Table 4 Broadmore Corporation eported the following information for 20X6 and 20x
ID: 2597688 • Letter: T
Question
Table 4 Broadmore Corporation eported the following information for 20X6 and 20x1 20X7 data Net sales revenue Cost of goods sold Total aset-asofDvember 31 Current liabilities 600,000 Stockholders' equity on December 31 Selling and general expenses Interest expense Net income Current assets 395,000 230,000 20,000 70,000 60,000 20,000 900,000 Stockholdens' equity on December 31278,000 5,000 20X6 data Current liabilities Total assets on December 3 Current assets 23) Refer to Table & The rate of return on net sales in 23) A) 0.20 B) 066 C) 0.0 D) 0.07 24) Refer to Table & The current ratio for 207 A)0.36 B) 240 0.42 D) 2.75 25) A plant managers salary may be referred to a A) either a direct cost or an indirect cost since management accounting is not restricted by generally accepted accounting principles B) a period cost C) an indirect cost D) a direct cost 26) 26) All of the following would probably be considered a direct material except A) lumber B) steel C) fabric D) glue 27) 27) Inventoriable product costs: A) include only the costs of direct materials and direct labor used to produce a product B) include the costs of direct materials, direct labor, and manufacturing overhead used to produce a product C) include marketing coets and research and development costs D) both A and B are correct 28) 28) Manufacturing overhead includes A) indirect labor and indirect materials C) indirect materials and direct materials B) factory rent and direct labor D) direct materials and direct laborExplanation / Answer
23) Return on net sales = Net income / Sales * 100
= $70000/950000 * 100
= 0.07
Option D is correct.
24) Current ratio = Current assets / Current liabilities
= $55000/ $20000
= 2.75
Option D is correct.
25) Plant managers salary is a cost that cannot be attributed to the product directly. It is thus an indirect cost.
Option C is correct
26) Glue is not a direct material. Though it is a part of the product, it cannot be said as the direct material for manufacturing the product.
Option D is correct.
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