test 3 mc practice 9 10 11 12 13

test 3 mc practice 9 10 11 12 13 - Accounting 2102 Farmer...

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Unformatted text preview: Accounting 2102 Farmer Practice Test Chapters 9, 10, 11, 12, and 13 1. (chp 10) Clutter Free, Inc., manufacturers a single wicker basket product line. Last year, the company had net operating income of $92,000 using absorption costing and a net operating income of $98,600 using variable costing. If the fixed manufacturing overhead cost was $3.00 per basket for the last two years, and if production was 18,000 units, then sales in baskets last year were: a. 24,600. b. 20,200. c. 15,800. d. 15,000. e. 10,800. 2. (chp 13) Upon review of Make Your Mark, Inc.s Statement of Cash Flows, the following was noted: Cash Flows from Operating Activities ($15,000) Cash Flows from Investing Activities $80,000 Cash Flows from Financing Activities ($60,000) From this information, the most likely explanation is that Make Your Mark is a. selling long term assets to fund operations and retire long term debt. b. using cash from operations and borrowing from creditors to purchase long term assets. c. issuing stock to investors to fund operations and purchase long term assets. d. selling long term assets to fund operations and pay dividends to shareholders. e. More than one of the above provides a likely explanation of Make Your Marks activities. Practice Test 3 Page 1 of 9 Accounting 2102 Farmer Practice Test Chapters 9, 10, 11, 12, and 13 3. (chp 10) The Geiger Company has two divisions - East and West. The divisions have the following revenues and expenses: East West Sales ............................................................. $720,000 $350,000 Variable costs ............................................... 370,000 240,000 Traceable fixed costs.................................... 130,000 80,000 Allocated common corporate costs.............. 120,000 50,000 Net operating income (loss) ......................... $100,000 $(20,000) On which figure should the performance of the East Divisions manager be judged assuming the traceable fixed costs are all noncontrollable? a. $350,000 b. $220,000 c. $110,000 d. $100,000 e. Unable to determine. 4. (chp 11) Peter C. Tails Lettuce Stand currently sells 60,000 heads of lettuce each year for $1.00 per head. Peter is thinking of expanding operations and serving the customer better by purchasing a slice and dice machine that will cut up each head of lettuce into bite size pieces that can be used for salads. Peter expects he will then be able to sell his lettuce for $2.00 per head. Peter has prepared the following analysis for each option based on sales of 60,000 heads of lettuce: Selling Unsliced Lettuce Total Variable Costs $15,000 Total Fixed Costs $18,000 Total Costs $33,000 Selling Sliced Lettuce Total Variable Costs $18,000 Total Fixed Costs $54,000 Total Costs $72,000 Assume that Peter is currently selling only 50,000 heads of lettuce per year instead of 60,000. Under this scenario, what will be Peters increase or decrease in profit for the year if he chooses to start slicing up the lettuce instead of selling it...
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test 3 mc practice 9 10 11 12 13 - Accounting 2102 Farmer...

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