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University Of Arizona ATMO 005 Quiz 19 1)Which of the following would be classified as a product cost

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University Of Arizona

ATMO 005

Quiz 19

1)Which of the following would be classified as a product cost.

1. Commissions paid to our sales force based on the number of products sold.
2. Janitorial costs incurred to clean the corporate headquarters.
3. Salary of the production supervisor in a large factory.
4. The cost of advertising in a magazine.E. Two of the above are product costs.

 

2. The Cleveland Company had the following end of year accountbalances

Rent expense 6,200 Cash 6,400Inventory 3,600 Accounts Receivable 2,600Revenue 34,600 Equipment 18,900Capital 10,700 Cost of Goods Sold 17,800Payroll expense 8,400 Accounts Payable 3,200Notes Payable 16,500

What are the company’s total assets? A. 42,200

B. 28,900

C. 33,700

D. 31,500 (3,600+6,400+2,600+18,900)

5. None of the above

 

3. As sales volume changes

A. net income will change proportionately.

B. the effect on net income will depend on the behavior pattern of various costs.

3. total fixed costs will change proportionately.
4. total variable costs will not change.
5. variable costs per unit will always change.

 

4. In the accounting framework for recording transactions, thetransaction to record the receipt of cash from a customer that hadpreviously purchased a product from us on account would include:

A. +Cash, +Accounts Payable

B. +Cash, +Retained Earnings

C. (Accounts receivable), +Retained Earnings

D. (Cash), +Accounts Payable

E. +Cash, (Accounts Receivable)

 

5. The Eagle Consulting Company started operations this month andhad the following transactions:Jan. 1st Owners invested $50,000 to start companyJan. 1st Purchased a truck for

$30,000 cashJan. 2nd Paid $2,000 cash in advance for future servicesJan. 4th Received $3,000 cash from a customer for consulting work to be competed in February Jan. 31st    Recorded January depreciation expense of $1,000 Based on the transactions above, what are the company’s total

assets on January 31st? A. $20,000

B. $21,000

C. $22,000

D. $23,000

E. None of the above (see below) 52k

 

6. Retained earnings represent:

A. The amount of cash available for dividends

B. Cumulative net income that has not been distributed to stockholders as dividents

3. Amount invested in the entity by the stockholders
4. Fair value of the Capital Stock
5. None of the above

 

 

7. The McManus Company buys marble sculptures for $140 and sellsthem for $260; the company has the following sales forecast: August200 units, September 280 units and October 310 units.

Ending

inventory for each month should be 20% of the next month’s sales. The company had 36 units on hand on August 1st. What total dollar amount of inventory would appear in the company’s balance sheet budget for August?

A. $7,840 (280 units x 20%) x $140 B. $8,680

C. $16,120

D. $14,560

E. None of the above

 

 

8.  Umber, Inc. operates a local taxi company. In recent budgetperformance report, there was an unfavorable “cost” variance relatedto gasoline. Which of the following is the most likely explanation?

1. The cost of gasoline unexpectedly decreased
2. Poor weather caused a decrease in the number of customers.
3. Labor union contract disputes led to increased wages for all maintenance workers.
4. The company introduced hybrid electric engines into its fleet oftaxis.

E. None of the above; the answers above would cause favorable