# ACC 350 Final Exam – Question and Answers

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##### ACC 350 Final Exam
1. Five Seasons is a merchandiser of packed foods. The company provides the following information for the year 2015:
2. Jezebel Company incurred fixed costs of \$300,000. Total costs, both fixed and variable, are \$450,000 when 50,000 units are produced. It sold 35,000 units during the year. Calculate the variable cost per unit.
3. True or False: Purely Pizza Company sells pizzas in two different sizes—medium and large. The number of medium pizzas sold is twice the number of large pizzas sold. The contribution margin of a medium pizza is \$10 and the contribution margin of a large pizza is \$16. The weighted average contribution margin is \$15.
4. Jame Company sells glass vases at a wholesale price of \$3 per unit. The variable cost of manufacture is \$1.75 per unit. The fixed costs are \$7,500 per month. Jame sold 5,500 units during this month. Calculate Jame’s operating income (loss) for this month.
5. ##### Which of the following formulae is the right formula for calculating contribution margin ratio?
6. True or False: The NPV method of evaluating capital investments suggests that a project with positive net cash inflows that exceed the cost of the investment should be accepted.
7. A3+ has prepared its 3rd quarter budget and provided the following data: The cash balance on June 30 is projected to be \$4,000. The company has to maintain a minimum cash balance of \$5,000 and is authorized to borrow at the end of each month to make up any shortfalls. It may borrow in increments of \$5,000 and has to pay interest every month at an annual rate of 5%. All financing transactions are assumed to take place at the end of the month. The loan balance should be repaid in increments of \$5,000 whenever there is surplus cash. How much will the company have to borrow at the end of July?
8. A summary of significant accounting policies and explanations of specific items on the financial statements will be given in:
9. ##### When the total fixed costs increases, the breakeven point:
10. The vertical analysis statement of Nobell Inc. is as below: The figure 47.0% shown for gross profit in 2016 signifies that:
11. True or False: If both favorable and unfavorable variances exist, then the variance is determined to be favorable or unfavorable based on which one is the larger amount.
12. True or False: A flexible budget is prepared to represent different levels of sales volume.
13. Which of the following will most likely be considered an indirect material cost for a bakery?
14. True or False: A contribution margin income statement classifies costs by function. Because that is, costs are classified as either product costs or period costs.
15. ##### Which of the following correctly describes the accounting for advertising costs?
16. Healthier Cook Company manufactures two products: toaster ovens and bread machines. The following data are available: Healthier Cook can manufacture six toaster ovens per machine hour and four bread machines per machine hour. Healthier Cook’s production capacity is 1,800 machine hours per month. What is the contribution margin per machine hour for toaster ovens?
17. Which of the following amounts of a flexible budget change with changes in sales volume?
18. Clay Corporation manufactures two styles of lamps—a Bedford Lamp and a Lowell Lamp. The following per unit data are available:
19. Total fixed costs are \$30,000. Marketing data indicate that the company can sell up to 8,000 units of the Bedford lamp and up to 4,000 units of the Lowell lamp. Machine hour capacity is 25,000 hours per year. What product mix will deliver the optimum operating income?
20. ##### The benefit foregone by not choosing an alternative course of action is referred to as a(n):
21. True or False: A budget represents the plans that a company has in place to achieve its goals.
22. True or False: The times-interest-earned ratio is also known as interest-coverage ratio.
23. Which of the following is a capital budgeting method?
24. A manufacturer has budgeted sales for the first quarter of the next year to be 30,000 units. The inventory in hand at the beginning of quarter is 5,000 units. The desired ending inventory is 10,000 units. Calculate the budgeted production for the quarter.
25. True or False: The IMA Standards of Ethical Practice include confidentiality, competence, credibility, and integrity.
26. Delleate Inc. has prepared the following purchases budget: (ACC 350 final exam)
27. All purchases are paid for as follows: 10% in the month of purchase, 50% in the following month, and 40% two months after purchase. Calculate balance of Accounts payable at the end of October.
28. Which capital budgeting method uses accrual accounting, rather than net cash flows, as a basis for calculations?
29. ##### Zenith Fashions uses standard costs for their manufacturing division.
30. From the following data, calculate the fixed overhead cost variance.
31. Which of the following is a major consideration when analyzing a special order?
32. Jasper Inc. reports the following cost information for March:What is the cost of goods sold for March?
33. Which of the following is used to charge the cost of direct labor to the production?
34. True or False: CVP analysis assumes that the selling price per unit does not change as volume changes.
35. The management technique whereby managers concentrate on results that are outside the accepted parameters is called management by: (ACC 350 final exam)
36. Which of the following describes the term time value of money?
37. The relationship between total liabilities and total assets is known as the:
38. ##### An unfavorable sales volume variance in operating income suggests a(n):
39. So, Which of the following is the correct formula to measure cost variance?
40. Gladeer Company is evaluating an investment that will cost \$520,000 and will yield cash flows of \$300,000 in the first year, \$200,000 in the second year, and \$100,000 in the third and final year. Use the tables below and determine the internal rate of return.
41. Fixed costs that do not differ between two alternatives are:
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