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Final

mkt500 final summary

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Department
Marketing
Course
MKT 500
Professor
Kimberly Wahl
Semester
Fall

Description
Quiz #3 - Summer 2013 Key 1. Tower Company planned to produce 3,000 units of its single product, Titactium, during November. The standards for one unit of Titactium specify six kilograms of materials at $0.30 per kilogram. Actual production in November was 3,100 units of Titactium. There was a favourable materials price variance of $380 and an unfavourable materials quantity variance of $120. Based on these variances, what could one assume? A. That more materials were purchased than were used. B. That more materials were used than were purchased. C. That the actual cost per kilogram for materials was less than the standard cost per kilogram. D. That the actual usage of materials was less than the standard allowed. Blooms Level: Understand Difficulty: Medium Learning Objective: 2 #12 2. Dahl Company, a clothing manufacturer, uses a standard costing system. Each unit of a finished product contains 2 metres of cloth. However, there is unavoidable waste of 20%, calculated on input quantities, when the cloth is cut for assembly. The cost of the cloth is $3 per metre. What is the standard direct material cost for cloth per unit of finished product? A. $4.80. B. $6.00. C. $7.00. D. $7.50. 2m/(1 - .20) * $3 Blooms Level: Apply Difficulty: Medium Garrison - Chapter 10 #18 Learning Objective: 1 3. Cox Company's direct material costs for the month of January were as follows: What was the favourable direct materials quantity variance for January? A. $3,360. B. $3,375. C. $3,400. D. $3,800. Std. Price = (18,000*3.60 - 3,600)/18,000 = $3.40/kg. (16,000 - 15,000)*$3.40 Blooms Level: Analyze Difficulty: Hard Garrison - Chapter 10 #19 Learning Objective: 2 4. The Porter Company has a standard cost system. In July, the company purchased and used 22,500 kilograms of direct material at an actual cost of $53,000, the materials quantity variance was $1,875 unfavourable, and the standard quantity of materials allowed for July production was 21,750 kilograms. What was the materials price variance for July? A. $2,725 favourable. B. $2,725 unfavourable. C. $3,250 favourable. D. $3,250 unfavourable. Std. Price = 1,875/(22,500 - 21,750) = $2.50/kg. variance = 22,500*2.50 - 53,000 Blooms Level: Analyze Difficulty: Hard Garrison - Chapter 10 #20 Learning Objective: 2 5. The Fletcher Company uses standard costing. The following data are available for October: What was the standard quantity of material allowed for October production? A. 23,000 kilograms. B. 24,000 kilograms. C. 24,500 kilograms. D. 25,000 kilograms. (23,500*2 + 1,000)/2 Blooms Level: Analyze Difficulty: Hard Garrison - Chapter 10 #27 Learning Objective: 2 6. Borden Enterprises uses standard costing. For the month of April, the company reported the following data: What was the labour rate variance for April? A. $2,850 favourable. B. $2,850 unfavourable. C. $3,760 favourable. D. $3,760 unfavourable. (8,000*10 - 4,800)/10 *(10 - 9.50) Difficulty: Hardalyze Garrison - Chapter 10 #36 Learning Objective: 3 King Company estimated that it would operate its manufacturing facilities at 800,000 direct labour hours for the year, which served as the denominator activity in the predetermined overhead rate. The total budgeted manufacturing overhead for the year was $2,000,000, of which $1,600,000 was variable and $400,000 was fixed. The standard variable overhead rate was $2 per direct labour hour. The standard direct labour time was 3 direct labour hours per unit. The actual results for the year are presented below: Garrison - Chapter 10 7. What was the variable overhead spending variance for the year? A. $2,000 favourable. B. $10,000 unfavourable. C. $82,000 unfavourable. D. $110,000 unfavourable. 764,000*2 - 1,610,000 Blooms Level: Apply Difficulty: Medium Garrison - Chapter 10 #127 Learning Objective: 4 8. What was the variable overhead efficiency variance for the year? A. $28,000 favourable. B. $28,000 unfavourable. C. $192,000 favourable. D. $192,000 unfavourable. (250,000*3 - 764,000)*2 Blooms Level: Apply Difficulty: Medium Garrison - Chapter 10 #128 Learning Objective: 4 9. What was the fixed overhead volume variance for the year? A. $7,000 unfavourable. B. $18,000 favourable. C. $25,000 unfavourable. D. $41,667 unfavourable. 250,000 * 3 * 400,000/800,000 - 400,000 Blooms Level: Apply Difficulty: Medium Garrison - Chapter 10 #130 Learning Objective: 6 10. All other things being equal, which of the following is a consequence of an increase in a division's traceable fixed expenses? A. The division's contribution margin ratio will decrease. B. The division's segment margin ratio will remain the same. C. The division's segment margin will decrease. D. The overall company operating income will remain the same. Blooms Level: Understand Difficulty: Medium Garrison - Chapter 11 #3 Learning Objective: 1 11. Lyons Company consists of two divisions: A and B. Lyons Company reported a contribution margin of $50,000 for Division A, and had a contribution margin ratio of 30% in Division B, when sales in Division B were $200,000. Operating income for the company was $25,000 and traceable fixed expenses were $40,000. What were Lyons Company's common fixed expenses? A. $40,000. B. $45,000. C. $70,000. D. $85,000. 50,000 + 200,000*.30 - 40,000 - 25,000 Difficulty: Hardalyze Garrison - Chapter 11 #4 Learning Objective: 1 12. More Company has two divisions: L and M. During July, the contribution margin in Division L was $60,000. The contribution margin ratio in Division M was 40%, and its sales were $250,000. Division M's segment margin was $60,000. The common fixed expenses were $50,000, and the company operating income was $20,000. What was the segment margin for Division L? A. $0. B. $10,000. C. $50,000. D. $60,000. Total SM = 20,000 + 50,000 = 70,000. L's SM = 70,000 - 60,000 Difficulty: Hardalyze Garrison - Chapter 11 #5 Learning Objective: 1 13. Divisions A and B of Denner Company reported the following results for October: If common fixed expenses were $31,000, what were the total fixed expenses? A. $31,000. B. $52,000. C. $62,000. D. $93,000. 31,000 + (90,000*(1 -.70) - 2,000) + (150,000*(1 -.60) - 23,000) Blooms Level: Apply Difficulty: Hard Garrison - Chapter 11 #7 Learning Objective: 1 14. Which of the following statements provide(s) an argument in favour of including only a plant's net book value rather than gross book value as part of operating assets in the ROI computation? I. Net book value is consistent with how plant and equipment items are reported on a balance sheet. II. Net book value is consistent with the computation of operating income, which includes amortization as an operating expense. III. Net book value allows ROI to decrease over time as assets get older. A. I only. B. III only. C. I and II only. D. I and III only. Blooms Level: Understand Difficulty: Medium Garrison - Chapter 11 #15 Learning Objective: 5 15. Assuming that sales and operating income remain the same, which of the following statements about a company's return on investment is correct? A. It will increase if operating assets increase. B. It will decrease if operating assets decrease. C. It will decr
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