AC 505 (AC 505)

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: Which of the following depicts the logical order for preparing the production budget, the cash budget, the sales budget, and the direct-labor budget? Vern's makes all sales on account, and has the following collection pattern: 20% are collected in the month of sale; 70% are ...

Excelsior Corporation recently used $90,000 of direct materials and $1,500 of indirect materials in production activities. To record these transactions Excelsior would: Addison Company produces two products: A and B. Annual production and sales is 1,000 units of Product A and 500 units of Product B. The company uses activity- based costing to determine product costs. The estimated overhead costs and expected activity for each of the company's three overhead activity centers are as follows: ...

Which of the following statements about capital budgeting is true? The Kelso Company has two divisions: Eastern and Western. The Eastern division has the following revenues and expenses: Sales: $900,000 Variable costs: 450,000 Fixed costs: 260,000 Allocated corporate costs: 240,000 Net income (loss): $(50,000) A new machine that costs $87,200 is expected to save annual cash operating costs of $20,000 over each of the next six years. The machine's internal rate of return is: Xebex Company i...

Atlanta, Inc., which uses the high-low method to analyze cost behavior, has determined that machine hours best explain the company's utilities cost. The company's relevant range of activity varies from a low of 600 machine hours to a high of 1,100 machine hours, with the following data being available for the first six months of the year: The following information is available for Forrest Company: A product sells for $15 per unit and has variable expenses of $9 per unit. Fixed expenses tota...

The individual generally responsible for explaining the direct-material price variance is the: The Whitfield Co. uses a standard costing system and has established the following standards: If a company uses standard costing, the manufacturing overhead applied to Work-in-Process Inventory would be computed as: Blackwelder Snow Removal's cost formula for its vehicle operating cost is $1,240 per month plus $348 per snow-day. For the month of December, the company planned for activity of 12 snow-da...