The following data is available for Wheels 'N Spokes Repair Shop for 2013: \[\begin{array} { l r } \text { Repair technicians' wages } & \$ 360,000 \\ \text { Fringe benefits } & 80,000 \\ \text { Overhead } & 60,000 \\ \text { Total } & \$ 500,000 \end{array}\] The desired profit margin is $40 per labor hour.The material loading charge is 40% of invoice cost.It is estimated that 5,000 labor hours will be worked in 2013. -Wheels 'N Spokes' labor charge in 2013 would be

A) $100. B) $112. C) $128. D) $140. A) $100. B) $112. C) $128. D) $140.

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 desired ROI per pair of shoes?

A) $68 B) $168 C) $102 D) $170 A) $68 B) $168 C) $102 D) $170

Red Grass Company produces high definition television sets.The following information is available for this product: \[\begin{array} { l r } \text { Fixed cost per unit } & \$ 250 \\ \text { Variable cost per unit } & 750 \\ \text { Total cost per unit } & 1,000 \\ \text { Desired ROl per unit } & 300 \end{array}\] -The target selling price for this television is

A) $550. B) $1,000. C) $1,050. D) $1,300. A) $550. B) $1,000. C) $1,050. D) $1,300.

Jaycee Auto Repair has the following budgeted costs for the next year: $\begin{array}{lcc}&\text { Time Charges }&\text { Material Charges }\\ \text { Shop employees' wages and benefits } & \$ 120,000 & \$- \\ \text { Parts manager's salary and benefits } & - & 45,000 \\ \text { Office employee's salary and benefits } & 30,000 & 15,000\\ \text { Other overhead } & 15,000 & 40,000 \\ \text { Invoice cost of parts and materials } & - & 400,000\\ \text { Total budgeted costs }&\$165,000&\$500,000 \end{array}$ -The labor rate to be used next year assuming 7,500 hours of repair time and a profit margin of $25 per labor hour is

A) $22. B) $41. C) $43. D) $47. A) $22. B) $41. C) $43. D) $47.

The Lumber Division of Paul Bunyon Homes Inc.produces and sells lumber that can be sold to outside customers or within the company to the Construction Division.The following data have been gathered for the coming period: Lumber Division: $\begin{array}{ll} \text { Capacity } & 200,000 \text { board feet } \\ \text { Price per board foot } & \$ 2.50 \\ \text { Variable production cost per bd. ft. } & \$ 1.25 \\ \text { Variable selling cost per bd. ft. } & \$ 0.50\\ \text { Construction Division: }\\ \text { Board feet needed } & 60,000\\ \text { Outside price paid per bd. } \mathrm{ft} \text {. }&\$2.00 \end{array}$ - If the Lumber Division sells to the Construction Division, $0.35 per board foot can be saved in shipping costs. If current outside sales are 150,000 board feet, what is the minimum transfer price that the Lumber Division could accept?

A) $2.00 B) $1.65 C) $1.40 D) $2.15 A) $2.00 B) $1.65 C) $1.40 D) $2.15

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 total cost per pair of shoes?

A) $40 B) $68 C) $168 D) $96 A) $40 B) $68 C) $168 D) $96

Exam 8: Reporting and Analyzing Receivables

The following data is available for Wheels 'N Spokes Repair Shop for 2013: Repair technicians' wages \ 360,000 Fringe benefits 80,000 Overhead 60,000 Total \ 500,000 The desired profit margin is $40 per labor hour.The material loading charge is 40% of invoice cost.It is estimated that 5,000 labor hours will be worked in 2013. - In January 2013, Wheels 'N Spokes repairs a bicycle that uses parts of $180.Its material loading charge on this repair would be

(Multiple Choice)

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Question 41

Why does the unit selling price increase when expected volume is lower than budgeted volume?

(Multiple Choice)

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Question 42

The following data is available for Wheels 'N Spokes Repair Shop for 2013: Repair technicians' wages \ 360,000 Fringe benefits 80,000 Overhead 60,000 Total \ 500,000 The desired profit margin is $40 per labor hour.The material loading charge is 40% of invoice cost.It is estimated that 5,000 labor hours will be worked in 2013. -Wheels 'N Spokes' labor charge in 2013 would be

(Multiple Choice)

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Question 43

Companies that sell products whose prices are set by market forces are called

(Multiple Choice)

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Question 44

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 desired ROI per pair of shoes?

(Multiple Choice)

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Question 45

The general formula for the minimum transfer price is: minimum transfer price equals

(Multiple Choice)

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Question 46

Tuttle Motorcycles Inc.manufactures and sells high-priced motorcycles.The Engine Division produces and sells engines to other motorcycle companies and internally to the Production Division.It has been decided that the Engine Division will sell 20,000 units to the Production Division at $1,050 a unit.The Engine Division, currently operating at capacity, has a unit sales price of $2,550 and unit variable costs and fixed costs of $1,050 and $750, respectively.The Production Division is currently paying $2,400 per unit to an outside supplier.$90 per unit can be saved on internal sales from reduced selling expenses. -What is the increase/decrease in overall company profits if this transfer takes place?

(Multiple Choice)

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Question 47

Red Grass Company produces high definition television sets.The following information is available for this product: Fixed cost per unit \ 250 Variable cost per unit 750 Total cost per unit 1,000 Desired ROl per unit 300 -The target selling price for this television is

(Multiple Choice)

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Question 48

The most common method used to establish transfer prices is

(Multiple Choice)

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Question 49

The difference between the target price and the desired profit is the target cost of the product.

(True/False)

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Question 50

Jaycee Auto Repair has the following budgeted costs for the next year: Time Charges Material Charges Shop employees' wages and benefits \ 120,000 \- Parts manager's salary and benefits - 45,000 Office employee's salary and benefits 30,000 15,000 Other overhead 15,000 40,000 Invoice cost of parts and materials - 400,000 Total budgeted costs \1 65,000 \5 00,000 -The labor rate to be used next year assuming 7,500 hours of repair time and a profit margin of $25 per labor hour is

(Multiple Choice)

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Question 51

The market-based transfer price approach produces a higher total contribution margin to the company than the cost-based approach.

(True/False)

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Question 52

In time-and-material pricing, a material loading charge covers all of the following except

(Multiple Choice)

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Question 53

The Lumber Division of Paul Bunyon Homes Inc.produces and sells lumber that can be sold to outside customers or within the company to the Construction Division.The following data have been gathered for the coming period: Lumber Division: Capacity 200,000 board feet Price per board foot \ 2.50 Variable production cost per bd. ft. \ 1.25 Variable selling cost per bd. ft. \ 0.50 Construction Division: Board feet needed 60,000 Outside price paid per bd. . \2 .00 - If the Lumber Division sells to the Construction Division, $0.35 per board foot can be saved in shipping costs. If current outside sales are 150,000 board feet, what is the minimum transfer price that the Lumber Division could accept?

(Multiple Choice)

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Question 54

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 total cost per pair of shoes?

(Multiple Choice)

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Question 55

When using cost-plus pricing, which amount per unit does not change when the expected volume differs from the budgeted volume?

(Multiple Choice)

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Question 56

The calculation to determine target cost is

(Multiple Choice)

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Question 57

Factors that can affect pricing decisions include all of the following except

(Multiple Choice)

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Question 58

When a cost-based transfer price is used, the transfer price may be based on any of the following except

(Multiple Choice)

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Question 59

All of the following are correct statements about the market-based approach except that it

(Multiple Choice)

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Question 60

Why does the unit selling price increase when expected volume is lower than budgeted volume?

Companies that sell products whose prices are set by market forces are called

The general formula for the minimum transfer price is: minimum transfer price equals

Red Grass Company produces high definition television sets.The following information is available for this product: Fixed cost per unit \ 250 Variable cost per unit 750 Total cost per unit 1,000 Desired ROl per unit 300 -The target selling price for this television is

The most common method used to establish transfer prices is

The difference between the target price and the desired profit is the target cost of the product.

The market-based transfer price approach produces a higher total contribution margin to the company than the cost-based approach.

In time-and-material pricing, a material loading charge covers all of the following except

When using cost-plus pricing, which amount per unit does not change when the expected volume differs from the budgeted volume?

The calculation to determine target cost is

Factors that can affect pricing decisions include all of the following except

When a cost-based transfer price is used, the transfer price may be based on any of the following except

All of the following are correct statements about the market-based approach except that it

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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