Question 1

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

Accepted Answer

A) charge for obtaining materials. 
B) charge for holding materials. 
C) labor charge per hour. 
D) charges for a particular job. 
A) charge for obtaining materials. 
B) charge for holding materials. 
C) labor charge per hour. 
D) charges for a particular job.

Question 2

In cost-plus pricing, the markup percentage is computed by dividing the desired ROI per unit by the

Accepted Answer

A) fixed cost per unit. 
B) total cost per unit. 
C) total manufacturing cost per unit. 
D) variable cost per unit. 
A) fixed cost per unit. 
B) total cost per unit. 
C) total manufacturing cost per unit. 
D) variable cost per unit.

Question 3

Use the following information for questions 
Management of the Catering Company would like the Food Division to transfer 10,000 cans of its final product to the Restaurant Division for $30. The Food Division sells the product to customers for $70 per unit. The Food Division's variable cost per unit is $35 and its fixed cost per unit is $10.
-If the Food Division is currently operating at full capacity, what is the minimum transfer price the Food Division should accept?

Accepted Answer

A) $30 
B) $35 
C) $45 
D) $70 
A) $30 
B) $35 
C) $45 
D) $70

Question 4

Lawrence Legal Services recently billed a customer $690.Labor hours were 6 and the cost of the materials used was $150.If the company's hourly labor rate was $75, what material loading charge was used?

Accepted Answer

A) 30% 
B) 50% 
C) 60% 
D) 100% 
A) 30% 
B) 50% 
C) 60% 
D) 100%

Question 5

Use the following information for questions 
The Can Division of Fruit Products Inc. manufactures and sells tin cans externally for $0.60 per can. Its unit variable costs and unit fixed costs are $0.24 and $0.08, respectively. The Packaging Division wants to purchase 50,000 cans at $0.32 a can. Selling internally will save $0.02 a can.
-Assuming the Can Division has sufficient capacity, what is the minimum transfer price it should accept?

Accepted Answer

A) $0.24 
B) $0.32 
C) $0.22 
D) $0.30 
A) $0.24 
B) $0.32 
C) $0.22 
D) $0.30

Question 6

Use the following information for questions 
The Wood Division of Fir Products, Inc. manufactures rubber moldings and sells them externally for $55. Its variable cost is $25 per unit, and its fixed cost per unit is $7. Fir's president wants the Wood Division to transfer 5,000 units to another company division at a price of $32.
-Assuming the Wood Division has available capacity of 5,000 units, the minimum transfer price it should accept is

Accepted Answer

A) $7. 
B) $25. 
C) $32. 
D) $55. 
A) $7. 
B) $25. 
C) $32. 
D) $55.

Question 7

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

Accepted Answer

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

Question 8

The markup percentage is

Accepted Answer

A) 20.69%. 
B) 22.59%. 
C) 25%. 
D) 26.09%. 
A) 20.69%. 
B) 22.59%. 
C) 25%. 
D) 26.09%.

Question 9

The negotiated transfer price approach should be used when

Accepted Answer

A) the selling division has available capacity and is willing to accept less than the market price. 
B) an outside market for the goods does not exist. 
C) no market price is available. 
D) any of these situations exist. 
A) the selling division has available capacity and is willing to accept less than the market price. 
B) an outside market for the goods does not exist. 
C) no market price is available. 
D) any of these situations exist.

Question 10

The last step in determining the material loading charge percentage is to

Accepted Answer

A) estimate annual costs for purchasing, receiving, and storing materials. 
B) estimate the total cost of parts and materials. 
C) divide material charges by the total estimated costs of parts and materials. 
D) add a desired profit margin on the materials themselves. 
A) estimate annual costs for purchasing, receiving, and storing materials. 
B) estimate the total cost of parts and materials. 
C) divide material charges by the total estimated costs of parts and materials. 
D) add a desired profit margin on the materials themselves.

Question 11

The material loading charge is expressed as a percentage of the total estimated cost of materials for the year.

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

A) fixed cost + opportunity cost. 
B) external purchase price. 
C) total cost + opportunity cost. 
D) variable cost + opportunity cost. 
A) fixed cost + opportunity cost. 
B) external purchase price. 
C) total cost + opportunity cost. 
D) variable cost + opportunity cost.

Question 13

Use the following information for questions 
Papillon Co. has determined the following per unit amounts: $$\begin{array} { l r l r } 
\text { Direct materials } & \$ 30 & \text { Fixed selling and administrative } & \$ 60 \
\text { Direct labor } & 36 & \text { Variable overhead } & 24 \
\text { Desired ROl } & 33 & \text { Variable selling and administrative } & 15 \
\text { Fixed overhead } & 45 & &
\end{array}$$
-The cost base using the absorption-cost approach is

Accepted Answer

A) $90. 
B) $105. 
C) $195. 
D) $135. 
A) $90. 
B) $105. 
C) $195. 
D) $135.

Question 14

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

Accepted Answer

A) variable cost 
B) total cost 
C) selling price 
D) contribution margin 
A) variable cost 
B) total cost 
C) selling price 
D) contribution margin

Question 15

The calculation to determine target cost is

Accepted Answer

A) variable manufacturing costs + fixed manufacturing costs. 
B) sales price - (variable manufacturing costs + fixed manufacturing costs). 
C) variable manufacturing costs + selling and administrative variable costs. 
D) sales price - desired profit. 
A) variable manufacturing costs + fixed manufacturing costs. 
B) sales price - (variable manufacturing costs + fixed manufacturing costs). 
C) variable manufacturing costs + selling and administrative variable costs. 
D) sales price - desired profit.

Question 16

The overall objective in the determination of a transfer price is to

Accepted Answer

A) maximize the return of the selling division. 
B) minimize the cost to the purchasing division. 
C) minimize the return of the selling division. 
D) maximize the return to the whole company. 
A) maximize the return of the selling division. 
B) minimize the cost to the purchasing division. 
C) minimize the return of the selling division. 
D) maximize the return to the whole company.

Question 17

In time-and-material pricing, the material charge is based on the cost of direct materials used and a material loading charge for related overhead costs.

Accepted Answer

A) True 
 B)False

Question 18

Which two methods are used most often when establishing a transfer price?

Accepted Answer

A) Negotiated transfer pricing and cost-based transfer pricing 
B) Cost-based transfer pricing and market-based transfer pricing 
C) Negotiated transfer pricing and market-based transfer pricing 
D) Cost-based transfer pricing and standard-based pricing 
A) Negotiated transfer pricing and cost-based transfer pricing 
B) Cost-based transfer pricing and market-based transfer pricing 
C) Negotiated transfer pricing and market-based transfer pricing 
D) Cost-based transfer pricing and standard-based pricing

Question 19

Use the following information for questions 
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

Accepted Answer

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

Question 20

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

Accepted Answer

A) 4 
B) 3 
C) 2 
D) 1 
A) 4 
B) 3 
C) 2 
D) 1

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

In cost-plus pricing, the markup percentage is computed by dividing the desired ROI per unit by the

Lawrence Legal Services recently billed a customer $690.Labor hours were 6 and the cost of the materials used was $150.If the company's hourly labor rate was $75, what material loading charge was used?

The markup percentage is

The negotiated transfer price approach should be used when

The last step in determining the material loading charge percentage is to

The material loading charge is expressed as a percentage of the total estimated cost of materials for the year.

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

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

The calculation to determine target cost is

The overall objective in the determination of a transfer price is to

In time-and-material pricing, the material charge is based on the cost of direct materials used and a material loading charge for related overhead costs.

Which two methods are used most often when establishing a transfer price?

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

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

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Exam 8: Reporting and Analyzing Receivables

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

In cost-plus pricing, the markup percentage is computed by dividing the desired ROI per unit by the

Lawrence Legal Services recently billed a customer $690.Labor hours were 6 and the cost of the materials used was $150.If the company's hourly labor rate was $75, what material loading charge was used?

The markup percentage is

The negotiated transfer price approach should be used when

The last step in determining the material loading charge percentage is to

The material loading charge is expressed as a percentage of the total estimated cost of materials for the year.

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

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

The calculation to determine target cost is

The overall objective in the determination of a transfer price is to

In time-and-material pricing, the material charge is based on the cost of direct materials used and a material loading charge for related overhead costs.

Which two methods are used most often when establishing a transfer price?

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

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

Filters