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PROJ 598 Contract and Procurement Week 8 Final Exam Complete Answer

PROJ 598 Contract and Procurement Week 8 Final Exam Complete A+ Answer

PROJ 598 Contract and Procurement Week 8 Final Exam Complete A+ Answer

Set 1

DeVry PROJ 598 Week 8 Final Exam
Part 1
1. (TCO A) All the below are tools and techniques of contract procurement, except (Points : 5)
Bidder’s conferences, negotiations, and advertising.

Analytical techniques, expert judgments, and evaluation techniques.

Estimates, bidder’s conferences, and evaluation techniques.

Negotiations, make-or-buy decisions, and advertising.

Question 2. 2. (TCO B) Proper selection criteria are critical for a successful project. All of the below would be considered good selection criteria for a buyer to use to select a seller, except (Points : 5)
Managerial approach of seller, references of seller, and ability of seller to make a reasonable make-or-buy decision.

Past work done by seller, intellectual property rights, and risk associated with a given seller.

Technical capability of seller, understanding of work by seller, and business type of seller.

Financial capacity of seller, overall cost, and warranty offered by seller.

(TCO A) Why are the project scope statement and WBS inputs of plan procurement?

(TCO B) List and describe five source selection criteria typically used in procurement management. For each, explain why this criterion is important for a buyer to use to select a given seller. (Points: 12)

(TCO C) Which has more cost risk to the seller, a fixed-price contract or a cost-reimbursable contract? Why? How might that risk be mitigated?

(TCO D) Describe the typical work relationship between a project manager and a contract manager. (Points : 12)

(TCO E) You are writing procurement SOW for an RFP. What items are you likely to include in this SOW? (Points : 12)

(TCO F) You have received back the bid proposals from prospective sellers. You are ready for source selection. What is source selection, and why is it important? (Points : 12)

Part 2

TCO G) One of the inputs to contract closeout is completion of work. What does it mean? (Points : 12)

(TCO A) In industry, there are four processes one follows in the procurement area of project management. Describe and explain these four processes in the procurement management process from the buyer perspective. (Points : 20)

(TCO C) Compare and contrast a firm fixed-price contract to a time and materials contract. When would each be appropriate for a given project? (Points : 20)

(TCO D) Compare and contrast an RFP and an RFI. When would each best be used in procuring goods or services? (Points : 20)

(TCO E) Describe the buyer’s plan procurement process of the contract management process as it relates to creating a RPF. Give an example of the activity that takes place in each step. (Points : 20)

Part 3:

TCO H) Under U.S. and international law, all contracts must contain five elements or satisfy five requirements. List and explain each of these five elements. (Points : 20)

2) Describe and compare and contrast the buyer’s and seller’s actions in the control procurement phase of the contract management process. Give an example for each. List and briefly describe the three tools and techniques used for bid or no-bid decision making. (Points : 20)

set 2

PROJ 598 Contract and Procurement Week 8 Final Exam Set 2 Answer

Question 1. 1. (TCO A) All the below are outputs of plan procurement except (Points : 5)
change requests, SOW, and source selection criteria.
make-or-buy decisions, procurement management plans, and contracts.
procurement documents, SOW, and document updates.
source selection criteria, procurement management plans, and make-or-buy decisions.

Question 2. 2. (TCO B) Proper selection criteria are critical for a successful project. All of the below would be considered good selection criteria for a buyer to use to select a seller, except (Points : 5)
managerial approach of seller, references of seller, and ability of seller to make a reasonable make-or-buy decision.
past work done by seller, intellectual property rights, and risk associated with a given seller.
technical capability of seller, understanding of work by seller, and business type of seller.
financial capacity of seller, overall cost, and warranty offered by seller.

Question 3. 3. (TCO A) What is the primary purpose of procurement planning? (Points : 8)

Question 4. 4. (TCO B) A seller’s financial capacity is often one of the buyer’s selection criteria. Why is this an important consideration for a buyer? (Points : 12)

Question 5. 5. (TCO C) From the viewpoint of the buyer, why are award fees and incentive fees important in contracts? (Points : 12)

Question 6. 6. (TCO D) Compare and contrast sole source and single source approaches to procurement. (Points : 12)

Question 7. 7. (TCO E) What is the purpose of creating a procurement SOW for an RFP? (Points : 12)

Question 8. 8. (TCO F) You are preparing for contract negotiations. To achieve your desired contract negotiation results, you need not only a strategy but also tactics and countertactics. Give an example of two tactics, and state why they help you achieve the desired result. (Points : 12)

Question 9. 9. (TCO G) There are many misconceptions regarding global contract management. Describe three such misconceptions, and describe the reality of actual global contracts. (Points : 12)

Page 2
Question 1. 1. (TCO A) According to the PMBOK® Guide, there are four processes in the procurement area. Describe and explain these four processes in the procurement management process from the buyer perspective.

Question 2. 2. (TCO B) You are a project manager at a bidder’s meeting. One of the potential sellers asks you a question concerning the project in the hallway leading to the meeting room. Can you answer this question for the seller? What would be your concern if you did answer the question?

Question 3. 3. (TCO C) Given the following, answer the below questions.

Question 4. 4. (TCO D) Compare and contrast an RFP and an RFI. When would each best be used in procuring goods or services?

Question 6. 6. (TCO G) Describe and compare and contrast the buyer’s and seller’s actions in the control procurement phase of the contract management process. Give an example for each.

Question 7. 7. (TCO F) “The side that does the most research and planning will often come out best in any negotiation.” Do you agree with this statement? Do you disagree with this statement? Defend your position with examples and other information.

Question 8. 8. (TCO H) What does the uniform commercial code (UCC) state regarding price and warranty? What if a price is not specified in an agreement? What if a price is specified in an agreement? Does the UCC modify the price? What about a warranty? What rights does the buyer have for a guarantee under the UCC? What protection is granted to the seller?

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PROJ 595 Project Risk Management Week 8 Final Exam

ACCT 553 Fed Taxes Mgmt Decisions Final Exam Complete A+ correct Answer

ACCT 553 Fed Taxes Mgmt Decisions Final Exam Complete A+ Answer

ACCT 553 Fed Taxes Mgmt Decisions Final Exam Complete A+ Answer

ACCT 553 Fed Taxes Mgmt Decisions Final Exam Complete A+ Answer

1. (TCO E) For federal tax purposes, income attributable to the direct efforts of the tax payer, such as salary, is classified as: (Points : 5)
portfolio income.
active income.
passive income.
None of the above

2. (TCO D) Which of the following is an example of a nontaxable like-kind exchange? (Points : 5)
An ice cream making machine for inventory of Rocky Road ice cream
Land for an office building
Office equipment for a computer
All of the above

3. (TCO H) Alex and Amy file a joint return for the 2012 tax year. Their adjusted gross income is $90,000. They had net investment income of $8,000. In 2012, they had the following interest expenses:
• Personal credit card interest: $5,000
• Home mortgage interest: $10,000
• Interest paid on qualified education loans: $2,000
• Investment interest (on loans used to buy stocks): $10,000
What is the interest deduction for Alex and Amy for the 2012 tax year? (Points : 5)
$8,000
$12,000
$20,000
$18,000

4. (TCO B) Unreimbursed expenses of employees are considered to be deductions: (Points : 5)
for AGI.
from AGI.
for or from AGI, depending on the type of expense.
None of the above

5. (TCO A) Which of the following expenditures is always an itemized deduction for individual taxpayers? (Points : 5)
Charitable contributions
State and local income taxes
Moving expenses
All of the above

6. (TCO E) Adam sold a piece of business equipment that had an adjusted basis to him of $50,000. In return for the equipment, Adam received $80,000 cash and a painting with a fair market value of $20,000 from the buyer. The buyer also assumed Adam’s $25,000 loan on the equipment. Adam paid $5,000 in selling expenses. What is the amount of Adam’s gain on the sale? (Points : 5)
$90,000
$125,000
$80,000
$70,000

7. (TCO I) Gary and Gerdy Gray purchased a home for $125,000 on September 15, 2010. On October 7, 2011 they were divorced, and as part of the divorce agreement, the home was transferred to Gerda, who sold the home on October 18, 2012 for $350,000. How much can Gerda exclude? (Points : 5)
$350,000
$250,000
$225,000
$0

8. (TCO I) Under the accrual method of accounting, expenses are generally accrued when: (Points : 5)
the expenses are actually incurred.
the taxpayer elects to take the deduction.
payment is made.
None of the above

9. (TCO D) Sean, a calendar year taxpayer, purchased stock on June 18, 2011 for $8,000. The stock became worthless on June 4, 2012. What is Sean’s loss in 2012? (Points : 5)
$8,000 short-term capital loss
No loss
$8,000 long-term capital loss
$8,000 itemized deduction for investments

10. (TCO A) Which of the following is a primary source of tax authority? (Points : 5)
Revenue ruling
Tax Court case
Temporary regulation
All of the above

11. (TCO F) A nonbusiness bad debt is deductible for tax purposes as a(n): (Points : 5)
short-term capital loss.
itemized deduction.
long-term capital loss.
ordinary business deduction.

12. (TCO A) The art of using existing tax laws to pay the least amount of tax legally possible is known as: (Points : 5)
tax evasion.
tax avoidance.
tax elusion.
None of the above

13. (TCO C) Which of the following items is not taxable? (Points : 5)
Interest on U.S. Treasury bills, notes, and bonds issued by an agency of the United States
Interest on federal income tax refund
Interest on New York State bonds
Discount income in installment payments received on notes bought at a discount

14. (TCO B) Under the terms of their divorce agreement executed in October 2011, Keith transferred Corporation M stock to his former wife, Karen, as a property settlement. At the time of the transfer, the stock had a basis to Keith of $20,000 and a fair market value of $50,000. What is the tax consequence of this transaction to Keith, and what is Karen’s basis in the Corporation M stock? (Points : 5)
Keith has a gain of $30,000; Karen’s basis is $20,000.
Keith has a gain of $30,000; Karen’s basis is $50,000.
Keith has no gain or loss; Karen’s basis is $20,000.
Keith has no gain or loss; Karen’s basis is $50,000.

15. (TCO G) During 2012, Edward East had wages of $10,000 and received unemployment compensation of $6,200 from the state. Edward is single and 45 years old. What is the amount of unemployment compensation to be included in his gross income? (Points : 5)
$0
$2,100
$4,200
$6,200

16. (TCO F) Hobby expenditures are deductible to the extent of: (Points : 5)
total individual gross income.
hobby gross income.
trade or business gross income.
nonbusiness gross income.

Page: 1 2

Essays

1. (TCO E) In 2012, Uriah Stone received the following payments:
• Interest on refund of federal income tax for 2011: $400
• Interest on award for personal injuries in 2009 automobile accident: $300
• Interest on municipal bonds: $1,500
• United States savings bonds interest (Series H): $1,000
What amount, if any, should Mr. Stone report as interest income on his 2012 tax return?

2. (TCO G) Would any of the following items be deductible on an individual’s income tax return? If so, would the item be deductible for or from AGI? Explain each item.
(a) Hobby expenditures of $2,000 in excess of hobby gross income
(b) $3,000 loss on the sale of a personal sailboat
(c) Interest of $8,000 on money borrowed to purchase tax-exempt securities (Points : 17)

3. (TCO F) Michael and Mary Mason sold for $380,000 in November of 2012 their residence that they had purchased in 2002 for $75,000. They made major capital improvements during their 10-year ownership totaling $25,000.
(a) What is their excluded gain? How much must they recognize?
(b) Suppose, instead, that the Masons sold their home for $720,000. They moved into a smaller house costing $220,000. What is their excluded gain? How much must they recognize? (Points : 17)

4. (TCO G) John Baron, a professional baseball player, raises Black Angus cattle under circumstances that would indicate that the activity is a hobby. His adjusted gross income for the year is $50,000, and he has $500 of other miscellaneous itemized deductions, all of which are subject to the two-percent floor. During the taxable year, the feed for the cattle cost $1,500. The income from the sale of cattle was $1,400.

(a) Under the hobby loss rule, to what extent is the expense of $1,500 deductible?
(b) Under the two-percent-of-adjusted-gross-income limitation, how much is the overall deductible amount of his itemized deductions?

5. (TCO I) Rick, a single individual with a salary of $45,000, incurred and paid the following expenses during the year:
Student loan interest: $800
Medical expenses: $5,000
Alimony: $11,000
Mortgage interest on personal residence: $3,000
State income taxes: $4,000
Moving expenses: $1,500
Contribution to a traditional IRA: $2,000
Analyze the above expenses, and determine which ones are deductible for AGI. Please support your position.

6. (TCO I) Kim had the following transactions for 2012:
Salary: $48,000
Damage award (compensatory) for city bus accident: $18,000
Loss on sale of stock investment: $5,600
Loan from father to purchase auto: $14,000
Alimony paid to ex-wife: $8,000
What is Kim’s AGI for 2012?

7. (TCO F) Sara owns a sole proprietorship, and Phil is the sole shareholder of a C (regular) corporation. Each business sustained a $9,000 operating loss and a $2,000 capital loss for the year. Evaluate how these losses will affect the taxable income of the two owners? (Points : 17)

8. (TCO B) Dave forms a corporation and transfers property having a basis to him of $22,000 and a fair market value of $29,000 to the corporation for 1,000 shares of $11 par stock. One year later, Hank transfers property having a basis to him of $3,500 and a fair market value of $4,500 for 100 shares of the stock. Hank is not related to Dave. The corporation issued no other stock.
(a) How much gain does Dave recognize on his exchange? What is the basis to Dave of his 1,000 shares?
(b) What gain or loss is recognized by the corporation when it issues its shares to Dave? What is the basis to the corporation of the property it received from Dave?
(c) What is the gain or loss that Hank recognizes on this transaction, and what is his basis in his 100 shares?

9. (TCO F) In 2012, OK Company had a net loss of $82,000 from operations. Jane owns OK Company and works 20 hours a week in the business. She has a large amount of income from other sources and is in the 35% marginal tax bracket. Would Jane’s tax situation be better if OK Company were a proprietorship or a C corporation? Explain why.

10. (TCO H) On May 18, 2012, Sara purchased 30 shares of ABC stock for $210, and on October 29, 2012, she purchased 90 additional shares for $900. On November 28, 2012, she sold 48 shares, which could not be specifically identified, for $576, and on December 8, 2012, she sold another 25 shares for $150. What is her recognized gain or loss?

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ACCT 553 Fed Taxes Mgmt Decisions Final Exam Complete A+ Answer

MIS 535 Managerial Appls of Info Tech Week 8 Final Exam A+ correct answer

MIS 535 Managerial Appls of Info Tech_Week 8 _Final Exam_ 100% correct answer

MIS 535 Managerial Appls of Info Tech_Week 8 _Final Exam_ 100% correct answer

MIS 535 Managerial Appls of Info Tech_Week 8 _Final Exam_ 100% correct answer

MIS 535 Managerial Appls of Info Tech_Week 8 _Final Exam_ 100% correct answer

Week 8 : Wk8 – Final Exam

1. (TCO A) Based on the examples in the chapter, if you were asked to formulate a plan for a regional drive-in restaurant chain’s efforts to use information technology to develop a loyal customer base, what would be the best use of information technology from the list below? (Points : 10)
Use IT to increase supplier loyalty.
Use IT to increase operational efficiency.
Use IT to create new products and business models.
Use IT to achieve customer intimacy.

2. (TCO B) ________ are visual tools for presenting performance data in a BI system. (Points : 10)
Dashboards and scorecards
Parameterized reports
Reports and the drill-down feature
Scenarios and models

3. (TCO C) A DBMS makes the (Points : 10)
physical database available for different logical views.
logical database available for different analytical views.
physical database available for different analytical views.
logical database available for different physical views.

4. (TCO D) Cloud computing requires (Points : 10)
less energy consumption
additional servers and thus additional energy to communicate through the Internet to the cloud
IT organizations to increase staffing levels
Employees to have fewer applications and databases

5. (TCO E) Enterprise applications have become easier to install because: (Points : 10)
they have been reduced in function
vendors have modularized the applications so they can be rolled out a module at a time
vendors have changed their design to make the application more adaptable to diverse business processes
Users have become more familiar with how to use the applications

6. (TCO F) In the traditional systems development lifecycle, end users (Points : 10)
are important and ongoing members of the team from the original analysis phase through maintenance.
are important only in the testing phases.
have no input.
are limited to providing information requirements and reviewing the technical staff’s work.

7. (TCO G) Electronic data are more susceptible to destruction, fraud, error, and misuse because information systems concentrate data in computer files that (Points : 10)
are usually bound up in legacy systems that are difficult to access and difficult to correct in case of error.
are not secure because the technology to secure them did not exist at the time the files were created.
have the potential to be accessed by large numbers of people and by groups outside of the organization.
are frequently available on the Internet.

Page 2

1. (TCO G) Discuss the issue of security challenges on the Internet as that issue applies to a global enterprise. List at least 5 Internet security challenges. (Points : 40)

2. (TCO F) What qualities of object-oriented development make this method especially suitable for Internet applications? (Points : 40)

3. (TCO E) Explain why standards are so important in information technology? What standards have been important for the growth of Internet technologies? (Points : 40)

4. (TCO D) What is cloud computing and how do you think its developments could impact businesses? (Points : 40)

5. (TCO C) IF you were to design the new contracts database for a publishing house what fields do you anticipate needing? Which of these fields might be in use in other databases used by the company? (Points : 40)

6. (TCO B) You are advising the owner of Small town Computer, a new, local computer repair store that also builds custom computers to order. What competitive strategies could Small town Computer exert? Which ones will it have difficulty exercising? (Points : 40)

7. TCO (A) You work for an auto manufacturer and distributor. How could you use information systems to achieve greater customer intimacy? (Points : 40)

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MIS 535 Managerial Appls of Info Tech

PROJ 598 Contract and Procurement Week 8 Final Exam A+ Answer

PROJ 598 Contract and Procurement Week 8 Final Exam Complete A+ Answer

PROJ 598 Contract and Procurement Week 8 Final Exam Complete A+ Answer

Set 1

DeVry PROJ 598 Week 8 Final Exam
Part 1
1. (TCO A) All the below are tools and techniques of contract procurement, except (Points : 5)
Bidder’s conferences, negotiations, and advertising.

Analytical techniques, expert judgments, and evaluation techniques.

Estimates, bidder’s conferences, and evaluation techniques.

Negotiations, make-or-buy decisions, and advertising.

Question 2. 2. (TCO B) Proper selection criteria are critical for a successful project. All of the below would be considered good selection criteria for a buyer to use to select a seller, except (Points : 5)
Managerial approach of seller, references of seller, and ability of seller to make a reasonable make-or-buy decision.

Past work done by seller, intellectual property rights, and risk associated with a given seller.

Technical capability of seller, understanding of work by seller, and business type of seller.

Financial capacity of seller, overall cost, and warranty offered by seller.

(TCO A) Why are the project scope statement and WBS inputs of plan procurement?

(TCO B) List and describe five source selection criteria typically used in procurement management. For each, explain why this criterion is important for a buyer to use to select a given seller. (Points: 12)

(TCO C) Which has more cost risk to the seller, a fixed-price contract or a cost-reimbursable contract? Why? How might that risk be mitigated?

(TCO D) Describe the typical work relationship between a project manager and a contract manager. (Points : 12)

(TCO E) You are writing procurement SOW for an RFP. What items are you likely to include in this SOW? (Points : 12)

(TCO F) You have received back the bid proposals from prospective sellers. You are ready for source selection. What is source selection, and why is it important? (Points : 12)

Part 2

TCO G) One of the inputs to contract closeout is completion of work. What does it mean? (Points : 12)

(TCO A) In industry, there are four processes one follows in the procurement area of project management. Describe and explain these four processes in the procurement management process from the buyer perspective. (Points : 20)

(TCO C) Compare and contrast a firm fixed-price contract to a time and materials contract. When would each be appropriate for a given project? (Points : 20)

(TCO D) Compare and contrast an RFP and an RFI. When would each best be used in procuring goods or services? (Points : 20)

(TCO E) Describe the buyer’s plan procurement process of the contract management process as it relates to creating a RPF. Give an example of the activity that takes place in each step. (Points : 20)

Part 3:

TCO H) Under U.S. and international law, all contracts must contain five elements or satisfy five requirements. List and explain each of these five elements. (Points : 20)

2) Describe and compare and contrast the buyer’s and seller’s actions in the control procurement phase of the contract management process. Give an example for each. List and briefly describe the three tools and techniques used for bid or no-bid decision making. (Points : 20)

set 2

PROJ 598 Contract and Procurement Week 8 Final Exam Set 2 Answer

Question 1. 1. (TCO A) All the below are outputs of plan procurement except (Points : 5)
change requests, SOW, and source selection criteria.
make-or-buy decisions, procurement management plans, and contracts.
procurement documents, SOW, and document updates.
source selection criteria, procurement management plans, and make-or-buy decisions.

Question 2. 2. (TCO B) Proper selection criteria are critical for a successful project. All of the below would be considered good selection criteria for a buyer to use to select a seller, except (Points : 5)
managerial approach of seller, references of seller, and ability of seller to make a reasonable make-or-buy decision.
past work done by seller, intellectual property rights, and risk associated with a given seller.
technical capability of seller, understanding of work by seller, and business type of seller.
financial capacity of seller, overall cost, and warranty offered by seller.

Question 3. 3. (TCO A) What is the primary purpose of procurement planning? (Points : 8)

Question 4. 4. (TCO B) A seller’s financial capacity is often one of the buyer’s selection criteria. Why is this an important consideration for a buyer? (Points : 12)

Question 5. 5. (TCO C) From the viewpoint of the buyer, why are award fees and incentive fees important in contracts? (Points : 12)

Question 6. 6. (TCO D) Compare and contrast sole source and single source approaches to procurement. (Points : 12)

Question 7. 7. (TCO E) What is the purpose of creating a procurement SOW for an RFP? (Points : 12)

Question 8. 8. (TCO F) You are preparing for contract negotiations. To achieve your desired contract negotiation results, you need not only a strategy but also tactics and countertactics. Give an example of two tactics, and state why they help you achieve the desired result. (Points : 12)

Question 9. 9. (TCO G) There are many misconceptions regarding global contract management. Describe three such misconceptions, and describe the reality of actual global contracts. (Points : 12)

Page 2
Question 1. 1. (TCO A) According to the PMBOK® Guide, there are four processes in the procurement area. Describe and explain these four processes in the procurement management process from the buyer perspective.

Question 2. 2. (TCO B) You are a project manager at a bidder’s meeting. One of the potential sellers asks you a question concerning the project in the hallway leading to the meeting room. Can you answer this question for the seller? What would be your concern if you did answer the question?

Question 3. 3. (TCO C) Given the following, answer the below questions.

Question 4. 4. (TCO D) Compare and contrast an RFP and an RFI. When would each best be used in procuring goods or services?

Question 6. 6. (TCO G) Describe and compare and contrast the buyer’s and seller’s actions in the control procurement phase of the contract management process. Give an example for each.

Question 7. 7. (TCO F) “The side that does the most research and planning will often come out best in any negotiation.” Do you agree with this statement? Do you disagree with this statement? Defend your position with examples and other information.

Question 8. 8. (TCO H) What does the uniform commercial code (UCC) state regarding price and warranty? What if a price is not specified in an agreement? What if a price is specified in an agreement? Does the UCC modify the price? What about a warranty? What rights does the buyer have for a guarantee under the UCC? What protection is granted to the seller?

For getting the instant digital download answer, Please click on the “PURCHASE” link below to get PROJ 598 Contract and Procurement Week 8 Final Exam Complete A+ Answer

For instant digital download of the above solution or tutorial, please click on the below link and make an instant purchase. You will be guided to the PAYPAL Standard payment page wherein you can pay and you will receive an email immediately with a download link.

In case you find any problem in getting the download link or downloading the tutorial, please send us an email on mail@genietutorial.com

PROJ 595 Project Risk Management Week 8 Final Exam

Bath Designs Inc company designs and manufactures a limited variety of custom bathroom storage cabinets and sauna units Answer

Bath Designs Inc company designs and manufactures a limited variety of custom bathroom storage cabinets and sauna units Answer

Bath Designs Inc company designs and manufactures a limited variety of custom bathroom storage cabinets and sauna units Answer

Bath Designs Inc company designs and manufactures a limited variety of custom bathroom storage cabinets and sauna units Answer

Bath Design

The transactions in this practice set were completed by Bath Designs Inc. during January, the first month of the company’s fiscal year. The company designs and manufactures a limited variety of custom bathroom storage cabinets and sauna units, and it maintains a job-order cost system.
You have accepted a position with Bath Designs Inc. as assistant controller, and you will begin your duties on January 1 of the current year. In your review of the previous assistant controller’s records, you notice some jobs were incomplete as of December 31 of the previous year. These jobs are contained in the Job Cost Records. You plan to complete most of these jobs in January and to accept new jobs from builders and contractors. You are responsible for the daily accounting operations, preparation of interim financial statements, and end-of-month adjusting and closings entries.
Bath Designs Inc. manufactures all products in a single production department. An individual job-order cost sheet is maintained for each job. The job-order cost sheet contains accumulated costs for each job, including actual direct materials, actual direct labor, and applied factory overhead.
Gross pay for direct labor is recorded by a debit to Work in Process. Salaries for all other factory personnel are recorded by a debit to Factory Overhead. Salaries of non-factory personnel are recorded at the end of each month by a debit to the appropriate salary expense accounts. Deductions for FICA tax at 7.65% of gross pay (this includes the Medicare Tax deduction) and employees’ income tax at 18% of gross pay are recorded whenever gross pay is recorded. All wages are paid on the last day of the month. All employer payroll taxes are recorded at the end of the month. Payroll taxes related to factory personnel are debited to Factory Overhead. Payroll taxes related to all other company personnel are debited to Payroll Taxes Expense—General.
Bath Designs Inc. maintains two materials accounts, one for Direct Materials and one for Indirect Materials and Factory Supplies.
Factory overhead is applied to each job based on 125% of direct labor cost for that job. Bath Designs Inc. maintains only one factory overhead account. Remember that debits to Factory Overhead represent actual overhead and credits to Factory Overhead represent applied overhead. Since the difference between actual factory overhead and applied factory overhead is insignificant, the over-applied or under-applied balance is closed out to Cost of Goods Sold as an adjusting entry at the end of each month.
Bath Designs Inc. marks up all work by 35% of the job cost. Refer to the individual Job Cost Record for the total cost of the job and multiply the total cost by 135% to determine the selling price for each job.
Since Bath Designs Inc. sells to builders and contractors, sales are exempt from state sales tax. All sales are on account and are subject to terms of 1/10, net 30 days, FOB shipping point.
Accounts Payable is used solely for the purchase of direct materials and indirect materials and factory supplies. All vendors except full payment within 30 days. Operating expenses, with the exception of any accrued salaries, payroll taxes, property taxes, and income taxes, are paid when incurred.
All cash received is deposited in the bank, and all payments are made by check.
When dealing with an accounts receivable or accounts payable item, be sure to record the company name in the General Ledger and post to Accounts Receivable or Accounts Payable Ledger.
It is January 1, and you are ready to assume your new responsibilities.

General Instructions

1. Journalize the entries for the month of January in the General Journal. When using the Work in Process account, be sure to post to the appropriate Job Cost Record.
1. Post the General Journal entries to the General Ledger, the Accounts Payable Ledger, and the Accounts Receivable Ledger.
2. Prepare Schedules of Accounts Receivable and Accounts Payable.
3. Prepare the Trial Balance section of the work sheet.
4. Complete the work sheet using the adjusting entries data for the Adjustment columns.
5. Prepare the following statements:
A. Income Statement
B. Retained Earnings Statement
C. Balance Sheet
6. Journalize and post the adjusting entries
7. Journalize and post the closing entries. (It is acknowledged that this step is not performed until year end; this is for instructional purposes only.)
8. Prepare a Post-Closing Trial Balance.

NARRATIVE OF TRANSACTIONS

Note: Certain transactions, such as those dealing with payroll, require detailed computational work before preparing the journal entry. These transactions are explained initially in the narrative as they occur. Please refer to the original transaction when preparing a subsequent similar transaction.

Jan. 2 Paid Berkeley Road Properties $3,600 for January rent. Of this amount, 30% is for office
Facilities and 70% is for factory facilities.
Jan. 2 Paid Pierce Advertising Agency $490 for preparing advertisements in local newspapers.
Jan. 3 Paid Liberty Wood Products Company $8413.12 in payment of December 31 balance.
Jan. 3 Received a check from Kian Corporation for the amount due within the discount period.
Jan. 4 Paid State National Bank $25,681.41 for December payroll taxes payable as follows:
Employee’s Income Tax Payable, $15,812.27; FICA Tax Payable, $9143.73; Federal
Unemployment Tax, $319.19; State Unemployment Tax, $406.22.
Jan. 4 Paid $7,423.36 for Income Tax Payable.
Jan. 4 Paid Ohio Plastics Company $10,714.00 in payment of the December 31 balance.
Jan. 4 Applied $3,624.00 of direct materials (requisition No. 670) and $8,120 of direct labor (time ticket No. 129) to Job No. 403, which will complete the job. The FICA rate is 7.65% of gross pay and the employees’ income tax rate is 18% of gross pay. When preparing the entry for applying direct labor, debit Work in Process for the gross pay, and credit Employees’ Income Tax Payable and FICA Tax Payable for the appropriate amounts and Salaries Payable for net pay.
Remember that employees are paid on the last day of each month.
Applied factory overhead to Job No. 403 is based upon 125% of direct labor cost.
Transferred the completed job to the finished goods account.
Jan. 5 Sold and shipped Job No. 403 to the appropriate customer. All sales are on account 1/10, net 30 days, FOB shipping point. Bath Designs Inc. marks up all work by 40% of the job cost (NOTE IN THE ORIGINAL INSTRUCTION SHEET IT SAYS BY 35%, SO NOT SURE WHICH TO USE). Refer to the individual Job Order Cost Sheet for the total cost of the job and multiply the total cost by 140% to determine the selling price for each job.
Bath Designs, Inc. maintains a perpetual inventory system. Each time a sale is made to a customer, you must debit Cost of Goods Sold and credit Finished Goods for the cost of the job.
Jan. 8 Requisitioned $1,241.27 of indirect materials and factory supplies to be used in the manufacture of all jobs currently in process. (Materials requisition No. 680)
Jan. 9 Paid Bob Davis, County Tax Collector, $6321.00 for property taxes accrued as of December 31.
Jan. 9 Purchased from Glory Container Corporation $2,243.26 of indirect factory supplies, credit terms net 15 days.
Jan. 9 Accepted a job for the manufacture of 17 closet units for Bloomingdale Engineering. The promise date is Feb. 14. Began the job today by applying $5,914.00 of direct materials to Job. No. 406. (Materials requisition No. 681.)
Jan. 10 Received a check from Tarara Design Corporation for the amount due within the discount period.
Jan. 11 Paid Rorick Hardware Inc. $9,100.00 in payment of the December 31 balance.
Jan. 11 Applied $1,327.14 of direct materials to Job. No. 402 (No. 682)
Jan. 12 Received a check from Ryan Sales Company for the amount due after the discount period has expired.
Jan. 15 Applied $2,214.06 of direct materials to Job No. 404 (No. 683)
Jan. 16 Purchased $503.00 of factory supplies from Samantha Supplies, Inc. and paid cash.
Jan. 16 Applied $3,216.50 of direct labor to Job. No. 405, which will complete the job. (Time ticket No. 130)
Applied factory overhead using the appropriate rate.
Transferred the completed job to the finished goods account.
Jan. 16 Sold four standard vanity units to a cash customer for $1,400. The cost of the goods shipped from finished goods inventory was $1,000.00.
Jan. 17 Requisitioned $614.50 of indirect materials and factory supplies to be used in all factory jobs currently in process (Materials requisition No. 684)
Jan. 17 Signed a contract with Elliana Interiors for the manufacture of 120 counter units. The promise date is Feb. 15. Began the job today by applying $4,220.00 of direct materials to Job. No. 407 (Materials requisition No.685)
Jan. 17 Paid the sales manager of Bath Designs Inc. $142.62 for customer entertaining.
Jan. 18 Received a report from the treasurer that Pickens Contractors, one of our customers, has declared bankruptcy. Wrote off the balance owed to Bath Designs Inc. by Pickens Contractors.
Jan. 18 Sold and shipped Job. No. 405 to the appropriate customer. Refer to that job’s Cost Record for the total cost of the job to determine the selling price.
Jan. 22 Purchased $10,232.16 of direct materials from Neola Supply Company, credit terms net 30 days.
Jan. 22 Accepted a job for the manufacture of 12 sauna units for Maplewood Designers. The promise date is Jan. 31. Began the job today by applying $2,468.10 of direct materials to Job No. 408 (Materials requisition No. 686)
Jan. 24 Paid Glory Container Corp. the amount due today from the Jan. 9 purchase.
Jan. 25 Applied $1,660 of direct labor to Job. No. 402, which will complete the job. (Time ticket No.131)
Applied factory overhead using the appropriate rate.
Transferred the completed job to the finished goods account.
Jan. 26 Sold and shipped Job No. 402 to the appropriate customer. Refer to that job’s Cost Record for the total cost of the job to determine the selling price.
Jan. 26 Ap0plied $3,640 of direct labor to Job. No. 408, which will complete the job. (time ticket No 132)
Applied factory overhead using the appropriate rate.
Transferred the completed job to the finished goods account.
Jan. 29 Sold and shipped Job No 408 to the appropriate customer. Refer to that job’s Cost Records for the total cost of the job for billing purposes.
Jan. 29 Paid Foley Tool Company amount due in payment of the Jan. 1 balance.
Jan. 29 Received a check from Powell Contractors Inc. for the amount due after the discount period has expired.
Jan. 29 Paid Post Office $500.00 for postage added to postage meter. Expense this amount.
Jan. 29 Paid Telephone Company $250.00 for Jan. phone service.
Jan. 29 Paid Owen Advertising Company $1,000.00 for designing ads for our new Internet website.
Jan. 29 Paid Allied Power and Light company $4,216.00 for heat, power, and light. Allocate 25% of this amount to Electricity Expense and 75% to Factory Overhead.
Jan. 31 Applied $1,000.00 of direct labor to Job 404 (time ticket No. 133)
Applied factory overhead using the appropriate rate. This job will not be completed until Feb.
Jan. 31 Applied $4,220.00 of direct labor to Job 407 (time ticket No. 134)
Applied factory overhead using the appropriate rate. This job will not be completed until March.
Jan. 31 Applied $1,160.00 of direct labor to Job 406 (time ticket No. 135)
Applied factory overhead using the appropriate rate. This job will not be completed until Feb.
Jan. 31 Received the following data on the monthly payroll from the payroll clerk:
Direct Labor (already recorded): $23,016.50
New payroll data (to be recorded):
Indirect $11,220.00
Superintendent’s Salary 3,100.00
Sales salaries 11,975.00
Officers’ salaries 7,140.00
Office salaries 6310.10
Record the monthly payroll in the general journal. Remember that direct labor payroll already has been recorded as it was incurred in Jan. Salaries for indirect labor are recorded only at the end of the month. Debit Factory Overhead for Indirect Labor and Superintendent’s salaries, debit other salary expense account for the appropriate amounts, credit FICA Tax Payable for 7.65% of gross pay, credit Employees’ Income Tax Payable for 18% of gross pay, and credit Salaries Payable for the net pay.
All payroll taxes relating to factory personnel are debited to Factory Overhead; all payroll taxes related to non-factory personnel are debited Payroll Taxes Expense – General. The FICA tax is 7.65% of gross pay, state unemployment. Tax is 5.4% of gross pay and federal unemployment. Tax is 0.8% of gross pay. Since this is the first month in the current year, no employee has reached the ceilings on the payroll taxes. Round the charge to Factory Overhead down to the next cent.
Jan. 31 Received a check from Seng Contractors for the amount due after the discount period has expired.
Jan. 31 Received a check from Ruth Builders for the amount due after the discount period has expired.
Jan. 31 Paid all employees for wages earned in Jan.
Jan. 31 Purchased $8,214.00 of direct materials on account from Rorick Hardware Inc.
(Take a trial balance at this point.) According to the book, the total for the debit and credit columns on the general journal BEFORE adjusting and closing entries are made should be $921,436.06. The total for adjusting entries is $18,635.08. Note: The figure for Factory Overhead and Cost of Goods Sold is rounded.
Adjusting Entries:
Jan. 31 Insurance expired during January:
Factory 1,314.00
Selling 61.25
General 268.80
Jan. 31 Office supplies inventory as of Jan. 31 is $1,650
Jan. 31 Depreciation for the month:
Factory equip 642.00
Office equip. 369.70
Jan. 31 Amortization of patents for Jan (debit Factory Overhead) 225.00
Jan. 31 Property tax accrued for the month:
Factory 485.00
General 137.26
Jan. 31 Close out under applied Factory Overhead of $1,427.24 to Cost of Goods Sold.
Jan. 31 Based on past experience, Bath Designs estimates that $7,900.00 is a reasonable balance for the Jan. 31 balance in the Allowance for Doubtful Accounts.
Jan. 31 Income tax is based on 40% of income before tax. Accrue income tax owed by debiting Income Tax Expense and crediting Income Tax Payable for $6,748.83.
(Prepare all reports at this point and print general ledger NOW)
Closing Entries:
Jan. 31 Prepare closing entries to close revenue and expense accounts to Income Summary, and transfer net income to Retained Earnings. (It is acknowledged that this step is not performed until year end; this is for instructional purposes only.) Prepare a Post-Closing Trial Balance.

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HRM 586 Labor Relations Final Exam A+ Complete Answer

HRM 586 Labor Relations Final Exam A+ Complete Answer

HRM 586 Labor Relations Final Exam A+ Complete Answer

HRM 586 Labor Relations Final Exam A+ Complete Answer

1. (TCO A) You are the new leader of the local union at your company. There are many new employees who have joined the union in the past year, and they have questions about the way union membership works. These new employees are not sure about how to be in the union and still interact with the boss. It seems to some of them that in their non-union jobs, they would just say and do what it took to get their questions answered, and they did not see much difference between themselves and the boss. Others want to run to the union steward every time the boss says something they don t like. The questions involve management rights and employee rights. Your job is to develop a summary sheet which lists the content for a union meeting. Your summary should include the basics of how unions operate and specifics on management rights and employee rights in the union environment. (Points : 34)

2. (TCO B) There are a number of social, economic, and business factors that are either helping or slowing down the development of the union movement. Describe the changes in the political climate that have helped or hindered growth of unions. Identify key legislation that has changed the way in which unions or companies operate in a union setting. (Points : 34)

3. (TCO C) Labor Management relations have been affected by political and legal forces since the mid 1900s. Describe laws that are relevant to negotiations. Which laws favor employers, and which favor unions? Close out with a discussion of the importance of these laws within the scope of the negotiating teams. (Points : 34)

4. (TCO D) Describe the differences of operations between the local unions and national unions. How are each involved in helping union employees? Describe the interactions between employees and representatives at both levels. (Points : 34)

5. (TCO E) The AFL-CIO and its leaders from the past help define the labor movement in the U.S. and help define where the union movement is today. How have the AFL-CIO (federation) national and local unions been involved politically? What impact has this had on unions and legislation passed? (Points : 34)

1. (TCO I) When you examine a negotiated agreement, you will find a variety of issues that can be put into the category of wages or economic concerns. However, the contract is not limited to these issues. There are a variety of issues that go beyond economic concerns, such as the union obligations. It is not just that management is required to perform a certain way according to the requirements of the contract. It is often felt by management that they are giving up everything in order to live by the contract. From a management point of view, the union has taken control without obligation through the function of the contract.
(a) Evaluate the obligations that the union might have under the contract in terms of what they mean to the functioning of the union and management.
(b) Lay out a plan to help management implement its options if the union does not meet its obligations. (Points : 34)

2. (TCO G) Two industries (Industry X and Industry Y) are run by labor unions. Even though the unions overseeing these industries are considered honest and conscientious, we have seen a large disparity in pay between the industries. In fact, the wages in Industry X are now three times the rate as those of Industry Y. What factors account for the differences in these two industries? (Points : 34)

3. (TCO F) The centerpiece of almost every negotiation is the issue of wages. The topic has become complex and is typically the catalyst for a strike. Of course, the topic of wages is multidimensional. It’s not just the salary that union member are making that impacts the profitability of the organization or the cost of products and services on the market. There are other costs that go into making up the total reward paid to any employee, including the union worker. It is this bigger picture of labor costs that concerns management during negotiations. While the union is focusing on what they can get in terms of total income to the union member, management is looking at the impact of these cost on the total business picture.
(a) Compare the methods available for the adjustment of wages during the effective period of the labor agreement. Make this comparison in light of the organization in which you currently work or recently worked.
(b) From a management perspective, defend what you would judge to be the most desirable arrangement for your organization. Be sure to include other factors around the wage issue that might impact your decision. (Points : 38)

4. (TCO H) If the collective bargaining process is to be successful, it is important that both sides come prepared to bargain. This means that both management and labor must make plans and develop a strategy before they even look across the table at the other party. It is often this preparation that determines to what extent one side gets its way more than the other side. It is impossible to walk into negotiations without knowing the costs that are potentially involved in the new contract arrangement. Clearly the union is well-prepared with their wish list and with as many facts and figures as they can find to bolster their position. Management does much the same thing to trade off items on the table.
(a) Select what you consider to be the key pre-negotiation preparation steps that can be taken by the union.
(b) Select what you consider to be the key pre-negotiation preparation steps that can be taken by management.
(c) Compare and contrast the historical elements that help us understand the current structure of the union. (Points : 34)

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HRM 586 Labor Relations Final Exam A+ Complete Answer

ACC 434 Week 5 Final Exam All Correct A+ Complete Answer

ACC 434 Week 5 Final Exam All Correct A+ Complete Answer

ACC 434 Week 5 Final Exam All Correct A+ Complete Answer

1. (TCO 1) Evaluating customer reaction of the trade-off of giving up some features of a product for a lower price would best fit which category of management decisions under activity-based management? (Points: 5)
Pricing and product-mix decisions.
Cost reduction decisions.
Design decisions.
Discretionary decisions.

2. (TCO 1) Danielle Company produces a special spray nozzle. The budgeted indirect total cost of inserting the spray nozzle is $180,000. The budgeted number of nozzles to be inserted is 60,000. What is the budgeted indirect cost allocation rate for this activity? (Points: 5)
$3.00
$2.50
$2.00
$3.50

3. (TCO 2) Fixed overhead costs include: (Points: 5)
the cost of sales commissions
property taxes paid on plant facilities
indirect materials
energy costs

4. (TCO 2) Information pertaining to Brenton Corporation’s sales revenue is presented in the following table:
February March April
Cash Sales $160,000 $150,000 $120,000
Credit Sales 300,000 400,000 280,000
Total Sales $460,000 $550,000 $400,000
Management estimates that 5% of credit sales are not collectible. Of the credit sales that are collectible, 60% are collected in the month of sale and the remainder in the month following the sale. Cost of purchases of inventory each month are 70% of the next month’s projected total sales. All purchases of inventory are on account; 25% are paid in the month of purchase, and the remainder is paid in the month following the purchase.
Brenton’s budgeted total cash receipts in April are
(Points: 5)
$448,000
$437,000.
$431,600.
$328,000.

5. (TCO 2) Financing decisions PRIMARILY deal with: (Points: 5)
the use of scarce resources
how to obtain funds to acquire resources
acquiring equipment and buildings
preparing financial statements for stockholders

6. (TCO 3) The cost components of an air conditioner include $35 for the compressor, $11.50 for the sheet molded compound frame, and $80 per unit for assembly. The factory machines and tools cost is $55,000. The company expects to produce 1,500 air conditioners in the coming year. What cost function best represents these costs? (Points: 5)
y = 1500 + 126.5X
y = 1,500 +55,000X
y = 55,000 + 1,500X
y = 55,000 +126.50X

7. (TCO 3) Which cost estimation method may use time-and-motion studies to analyze the relationship between inputs and outputs in physical terms? (Points: 5)
the quantitative analysis method
the account analysis method
the conference method
the industrial engineering method

8. (TCO 4) Sunk costs: (Points: 5)
have future implications
are ignored when evaluating alternatives
are differential
are relevant

9. (TCO 5) Throughput contribution equals revenues minus: (Points: 5)
operating costs
direct material costs of goods sold
direct material costs and minus operating costs
direct material and direct labor costs

10. (TCO 5) Keeping the bottleneck operation busy and subordinating all nonbottleneck operations to the bottleneck operation involves: (Points: 5)
keeping the bottleneck resource busy at least 90% of the time
maximizing the contribution margin of the nonbottleneck operation
having the workers at the nonbottleneck operation or machine improving their productivity
None of these answers is correct

11. (TCO 6) What type of cost is the result of an event that results in more than one product or service simultaneously (Points: 5)
Byproduct cost
Joint cost
Main costs
Separable cost

12. (TCO 6) Which of the following is a disadvantage of the physical-measure method of allocating joint costs? (Points: 5)
The measurement basis for each product may be different.
The need for a common denominator.
The physical measure may not reflect the product’s ability to generate revenues.
All of the above are disadvantages.

13. (TCO 7) Life-cycle costing is the name given to: (Points: 5)
a method of cost planning to reduce manufacturing costs to targeted levels
the process of examining each component of a product to determine whether its cost can be reduced
the process of managing all costs along the value chain
a system that focuses on reducing costs during the manufacturing cycle

14. (TCO 7) Each month, Haddon Company has $275,000 total manufacturing costs (20% fixed) and $125,000 distribution and marketing costs (36% fixed). Haddon’s monthly sales are $500,000.
The markup percentage on full cost to arrive at the target (exisitng) selling price is
(Points: 5)
25%
75%
80%
20%

15. (TCO 8) Transfer prices should be judged by whether they promote: (Points: 5)
goal congruence.
the balanced scorecard method.
a high level of subunit autonomy in decision making.
Both 1 and 2 are correct.

There is a mistake in number 15. the correct answer should be 1 & 3

16. (TCO 8) Division A sells soybean paste internally to Division B, which in turn, produces soybean burgers that sell for $5 per pound. Division A incurs costs of $0.75 per pound while Division B incurs additional costs of $2.50 per pound. Which of the following formulas correctly reflects the company’s operating income per pound? (Points: 5)
$5.00 – ($1.25 + $2.50) = $1.25
$5.00 – ($0.75 + $2.50) = $1.75
$5.00 – ($0.75 + $3.75) = $0.50
$5.00 – ($0.25 + $1.25 + $3.50) = 0

17. (TCO 8) When companies do not want to use market prices or find it too costly, they typically use ________ prices, even though suboptimal decisions may occur. (Points: 5)
short-run average cost
long-run cost
average-cost
full-cost

18. (TCO 9) To guide cost allocation decisions, the benefits-received criterion: (Points: 5)
may use an allocation base of division revenues to allocate advertising costs
is the primarily used criterion in activity-based costing
results in subsidizing products that are not profitable
generally uses the cost driver as the cost allocation base

19. (TCO 9) The Hassan Corporation has an Electric Mixer Division and an Electric Lamp Division. Of a $20,000,000 bond issuance, the Electric Mixer Division used $14,000,000 and the Electric Lamp Division used $6,000,000 for expansion. Interest costs on the bond totaled $1,500,000 for the year. What amount of interest costs should be allocated to the Electric Mixer Division? (Points: 5)
$4,200,000
$14,000,000
$1,050,000
$450,000

20. (TCO 10) The net present value method focuses on: (Points: 5)
cash inflows
accrual-accounting net income
cash outflows
Both 1 and 3 are correct

21. (TCO 10) The Zeron Corporation wants to purchase a new machine for its factory operations at a cost of $950,000. The investment is expected to generate $350,000 in annual cash flows for a period of four years. The required rate of return is 14%. The old machine can be sold for $50,000. The machine is expected to have zero value at the end of the four-year period. What is the net present value of the investment? Would the company want to purchase the new machine? Income taxes are not considered. (Points: 5)
$119,550; yes
$326,750; no
$1,019,550; yes
$69,550; no

22. (TCO 11) The four cost categories in a cost of quality program are (Points: 5)
product design, process design, internal success, and external success
prevention, appraisal, internal failure, and external failure.
design, conformance, control and process.
design, process specification, on-time delivery, and customer satisfaction.

23. (TCO 11) Regal Products has a budget of $900,000 in 20X6 for prevention costs. If it decides to automate a portion of its prevention activities, it will save $60,000 in variable costs. The new method will require $18,000 in training costs and $120,000 in annual equipment costs. Management is willing to adjust the budget for an amount up to the cost of the new equipment. The budgeted production level is 150,000 units. Appraisal costs for the year are budgeted at $600,000. The new prevention procedures will save appraisal costs of $30,000. Internal failure costs average $15 per failed unit of finished goods. The internal failure rate is expected to be 3% of all completed items. The proposed changes will cut the internal failure rate by one-third. Internal failure units are destroyed. External failure costs average $54 per failed unit. The company’s average external failures average 3% of units sold. The new proposal will reduce this rate by 50%. Assume all units produced are sold and there are no ending inventories. How much will internal failure costs change if the internal product failures are reduced by 50% with the new procedures? (Points: 5)
$500,000 decrease
$750,000 decrease
$33,750 decrease
$67,500 decrease

24. (TCO 12) Obsolescence is an example of which cost category? (Points: 5)
ordering costs
carrying costs
labor costs
quality costs

25. (TCO 12) Liberty Celebrations, Inc., manufactures a line of flags. The annual demand for its flag display is estimated to be 100,000 units. The annual cost of carrying one unit in inventory is $1.60, and the cost to initiate a production run is $30. There are no flag displays on hand but Liberty had scheduled 60 equal production runs of the display sets for the coming year, the first of which is to be run immediately. Liberty Celebrations has 250 business days per year. Assume that sales occur uniformly throughout the year and that production is instantaneous. If Liberty Celebrations does not maintain a safety stock, the estimated total carrying cost for the flag displays for the coming year is the estimated total setup cost for the flag displays for the coming year is (Points: 5)
$1,800
$2,000
$1,600.
$1,500.

(TCO 5) Robert’s Medical Equipment Company manufactures hospital beds. Its most popular model, Deluxe, sells for $5,000. It has variable costs totaling $2,800 and fixed costs of $1,000 per unit, based on an average production run of 5,000 units. It normally has four production runs a year, with $400,000 in setup costs each time. Plant capacity can handle up to six runs a year for a total of 30,000 beds.
A competitor is introducing a new hospital bed similar to Deluxe that will sell for $4,000. Management believes it must lower the price to compete. Marketing believes that the new price will increase sales by 25% a year. The plant manager thinks that production can increase by 25% with the same level of fixed costs. The company currently sells all the Deluxe beds it can produce.
Question 1: What is the annual operating income from Deluxe at the current price of $5,000?

Question 2: What is the annual operating income from Deluxe if the price is reduced to $4,000 and sales in units increase by 25%?

(TCO 7) Grace Greeting Cards Incorporated is starting a new business venture and are in the process of evaluating its product lines. Information for one new product, traditional parchment grade cards, is as follows:
∙ Sixteen times each year, a new card design will be put into production. Each new design will require $600 in setup costs.
∙ The parchment grade card product line incurred $75,000 in development costs and is expected to be produced over the next four years.
∙ Direct costs of producing the designs average $0.50 each.
∙ Indirect manufacturing costs are estimated at $50,000 per year.
∙ Customer service expenses average $0.10 per card.
∙ Current sales are expected to be 2,500 units of each card design. Each card sells for $3.50.
∙ Sales units equal production units each year.
What is the estimated life-cycle operating income for the first year?

4. (TCO 8) Sportswear Company manufactures socks. The Athletic Division sells its socks for $6 a pair to outsiders. Socks have manufacturing costs of $2.50 each for variable and $1.50 for fixed. The division’s total fixed manufacturing costs are $105,000 at the normal volume of 70,000 units.
The European Division has offered to buy 15,000 socks at the full cost of $4. The Athletic Division has excess capacity and the 15,000 units can be produced without interfering with the current outside sales of 70,000. The 85,000 volume is within the division’s relevant operating range.
Explain whether the Athletic Division should accept the offer. Support your decision showing all calculations.
(Points: 25)

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ACC 434 Week 5_ Final Exam_Answer_All Correct

FIN 515 Managerial Finance Course Week 8 FINAL EXAM Four SETS A+ Answer

FIN 515 Managerial Finance Course Week 8 FINAL EXAM Four SETS A+ Answer

FIN 515 Managerial Finance Course Week 8 FINAL EXAM Four SETS A+ Answer

Set 1

Final Exam Page 1

1. (TCO A) Which of the following does NOT always increase a company’s market value? (Points : 5)
Increasing the expected growth rate of sales
Increasing the expected operating profitability (NOPAT/Sales)
Decreasing the capital requirements (Capital/Sales)
Decreasing the weighted average cost of capital
Increasing the expected rate of return on invested capital

2. (TCO F) Which of the following statements is correct? (Points : 5)
The NPV, IRR, MIRR, and discounted payback (using a payback requirement of 3 years or less) methods always lead to the same accept/reject decisions for independent projects.
For mutually exclusive projects with normal cash flows, the NPV and MIRR methods can never conflict, but their results could conflict with the discounted payback and the regular IRR methods.
Multiple IRRs can exist, but not multiple MIRRs. This is one reason some people favor the MIRR over the regular IRR.
If a firm uses the discounted payback method with a required payback of 4 years, then it will accept more projects than if it used a regular payback of 4 years.
The percentage difference between the MIRR and the IRR is equal to the project’s WACC.

3. (TCO D) Church Inc. is presently enjoying relatively high growth because of a surge in the demand for its new product. Management expects earnings and dividends to grow at a rate of 25% for the next 4 years, after which competition will probably reduce the growth rate in earnings and dividends to zero, i.e., g = 0. The company’s last dividend, D0, was $1.25, its beta is 1.20, the market risk premium is 5.50%, and the risk-free rate is 3.00%. What is the current price of the common stock?
a. $26.77
b. $27.89
c. $29.05
d. $30.21
e. $31.42
(Points : 20)

4. (TCO G) Singal Inc. is preparing its cash budget. It expects to have sales of $30,000 in January, $35,000 in February, and $35,000 in March. If 20% of sales are for cash, 40% are credit sales paid in the month after the sale, and another 40% are credit sales paid 2 months after the sale, what are the expected cash receipts for March?
a. $24,057
b. $26,730
c. $29,700
d. $33,000
e. $36,300
(Points : 20)

Final Exam Page 2
1. (TCO H) Zervos Inc. had the following data for 2008 (in millions). The new CFO believes (a) that an improved inventory management system could lower the average inventory by $4,000, (b) that improvements in the credit department could reduce receivables by $2,000, and (c) that the purchasing department could negotiate better credit terms and thereby increase accounts payable by $2,000. Furthermore, she thinks that these changes would not affect either sales or the costs of goods sold. If these changes were made, by how many days would the cash conversion cycle be lowered?
Original Revised
Annual sales: unchanged
Cost of goods sold: unchanged
Average inventory: lowered by $4,000
Average receivables: lowered by $2,000
Average payables: increased by $2,000
Days in year $110,000
$80,000
$20,000
$16,000
$10,000
365 $110,000
$80,000
$16,000
$14,000
$12,000
365

a. 34.0
b. 37.4
c. 41.2
d. 45.3
e. 49.8 (Points : 30)

2. (TCO C) Bumpas Enterprises purchases $4,562,500 in goods per year from its sole supplier on terms of 2/15, net 50. If the firm chooses to pay on time but does not take the discount, what is the effective annual percentage cost of its nonfree trade credit? (Assume a 365-day year.)
a. 20.11%
b. 21.17%
c. 22.28%
d. 23.45%
e. 24.63%
(Points : 30)

3. (TCO E) You were hired as a consultant to the Quigley Company, whose target capital structure is 35% debt, 10% preferred, and 55% common equity. The interest rate on new debt is 6.50%, the yield on the preferred is 6.00%, the cost of common from retained earnings is 11.25%, and the tax rate is 40%. The firm will not be issuing any new common stock. What is Quigley’s WACC?
a. 8.15%
b. 8.48%
c. 8.82%
d. 9.17%
e. 9.54%
(Points : 30)

4. (TCO B) A company forecasts the free cash flows (in millions) shown below. The weighted average cost of capital is 13%, and the FCFs are expected to continue growing at a 5% rate after Year 3. Assuming that the ROIC is expected to remain constant in Year 3 and beyond, what is the Year 0 value of operations, in millions?
Year: 1 2 3
Free cash flow: -$15 $10 $40
a. $315
b. $331
c. $348
d. $367
e. $386
(Points : 35)

5. (TCO G) Based on the corporate valuation model, Hunsader’s value of operations is $300 million. The balance sheet shows $20 million of short-term investments that are unrelated to operations, $50 million of accounts payable, $90 million of notes payable, $30 million of long-term debt, $40 million of preferred stock, and $100 million of common equity. The company has 10 million shares of stock outstanding. What is the best estimate of the stock’s price per share?
a. $13.72
b. $14.44
c. $15.20
d. $16.00
e. $16.80
(Points : 35)

6. TCO G) Clayton Industries is planning its operations for next year, and Ronnie Clayton, the CEO, wants you to forecast the firm’s additional funds needed (AFN). The firm is operating at full capacity. Data for use in your forecast are shown below. Based on the AFN equation, what is the AFN for the coming year? Dollars are in millions.
Last year’s sales = S0 $350 Last year’s accounts payable $40
Sales growth rate = g 30% Last year’s notes payable $50
Last year’s total assets = A0* $500 Last year’s accruals $30
Last year’s profit margin = PM 5% Target payout ratio 60%

a. $102.8
b. $108.2
c. $113.9
d. $119.9
e. $125.9 (Points : 30)

Set 2

1. (TCO A) Which of the following does NOT always increase a company’s market value? (Points : 5)
Increasing the expected growth rate of sales
Increasing the expected operating profitability (NOPAT/Sales)
Decreasing the capital requirements (Capital/Sales)
Decreasing the weighted average cost of capital
Increasing the expected rate of return on invested capital

2. (TCO F) Which of the following statements is correct? (Points : 5)
The MIRR and NPV decision criteria can never conflict.
The IRR method can never be subject to the multiple IRR problem, while the MIRR method can be.
One reason some people prefer the MIRR to the regular IRR is that the MIRR is based on a generally more reasonable reinvestment rate assumption.
The higher the WACC, the shorter the discounted payback period.
The MIRR method assumes that cash flows are reinvested at the crossover rate.

3. (TCO D) The Ramirez Company’s last dividend was $1.75. Its dividend growth rate is expected to be constant at 25% for 2 years, after which dividends are expected to grow at a rate of 6% forever. Its required return (rs) is 12%. What is the best estimate of the current stock price?
a. $41.58
b. $42.64
c. $43.71
d. $44.80
e. $45.92
(Points : 20)

4. (TCO G) The ABC Corporation’s budgeted monthly sales are $4,000. In the first month, 40% of its customers pay and take the 3% discount.
The remaining 60% pay in the month following the sale and don’t receive a discount.
ABC’s bad debts are very small and are excluded from this analysis.
Purchases for next month’s sales are constant each month at $2,000. Other payments for wages, rent, and taxes are constant at $500 per month.
Construct a single month’s cash budget with the information given. What is the average cash gain or (loss) during a typical month for the ABC Corporation? (Points : 20)

5. (TCO G) Howton & Howton Worldwide (HHW) is planning its operations for the coming year, and the CEO wants you to forecast the firm’s additional funds needed (AFN). The firm is operating at full capacity. Data for use in the forecast are shown below. However, the CEO is concerned about the impact of a change in the payout ratio from the 10% that was used in the past to 50%, which the firm’s investment bankers have recommended. Based on the AFN equation, by how much would the AFN for the coming year change if HHW increased the payout from 10% to the new and higher level? All dollars are in millions.
Last year’s sales = S0 $300 Last year’s accounts payable $50
Sales growth rate = g 40% Last year’s notes payable $15
Last year’s total assets = A0* $500 Last year’s accruals $20
Last year’s profit margin = PM 20% Initial payout ratio 10%

a. $31.9
b. $33.6
c. $35.3
d. $37.0
e. $38.9 (Points : 30)

The AFN model forecasts MicroDrive’s need for external funds to support its forecasted 2011 sales. Year 0 is 2010, which has just ended, and Year 1 is 2011, which has just begun. (Ignore rounding differences.)

Part II. Additional Funds Needed (AFN) to Support Growth

Page 2

1. (TCO H) Your consulting firm was recently hired to improve the performance of Shin-Soenen Inc, which is highly profitable but has been experiencing cash shortages due to its high growth rate. As one part of your analysis, you want to determine the firm’s cash conversion cycle. Using the following information and a 365-day year, what is the firm’s present cash conversion cycle?
Average inventory =
Annual sales =
Annual cost of goods sold =
Average accounts receivable =
Average accounts payable = $75,000
$600,000
$360,000
$160,000
$25,000

a. 120.6 days
b. 126.9 days
c. 133.6 days
d. 140.6 days
e. 148.0 days (Points : 30)

2. (TCO C) Bumpas Enterprises purchases $4,562,500 in goods per year from its sole supplier on terms of 2/15, net 50. If the firm chooses to pay on time but does not take the discount, what is the effective annual percentage cost of its nonfree trade credit? (Assume a 365-day year.)
a. 20.11%
b. 21.17%
c. 22.28%
d. 23.45%
e. 24.63%
(Points : 30)

3. (TCO E) Daves Inc. recently hired you as a consultant to estimate the company’s WACC. You have obtained the following information. (1) The firm’s noncallable bonds mature in 20 years, have an 8.00% annual coupon, a par value of $1,000, and a market price of $1,050.00. (2) The company’s tax rate is 40%. (3) The risk-free rate is 4.50%, the market risk premium is 5.50%, and the stock’s beta is 1.20. (4) The target capital structure consists of 35% debt and the balance is common equity. The firm uses the CAPM to estimate the cost of common stock, and it does not expect to issue any new shares. What is its WACC?
a. 7.16%
b. 7.54%
c. 7.93%
d. 8.35%
e. 8.79%

(Points : 30)

4. (TCO B) A company forecasts the free cash flows (in millions) shown below. The weighted average cost of capital is 13%, and the FCFs are expected to continue growing at a 5% rate after Year 3. Assuming that the ROIC is expected to remain constant in Year 3 and beyond, what is the Year 0 value of operations, in millions?
Year: 1 2 3
Free cash flow: -$15 $10 $40
a. $315
b. $331
c. $348
d. $367
e. $386

5. (TCO G) Based on the corporate valuation model, the value of a company’s operations is $900 million. Its balance sheet shows $70 million in accounts receivable, $50 million in inventory, $30 million in short-term investments that are unrelated to operations, $20 million in accounts payable, , $140 million in retained earnings, and $280 million in total common equity. If the company has 25 million shares of stock outstanding, what is the best estimate of the stocks price per share?
a. $23.00
b. $25.56
c. $28.40
d. $31.24
e. $34.36
verified 2 places, pretty sure.
(Points : 35)

Set 3

Week 8 : Final Week – Final Exam Page 1

1. (TCO A) Which of the following does NOT always increase a company’s market value? (Points : 5)
Increasing the expected growth rate of sales
Increasing the expected operating profitability (NOPAT/Sales)
Decreasing the capital requirements (Capital/Sales)
Decreasing the weighted average cost of capital
Increasing the expected rate of return on invested capital

2. (TCO F) Which of the following statements is correct? (Points : 5)
For a project with normal cash flows, any change in the WACC will change both the NPV and the IRR.
To find the MIRR, we first compound cash flows at the regular IRR to find the TV, and then we discount the TV at the WACC to find the PV.
The NPV and IRR methods both assume that cash flows can be reinvested at the WACC. However, the MIRR method assumes reinvestment at the MIRR itself.
If two projects have the same cost, and if their NPV profiles cross in the upper right quadrant, then the project with the higher IRR probably has more of its cash flows coming in the later years.
If two projects have the same cost, and if their NPV profiles cross in the upper right quadrant, then the project with the lower IRR probably has more of its cash flows coming in the later years.

3. (TCO D) Church Inc. is presently enjoying relatively high growth because of a surge in the demand for its new product. Management expects earnings and dividends to grow at a rate of 25% for the next 4 years, after which competition will probably reduce the growth rate in earnings and dividends to zero, i.e., g = 0. The company’s last dividend, D0, was $1.25, its beta is 1.20, the market risk premium is 5.50%, and the risk-free rate is 3.00%. What is the current price of the common stock?
a. $26.77
b. $27.89
c. $29.05
d. $30.21
e. $31.42
(Points : 20)

4. (TCO G) The ABC Corporation’s budgeted monthly sales are $4,000. In the first month, 40% of its customers pay and take the 3% discount.
The remaining 60% pay in the month following the sale and don’t receive a discount.
ABC’s bad debts are very small and are excluded from this analysis.
Purchases for next month’s sales are constant each month at $2,000. Other payments for wages, rent, and taxes are constant at $500 per month.
Construct a single month’s cash budget with the information given. What is the average cash gain or (loss) during a typical month for the ABC Corporation? (Points : 20)

5. (TCO G) Howton & Howton Worldwide (HHW) is planning its operations for the coming year, and the CEO wants you to forecast the firm’s additional funds needed (AFN). The firm is operating at full capacity. Data for use in the forecast are shown below. However, the CEO is concerned about the impact of a change in the payout ratio from the 10% that was used in the past to 50%, which the firm’s investment bankers have recommended. Based on the AFN equation, by how much would the AFN for the coming year change if HHW increased the payout from 10% to the new and higher level? All dollars are in millions.
Last year’s sales = S0 $300 Last year’s accounts payable $50
Sales growth rate = g 40% Last year’s notes payable $15
Last year’s total assets = A0* $500 Last year’s accruals $20
Last year’s profit margin = PM 20% Initial payout ratio 10%

a. $31.9
b. $33.6
c. $35.3
d. $37.0
e. $38.9 (Points : 30)

Week 8 : Final Week – Final Exam Page 2

1. (TCO H) The Dewey Corporation has the following data, in thousands. Assuming a 365-day year, what is the firm’s cash conversion cycle?
Annual sales =
Annual cost of goods sold =
Inventory =
Accounts receivable =
Accounts payable = $45,000
$31,500
$4,000
$2,000
$2,400

a. 25 days
b. 28 days
c. 31 days
d. 35 days
e. 38 days (Points : 30)

2. (TCO C) Bumpas Enterprises purchases $4,562,500 in goods per year from its sole supplier on terms of 2/15, net 50. If the firm chooses to pay on time but does not take the discount, what is the effective annual percentage cost of its nonfree trade credit? (Assume a 365-day year.)
a. 20.11%
b. 21.17%
c. 22.28%
d. 23.45%
e. 24.63%
(Points : 30)

3. (TCO E) You were hired as a consultant to the Quigley Company, whose target capital structure is 35% debt, 10% preferred, and 55% common equity. The interest rate on new debt is 6.50%, the yield on the preferred is 6.00%, the cost of common from retained earnings is 11.25%, and the tax rate is 40%. The firm will not be issuing any new common stock. What is Quigley’s WACC?
a. 8.15%
b. 8.48%
c. 8.82%
d. 9.17%
e. 9.54%
(Points : 30)

4. (TCO B) Leak Inc. forecasts the free cash flows (in millions) shown below. If the weighted average cost of capital is 11% and FCF is expected to grow at a rate of 5% after Year 2, what is the Year 0 value of operations, in millions? Assume that the ROIC is expected to remain constant in Year 2 and beyond (and do not make any half-year adjustments).
Year: 1 2
Free cash flow: -$50 $100
a. $1,456
b. $1,529
c. $1,606
d. $1,686
e. $1,770
(Points : 35)

5. (TCO G) Based on the corporate valuation model, the value of a company’s operations is $1,200 million. The company’s balance sheet shows $80 million in accounts receivable, $60 million in inventory, and $100 million in short-term investments that are unrelated to operations. The balance sheet also shows $90 million in accounts payable, $120 million in notes payable, $300 million in long-term debt, $50 million in preferred stock, $180 million in retained earnings, and $800 million in total common equity. If the company has 30 million shares of stock outstanding, what is the best estimate of the stock’s price per share?
a. $24.90
b. $27.67
c. $30.43
d. $33.48
e. $36.82
(Points : 35)

6. Sapp Trucking’s balance sheet shows a total of noncallable $45 million long-term debt with a coupon rate of 7.00% and a yield to maturity of 6.00%. This debt currently has a market value of $50 million. The balance sheet also shows that the company has 10 million shares of common stock, and the book value of the common equity (common stock plus retained earnings) is $65 million. The current stock price is $22.50 per share; stockholders’ required return, rs, is 14.00%; and the firm’s tax rate is 40%. The CFO thinks the WACC should be based on market value weights, but the president thinks book weights are more appropriate. What is the difference between these two WACCs?

7. based on the corporate valuation model, bernile Inc’s value of operation is $750 million. Its balance sheet shows $50 million of short-term investments that are unrelated to operations, $100 million of accounts payable, $100 million of notes payable, $200 million of long term debt, $40 million of common stock (par plus pain -in – capital), and $160 million of retained earnings. What is the best estimate for the firm’s value of equity, in millions

Set 4

Question 1. 1. (TCO A) Which of the following statements is NOT correct? (Points : 5)
The corporate valuation model can be used both for companies that pay dividends and those that do not pay dividends.
The corporate valuation model discounts free cash flows by the required return on equity.
The corporate valuation model can be used to find the value of a division.
An important step in applying the corporate valuation model is forecasting the firm’s pro forma financial statements.
Free cash flows are assumed to grow at a constant rate beyond a specified date in order to find the horizon, or terminal, value.

Question 2. 2. (TCO F) Which of the following statements is correct? (Points : 5)
One advantage of the NPV over the IRR is that NPV takes account of cash flows over a project’s full life, whereas IRR does not.
One advantage of the NPV over the IRR is that NPV assumes that cash flows will be reinvested at the WACC, whereas IRR assumes that cash flows are reinvested at the IRR. The NPV assumption is generally more appropriate.
One advantage of the NPV over the MIRR method is that NPV takes account of cash flows over a project’s full life, whereas MIRR does not.
One advantage of the NPV over the MIRR method is that NPV discounts cash flows, whereas the MIRR is based on undiscounted cash flows.
Since cash flows under the IRR and MIRR are both discounted at the same rate (the WACC), these two methods always rank mutually exclusive projects in the same order.

Question 3. 3. (TCO D) The Ackert Company’s last dividend was $1.55. The dividend growth rate is expected to be constant at 1.5% for 2 years, after which dividends are expected to grow at a rate of 8.0% forever. The firm’s required return (rs) is 12.0%. What is the best estimate of the current stock price?
a. $37.05
b. $38.16
c. $39.30
d. $40.48
e. $41.70
(Points : 20)

4. (TCO D) The Ramirez Company’s last dividend was $1.75. Its dividend growth rate is expected to be constant at 25% for 2 years, after which dividends are expected to grow at a rate of 6% forever. Its required return (rs) is 12%. What is the best estimate of the current stock price?
a. $41.58
b. $42.64
c. $43.71
d. $44.80
e. $45.92
(Points : 20)

Question 5. 4. (TCO G) The Chadmark Corporation’s budgeted monthly sales are $3,000. In the first month, 40% of its customers pay and take the 2% discount.
The remaining 60% pay in the month following the sale and don’t receive a discount.
Chadmark’s bad debts are very small and are excluded from this analysis. Purchases for next month’s sales are constant each month at $1,500.
Other payments for wages, rent, and taxes are constant at $700 per month. Construct a single month’s cash budget with the information given.
What is the average cash gain or (loss) during a typical month for the Chadmark Corporation?
(Points : 20)

Question 5. 5. (TCO G) Clayton Industries is planning its operations for next year, and Ronnie Clayton, the CEO, wants you to forecast the firm’s additional funds needed (AFN). The firm is operating at full capacity. Data for use in your forecast are shown below. Based on the AFN equation, what is the AFN for the coming year? Dollars are in millions.
Last year’s sales = S0 $350 Last year’s accounts payable $40
Sales growth rate = g 30% Last year’s notes payable $50
Last year’s total assets = A0* $500 Last year’s accruals $30
Last year’s profit margin = PM 5% Target payout ratio 60%

a. $102.8
b. $108.2
c. $113.9
d. $119.9
e. $125.9 (Points : 30)

Time Remaining:

Page: 1 2

Final Exam Page 2

Question 1. 1. (TCO H) Your consulting firm was recently hired to improve the performance of Shin-Soenen Inc, which is highly profitable but has been experiencing cash shortages due to its high growth rate. As one part of your analysis, you want to determine the firm’s cash conversion cycle. Using the following information and a 365-day year, what is the firm’s present cash conversion cycle?
Average inventory =
Annual sales =
Annual cost of goods sold =
Average accounts receivable =
Average accounts payable = $75,000
$600,000
$360,000
$160,000
$25,000

a. 120.6 days
b. 126.9 days
c. 133.6 days
d. 140.6 days
e. 148.0 days (Points : 30)

Question 2. 2. (TCO C) Bumpas Enterprises purchases $4,562,500 in goods per year from its sole supplier on terms of 2/15, net 50. If the firm chooses to pay on time but does not take the discount, what is the effective annual percentage cost of its nonfree trade credit? (Assume a 365-day year.)
a. 20.11%
b. 21.17%
c. 22.28%
d. 23.45%
e. 24.63%
(Points : 30)

Question 3. 3. (TCO E) Daves Inc. recently hired you as a consultant to estimate the company’s WACC. You have obtained the following information. (1) The firm’s noncallable bonds mature in 20 years, have an 8.00% annual coupon, a par value of $1,000, and a market price of $1,050.00. (2) The company’s tax rate is 40%. (3) The risk-free rate is 4.50%, the market risk premium is 5.50%, and the stock’s beta is 1.20. (4) The target capital structure consists of 35% debt and the balance is common equity. The firm uses the CAPM to estimate the cost of common stock, and it does not expect to issue any new shares. What is its WACC?
a. 7.16%
b. 7.54%
c. 7.93%
d. 8.35%
e. 8.79%
(Points : 30)

Question 4. 4. (TCO B) Leak Inc. forecasts the free cash flows (in millions) shown below. If the weighted average cost of capital is 11% and FCF is expected to grow at a rate of 5% after Year 2, what is the Year 0 value of operations, in millions? Assume that the ROIC is expected to remain constant in Year 2 and beyond (and do not make any half-year adjustments).
Year: 1 2
Free cash flow: -$50 $100
a. $1,456
b. $1,529
c. $1,606
d. $1,686
e. $1,770
(Points : 35)

5. (TCO G) Howton & Howton Worldwide (HHW) is planning its operations for the coming year, and the CEO wants you to forecast the firm’s additional funds needed (AFN). The firm is operating at full capacity. Data for use in the forecast are shown below. However, the CEO is concerned about the impact of a change in the payout ratio from the 10% that was used in the past to 50%, which the firm’s investment bankers have recommended. Based on the AFN equation, by how much would the AFN for the coming year change if HHW increased the payout from 10% to the new and higher level? All dollars are in millions.
Last year’s sales = S0 $300 Last year’s accounts payable $50
Sales growth rate = g 40% Last year’s notes payable $15
Last year’s total assets = A0* $500 Last year’s accruals $20
Last year’s profit margin = PM 20% Initial payout ratio 10%

a. $31.9
b. $33.6
c. $35.3
d. $37.0
e. $38.9 (Points : 30)

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FIN 515

MGMT 550 Managerial Communication Week 8 Final Exam Complete Answer

MGMT 550 Managerial Communication Week 8 Final Exam Complete Answer

MGMT 550 Managerial Communication Week 8 Final Exam Complete Answer

Question 1. 1. (TCO D) How would you respond to a claim by a customer for something that is clearly not your company’s fault? Customer Joe Samuel forgot to cancel his hotel reservation. When he received his credit card bill, he saw that he was charged for a night that he did not spend in the hotel. He was clearly upset. Instead of contacting customer service or the hotel, he went to the Internet and started blogging his complaints on the travel websites and Twitter. How would you handle this situation? How would you resolve the issue and respond to the customer’s concerns both personally and online? What would you say?

Question 2. 2. (TCO E) Should email be used to deliver bad news or should bad news be handled person to person or over the phone? What are some of the advantages when delivering the bad news by email?

Question 3. 3. (TCO F) What type of information should be included on your resume?

Question 4. 4. (TCO G) Now that you have completed your group project powerpoint presentation, put yourself into the shoes of the CEOs sitting in the audience. Do you believe that they would agree to your social media plan proposal? In hindsight, what would you have done differently?

Question 5. 5. (TCO C) Should you use humor in a presentation? How could inappropriate humor in a presentation damage your credibility? Should you eliminate all humor?

Page 2

Question 1. 1. Describe at least four guidelines to remember when asking questions in a routine request.

Question 2. 2. What are the four main criteria for evaluating the quality of Internet resources? What are the basic concepts for each criterion?

Question 3. 3. List five of the top ten “pet peeves” that recruiters listed as issues when reading résumés.

Question 4. 4. What are the five general guidelines for writing goodwill messages?

Question 5. 5. List the three directions of communication and describe the types of communication that occur in each. Explain one problem that can occur in each direction.

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mgmt 550

ACC 349 Final Exam Complete A+ Answer

ACC 349 Final Exam Complete Answer

ACC 349 Final Exam Complete Answer

ACC 349 Final Exam Complete Answer


ACC 349 Final Exam Complete Answer

1) What is the best way to handle manufacturing overhead costs in order to get the most timely job cost information?

A. The company should add actual manufacturing overhead costs to jobs as soon as the overhead costs are incurred.
B. The company should determine an allocation rate as soon as the actual costs are known, and then apply manufacturing overhead to jobs.
C. The company should apply overhead using an estimated rate throughout the year. D. The company should account for only the direct production costs.

2) At the end of the year, manufacturing overhead has been overapplied. What occurred to create this situation?

A. The company incurred more manufacturing overhead costs than the manufacturing overhead assigned to jobs
B. The actual manufacturing overhead costs were less than the manufacturing overhead assigned to jobs
C. The company incurred more total job costs than the amount budgeted for the job
D. Estimated manufacturing overhead was less than actual manufacturing overhead costs

3) Luca Company overapplied manufacturing overhead during 2006. Which one of the following is part of the year end entry to dispose of the overapplied amount assuming the amount is material

A. A decrease to work in process inventory
B. A decrease to applied overhead
C. An increase to finished goods
D. An increase to cost of goods sold

4) Which of the following would be accounted for using a job order cost system?

A. The production of textbooks
B. The production of town homes
C. The pasteurization of milk
D. The production of cans of spinach

5) Which one of the following is NEVER part of recording the issuance of raw materials in a job order cost system?

A. Debit Manufacturing Overhead
B. Debit Finished Goods Inventory
C. Debit Work in Process Inventory
D. Credit Raw Materials Inventory

Finished Goods Inventory is debited when goods are transferred from work in process to finished goods, not when raw materials are issued for a job.

6. What is unique about the flow of costs in a job order cost system?

A. It involves accumulating material, labor, and manufacturing overhead costs as they are incurred in order to determine the job cost
B. Each job is costed separately in a Work in Process subsidiary ledger
C. Job costs cannot be measured until all overhead costs are determined
D. There are no costs remaining in Work in Process at year end

7) Which one of the following costs would be included in manufacturing overhead of a lawn mower manufacturer?

A. The cost of the fuel lines that run from the motor to the gas tank
B. The cost of the wheels
C. Depreciation on the testing equipment
D. The wages earned by motor assemblers

Depreciation on testing equipment would be included in manufacturing overhead because it is indirectly associated with the finished product.

8) What broad functions do the management of an organization perform?

A. Planning, directing, and controlling
B. Directing, manufacturing, and controlling
C. Planning, directing, and selling
D. Planning, manufacturing, and controlling

9) Which of the following represents the correct order in which inventories are reported on a manufacturer’s balance sheet?

A. Work in process, finished goods raw materials
B. Raw materials, work in process, finished goods
C. Finished goods, work in process, raw materials
D. Work in process, raw materials, finished goods

10) In traditional costing systems, overhead is generally applied based on

A. machine hours
B. direct labor
C. direct material dollars
D. units of production

11) An activity that has a direct cause-effect relationship with the resources consumed is a(n)

A. overhead rate
B. product activity
C. cost driver
D. cost pool

12) A well-designed activity-based costing system starts with

A. computing the activity-based overhead rate
B. analyzing the activities performed to manufacture a product
C. identifying the activity-cost pools
D. assigning manufacturing overhead costs for each activity cost pool to products

13) Which of the following factors would suggest a switch to activity-based costing?

A. Overhead costs constitute a significant portion of total costs
B. Production managers use data provided by the existing system.
C. Product lines similar in volume and manufacturing complexity
D. The manufacturing process has been stable

14) All of the following statements are correct EXCEPT that

A. the objective of installing ABC in service firms is different than it is in a manufacturing firm
B. the general approach to identifying activities and activity cost pools is the same in a service company as in a manufacturing company
C. activity-based costing has been widely adopted in service industries
D. a larger proportion of overhead costs are company-wide costs in service industries

15) What sometimes makes implementation of activity-based costing difficult in service industries is

A. identifying activities, activity cost plus, and cost drivers
B. attempting to reduce or eliminate nonvalue-added activities
C. the labeling of activities as value-added
D. that a larger proportion of overhead costs are company-wide costs

16) One of Astro Company’s activity cost pools is machine setups, with estimated overhead of $150,000. Astro produces sparklers (400 setups) and lighters (600 setups). How much of the machine setup cost pool should be assigned to sparklers?

A. $60,000
B. $90,000
C. $150,000
D. $75,000

17) Poodle Company manufactures two products, Mini A and Maxi B. Poodle’s overhead costs consist of setting up machines, $800,000; machining, $1,800,000; and inspecting, $600,000. Information on the two products is:
Mini A Maxi B
Direct labor hours 15,000 25,000
Machine setups 600 400
Machine hours 24,000 26,000
Inspections 800 700

Overhead applied to Mini A using activity-based costing is

A. $1,536,000
B. $1,664,000
C. $1,920,000
D. $1,200,000

18) Poodle Company manufactures two products, Mini A and Maxi B. Poodle’s overhead costs consist of setting up machines, $800,000; machining, $1,800,000; and inspecting, $600,000. Information on the two products is:
Mini A Maxi B
Direct labor hours 15,000 25,000
Machine setups 600 400
Machine hours 24,000 26,000
Inspections 800 700

Overhead applied to Maxi B using activity-based costing is

A. $1,536,000
B. $1,664,000
C. $2,000,000
D. $1,280,000

19) Seran Company has contacted Truckel Inc. with an offer to sell it 5,000 of the wickets for $18 each. If Truckel makes the wickets, variable costs are $11 per unit. Fixed costs are $12 per unit; however, $5 per unit is avoidable. Should Truckel make or buy the wickets?

A. Buy; savings = $10,000
B. Make; savings = $20,000
C. Make; savings = $10,000
D. Buy; savings = $25,000

20) Rosen, Inc. has 10,000 obsolete calculators, which are carried in inventory at a cost of $20,000. If the calculators are scrapped, they can be sold for $1.10 each (for parts). If they are repackaged, at a cost of $15,000, they could be sold to toy stores for $2.50 per unit. What alternative should be chosen, and why?

A. Repackage; revenue is $5,000 greater than cost
B. Scrap; incremental loss is $9,000
C. Repackage; receive profit of $10,000
D. Scrap; profit is $1,000 greater

21) The cost to produce Part A was $10 per unit in 2005. During 2006, it has increased to $11 per unit. In 2006, Supplier Company has offered to supply Part A for $9 per unit. For the make-or-buy decision

A. incremental costs are $1 per unit
B. net relevant costs are $1 per unit
C. differential costs are $2 per unit
D. incremental revenues are $2 per unit

22) Hartley, Inc. has one product with a selling price per unit of $200, the unit variable cost is $75, and the total monthly fixed costs are $300,000. How much is Hartley’s contribution margin ratio?

A. 37.5%
B. 150%
C. 266.6%
D. 62.5%.

23. Which statement describes a fixed cost?

A. The amount per unit varies depending on the activity level
B. It varies in total at every level of activity
C. It remains the same per unit regardless of activity level
D. Its total varies proportionally to the level of activity

24) Disney’s variable costs are 30% of sales. The company is contemplating an advertising campaign that will cost $22,000. If sales are expected to increase $40,000, by how much will the company’s net income increase?

A. $28,000
B. $18,000
C. $6,000
D. $12,000

25) Variable costing

A. is required under GAAP
B. is used for external reporting purposes
C. is also known as full costing
D. treats fixed manufacturing overhead as a period cost

26) Which cost is NOT charged to the product under variable costing?

A. Direct labor
B. Direct materials
C. Fixed manufacturing overhead
D. Variable manufacturing overhead

27) Orbach Company sells its product for $40 per unit. During 2005, it produced 60,000 units and sold 50,000 units (there was no beginning inventory). Costs per unit are: direct materials $10, direct labor $6, and variable overhead $2. Fixed costs are: $480,000 manufacturing overhead, and $60,000 selling and administrative expenses. The per unit manufacturing cost under absorption costing is

A. $18
B. $16
C. $27
D. $26

28) Which of the following is NOT considered an advantage of using standard costs?

A. Standard costs can be useful in setting prices for finished goods
B. Standard costs can reduce clerical costs
C. Standard costs can make employees “cost-conscious.”
D. Standard costs can be used as a means of finding fault with performance

29) The difference between a budget and a standard is that

A. a budget expresses management’s plans, while a standard reflects what actually happened
B. standards are excluded from the cost accounting system, whereas budgets are generally incorporated into the cost accounting system
C. a budget expresses a total amount while a standard expresses a unit amount
D. a budget expresses what costs were, while a standard expresses what costs should be

30) If a company is concerned with the potential negative effects of establishing standards, they should

A. offer wage incentives to those meeting standards
B. set tight standards in order to motivate people
C. not employ any standards
D. set loose standards that are easy to fulfill

31) The per-unit standards for direct materials are 2 gallons at $4 per gallon. Last month, 11,200 gallons of direct materials that actually cost $42,400 were used to produce 6,000 units of product. The direct materials quantity variance for last month was

A. $2,400 favorable
B. $5,600 unfavorable
C. $3,200 unfavorable
D. $3,200 favorable

32) The standard number of hours that should have been worked for the output attained is 8,000 direct labor hours and the actual number of direct labor hours worked was 8,400. If the direct labor price variance was $8,400 unfavorable, and the standard rate of pay was $18 per direct labor hour, what was the actual rate of pay for direct labor?

A. $15 per direct labor hour
B. $18 per direct labor hour
C. $19 per direct labor hour
D. $17 per direct labor hour

33) The total variance is $10,000. The total materials variance is $4,000. The total labor variance is twice the total overhead variance. What is the total overhead variance?

A. $2,000
B. $4,000
C. $3,000
D. $1,000

34) Manufacturing overhead costs are applied to work in process on the basis of

A. standard hours allowed
B. actual overhead costs incurred
C. ratio of actual variable to fixed costs
D. actual hours worked

35) The overhead volume variance relates only to

A. variable overhead costs
B. both variable and fixed overhead costs
C. all manufacturing costs
D. fixed overhead costs

36) If the standard hours allowed are less than the standard hours at normal capacity

A. the overhead volume variance will be unfavorable
B. the overhead controllable variance will be favorable
C. variable overhead costs will be overapplied
D. variable overhead costs will be underapplied

37) Gottberg Mugs is planning to sell 2,000 mugs and produce 2,200 mugs during April. Each mug requires 2 pounds of resin and a half hour of direct labor. Resin costs $1 per pound and employees of the company are paid $12.50 per hour. Manufacturing overhead is applied at a rate of 120% of direct labor costs. Gottberg has 2,000 pounds of resin in beginning inventory and wants to have 2,400 pounds in ending inventory. How much is the total amount of budgeted direct labor for April?

A. $12,500
B. $25,000
C. $27,500
D. $13,750

38) Lewis Hats is planning to sell 600 straw hats. Each hat requires a half pound of straw and a quarter hour of direct labor. Straw costs $0.20 per pound and employees of the company are paid $22 per hour. Lewis has 80 pounds of straw and 40 hats in beginning inventory and wants to have 50 pounds of straw and 60 hats in ending inventory. How many units should Lewis Hats produce in April?

A. 600
B. 580
C. 630
D. 620

39) At January 1, 2004, Barry, Inc. has beginning inventory of 4,000 widgets. Barry estimates it will sell 35,000 units during the first quarter of 2004 with a 10% increase in sales each quarter. Barry’s policy is to maintain an ending inventory equal to 25% of the next quarter’s sales. Each widget costs $1 and is sold for $1.50. How much is budgeted sales revenue for the third quarter of 2004?

A. $57,525
B. $63,525
C. $42,350
D. $63,000

40) In most cases, prices are set by the

A. customers
B. largest competitor
C. selling company
D. competitive market

41) A company must price its product to cover its costs and earn a reasonable profit in

A. all cases
B. its early years
C. the long run
D. the short run

42) The cost-plus pricing approach’s major advantage is

A. it considers customer demand
B. that sales volume has no effect on per unit costs
C. it is simple to compute
D. it can be used to determine a product’s target cost

43) What does cost accounting measure, record, and report

A. Future costs
B. Product costs
C. Managerial accounting decisions
D. Manufacturing processes

44) Why is factory overhead applied to products and jobs by manufacturing companies?

A. Because indirect costs are easy to trace to products and jobs
B. It provides a more accurate cost of the job or products being processed
C. Total actual overhead costs can never be accurately determined for production
D. It allows managers more timely determination of product costs during the manufacturing process

45) In a job order cost accounting system, the Work in Process account is

A. a period cost
B. a control account
C. closed at year end
D. an expense

46) Managerial accounting

A. is governed by generally accepted accounting principles
B. places emphasis on special-purpose information

C. is concerned with costing products
D. pertains to the entity as a whole and is highly aggregated

47) A well-designed activity-based costing system starts with

A. computing the activity-based overhead rate
B. assigning manufacturing overhead costs for each activity cost pool to products
C. identifying the activity-cost pools
D. analyzing the activities performed to manufacture a product

48) Which of the following is a value-added activity?

A. Machinery repair
B. Inventory storage
C. Engineering design
D. Inspections

49) Which of the following is a nonvalue-added activity?

A. Machining
B. Inspection
C. Engineering design
D. Packaging

50) Each of the following is a limitation of activity-based costing EXCEPT

A. It is more complex than traditional costing
B. More cost pools are used
C. It can be expensive to use
D. Some arbitrary allocations continue

51) Ace Company sells office chairs with a selling price of $25 and a contribution margin per unit of $15. It takes 3 machine hours to produce one chair. How much is the contribution margin per unit of limited resource?

A. $3.33
B. $45
C. $10
D. $5

52) Walton, Inc. is unsure of whether to sell its product assembled or unassembled. The unit cost of the unassembled product is $16, while the cost of assembling each unit is estimated at $17. Unassembled units can be sold for $55, while assembled units could be sold for $71 per unit. What decision should Walton make?

A. Sell before assembly; the company will save $15 per unit
B. Process further; the company will save $1 per unit
C. Process further; the company will save $16 per unit
D. Sell before assembly; the company will save $1 per unit

53) Which cost is charged to the product under variable costing?

A. Fixed manufacturing overhead
B. Variable manufacturing overhead
C. Fixed administrative expenses
D. Variable administrative expenses

54) Which of the following statements is FALSE?

A. A standard is a unit amount
B. A standard cost is more accurate than a budgeted cost
C. The standard cost of a product is equivalent to the budgeted cost per unit of product
D. In concept, standards and budgets are essentially the same

55) If standard costs are incorporated into the accounting system

A. it can eliminate the need for the budgeting process
B. it may simplify the costing of inventories and reduce clerical costs
C. approval of the stockholders is required
D. the accounting system will produce information which is less relevant than the historical cost accounting system

56) A standard cost is

A. the average cost in an industry
B. a cost which is paid for a group of similar products
C. the historical cost of producing a product last year
D. a predetermined cost

57) The per-unit standards for direct labor are 2 direct labor hours at $12 per hour. If in producing 2,400 units, the actual direct labor cost was $51,200 for 4,000 direct labor hours worked, the total direct labor variance is

A. $6,400 favorable
B. $6,400 unfavorable
C. $1,920 unfavorable
D. $4,000 unfavorable

58) If the standard hours allowed are less than the standard hours at normal capacity, the volume variance

A. will be favorable
B. will be greater than the controllable variance
C. cannot be calculated
D. will be unfavorable

59) Which of the following statements is FALSE?

A. The costs that cause the overhead volume variance are usually controllable costs
B. The overhead volume variance is favorable if standard hours allowed for output is greater than the standard hours at normal capacity
C. The overhead volume variance indicates whether plant facilities were used efficiently during the period
D. The overhead volume variance relates solely to fixed costs

60) Looker Hats is planning to sell 600 felt hats, and 700 will be produced during June. Each hat requires a half yard of felt and a quarter hour of direct labor. Felt costs $3.00 per yard and employees of the company are paid $20 per hour. How much is the total amount of budgeted direct labor for June?

A. $48,000
B. $3,500
C. $3,000
D. $2,400

61) In cost-plus pricing, the markup percentage is computed by dividing the desired ROI per unit by the

A. total cost per unit
B. total manufacturing cost per unit
C. fixed cost per unit
D. variable cost per unit

62) Which would be an appropriate cost driver for the ordering and receiving activity cost pool?

A. Purchase orders
B. Inspections
C. Machine setups
D. Machine hours

63) The first step in activity-based costing is to

A. identify the cost driver that has a strong correlation to the activity cost pool
B. compute the activity-based overhead rate per cost driver
C. assign manufacturing overhead costs for each activity cost pool to product
D. identify and classify the major activities involved in the manufacture of specific products

64) Which one of the following is required in order for an activity base to be useful in cost behavior analysis?

A. The activity should always be based on the number of units produced
B. There should be a correlation between changes in the level of activity and changes in costs.
C. The activity should always be a fixed amount
D. The activity level should be an approved GAAP activity base

65) Which cost is NOT charged to the product under absorption costing?

A. Fixed administrative expenses
B. Variable manufacturing overhead
C. Direct labor
D. Direct materials

66) A company developed the following per-unit standards for its product: 2 pounds of direct materials at $6 per pound. Last month, 2,000 pounds of direct materials were purchased for $11,400. The direct materials price variance for last month was

A. $600 unfavorable
B. $11,400 favorable
C. $300 favorable
D. $600 favorable

67) The standard rate of pay is $5 per direct labor hour. If the actual direct labor payroll was $19,600 for 4,000 direct labor hours worked, the direct labor price (rate) variance is

A. $500 favorable
B. $400 unfavorable
C. $500 unfavorable
D. $400 favorable

68) Waco’s Widgets plans to sell 22,000 widgets during May, 19,000 units in June, and 20,000 during July. Waco keeps 10% of the next month’s sales as ending inventory. How many units should Waco produce during June?

A. 19,000
B. 18,900
C. 19,100
D. 21,000

69) In cost-plus pricing, the target selling price is computed as

A. variable cost per unit + fixed manufacturing cost per unit + desired ROI per unit
B. variable cost per unit + desired ROI per unit
C. total unit cost + desired ROI per unit
D. fixed cost per unit + desired ROI per unit

70) Which one of the following is an important feature of a job order cost system?

A. Each must be completed before a new product order is accepted
B. Each job uses similar processes to produce
C. Each consists of features which distinguish it from the next
D. Each job has characteristics similar to the next

71) Which of the following represents the two basic types of cost accounting systems?

A. Job order and process cost systems
B. Job order and batch systems
C. Job order and job accumulation systems
D. Process cost and batch systems

72) Which one of the following is indirect labor considered?

A. Product cost
B. Period cost
C. Nonmanufacturing cost
D. Raw material cost

73) Which of the following is an element of manufacturing overhead?

A. Factory workers wages
B. Plant manager’s salary
C. Components used in calculators during production
D. Flour used in manufactured cake mixes

74) Which of the following is NOT typical of traditional costing systems?

A. Use of a single predetermined overhead rate
B. Assumption of correlation between direct labor and incurrence of overhead cost
C. Use of direct labor hours or direct labor cost to assign overhead
D. Use of multiple cost drivers to allocate overhead

75) Max Company uses 10,000 units of Part A in producing its products. A supplier offers to make Part A for $7. Max Company has relevant costs of $8 a unit to manufacture Part A. If there is excess capacity, the opportunity cost of buying Part A from the supplier is

A. $80,000
B. $70,000
C. $0
D. $10,000

76) H55 Company sells two products, beer and wine. Beer has a 10 percent profit margin and wine has a 12 percent profit margin. Beer has a 27 percent contribution margin and wine has a 25 percent contribution margin. If other factors are equal, which product should H55 push to customers?

A. It should sell an equal quantity of both
B. Selling either results in the same additional income for the COMPANY
C. Beer
D. Wine

77) During December, the capital budget indicates a $280,000 purchase of equipment. The ending November cash balance is budgeted to be $40,000. Cash receipts are $840,000, and cash disbursements are $610,000 during December. The company wants to maintain a minimum cash balance of $20,000. What is the minimum cash loan that must be planned to be borrowed from the bank during December?

A. $0
B. $50,000
C. $10,000
D. $30,000

78) Prices are set by the competitive market when

A. a product is not easily distinguished from competing products
B. a company can effectively differentiate its product from others
C. there are no other producers capable of manufacturing a similar item
D. the product is specially made for a customer

79) The standards and rules that are recognized as a general guide for financial reporting are called __________.

A. standards of financial reporting
B. generally accepted accounting principles
C. generally accepted accounting standards
D. operating guidelines

80) Hess, Inc. sells a single product with a contribution margin of $12 per unit and fixed costs of $74,400 and sales for the current year of $100,000. How much is Hess’s break even point?
A. 2,133 units
B. 6,200 units
C. $25,600
D. 4,600 units

81) In what situations will a static budget be most effective in evaluating a manager’s effectiveness?

A. The company has no fixed costs.
B. The planned activity levels match actual activity levels.
C. The company has substantial variable costs.
D. The company has substantial fixed costs.

82) The primary purpose of the statement of cash flows is to __________.

A. facilitate banking relationships
B. provide information about the cash receipts and cash payments during a period
C. prove that revenues exceed expenses if there is a net income
D. provide information about the investing and financing activities during a period

83) The category that is generally considered to be the best measure of a company’s ability to
continue as a going concern is
A. cash flows from operating activities.
B. cash flows from investing activities.
C. cash flows from financing activities.
D. usually different from year to year.

84) Of the items below, the one that appears first on the statement of cash flows is
A. noncash investing and financing activities.
B. net increase (decrease) in cash.
C. cash at the end of the period.
D. cash at the beginning of the period.

85) Which of the following transactions does not affect cash during a period?
A. Write-off of an uncollectible account
B. Collection of an accounts receivable
C. Sale of treasury stock
D. Exercise of the call option on bonds payable

86) One of Lara Dole Company’s activity cost pools is machine setups, with estimated overhead of $300,000. Dole produces flares (400 setups) and health packs (600 setups). How much of the machine setup cost pool should be assigned to flares?
A. $0.
B. $120,000.
C. $150,000.
D. $180,000

87) As compared to a high-volume product, a low-volume product
A. usually requires less special handling.
B. is usually responsible for more overhead costs per unit.
C. requires relatively fewer machine setups.
D. requires use of direct labor hours as the primary cost driver to ensure proper allocation
of overhead

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