Mised Questions Flashcards by Jeffrey Alvarado

System design cycle

The system life cycle order is analysis, design, programming, implementation, and maintenance.

How well did you know this?

Not at all

Perfectly

What measurement is used to compare projects?

ROI
RI
PI
Economic value added

ROI=

NI/average total assets or invested capital

How well did you know this?

Not at all

Perfectly

What system provides information to assist a user to develop answer?

Decision support system

How well did you know this?

Not at all

Perfectly

What system creates and manages databases?

Database management system (DBMS)

How well did you know this?

Not at all

Perfectly

What system provides answers based on information provided by the user and rules developed by an expert to address specified situations?

Expert or knowledge based system

How well did you know this?

Not at all

Perfectly

What factors increase investments?

High capital goods stock
A increase in acquisition costs
A low tech growth rate
A real interest rate decrease

A real interest rate decrease

How well did you know this?

Not at all

Perfectly

What performance measure is used to evaluate a firms capital?

Economic value added=

Operating profit- cost of capital

How well did you know this?

Not at all

Perfectly

What advantage does cost leadership offer?

Firms will enjoy a larger market share. This is achieved through lower costs which entails lower prices and more customers.

How well did you know this?

Not at all

Perfectly

What is the debt financing net of flotation costs?

15 mil, 20 year, 6% bond at 102 w/ float cost of 3%

(15 mil x 1.02) - (15 mil x .03)=14,850,000

Annual interest is 900,000 (15 mil x .06)

900,000/14,850,000= 6.06

How well did you know this?

Not at all

Perfectly

What is the dividend growth model?

(Sum of next year’s dividend/ current price) + growth

How well did you know this?

Not at all

Perfectly

What is the formula for net national income?

GDP-depreciation=net domestic product (NDP)

NDP- indirect business taxes+income earn abroad= net national income

How well did you know this?

Not at all

Perfectly

When production exceeds sales, is net income higher when using absorption or variable costing?

Absorption costing, because variable costing expenses all costs in the period. Absorption costing charges manufacturing costs to inventory moving it to future periods until it is sold and moved to expenses through COGS.

If inventory increases due to lower sales and higher inventory, absorption has most of the manufacturing costs attached to inventory while variable expenses, creating higher expenses and lower net income.

How well did you know this?

Not at all

Perfectly

What is the price elasticity of demand?

1,600 to 1,700 units

$40 to $35

40-35=5
5/40=.125

1,600-1,700=100
100/1,600=.0625

.0625/.125=.5

How well did you know this?

Not at all

Perfectly

How is safety stock calculated?

Actual sales - break even sales

How well did you know this?

Not at all

Perfectly

Using the net realizable value how much joint cost should be allocated to Kul?

Kul:
units produced 1,000
market value 40,000
Additional split off 0

Ju:
units produced 2,500
market value 60,000
Additional split off 0

Beg:
units produced 500
market value 9,000
Additional split off 5,000

Production joint cost: 54,000

Kul:

Subtract NRV from joint cost:
54,000-(9,000-5000)=50,000 to allocate

Sales value - additional cost = NRV
40,000 - 0= 40,000

40,000/ (40,000+60,000) x 50,000= 20,000

How well did you know this?

Not at all

Perfectly

Calculate cost of equity.

Declared dividend per share- current year $4

Growth rate 5.5%

Current market price $45

[Dividend 1/ price] + growth

Because we only have Dividend 0(current year) we multiply it by the growth.
4x (1+5.5%)/45=.0938 + .055= .1438

Direct materials: beg 18k, end 15k
WIP: beg 9k, end 6k
FG: beg 27, end 36k

Direct Materials purchased in May: 42k
Direct labor payroll in May: 30k
DL rate per hour in May: 7.50
FOH rate per DL hour in May: 10

For the month of May what was the prime cost?

Prime cost= DM + DL

DM:

18k +42k-15k= 45

DL: 30k

Prime cost: 45 + 30= 75,000

Don’t use WIP bc it includes materials from previous periods.

What are the cost flows for DM, WIP and FGs?

DM: beg + purchase-DM used = ending

WIP: beg + DM used+ DL+ MOH- COGM= ending

FG: beg + COGM - COGS = ending

What is the formula for GDP?

Government spending + investments + consumption + exports (net)

Units
Beg WIP 2,000
Units started in May 8,000
Spoilage 500
Units completed and transferred 7,000
Ending WIP (80% complete) 2,500

Conversion costs:
Beg WIP $10,000
Units started in May 75,500

Using the weighted average method what is the conversion cost?

500+7,000+2,000*=9,500

*2,500x.80

10,000+75,500=85,500

85,500/9,500=$9

$9x7,500=67,500

What is a collection of data pertinent to a whole group?

A file

What is data pertinent to a single transaction or vendor?

A record

What is a portion of a record such as a telephone number?

A field

What is a portion of a character such as a single digit of a phone number?

A byte

Find the present value factor? $1 @ 10%

FV/(1+int rate) n 1/(1.1)1

What is the variable cost income statement?

``` Sales Less variable expenses: Production Selling and admin =contribution margin Less fixed expenses: Production Selling and admin =operating income ``` The only difference in variable and absorption is that variable expenses fixed manufacturing costs in full. Absorption only to extent of products sold.

Which of the following measures shareholder wealth? EPS Profits Stock value Total return per share

Total return per share This includes EPS and stock value changes

What costs are included in product costs?

DM, DL, fixed and variable costs

Use the FIFO method to complete: ``` Beg 400 (60% complete) Completed during year 1,000 Ending 200 (20% complete) ```

160 (400x40%) 600 (1,000-400) 40 (200x20) 800 total

What is the economic order quantity? Monthly carrying cost= 40 Ordering cost= 2,800 Annual sales= 15,000 units

SQRT of (2 x demand x orderimg cost)/ carrying cost 2x15,000x2,800=84,000,000/(40x12)=175,000 Sqrt of 175k is 418

P/s, $1,000 par = 24,000,000 C/s, $100 par = 20,000,000 APIC =36,000,000 RE= 18,000,00 No dividends in arrears What is the book value of the common stock?

Since no dividends in arrears all RE counts towards common stock. 20+36+18=74 million 20/100= 200,000 shares 74 million/200,00 shares= 370 book value

A IS company buys French shares for 1,000,000 euros on 3/1 when the exchange rate was 1E= $1.10. After holding it for 8 months it sold for 1,200,000 euros when the exchange rate was 1E= $1.23. What was the total gain or loss?

Investment cost: 1,000,000E x 1.1 = $1,100,000 Investment proceeds: 1,200,000E x 1.23= 1,476,000 1,476 - 1,100= 376,000 gain

A company wants to approximate the 12% interest rate based on 365 day year it pays on a capital loan. Which of the following should the company offer it’s customers? 2%, 15, net 45 1%, 15, net 45 .75%, 10, net 30 .50%, 10, net 30

(Discount rate/principal) x 1/(length of discount /365) Length of discount period= discount date - net date (.01/.99) x 1/(30/365) = .0101 x (365/30) = .0101 x 12.16= 12.28

What are the variable overhead spending and efficiency variances? ``` Actual costs: Variable $10,000 Fixed $8,800 Budgeted fixed OH $8,000 Variable OH rate $3 Fixed OH rate $2 Actual units produced 800 Std hrs for actual production 3,200 Actual hrs 3,400 ```

Variable variance uses hours as quantity Spending variance: 1.) Find actual rate $10,000 spend / 3,400 hrs= 2.94 2.)Using AxA and AxS AxA is 3,400 x 2.94= 10,000 AxS is 3,400 x 3= 10,200 10,000-10,200= 200 Favorable bc 10,200 was the budget. Efficiency variance: Using AxS and SxS AxS is 3,400 x 3= 10,200 SxS is 3,200 x 3= 9,600 10,200-9600= 600 UF bc we budgeted to use 3,200 hrs and we used 3,400

What are the fixed overhead spending and production volume variances? ``` Actual costs: Variable $10,000 Fixed $8,800 Budgeted fixed OH $8,000 Variable OH rate $3 Fixed OH rate $2 Actual units produced 800 Std hrs for actual production 3,200 Actual hrs 3,400 ```

Spending variance: Budget - spending 8,800-8,000= 800 UF Volume variance: Applied - budget 3,400hrs x $2= 6,800 8,000-6,800= 1,200 UF because more volume was expected.

Does ABC costing consume heterogeneous or homogeneous resources?

heterogeneous

Does process costing consume heterogeneous or homogeneous resources?

Homogeneous

What causes a company’s break even point in slaws to increase?

If the company’s total fixed costs increase.