NO.38 Who does Sarbanes-Oxley apply to?

NO.39 A company allocates overhead based on the number of shoes produced.
The company estimates the following costs and shoe production for the upcoming year:
Estimated total overhead = $1,250,000
Estimated number of shoes = 4,000,000
Actual overhead = $1,350,000
Actual number of shoes = 4,100,000
What is the predetermined overhead rate?

NO.40 Which role do ethical standards have in management accounting?

NO.41 Which formula yields a cash times interest earned ratio of 11?

NO.42 What is a significant role of the U.S. Securities and Exchange Commission (SEC) in financial reporting?

NO.43 What does it mean if a company has a debt ratio of 101.5%?

NO.44 During the year, a company purchased goods on a credit basis for its supplies of $750.
What would be the impact on the accounting equation and financial statement?

NO.45 The following list provides partial financial information for a company.
Current assets = $36,543
Total assets = $58,719
Current liabilities = $24,824
Total liabilities = $48,561
Stockholders’ equity = $10,158
Sales = $46,997
Net income = $3,761
Market value of equity = $41,316
What is the current ratio for this company?

NO.46 Where should a company report cash payments to acquire or construct long-term fixed assets on a statement of cash flows?

NO.47 What does it mean if a company has a debt ratio of 101.5%?

NO.48 Match each accounting term with its definition.
Answer options may be used more than once or not at all.
Select your answer from the pull-down list.

NO.49 What does management accounting present?

NO.50 A company manufactures and sells widgets. The following information is available:
* Total fixed costs per month are $300,000
* The variable cost per widget is $50
* Each widget sells for $100
How many widgets does the company need to sell each month to break even?

NO.51 How does management accounting differ from financial accounting?

NO.52 A company manufactures leather products and has recently switched to the activity-based costing (ABC) method. It needs to determine the cost of its leather wallets. The company is already aware of its DM and DL costs.
What is the first step to calculating the cost of the product?

NO.53 Which two examples represent financial statement errors?
Choose 2 answers.

NO.54 Which act was implemented as a result of the corporate scandals at companies such as Enron and WorldCom?

NO.55 Which action should a managerial accountant consider taking if confronted by an ethical conflict?

NO.56 Which information does a balance sheet provide about a company?

NO.57 Last year, X Corporation had sales of $500,000 and total expenses of $300,000. A manager of the company is entitled to get a sales commission of 10% of net profit.
What amount of sales commission is to be recognized at year-end?

NO.58 Which body regulates a certified public accounting firm’s audit practices when the firm is auditing a large, publicly traded company?

NO.59 A company presently uses traditional volume-based costing to allocate overhead to its products.
The following table provides information on two of the company’s products:
Product A
Product B
Selling price
$8
$12
Direct material
$2
$3
Direct labor
$1
$2
Applied overhead
$3
$4
Gross margin
$2
$3
Overhead that would be applied to Product A would increase to $8 per unit after identifying cost pools and cost drivers, and the overhead applied to Product B would drop to $2 per unit .
How would this change in the way overhead is allocated affect the selling price of both products?

NO.60 A manufacturer produces three products A, B, and C.
The company uses the following information to determine activity rates for each pool.
Cost Pool
Costs
Total Activity
Pool 1
$300,000
20,000 hours
Pool 2
$20,000
500 pounds
Pool 3
$10,000
100 moves
Data concerning the three products appear in the following table.
Cost Driver
Product A
Product B
Product C
Number of hours
10,000
7,500
2,500
Number of pounds
150
250
100
Number of moves
20
40
50
What is the total amount of overhead applied to Product B?