Instructions: Designate the best answer for each of the following questions. 1.Which of the following is a responsibility center that incurs expenses, generates revenues, and is responsible for generating a return on assets? a. Cost center b. Revenue center c. Profit center d. Investment center 2.Which one of the following is the most useful measure for evaluating a manager's performance in controlling revenues and costs in a profit center? a. Contribution margin b. Contribution net income c. Contribution gross profit d. Controllable margin 3.Hanover Corporation desires to earn target net income of $42,000. The selling price per unit is $18, unit variable cost is $5.60, and total fixed costs are $123,912. How many units must the company sell to earn its target net income? a. 13,380 b. 9,993 c. 3,387 d. 9,217 4.Remark Enterprises uses a process cost accounting system. Beginning Work in Process3,000 units (50% complete) Ending Work in Process2,000 units (30% complete) Started into Production56,000 units How many units were completed and transferred out during the current period? a. 56,000 b. 58,000 c. 59,000 d. 57,000 5.Ralston Gifts applies overhead on the basis of machine hours. The following data were provided by Ralston: Estimated annual overhead cost$516,600 Actual annual overhead cost$537,500 Estimated machine hours126,000 Actual machine hours125,000 How much overhead was applied? a. $512,500 b. $520,380 c. $516,600 d. $541,800
Instructions: Designate the best answer for each of the following questions.
1.Which of the following is a responsibility center that incurs expenses, generates revenues, and is responsible for generating a return on assets?
a. Cost center
b. Revenue center
c. Profit center
d. Investment center
2.Which one of the following is the most useful measure for evaluating a manager's performance in controlling revenues and costs in a profit center?
a. Contribution margin
b. Contribution net income
c. Contribution gross profit
d. Controllable margin
3.Hanover Corporation desires to earn target net income of $42,000. The selling price per unit is $18, unit variable cost is $5.60, and total fixed costs are $123,912. How many units must the company sell to earn its target net income?
a. 13,380
b. 9,993
c. 3,387
d. 9,217
4.Remark Enterprises uses a
Beginning Work in Process3,000 units (50% complete)
Ending Work in Process2,000 units (30% complete)
Started into Production56,000 units
How many units were completed and transferred out during the current period?
a. 56,000
b. 58,000
c. 59,000
d. 57,000
5.Ralston Gifts applies
Estimated annual overhead cost$516,600
Actual annual overhead cost$537,500
Estimated machine hours126,000
Actual machine hours125,000
How much overhead was applied?
a. $512,500
b. $520,380
c. $516,600
d. $541,800
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