Exam 2 Practice - Practice Exam 2 These practice questions...

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Practice Exam 2 These practice questions do not cover every topic that may appear on the actual exam, but they should be a part of your exam preparation. You should also study your class notes, assignments, practice problems as well as the assigned reading from the textbook. Time value of money tables will be provided on the exam. 01. Which department is often responsible for a direct materials variance based on useage? A. The accounting department B. The production department C. The purchasing department D. The budgeting department 02. Capital budgeting decisions can be difficult because A. Decision may be difficult or impossible to reverse. B. Large amounts of money are usually involved. C. Investment involves a long-term commitment D. Outcome is uncertain. E. All of the above. 03. Which of the following accounts is closed at the end of the year? A. Cash B. Revenue C. Retained earnings D. Accounts payable 04. When a company receives a utility bill that is not due until next month, it should A. debit utilities expense and credit accounts payable. B. debit utilities expense and credit accounts receivable. C. debit accounts payable and credit utilities expense. D. debit utilities expense and credit cash E. make no entry until the bill is paid. 05. How long will it take an investment of $25,000 to accumulate to a total of $35,462.50 assuming an interest rate of 6 percent? A. 4 years. B. 10 years. C. 5 years. D. 6 years. E. 2 years. 06. Cobert Company’s actual sales results exceeded the planned results for July. This amount exceeded the amount of an unfavorable difference reported for June sales. Which of the following statements about the sales performance report for both months is true? A. The sales report is not useful since it shows a favorable and unfavorable difference for the two months. B. The differences for the two months will offset each other so the differences should not be a concern. C. The difference for July can be ignored. D. The differences for both months should be investigated if the amounts are significant. 07. Which of the following statements is true? A. A flexible budget expresses all costs on a per unit basis. B. Sales variances may be computed in a manner similar to cost variances and can be caused by a difference from planned prices or volume. C. The final budget amounts in a performance report are based on an expected level of sales or production. D. If an actual amount is more than a budgeted amount, an unfavorable variance will always result. -- Page 1 --
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08. When deciding whether to replace some equipment, the purchase price of the new equipment is A. a relevant cost. B. a semi-relevant cost. C. a sunk cost. D. none of the above 09. The Ooey Gooey Candy Company produces chocolate frosted sugar bombs that are used in one of the company’s products. For the production of the component, the company incurs direct material costs of $2,000, direct labor costs of $1,000, variable overhead costs of $4,000 and fixed overhead costs of $3,000. If the
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Exam 2 Practice - Practice Exam 2 These practice questions...

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