Posted: August 2nd, 2022

Question

LabAssignment1 x

Lab Assignment

Question #1

Managerial accounting stresses accounting concepts and procedures that are relevant to preparing reports for

investors and banks.

internal users of accounting information.

shareholders and creditors.

the Securities and Exchange Commission (SEC).

Question #2

The goal of managerial accounting is to provide information that managers need for

planning, control, and financial reporting.

control, evaluation, and financial reporting.

planning, control, and decision making.

preparing reports for external users.

Question #3

The financial plans prepared by managerial accountants are referred to as

budgets.

financial statements.

treasurer’s reports.

controller’s opinions.

Question #4

Performance reports often compare current performance with

a competing company’s performance.

shareholders’ expected level of performance.

industry standards.

performance in a prior period or budgeted performance

Question #5

Below is a performance report that compares budgeted and actual profit of Atlanta Enterprises for the month of June:

 

Budget

Actual

Difference

Sales

$182,000

$180,000

($2,000)

Less:

 

 

 

Cost of ingredients

14

5,000

14

1,000

4,000

Salaries

24,000

23,000

1,000

Controllable profit

$ 13,000

$ 1

6,000

$ 3,000

In evaluating the department in terms of its changes in sales and expenses, what will be most important to investigate?

Sales Cost of ingredients Salaries

Debtors

Question #6

The fundamental difference between managerial and financial accounting is that

all financial accounting information is audited by Certified Public Accountants whereas managerial accounting information is audited by the IMA.

managerial accounting is concerned principally with budgets, whereas financial accounting is concerned with a wider range of the organization’s activities.

managerial accounting provides information for decision-makers within the organization, whereas financial accounting provides information for individuals and institutions external to the organization.

financial accounting information follows U.S. Generally Accepted Accounting Principles, whereas managerial accounting information generally follows rules set forth by the Institute of Management Accountants.

Question #7

Variable cost per unit

increases when the number of units produced increases.

does not change when the number of units produced increases.

decreases when the number of units produced increases.

decreases when the number of units produced decreases.

Question #8

Which of the following is most likely to be a fixed cost?

Cost of wheels for a lawn mower manufacturer

Rent

on a factory building

Cost of labor for cashiers at a retail store

Supplies used by the housekeeping staff that cleans hotel rooms

Question #9

Sunland’s Salsa is in the process of preparing a production cost budget for May. Actual costs in April were:

Sunland’s Salsa
Production Costs
April 2020

1,000

Production

25,000
Jars of Salsa

Ingredient cost

(variable)

$21,500

Labor cost

(variable)

10,000

Rent (fixed)

5,000

Depreciation

(fixed)

6,000

Other

(fixed)

   

Total

$43,500

Using this information, prepare a budget for May. Assume that production will increase to 30,000 jars of salsa, reflecting an anticipated sales increase related to a new marketing campaign.

Production

   

enter a dollar amount

   

enter a dollar amount

   

enter a dollar amount

Sunland’s Salsa
Budgeted Production Costs
May 2020

30,000
Jars of Salsa

Ingredient cost

$

enter a dollar amount

 

   
Labor cost enter a dollar amount
Rent
Depreciation
Other
Total

$enter a total dollar amount 

Question #10

The Riverview Hotel is a deluxe four-star establishment. Late on Friday, it had 20 of its 300 rooms available when the desk clerk received a call from the Pines Hotel. The Pines Hotel made a booking error and did not have room for 4 guests (each of whom had a “confirmed” room). The Pines wants to send its customers to the Riverview but pay the rate the guests would have been charged at the Pines ($140 per room) rather than paying the normal rate of $220 per room at the Riverview

If the Riverview accepts the guests, what will be the incremental revenue?

Incremental

Revenue

$enter incremental revenue in dollar 

Question # 11

Sanchez Sweets is in the process of preparing a production cost budget for May. Actual costs in April for production of 7,000 batches of cookies were:

Rent

Labor cost

Depreciation

Total

Ingredients cost

$ 7,200

1,100

3,300

900

Other fixed costs

700

$13,200

The company is currently producing and selling 80,000 batches of cookies annually with each batch sold for $8.00. The company is considering lowering the price to $7.50 per batch for which management estimates this will increase sales to 90,000 batches. Ingredients and labor are the only variable costs.

What is the incremental cost associated with producing an extra 10,000 batches of cookies? 
(Do not round intermediate calculations, round final answer to 0 decimal places, e.g. 2,520.)

Incremental cost

$enter incremental cost in dollars 

What is the incremental revenue associated with the price reduction?

Incremental revenue

$enter incremental revenue in dollars 

Should Sanchez Sweets lower the price of its cookies?

select an option                                  , lowering the price will result in incremental select an option                                   of $enter a dollar amount  .

Question #12

Sterling Auto Detail is currently open Monday through Friday. In the past year, income before taxes was as follows:

5,000

Numbers of cars detailed

2,080

Revenue

$468,000

Less operating expenses:

   Supplies (polish, wax, etc.)

$5,824

   Salaries of detailers

104,000

   Water and other variable costs

12,480

   Supervisor’s salary

65,000

   Rent

36,000

   Depreciation

   Other fixed costs

1,050

229,354

Income before taxes

$238,646

Quincy Davis, the owner of Sterling, is considering extending the workweek through Saturday. If he takes this action, he’ll hire a part-time employee for $300 per day to act as the Saturday manager so the supervisor still can have Saturday off. Quincy estimates that his company will detail an additional 10 cars per Saturday, 52 weeks per year

Calculate the annual incremental revenue associated with being open on Saturday.

Annual incremental revenue

$enter a annual incremental revenue in dollar 

Question #13

The production cost information for Carla Vista’s Salsa is as follows:

Production

30,000
Jars of Salsa

Ingredient cost (variable)

   

Labor cost (variable)

   

Rent (fixed)

   

Depreciation (fixed)

   

Other (fixed)

   

   Total

   

Carla Vista’s Salsa
Production Costs
April 2020

$27,000

14,400

4,300

6,200

1,900

$53,800

The company is currently producing and selling 420,000 jars of salsa annually. The jars sell for $6.00 each. The company is considering lowering the price to $5.50. Suppose this action will increase sales to 480,000 jars.

(a)

What is the incremental cost associated with producing an extra 60,000 jars of salsa?

Incremental Cost

$enter incremental cost in dollar 

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