Practice _Final

Practice_Final - University of Toledo BUAD 2050 Fall 2011 Practice Exam – Final 1 1 During 2010 Eddy Co paid $16,000 for direct material $17,000

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Unformatted text preview: University of Toledo BUAD 2050 - Fall 2011 Practice Exam – Final 1 1. During 2010, Eddy Co. paid $16,000 for direct material, $17,000 in wages for production workers, and $24,000 in wages for sales personnel. Lease payments and utilities on the production facilities amounted to $7,000. General, selling, and administrative expenses were $6,000. The company owns a manufacturing equipment. The original cost of the equipment is $30,000 and has a salvage value of $5,000 after 5 years. Depreciation on sales car equals $6,000. The company produced 5,000 units and sold 3,000 units at a price of $10.00 a unit. The cost of goods sold is which of the following amounts? A. $64,000 B. $32,000 C. $27,000 D. $45,000 2. What is the effect on the financial statements of recording a $10,000 payment for sales personnel in cash? 3. Select the correct statement regarding fixed costs. a. Because they do not change, fixed costs should be ignored in decision making. b. The fixed cost per unit decreases when volume increases. c. The fixed cost per unit increases when volume increases. d. The fixed cost per unit does not change when volume decreases. 4. Two different costs incurred by Ramirez Company exhibit the following behavior pattern: Cost # 1 and Cost # 2 exhibit which of the? a. Fixed / Fixed b. Variable / Variable c. Fixed /Variable d. Variable / Fixed 5. The magnitude of operating leverage for Perkins Corporation is 3.4 when sales are $100,000. If sales increase to $110,000, profits would be expected to increase by what percent? a. 2.9% b. 34% c. 60% d. 37% Assets = Liab. + Equity Rev.- Exp. = Net Inc. A) +- / n/a n/a n/a +- B)- n/a- n/a +- C)- n/a- n/a n/a n/a D) + /- n/a n/a n/a n/a n/a University of Toledo BUAD 2050 - Fall 2011 Practice Exam – Final 2 6. The dotted line in the graph below depicts which type of cost per unit ? a. fixed cost b. variable cost c. mixed cost d. none of the above 7. The following income statement is provided for Barron Company in 2010: What amount was the company's operating leverage factor? a. 0.44 b. 2.27 c. 2.36 d. 2.72 Use the following information to answer questions 8 & 9: Handy Hiking produces backpacks. In 2010, its highest and lowest production levels occurred in July and January, respectively. In July, it produced 4,000 backpacks at a total cost of $110,000. In January, it produced 2,500 backpacks at a total cost of $87,500. 8. Using the high/low method, the average variable cost of producing a backpack was: a. $15.00 b. $31.25 c. $30.38 d. $0.067 9. Using the high/low method, the total fixed cost of producing a backpack was: a. $50,000 b. $1,500 c. $22,500 d. $109,733 University of Toledo BUAD 2050 - Fall 2011 Practice Exam – Final 3 10. CMA, Inc. produces a product that has a variable cost of $2.50 per unit. The company's fixed costs are $30,000. The product is sold for $5.00 per unit and the company desires to earn a target profit of $10,000. What amount of sales that will be necessary to earn the desired profit? $10,000....
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This note was uploaded on 02/22/2012 for the course BUAD 2050 taught by Professor Nicholasw.schroeder during the Spring '09 term at Toledo.

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Practice_Final - University of Toledo BUAD 2050 Fall 2011 Practice Exam – Final 1 1 During 2010 Eddy Co paid $16,000 for direct material $17,000

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