Easy Round

 

Easy Round

1.   True or False: False: Management Management accounting accounting is based based on the Generally Generally Accepted Accepted Accounting Principles (GAAP). Answer. False 2.  What is a Japanese word for ‘continuous Improvement’?  Answer. Kaizen 3.  Which of the following systems are packaged business software systems that allows companies to automate and integrate the majority of their business processes, share common data and practices across the entire enterprise and produce and access information in a real-time environment. A.  Business Systems Planning (BSP) B.  Enterprise Resource Planning (ERP) C.  Executive Support System (ESS) D.  Database Answer. B   is a technique used to separate the repeatedly ‘vital few’ from the ‘trivial The 4. It technique is a widely used tool that has shown that 20 tomany’. 30 percent of the items in a set of items accounts for 70 to 80 percent of the cost or values (e.g., inventory, donors to charity, source of defects.) A.  SWOT Analysis B.  PESTLE Analysis C.  Business Process Modelling D.  Pareto Analysis

Answer. D 5.   True or False: False: The risk free rate of interest is equal to the sum of the real rate of interest plus an inflation risk premium. Answer. True 6.  Mayall Corporation is developing standards for its products. Each unit of output of the product requires 0.92 kilogram of a particular input. The allowance for waste and spoilage is .02 kilogram of this input for each unit of output. The allowance for reject is 0.11 kilogram of this input for each output. The standard quantity of this input per unit of output should be: A.  0.90 B.  0.92 C.  0.79 D.  1.05 Answer. D (0.92+0.02+0.11)

 

  7.   The Golden Company is analysing projects A, B, and C as possible investment investment opportunities. Each of o f these projects has a useful life of eight years. The following information has been obtained: Project A Project B Project C Initial Investment $250,000 $475,000 $380,000 Present Value future net cash flows Internal rate ofofreturn

$290,000 16%

$503,000 20%

$422,000 18%

Consider the following sOltements: I.  II.  III. 

Project A is preferred to Project B according to a net present value ranking. Project A is preferred to Project Proje ct B according to an internal rate of retu return rn ranking. Project A is preferred to Project B according to a project profitability index ranking.

Which is true? A.  Only I B.  Only II C.  Only I and II D.  Only I and III Answer. D 8.  (Ignore income taxes in this problem.) Golab Roofing is considering the purchase of a crane that would cost $69,846, would have useful life of 6 years, and would have no salvage value. The use of the crane would result in labor savings of $21,000 per year. The internal rate of return on the investment in the crane is closest to: A.  18%   B. C.  20% 19% D.  17% Answer. B Solution:

69846 = 21000 69846 21000

 =

(−(+) 

 

21000 (1  (1 (1   ))− 21000

3.326 =



(1  (1 (1   ))− 

 

 

 

9.  Elliott Company uses a predetermined predetermined overhead rate based on machine-hours to apply manufacturing overhead to jobs. The company manufactures tools to customer specifications. The following data pertain to Job 1501: Direct Materials used $4,200 Direct Labor-hours worked 300 Direct Labor rate per hour $8.00 Machine-hours used 200 Predetermined overhead rate per machine hour $15.00 What is the total manufacturing cost recorded on Job 1501? Answer. 9600 Solution: DMU

4200

DL (300*8)

2400

OH (200*15) 3000  Total

9600

10. Gottlob Corporation’s most recent income statement appears below:   Sales (all on account $824,000 Cost of Goods Sold 477,000 Gross Margin 347,000 Selling and administrative expense 208,000 Net Operating income 139,000 Interest Expense 37,000 Net Income before taxes 102,000 Income taxes 30,000 Net Income $72,000  The gross margin margin percentage percentage is closest closest to: A.  20.7% B.  72.7% C.  42.1% D.  481.9% Answer. C (347000/824000)

Average Round

1.  In calculating the break-even point for a multi-prodc