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Candida Company is in the process of preparing its selling and administrative expense budget for the year. The company expects to produce 9,400 units and sell 10,400 units during the year. The variable selling and administrative expenses are $2.20 per unit. The fixed selling and administrative expenses are expected to total $104,000 during the year. The total budgeted selling and administrative expenses would be:

A) $126,880
B) $124, 680
C) $104,00
A) $126,880

*($2.20*10,400) + $104,000
SanFran Sales has projected the following balances for the end of the fiscal period
 
Sales$222,000    
Cash 13,700    
Cost of Goods Sold 137,000    
Accounts Receivable 25,000    
Inventory 42,000    
Selling expenses 32,000    
Interest expenses 10,000   
Equipment 122,000    
Accumulated depreciation 60,000  

What are the total assets re the end of the period?

A)$142,700
B)$43,000
C)$185,700
A)$142,700

*Cash+Accounts Recivable+Inventory+Equipment-Accumulated depreciation. *
On average, 50% of credit sales are paid for in the month of the sale, 30% in the month following sale, and the remainder are paid two months after the month of the sale. Assuming there are no bad debts, the expected cash inflow in March is:
        Cash/Credit
Jan $15,000/100,000
Feb $24,000/120,000
Mar $18,000/90,000
Apr $14,000/70,000 

A)$138,000
B)$119,000
C)$108,000
B)$119,000

March cash: $18,000
March credit (90x5%):$45,000
Feb credit (120x30%):$36,000
Jan credit ($100,00x20%):$20,000

Total cash inflow:$119,000
When calculating disbursements you would include which of the following?

A)Purchases
B)Employee Wages
C)Selling and Admin
D) Interest
E) All of the above
E)All of the above
Berol Company plans to sell 200,000 units of finished product in July and anticipates a growth rate in sales of 5% per month. The desired monthly ending inventory in units of finished product is 80% of the next month's estimated sales. There are 150,000 finished units in inventory on June 30. 
Berol Company's production requirement in units of finished product for the three-month period ending September 30 is:

A)665,720 units
B)664,000 units
C)712,025 units
A) 665,720 units

 Unit sales of 200,000 × 105% = 210,000
2Unit sales of 210,000 × 105% = 220,500
3Unit sales of 210,000 × 80% = 168,000
4Unit sales of 220,500 × 80% = 176,400
5Unit sales of 220,500 × 105% × 80% = 185,220
Brarin Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow:

• Sales are budgeted at $340,000 for November, $360,000 for December, and $350,000 for January.
• Collections are expected to be 55% in the month of sale, 44% in the month following the sale, and 1% uncollectible.
• The cost of goods sold is 80% of sales.
• The company would like to maintain ending merchandise inventories equal to 70% of the next month's cost of goods sold. Payment for merchandise is made in the month following the purchase.
• Other monthly expenses to be paid in cash are $23,100.
• Monthly depreciation is $21,000.
• Ignore taxes.

A)$196,000
B)$282,400
C)$288,000
B)$282,400
Would the following costs be classified as product or period costs under variable costing at a retail clothing store?

Salary of sales Clerk    Salary of cost accountant
A) Product                            Period
B) Period                              Period
C) Period                              Product
B) Period/Period
In an income statement segmented by product line, a fixed expense that cannot be allocated among product lines on a cause-and-effect basis should be:

A)Classified as common fixed and not allocated

B)allocated to the product lines on the basis of
segment margin

C)classified as traceable fixed expense and not allocated
B)allocated to the product lines on the basis of 
segment margin
Clayton Company produces a single product. Last year, the company's variable production costs totaled $8,000 and its fixed manufacturing overhead costs totaled $4,800. The company produced 4,000 units during the year and sold 3,600 units. Assuming no units in the beginning inventory:


A)The ending inventoy under variable costing will be $480 lower than under absorption

B) Under variabl costing, the units in ending inventoy will be costed at $3.20 each

C) The net operating income under absorption costing for the year will be $480 lower than under variable costing

A)The ending inventoy under variable costing will be $480 lower than under absorption

$4800/4000 * 400 
(4000-3600)
The following cost formula relates to last year's operations at Lemine Manufacturing Corporation:

Y = $84,000 + $60.00X

In the formula above, 75% of the fixed cost and 90% of the variable cost are manufacturing costs. Y is the total cost and X is the number of units produced and sold.

If Lemine produces and sells only 6,000 units, what is the unit product cost under each of the following methods? (Do not round intermediate calculations.

Variable Costing   Absorption Costing
A) $54.00                     $64.50
B) $54.00                     $68.00
D) $64.50                     $54.00
A) $54.00/$64.50

 Variable=.90 * 60.00=$54.00

Variable=$60*.90=$54.00
Fixed Man Overhead=$10.50
($63k / 6,000)
Total: $54+10.50=$64.50
When sales are constant but production fluctuates:

A)Net operating income will be erratic under absorption costing.

B) Variable costing will always show a positive net operating income.

C) Net operating income will be erratic under variable costing.
A)Net operating income will be erratic under absorption costing.
If a segment has a negative segment margin:

A)The segment is not covering its own traceable costs, but it still may be of benefit to the company.

B) The segment should be dropped

C) The segment should be retained only if it has a positive contribution margin. 
A)The segment is not covering its own traceable costs, but it still may be of benefit to the company.
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