Finance Mid-term Exam Questions
Chapter 201. Web revenue may be elevated or decreased by altering the gross sales combine.2. If an organization has restricted machine hours obtainable for manufacturing, it's usually extra worthwhile to provide and promote the product with the very best contribution margin per machine hour.three. In response to the idea of constraints, an organization should determine its constraints and discover methods to cut back or eradicate them.four. Price construction refers back to the relative proportion of product versus interval prices that an organization incurs.5. The distinction between absorption costing and variable costing is the therapy of fastened manufacturing overhead.6. Manufacturing price per unit might be larger below variable costing than below absorption costing.7. For Buffalo Co., at a gross sales degree of 5,000 items, gross sales is $75,000, variable bills complete $50,000, and glued bills are $21,000. What's the contribution margin per unit?a. $four.20 c. $10.00b. $5.00 d. $15.008. For Pierce Firm, gross sales is $500,000, variable bills are $330,000, and glued bills are $140,000. Pierce’s contribution margin ratio isa. 10%. c. 28%.b. 34%. d. 66%.9. Gross sales combine isa. the relative share during which an organization sells its a number of merchandise.b. the development of gross sales over current intervals.c. the combination of variable and glued bills in relation to gross sales.d. a measure of leverage utilized by the corporate.10. A shift from low-margin gross sales to high-margin salesa. might improve web revenue, despite the fact that there's a decline in complete items bought.b. will at all times improve web revenue.c. will at all times lower web revenue.d. will at all times lower items bought.11. Decreasing reliance on human employees and as an alternative investing closely in computer systems and on-line know-how willa. scale back fastened prices and improve variable prices.b. scale back variable prices and improve fastened prices.c. haven't any impact on the relative proportion of fastened and variable prices.d. make the corporate much less inclined to financial swings.12. A price construction which depends extra closely on fastened prices makes the companya. extra delicate to adjustments in gross sales income.b. much less delicate to adjustments in gross sales income.c. both kind of delicate to adjustments in gross sales income, relying on different components.d. have a decrease break-even level.13. When an organization assigns the prices of direct supplies, direct labor, and each variable and glued manufacturing overhead to merchandise, that firm is usinga. operations costing. c. absorption costing.b. variable costing. d. product costing.14. Sprinkle Co. sells its product for $20 per unit. Throughout 2013, it produced 60,000 items and bought 50,000 items (there was no starting stock). Prices per unit are: direct supplies $5, direct labor $three, and variable overhead $1. Mounted prices are: $240,000 manufacturing overhead, and $30,000 promoting and administrative bills. The per unit manufacturing price below absorption costing isa. $eight. c. $13.b. $9. d. $14.15. Sprinkle Co. sells its product for $20 per unit. Throughout 2013, it produced 60,000 items and bought 50,000 items (there was no starting stock). Prices per unit are: direct supplies $5, direct labor $three, and variable overhead $1. Mounted prices are: $240,000 manufacturing overhead, and $30,000 promoting and administrative bills. The per unit manufacturing price below variable costing isa. $eight. c. $13.b. $9. d. $14.16. The manufacturing price per unit for absorption costing isa. often, however not at all times, larger than manufacturing price per unit for variable costing.b. often, however not at all times, decrease than manufacturing price per unit for variable costing.c. at all times larger than manufacturing price per unit for variable costing.d. at all times decrease than manufacturing price per unit for variable costing.17. The one major distinction between variable and absorption costing is that undera. variable costing, corporations cost the fastened manufacturing overhead as an expense within the present interval.b. absorption costing, corporations cost the fastened manufacturing overhead as an expense within the present interval.c. variable costing, corporations cost the variable manufacturing overhead as an expense within the present interval.d. absorption costing, corporations cost the variable manufacturing overhead as an expense within the present interval.18. Capitol Manufacturing sells three,000 items of Product A yearly, and seven,000 items of Product B yearly. The gross sales combine for Product A isa. 30%. c. 70%.b. 43%. d. Can not decide from info given.Chapter 2119. In incremental evaluation, complete variable prices will at all times change below various programs of motion, and complete fastened prices will at all times stay fixed.20. In incremental evaluation, complete fastened prices will at all times stay fixed below various programs of motion.21. A chance price is the potential profit obtained through the use of sources in an alternate plan of action.22. The essential choice rule in a promote or course of additional choice is: course of additional if the incremental income from processing exceeds the incremental processing prices.23. From a quantitative standpoint, a section needs to be eradicated if its contribution margin is lower than the fastened prices that may be eradicated.24. A income that differs between options and makes a distinction in decision-making is known as a(n)a. gross sales income. c. incremental income.b. irrelevant income. d. unavoidable income.25. Alvarez Firm is contemplating the next options:Various A Various B• Revenues $50,000 $60,000• Variable prices 30,000 30,000• Mounted prices 10,000 16,000What's the incremental revenue?a. $10,000 c. $0b. $6,000 d. $four,00026. Which of the next is an irrelevant price?a. An avoidable price c. An incremental costb. A sunk price d. A chance price27. Related prices are alwaysa. fastened prices. c. variable prices.b. sunk prices d. avoidable prices.28. Miley, Inc. has extra capability. Beneath what conditions ought to the corporate settle for a particular order for lower than the present promoting worth?a. Neverb. When extra fastened prices have to be incurred to accommodate the orderc. When the corporate thinks it might use the cheaper supplies with out the client's knowledged. When incremental revenues exceed incremental prices29. A manufacturing facility is working at lower than 100% capability. Potential extra enterprise is not going to deplete the rest of the plant capability. Given the next listing of prices, which one needs to be ignored in a choice to provide extra items of product?a. Variable promoting expensesb. Mounted manufacturing facility overheadc. Direct labord. Contribution margin of extra items30. A company’s unit prices primarily based on 100,000 items are:• Variable prices $75• Mounted prices 30• The traditional unit gross sales worth per unit is $165.A particular order from a international firm has been obtained for five,000 items at $135 a unit. To be able to fulfill the order, three,000 items of normal gross sales must be foregone.The chance price related to this order isa. $225,000. c. $495,000.b. $270,000. d. $405,000.31. Within the evaluation in regards to the acceptance or rejection of a particular order, which objects are related?a. Variable prices solely c. Variable prices and glued costsb. Mounted prices solely d. Variable prices and unavoidable prices32. What of the next wouldn't be related in a make-or-buy choice?a. Alternative prices c. Unavoidable variable costsb. Avoidable fastened price d. Incremental fastened prices33. Max Firm makes use of 20,000 items of Half A in producing its merchandise. A provider gives to make Half A for $7. Max Firm has related prices of $eight a unit to fabricate Half A. If there's extra capability, the chance price of shopping for Half A from the provider isa. $zero. c. $20,000.b. $140,000. d. $160,000.34. Prices incurred earlier than the split-off level space. sunk prices. c. incremental prices.b. related prices. d. alternative prices.35. The purpose within the manufacturing course of when joint merchandise are readily identifiable is thea. separation level. c. split-off level.b. frequent level. d. break-even level.36. What's going to probably happen if an organization eliminates an unprofitable section when a portion of fastened prices are unavoidable?a. All bills of the eradicated section might be eradicated.b. Web revenue will lower.c. Web revenue will improve.d. The corporate's variable prices will improve.37. If an unprofitable section is eliminateda. it's unimaginable for web revenue to lower.b. fastened bills allotted to the eradicated section might be eradicated.c. variable bills of the eradicated section might be eradicated.d. it's unimaginable for web revenue to extend.Chapter 2238. In a aggressive setting, the corporate should set a goal price and a goal promoting worth.39. The price-plus pricing strategy establishes a value base and provides a markup to this base to find out a goal promoting worth.40. Gross sales quantity performs a big function in figuring out per unit prices within the cost-plus pricing strategy.41. In time-and-material pricing, the fabric cost is predicated on the price of direct supplies used and a cloth loading cost for associated overhead prices.42. A negotiated switch worth needs to be used when an outdoor marketplace for the products doesn't exist.43. The absorption-cost strategy is in step with usually accepted accounting ideas as a result of it defines the fee base because the manufacturing price.44. Usually, costs are set by thea. clients. c. aggressive market.b. largest competitor. d. promoting firm.45. All the following are appropriate statements concerning the goal worth besides ita. is the worth the corporate believes would place it within the optimum place for its audience.b. is used to find out a product's goal price.c. is set after the corporate has recognized its market and does market analysis.d. is set after the corporate units its desired revenue quantity.46. Goal price is comprised ofa. variable and glued manufacturing prices solely.b. variable manufacturing and promoting and administrative prices solely.c. complete manufacturing and promoting and administrative prices.d. fastened manufacturing and promoting and administrative prices solely.47. Bond Co. is utilizing the goal price strategy on a brand new product. Info gathered to this point reveals:• Anticipated annual gross sales 400,000 units• Desired revenue per unit $zero.35• Goal price $168,000What's the goal promoting worth per unit?a. $zero.42 c. $zero.70b. $zero.35 d. $zero.7748. In cost-plus pricing, the markup consists ofa. manufacturing prices.b. desired ROI.c. promoting and administrative prices.d. complete price and desired ROI.49. Bellingham Swimsuit Co. has obtained a cargo of fits that price $200 every. If the corporate makes use of cost-plus pricing and applies a markup share of 60%, what's the gross sales worth per swimsuit?a. $333 c. $320b. $280 d. $50050. Why does the unit promoting worth improve when anticipated quantity is decrease than budgeted quantity?a. Variable prices and glued prices must be unfold over fewer items.b. Mounted prices and desired ROI must be unfold over fewer items.c. Variable prices and desired ROI must be unfold over fewer items.d. Mounted prices solely must be unfold over fewer items.51. In time-and-material pricing, a cloth loading cost covers the entire following excepta. buying prices.b. associated overhead.c. desired revenue margin.d. All of those are lined.52. The labor cost per hour in time-and-material pricing consists of the entire following excepta. an allowance for a desired revenue.b. costs for labor loading.c. promoting and administrative prices.d. overhead prices.53. Dudly Drafting Companies makes use of a 45% materials loading cost and a labor charge of $20 per hour. How a lot might be charged on a job that requires three.5 hours of labor and $40 of supplies?a. $128 c. $110b. $88 d. $13354. All the following are approaches for figuring out a switch worth besides thea. cost-based strategy.b. market-based strategy.c. negotiated strategy.d. time-and-material strategy.55. The switch worth strategy that's typically thought of the very best strategy as a result of it usually gives the right financial incentives is thea. cost-based strategy.b. market-based strategy.c. negotiated worth strategy.d. time-and-material pricing strategy.56. The switch worth strategy that may consequence within the largest contribution margin to the shopping for division is thea. cost-based strategy.b. market-based strategy.c. negotiated worth strategy.d. time-and-material pricing strategy.57. Transfers between divisions situated in nations with totally different tax ratesa. simplify the willpower of the suitable switch worth.b. are reducing in quantity as extra corporations "localize" operations.c. encourage corporations to report extra revenue in nations with low tax charges.d. all of those are appropriate.Chapter 2358. A advantage of budgeting is that it gives particular targets for evaluating efficiency.59. A finances generally is a technique of speaking an organization's targets to exterior events.60. The finances itself and the administration of the finances are the accountability of the accounting division.61. The circulation of enter information for budgeting needs to be from the very best ranges of accountability to the bottom.62. Budgets can have a constructive or detrimental impact on human conduct relying on the way during which the finances is developed and administered.63. The finances is developed throughout the framework of a gross sales forecast.64. The grasp finances displays administration's long-term plans encompassing 5 years or extra.65. If a month-to-month money finances is ready correctly, there'll by no means be a money deficiency on the finish of any month.66. If budgets are to be efficient, there should bea. a historical past of profitable operations.b. impartial verification of finances targets.c. an organizational construction with clearly outlined strains of authority and accountability.d. extra plant capability.67. An unrealistic finances is extra more likely to consequence when ita. has been developed in a high down vogue.b. has been developed in a backside up vogue.c. has been developed by all ranges of administration.d. is developed with efficiency appraisal usages in thoughts.68. A grasp finances consists ofa. an interrelated long-term plan and working budgets.b. monetary budgets and a long-term plan.c. interrelated monetary budgets and working budgets.d. all of the accounting journals and ledgers utilized by an organization.69. The place to begin in making ready a grasp finances is the preparation of thea. manufacturing finances.b. gross sales finances.c. buying finances.d. personnel finances.70. Doe Manufacturing plans to promote 6,000 purple garden chairs throughout Could, 5,700 in June, and 6,000 throughout July. The corporate retains 15% of the subsequent month’s gross sales as ending stock. What number of items ought to Doe produce throughout June?a. 5,745 c. 6,600b. 5,655 d. Not sufficient info to find out.71. Lorie Nursery plans to promote 320 potted crops throughout April and 240 items in Could. Lorie Nursery retains 15% of the subsequent month’s gross sales as ending stock. What number of items ought to Lorie Nursery produce throughout April?a. 308 c. 332b. 320 d. 35672. Pell Manufacturing is making ready its direct labor finances for Could. Projections for the month are that 33,400 items are to be produced and that direct labor time is three hours per unit. If the labor price per hour is $12, what's the complete budgeted direct labor price for Could?a. 1,159,200 c. 1,180,800b. 1,202,400 d. 1,296,00073. The money finances reflectsa. all revenues and all bills for a interval.b. anticipated money receipts and money disbursements from all sources.c. all of the objects that seem on a budgeted revenue assertion.d. all of the objects that seem on a budgeted steadiness sheet.74. Which one of many following objects would by no means seem on a money finances?a. Workplace salaries expenseb. Curiosity expensec. Depreciation expensed. Journey expense75. The first advantages of budgeting embody the entire following besides ita. requires solely high administration to plan forward and formalize their future targets.b. gives particular targets for evaluating efficiency.c. creates an early warning system for potential issues.d. motivates personnel all through the group.Chapter 2476. A static finances is one that's geared to at least one degree of exercise.77. A static finances is modified solely when precise exercise is totally different from the extent of exercise anticipated.78. A versatile finances is a sequence of static budgets at totally different ranges of actions.79. Versatile budgeting depends on the belief that unit variable prices will stay fixed throughout the related vary of exercise.80. Administration by exception implies that administration will examine areas the place precise outcomes differ from deliberate outcomes if the objects are materials and controllable.81. A distinction needs to be made between controllable and noncontrollable prices when reporting info below accountability accounting.82. Extra prices change into controllable as one strikes down to every decrease degree of managerial accountability.83. Prime administration's response to a distinction between budgeted and precise gross sales typically relies upon ona. whether or not the distinction is favorable or unfavorable.b. whether or not administration anticipated the distinction.c. the materiality of the distinction.d. the persona of the highest managers.84. What's the major distinction between a static finances and a versatile finances?a. The static finances comprises solely fastened prices, whereas the versatile finances comprises solely variable prices.b. The static finances is ready for a single degree of exercise, whereas a versatile finances is adjusted for various exercise ranges.c. The static finances is constructed utilizing enter from solely higher degree administration, whereas a versatile finances obtains enter from all ranges of administration.d. The static finances is ready just for items produced, whereas a versatile finances displays the variety of items bought.85. What budgeted quantities seem on the versatile finances?a. Authentic budgeted quantities on the static finances exercise levelb. Precise prices for the budgeted exercise levelc. Budgeted quantities for the precise exercise degree achievedd. Precise prices for the estimated exercise degree86. Beneath administration by exception, which variations between deliberate and precise outcomes needs to be investigated?a. Materials and noncontrollableb. Controllable and noncontrollablec. Materials and controllabled. All variations needs to be investigated87. Within the Dichter Co., oblique labor is budgeted for $72,000 and manufacturing facility supervision is budgeted for $24,000 at regular capability of 160,000 direct labor hours. If 180,000 direct labor hours are labored, versatile finances complete for these prices isa. $ 96,000 c. $108,000b. $105,000 d. $ 99,00088. A price is taken into account controllable at a given degree of managerial accountability ifa. the supervisor has the ability to incur the fee inside a given time interval.b. the fee has not exceeded the finances quantity within the grasp finances.c. it's a variable price, however it's uncontrollable if it's a fastened price.d. it adjustments in magnitude in a versatile finances.89. As one strikes as much as every larger degree of managerial accountability,a. fewer prices are controllable.b. the accountability for price incurrence diminishes.c. a higher variety of prices are controllable.d. efficiency analysis turns into much less essential.90. Administration by exceptiona. is only at high ranges of administration.b. may be carried out at every degree of accountability inside a corporation.c. can solely be utilized when evaluating precise outcomes with the grasp finances.d. is the other of aim congruence.91. The linens division of a big division retailer isa. not a accountability heart.b. a revenue heart.c. a value heart.d. an funding heart.92. Trails and Paths, Inc. had common working belongings of $6,000,000 and gross sales of $three,000,000 in 2013. If the controllable margin was $600,000, the ROI wasa. 50% c. 40%b. 20% d. 10%93. A distinguishing attribute of an funding heart is thata. revenues are generated by promoting and shopping for shares and bonds.b. curiosity income is the foremost supply of revenues.c. the profitability of the middle is said to the funds invested within the heart.d. it's a accountability heart which solely generates revenues.94. Which of the next will trigger a rise in ROI?a. A rise in variable costsb. A rise in common working assetsc. A rise in salesd. A rise in controllable fastened costsChapter 2595. Customary price is the business common price for a selected merchandise.96. Precise prices that modify from customary prices at all times point out inefficiencies.97. In growing a regular price for direct supplies, a worth issue and a amount issue have to be thought of.98. A variance is the distinction between precise prices and customary prices.99. If precise prices are lower than customary prices, the variance is favorable.100. The entire overhead variance is the distinction between precise overhead prices and overhead prices utilized to work finished.101. What's a regular price?a. The entire variety of items instances the budgeted quantity expectedb. Any quantity that seems on a budgetc. The entire quantity that seems on the finances for product costsd. The quantity administration thinks needs to be incurred to provide a very good or service102. The distinction between a finances and a regular is thata. a finances expresses what prices have been, whereas a regular expresses what prices needs to be.b. a finances expresses administration's plans, whereas a regular displays what truly occurred.c. a finances expresses a complete quantity, whereas a regular expresses a unit quantity.d. requirements are excluded from the fee accounting system, whereas budgets are usually integrated into the fee accounting system.103. Marburg Co. expects direct supplies price of $6 per unit for 100,000 items (a complete of $600,000 of direct supplies prices). Marburg’s customary direct supplies price and budgeted direct supplies price isStandard Budgeteda. $6 per unit $600,000 per yearb. $6 per unit $6 per unitc. $600,000 per yr $6 per unitd. $600,000 per yr $600,000 per yr104. Which of the next statements about customary prices is fake?a. Correctly set requirements ought to promote effectivity.b. Customary prices facilitate administration planning.c. Requirements shouldn't be utilized in "administration by exception."d. Customary prices can simplify the costing of inventories.105. An unfavorable supplies amount variance would happen ifa. extra supplies have been bought than have been used.b. precise kilos of supplies used have been lower than the usual kilos allowed.c. precise labor hours used have been higher than the usual labor hours allowed.d. precise kilos of supplies used have been higher than the usual kilos allowed.106. Which of the next statements is true?a. Variances are the variations between complete precise prices and complete customary prices.b. When precise prices exceed customary prices, the variance is favorable.c. An unfavorable variance outcomes when precise prices are reducing however requirements are usually not modified.d. All the above are true.107. If precise direct supplies prices are higher than customary direct supplies prices, it means thata. precise prices have been calculated incorrectly.b. the precise unit worth of direct supplies was higher than the usual unit worth of direct supplies.c. the precise unit worth of uncooked supplies or the precise portions of uncooked supplies used was higher than the usual unit worth or customary portions of uncooked supplies anticipated.d. the buying agent or the manufacturing foreman is inefficient.108. If precise prices are higher than customary prices, there's a(n)a. regular variance.b. unfavorable variance.c. favorable variance.d. error within the accounting system.109. A complete supplies variance is analyzed in phrases ofa. worth and amount variances.b. purchase and promote variances.c. amount and high quality variances.d. tight and free variances.110. Labor effectivity is measured by thea. supplies amount variance.b. complete labor variance.c. labor amount variance.d. labor charge variance.111. An unfavorable labor amount variance could also be brought on bya. paying employees larger wages than anticipated.b. misallocation of employees.c. employee fatigue or carelessness.d. larger pay charges mandated by union contracts.112. Dillon has a regular of two hours of labor per unit, at $12 per hour. In producing 2,000 items, Dillon used three,850 hours of labor at a complete price of $46,970. Dillon's labor worth variance isa. $770 U.b. $800 U.c. $1,zero30 F.d. $1,930 F.113. Dillon has a regular of two hours of labor per unit, at $12 per hour. In producing 2,000 items, Dillon used three,850 hours of labor at a complete price of $46,970. Dillon's labor amount variance isa. $770 U. c. $770 F.b. $1,800 F. d. $1,930 F.114. The balanced scorecarda. incorporates monetary and nonfinancial measures in an built-in system.b. is predicated on monetary measures.c. is predicated on nonfinancial measures.d. doesn't use monetary or nonfinancial measures.115. Which isn't one of many 4 mostly used views on a balanced scorecard?a. The monetary perspectiveb. The client perspectivec. The exterior course of perspectived. The training and progress perspectiveChapter 26116. Capital budgeting selections often contain massive investments and infrequently have a major influence on an organization's future profitability.117. The money payback technique is regularly used as a screening software nevertheless it doesn't think about the profitability of a challenge.118. The profitability index permits comparability of the relative desirability of initiatives that require differing preliminary investments.119. Sensitivity evaluation makes use of various final result estimates to get a way of the variability amongst potential returns.120. A post-audit is an analysis of how properly a challenge's precise efficiency matches the projections made when the challenge was proposed.121. A serious benefit of the annual charge of return technique is that it considers the time worth of cash.122. Capital budgeting is the processa. utilized in promote or course of additional selections.b. of figuring out how a lot capital inventory to concern.c. of constructing capital expenditure selections.d. of eliminating unprofitable product strains.123. The payback interval is usually in comparison with an asset’sa. estimated helpful life.b. guarantee interval.c. web current worth.d. inner charge of return.124. Which of the next ignores the time worth of cash?a. Inner charge of returnb. Profitability indexc. Web current valued. Money payback125. Brady Corp. is contemplating the acquisition of a bit of apparatus that prices $20,000. Projected web annual money flows over the project’s life are:Yr Web Annual Money Flow1. $ three,0002. eight,0003. 15,0004. 9,000The money payback interval isb. 2.29 years c. 2.60 years.c. 2.40 years. d. 2.31 years.126. The money payback techniquea. considers money flows over the lifetime of a challenge.b. can't be used with uneven money flows.c. is superior to the web current worth technique.d. could also be helpful as an preliminary screening machine.127. An organization's price of capital refers to thea. charge the corporate should pay to acquire funds from collectors and stockholders.b. complete price of a capital challenge.c. price of printing and registering frequent inventory shares.d. charge of return earned on frequent inventory.128. A challenge with a zero web current worth signifies that it isa. unacceptable.b. worthwhile.c. acceptable.d. going to have a suitable money payback interval.129. The profitability indexa. doesn't keep in mind the discounted money flows.b. is calculated by dividing complete money flows by the preliminary funding.c. permits comparability of the relative desirability of initiatives that require differing preliminary investments.d. won't ever be higher than 1.130. A capital budgeting technique that takes into consideration the time worth of cash is thea. annual charge of return technique.b. return on stockholders' fairness technique.c. money payback method.d. inner charge of return technique.