AC 505 AC505 Unit 4 Quiz (Kaplan University)

AC 505 Unit 4 Quiz (Kaplan University)

1. Pitkins Company collects 20% of a month's sales in the month of sale, 70% in the month following sale, and 6% in the second month following sale. The remainder is uncollectible. Budgeted sales for the next four months are:
2. Which of the following depicts the logical order for preparing the production budget, the cash budget, the sales budget, and the direct-labor budget?
3. Vern's makes all sales on account, and has the following collection pattern: 20% are collected in the month of sale; 70% are collected in the first month after sale; and 10% are collected in the second month after sale. Sales for the last quarter of the year are budgeted as follows:
4. The management of International Cookwares believes that delivery performance measures must be improved if the company is to maintain its competitive edge.  The following data are considered to be typical of the time to complete orders.
5. Which of the following statements about budgeting is true?
6. Fragrance, Inc. has two divisions: the Cologne Division and the Bottle Division. The Bottle Division produces containers that can be used by the Cologne Division. The Bottle Division incurs variable cost of $2.00 per unit, and its fixed cost is $.50 per unit. The Cologne Division can purchase similar containers from external suppliers for $2.90. The Bottle Division sells its containers to outside companies for $3.00 each. Assuming all of the containers produced by the bottle Division can be sold to outside companies, which of the following is the range at which a negotiated transfer price between the two divisions should occur?
7. Indicate which of the following statements about evaluating investment centers is false.
8. Sales revenue   $1,500,000
   Gross margin      600,000
   Net income         90,000
   Average operating assets    450,000
   Owners’ equity                   200,000
9. Smelly Cigars has two divisions: the Rolling Division and the Box Division. The Box Division produces boxes that can be used by the Rolling Division. The Box Division incurs variable cost of $2.00 per unit, and its fixed cost is $ .50 per unit. The Rolling Division can purchase similar boxes from external suppliers for $3.40. The Box Division sells its boxes to outside companies for $3.50 each. Assuming the Box Division has enough excess capacity to supply all of the Rolling Division’s needs, which of the following is the range at which a negotiated transfer price between the two divisions should occur?
10. Wilson Corporation prepares its budget on an on-going basis, with a new quarter being added to the budget as the current quarter is completed. This type of budget is most commonly known as a: