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“Kaufmann Company recorded the following data for the month of January, 19X5: Inventories 1/1/X5 1/31/X5 Raw Materials 22,000 21,000 Work in process 16,000 13,000 Finished goods 20,000 25,000 Additional data: Sales revenue $200,000 Direct labor costs 30,000 Manufacturing overhead costs 70,000 Selling expenses 15,000 Administrative expenses 25,00073. Assume that the cost of goods sold for January was $120,000. The net income for January would be: a. $35,000 b. $65,000 c. $55,000 d. $40,000”,”4Net Income for January: Sales $200,000 – Cost of Goods Sold 120,000 = Gross Margin 80,000 – Selling & Adm. Expenses 40,000 Net Income $ 40
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Read more“Kaufmann Company recorded the following data for the month of January, 19X5: Inventories 1/1/X5 1/31/X5 Raw Materials 22,000 21,000 Work in process 16,000 13,000 Finished goods 20,000 25,000 Additional data: Sales revenue $200,000 Direct labor costs 30,000 Manufacturing overhead costs 70,000 Selling expenses 15,000 Administrative expenses 25,00072. If raw materials costing $25,000 were purchased during January, the total manufacturing costs for the month would be: a. $124,000 b. $126,000 c. $125,000 d. $128,000”,”2Total Manufacturing Costs for the month:RM (22000 + 25000 – 21,000) 26,000DL 30,000MOH 70,000 $126
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Read more“Question 71 refers to the following: The manufacturing operations of QC Company had the following inventory balances for the month of March, 19X5: Inventories 3/1/X5 3 /31/X5 Raw Materials 10,000 12,000 Work in process 6,000 7,000 Finished goods 30,000 22,000 71. If QC transferred $38,000 of completed goods from work in process to finished goods during March, what was the amount of the cost of goods sold? a. $38,000 b. $43,000 c. $30,000 d. $46,000”,”4Cost of Goods Sold = Beginning Inv. of FG + Transferred – Ending Inv. of FG Cost of Goods Sold = 30,000 + 38,000 -22,000 = $46
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Read more70. Which of the following capital budgeting techniques implicitly assumes that the cash flows are reinvested at the company’s minimum required rate of return? Net present value Time-adjusted rate of return a. Yes Yes b. Yes No c. No Yes d. No No
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Read more69. The evaluation of an investment having uneven cash flows using the payback method: a. cannot be done. b. can be done only by matching cash inflows and investment outflows on a year-by-year basis. c. will produce essentially the same results as those obtained through the use of discounted cash flow techniques. d. requires the use of a sophisticated calculator or computer software.
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Read more68. The management of a company considering an investment in automated equipment should consider: a. primarily the reduction in direct labor cost since this reduction usually is sufficient to justify the investment. b. only the quantifiable tangible aspects of the benefits of automation that can be used to calculate the net present value or the time-adjusted rate of return. c. both the tangible and intangible benefits of automation including an attempt to quantify the intangible benefits. d. the need for total automation rather than a piecemeal approach.
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Read more67. In which of the following situations would a project be acceptable under the time-adjusted rate of return method? I. The time-adjusted rate of return is equal to the cost of capital. II. The time-adjusted rate of return is greater than the cost of capital. III. The time-adjusted rate of return is less than or equal to the cost of capital. a. Only I. b. Only III. c. Only II. d. Both I and II.
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Read more“66. If the net present value of a project is zero based on a discount rate of sixteen percent, then the time-adjusted rate of return is: a. equal to sixteen percent. b. less than sixteen percent. c. greater than sixteen percent. d. not subject to determination based on the net present value method.”
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Read more“65. Consider the following production and cost data for two products, L and C: Product L Product C Contribution margin per unit $120 $112 Machine set-ups needed per unit 10 set-ups 8 set-ups The company can perform 60,000 machine set-ups each period and there is unlimited demand for each product. What is the largest possible total contribution margin that can be realized each period? a. $720,000. b. $840,000. c. $780,000. d. $1,560,000.”,”2Contribution Margin per Machine set-ups: Product L = 120/10 = $12/setup Product C = 112/8 = $14/setupProduct C can produce the largest possible contribution margin because its CM/set-ups is $14, compared to Product L’s $12.Product C:Machine set-ups each period = 60,000 = 7,500 unitsMachine set-ups needed per unit 8CM = Number of Units x CM $ per unitContribution Margin = 7,500 x $112 = $840
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