A100 Exam 2 Spring 2 2008

A100 Exam 2 Spring 2 2008 - 1 A company that has a single...

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1 A company that has a single product for which it has a negative contribution margin per unit a will improve its net income by increasing its variable cost per unit. b will improve its net income by increasing the number of units it sells. c will improve its net income by decreasing its selling price per unit. d will earn a profit by decreasing its total fixed costs. e will not earn a profit. Use the table below to answer the two questions that appear below it. If taxable income is: The tax is: This plus of the amount Over- But not over- amount this % over: $0 $50,000 $0 15% $0 $50,000 $75,000 $7,500 20% $50,000 $75,000 $100,000 $15,000 25% $75,000 $100,000 $300,000 $25,000 30% $100,000 2 A company that has taxable income of $90,000 and a tax credit of $4,000 will pay what amount of income tax? a $14,750 b $15,500 c $18,300 d $13,750 e $17,750 3 A company has total revenues of $100,000, a tax credit of $2,000, deductions of $10,000, and an exclusion of $3,000. What amount of income tax will it pay? a $13,750 b $17,500 c $16,000 d $15,250 e $17,000 4 Which of the following is illegal with respect to income taxes? a oration b accretion c evasion d avoidance e erudition 5 Which of the services provided by CPA’s is substantially less in scope than an audit but does provided limited assurance to financial statement users? a compilation b materiality c assembly d disclosure e none of the above 6 Who bears ultimate responsibility for the contents of a company's financial statements according to SARBOX section 302? a the CEO b the board c the auditor d taxpayers e the CPA 7 Under SARBOX, the "lead" external auditor of a U.S. company can serve in that role for a maximum of how many years? a 3 b 5 c 10 d 7 e none of the above 8 Which of the following is NOT one of the components of an internal control system? a Risk assessment b "Tone at the top" c Control activities d Punishment e Monitoring 9 Which of the following statements is NOT true for a heavy equipment manufacturing company in the U S of A? a All else being equal, cost of goods sold will be higher in factories that are newer. b If fewer units are manufactured and sold, the cost per unit will be lower. c Research and development costs are excluded from the cost of the product. d On the income statement, the only account that shows manufacturing costs is cost of goods sold. e none of the above 10 A company's total costs are represented by a straight line with a slope of 3 and a y-intercept of 40,000. The slope of the straight line representing its total revenues is 7, and it has a y-intercept of 0. What is the company's breakeven point in terms of units sold?
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a 20,000 b 7,000 c 10,000 d 13,334 e none of the above Answer questions 11 through 14 using the following information: Rollo Company assembles and sells lawn carts for $50 each. Each cart requires direct materials costing $30.
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This note was uploaded on 09/29/2008 for the course BUS-A 100 taught by Professor Tiller during the Spring '08 term at Indiana.

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A100 Exam 2 Spring 2 2008 - 1 A company that has a single...

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