Custom Shoes Co.has gathered the following information concerning one model of shoe: \[\begin{array} { l l } \text { Variable manufacturing costs } & \$ 40,000 \\ \text { Variable selling and administrative costs } & \$ 20,000 \\ \text { Fixed manufacturing costs } & \$ 160,000 \\ \text { Fixed selling and administrative costs } & \$ 120,000 \\ \text { Investment } & \$ 1,700,000 \\ \text { ROl } & 30 \% \\ \text { Planned production and sales } & 5,000 \text { pairs } \end{array}\] - What is the markup percentage?

A) 150% B) 255% C) 850% D) 182% A) 150% B) 255% C) 850% D) 182% A

Custom Shoes Co.has gathered the following information concerning one model of shoe: \[\begin{array} { l l } \text { Variable manufacturing costs } & \$ 40,000 \\ \text { Variable selling and administrative costs } & \$ 20,000 \\ \text { Fixed manufacturing costs } & \$ 160,000 \\ \text { Fixed selling and administrative costs } & \$ 120,000 \\ \text { Investment } & \$ 1,700,000 \\ \text { ROl } & 30 \% \\ \text { Planned production and sales } & 5,000 \text { pairs } \end{array}\] - What is the target selling price per pair of shoes?

A) $142 B) $170 C) $114 D) $158 A) $142 B) $170 C) $114 D) $158 B

The following per unit information is available for a new product of Red Ribbon Company: \[\begin{array} { l r } \text { Desired ROl } & \$ 20 \\ \text { Fixed cost } & 40 \\ \text { Variable cost } & 60 \\ \text { Total cost } & 100 \\ \text { Selling price } & 120 \end{array}\] Red Ribbon Company's markup percentage would be

A) 17%. B) 20%. C) 33%. D) 50%. A) 17%. B) 20%. C) 33%. D) 50%.

Carlos Consulting Inc.provides financial consulting and has collected the following data for the next year's budgeted activity for a lead consultant. \[\begin{array} { l l } \text { Consultants' wages } & \$ 90,000 \\ \text { Fringe benefits } & \$ 22,500 \\ \text { Related overhead } & \$ 17,500 \\ \text { Supply clerk's wages } & \$ 18,000 \\ \text { Fringe benefits } & \$ 4,000 \\ \text { Related overhead } & \$ 20,000 \\ \text { Profit margin per hour } & \$ 20 \\ \text { Profit margin on materials } & 15 \% \\ \text { Total estimated consulting hours } & 5,000 \\ \text { Total estimated supply costs } & \$ 168,000 \end{array}\] -The material loading charge is

A) 15%. B) 25%. C) 40%. D) 55%. A) 15%. B) 25%. C) 40%. D) 55%.

Carlos Consulting Inc.provides financial consulting and has collected the following data for the next year's budgeted activity for a lead consultant. \[\begin{array} { l l } \text { Consultants' wages } & \$ 90,000 \\ \text { Fringe benefits } & \$ 22,500 \\ \text { Related overhead } & \$ 17,500 \\ \text { Supply clerk's wages } & \$ 18,000 \\ \text { Fringe benefits } & \$ 4,000 \\ \text { Related overhead } & \$ 20,000 \\ \text { Profit margin per hour } & \$ 20 \\ \text { Profit margin on materials } & 15 \% \\ \text { Total estimated consulting hours } & 5,000 \\ \text { Total estimated supply costs } & \$ 168,000 \end{array}\] A consulting job takes 20 hours of consulting time and $180 of supplies.The client's bill would be

A) $1,172. B) $772. C) $952. D) $1,100. A) $1,172. B) $772. C) $952. D) $1,100.

Exam 8: Reporting and Analyzing Receivables

Custom Shoes Co.has gathered the following information concerning one model of shoe: Variable manufacturing costs \ 40,000 Variable selling and administrative costs \ 20,000 Fixed manufacturing costs \ 160,000 Fixed selling and administrative costs \ 120,000 Investment \ 1,700,000 ROl 30\% Planned production and sales 5,000 pairs - What is the markup percentage?

Free

(Multiple Choice)

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Question 1

Correct Answer:

Verified

A

Using time-and-material pricing involves how many steps?

Free

(Multiple Choice)

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Question 2

Correct Answer:

Verified

B

Custom Shoes Co.has gathered the following information concerning one model of shoe: Variable manufacturing costs \ 40,000 Variable selling and administrative costs \ 20,000 Fixed manufacturing costs \ 160,000 Fixed selling and administrative costs \ 120,000 Investment \ 1,700,000 ROl 30\% Planned production and sales 5,000 pairs - What is the target selling price per pair of shoes?

Free

(Multiple Choice)

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(43)

Question 3

Correct Answer:

Verified

B

In the formula for the minimum transfer price, opportunity cost is the __________ of the goods sold externally.

(Multiple Choice)

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Question 4

The following per unit information is available for a new product of Red Ribbon Company: Desired ROl \ 20 Fixed cost 40 Variable cost 60 Total cost 100 Selling price 120 Red Ribbon Company's markup percentage would be

(Multiple Choice)

4.8/5

(36)

Question 5

A company must price its product to cover its costs and earn a reasonable profit in

(Multiple Choice)

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(36)

Question 6

The price used to record a sale between divisions within the same vertically integrated company is called the

(Multiple Choice)

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Question 7

The maximum transfer price from the buying division's standpoint is the

(Multiple Choice)

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Question 8

A negotiated transfer price should be used when an outside market for the goods does not exist.

(True/False)

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Question 9

In the cost-plus pricing approach, the desired ROI per unit is computed by multiplying the ROI percentage by

(Multiple Choice)

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Question 10

The negotiated transfer price approach should be used when

(Multiple Choice)

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Question 11

Under the negotiated transfer pricing approach, the minimum transfer price is established by the

(Multiple Choice)

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Question 12

Which of the following organizations would most likely not use time-and-material pricing?

(Multiple Choice)

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Question 13

Divisions within vertically integrated companies normally sell goods only to other divisions within the same company.

(True/False)

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Question 14

Wasson Widget Company is contemplating the production and sale of a new widget.Projected sales are $300,000 (or 75,000 units) and desired profit is $36,000.What is the target cost per unit?

(Multiple Choice)

4.8/5

(42)

Question 15

Boomer Boombox Inc.wants to produce and sell a new lightweight radio.Desired profit per unit is $1.84.The expected unit sales price is $22 based on 10,000 units.What is the total target cost?

(Multiple Choice)

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Question 16

The first step for time-and-material pricing is to calculate the material loading charge.

(True/False)

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Question 17

Carlos Consulting Inc.provides financial consulting and has collected the following data for the next year's budgeted activity for a lead consultant. Consultants' wages \ 90,000 Fringe benefits \ 22,500 Related overhead \ 17,500 Supply clerk's wages \ 18,000 Fringe benefits \ 4,000 Related overhead \ 20,000 Profit margin per hour \ 20 Profit margin on materials 15\% Total estimated consulting hours 5,000 Total estimated supply costs \ 168,000 -The material loading charge is

(Multiple Choice)

4.8/5

(43)

Question 18

Carlos Consulting Inc.provides financial consulting and has collected the following data for the next year's budgeted activity for a lead consultant. Consultants' wages \ 90,000 Fringe benefits \ 22,500 Related overhead \ 17,500 Supply clerk's wages \ 18,000 Fringe benefits \ 4,000 Related overhead \ 20,000 Profit margin per hour \ 20 Profit margin on materials 15\% Total estimated consulting hours 5,000 Total estimated supply costs \ 168,000 A consulting job takes 20 hours of consulting time and $180 of supplies.The client's bill would be

(Multiple Choice)

4.8/5

(45)

Question 19

All of the following are approaches for determining a transfer price except the

(Multiple Choice)

4.8/5

(36)

Question 20

Using time-and-material pricing involves how many steps?

In the formula for the minimum transfer price, opportunity cost is the __________ of the goods sold externally.

The following per unit information is available for a new product of Red Ribbon Company: Desired ROl \ 20 Fixed cost 40 Variable cost 60 Total cost 100 Selling price 120 Red Ribbon Company's markup percentage would be

A company must price its product to cover its costs and earn a reasonable profit in

The price used to record a sale between divisions within the same vertically integrated company is called the

The maximum transfer price from the buying division's standpoint is the

A negotiated transfer price should be used when an outside market for the goods does not exist.

In the cost-plus pricing approach, the desired ROI per unit is computed by multiplying the ROI percentage by

The negotiated transfer price approach should be used when

Under the negotiated transfer pricing approach, the minimum transfer price is established by the

Which of the following organizations would most likely not use time-and-material pricing?

Divisions within vertically integrated companies normally sell goods only to other divisions within the same company.

Wasson Widget Company is contemplating the production and sale of a new widget.Projected sales are $300,000 (or 75,000 units) and desired profit is $36,000.What is the target cost per unit?

Boomer Boombox Inc.wants to produce and sell a new lightweight radio.Desired profit per unit is $1.84.The expected unit sales price is $22 based on 10,000 units.What is the total target cost?

The first step for time-and-material pricing is to calculate the material loading charge.

All of the following are approaches for determining a transfer price except the

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: the Big Picture

Managerial Accounting

Time Value of Money and Present Value Calculations

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