs over time
This report measures interim progress towards the zero-defect goal.
This report measures actual costs of quality compared to budgeted costs of quality for a period of time.
This report measures actual costs of quality versus what quality costs would be at an ideal or targeted zero-defect standard

4. Which of the following equations measures the total budget variance?
AQ ? (AP – SP)
SP ? (AQ – SQ)
SQ ? (AP – SP)
(AQ ? AP) – (SQ ? SP)

5. An activity output measure is:
the number of outputs from a process
the cost of the activity measured
the effort expended to identify root causes
the number of times an activity is performed

6. An example of a prevention cost is:
field testing
quality audits
reinspection
repair costs

7. Which of the following is an example of a non-value-added manufacturing activity?
assembly
scheduling
finishing
assembling

8. A quality report that compares current actual quality costs with budgeted quality costs for the future is the:
interim quality performance report
one-year quality performance report
multiple-period quality trend report
long-range quality performance report

9. The number of units that can be produced in a given period of time is called:
velocity
cycle time
turnover
efficiency

10. Which of the following is a value-added activity?
moving
inspection
processing
waiting

11. Price/rate variances focus on the differences between
actual and standard inputs multiplied by actual prices.
actual and standard unit prices of an input multiplied by the actual quantity of inputs
actual and standard inputs multiplied by standard prices
actual and standard unit prices of an input multiplied by the budgeted quantity of inputs

12. For non-value-added activities that are unnecessary, the standard quantity is:
one
zero
actual quantity minus standard price
actual quantity plus standard price

13. The costs of a consumer complaint department are:
external failure costs
internal failure costs
appraisal costs
prevention costs

14. At the beginning of 2011, Peters Company installed a JIT purchasing and manufacturing system. The following information has been gathered about one of the company’s products:
Theoretical annual capacity 2,000
Actual production 1,800
Production hours available 500
Actual conversion cost per hour $7
1) The theoretical velocity per hour is:
2) What is the ideal conversion cost per unit?
15. Bender Corporation produced 100 units of Product AA. The total standard and actual costs for materials and direct labor for the 100 units of Product AA are as follows:
Materials: Standard Actual
Standard: 200 pounds at $3.00 per pound $600
Actual: 220 pounds at $2.85 per pound $627

Direct labor:
Standard: 400 hours at $15.00 per hour 6,000
Actual: 368 hours at $16.50 per hour 6,072
1)What is the material usage variance for Bender Corporation?
2) What is the material price variance for Bender Corporation?
16. At the beginning of the year, Grant Company initiated a quality improvement program. The program was successful in reducing scrap and rework costs. To help assess the impact of the quality improvement program, the following data were collected for the current and preceding years:
Preceding Year Current Year
Sales $3,000,000 $3,000,000
Quality training 3,000 4,500
Material inspections 7,500 12,000
Scrap 60,000 45,000
Rework 120,000 75,000
Product inspection 15,000 30,000
Product warranty 105,000 82,500
1)For the current year, prevention costs are what percentage of sales?
2) For the current year, appraisal costs are what percentage of sales?
3) For the current year, internal failure costs are what % of sales?
4)For the current year, external failure cost are what % of sales?

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