26) The method that measures the time it will take to recoup, in the form of cash inflows, the total dollars invested in a project is called A) the accrued accounting rate of return method. B) payback. C) internal rate of return method. D) the book-value method. E) the NPV. 27) The net initial investment for a new mainframe computer is $2,000,000. Annual cash flows are expected to increase by $800,000 per year. The equipment has a 10-year useful life. What is the payback period? A) 4.00 years B) 2.50 years C) 2.00 years D) 1.75 years E) 0.75 […]

  15) What are the costs per equivalent unit for direct materials and conversion respectively? A) $2.00; $1.54 B) $1.45; $1.54 C) $2.11; $1.62 D) $2.11; $1.18 E) $2.00; $1.18   Use the information below to answer the following question(s).   Cartwright Custom Carpentry manufactures chairs in its Processing Department, and uses the FIFO cost flow assumption. Direct Materials are included at the inception of the production cycle and must be bundled in single kits for each unit. Conversion costs are incurred evenly throughout the production cycle. Inspection takes place at the end of the process and spoiled units generally […]

  11) Deducting the disposal value from the costs of the spoiled goods accumulated to the point of inspection equals A) the net cost of discarded goods. B) the net cost of reworked goods. C) the net cost of spoilage. D) the net cost of scrap. E) the net cost of disposals.   12) Costs of spoilage include all of the following EXCEPT A) the opportunity cost of the plant and workers. B) storage. C) lost contribution margin. D) the contribution margin gained on rework. E) all costs incurred to make the spoiled product to date. 13) If the inspection […]

  18.3   Apply the standard-costing method to account for spoilage, and allocate costs of normal spoilage.   1) Under standard costing, there is no need to calculate a cost per equivalent unit.   2) Process costing is simplified when using standard costs.   3) The calculation of equivalent units under standard costing is the same as under FIFO.   4) Which of the following can be used in accounting for spoilage? A) standard costs B) FIFO C) Weighted average D) FIFO and weighted average but not standard costs E) FIFO and weighted average and standard costs 5) The standard-costing method […]

77) Picture Pretty manufactures picture frames. Sales for August are expected to be 10,000 units of various sizes. Historically, the average frame requires four feet of framing, one square foot of glass, and two square feet of backing. Beginning inventory includes 1,500 feet of framing, 500 square feet of glass, and 500 square feet of backing. Current prices are $0.30 per foot of framing, $6.00 per square foot of glass, and $2.25 per square foot of backing. Ending inventory should be 150% of beginning inventory. Purchases are paid for in the month acquired. Required: a.Determine the quantity of framing, glass, […]