The gross margin for Year 1 is:

• A.US $3,429,360
• B.US $4,232,160
• C.US $4,350,000
• D.US $4,800,000

Correct Answer: D

The gross margin equals revenue minus gist of goods sold beginning finished goods inventory + cost of goods manufactured - ending finished goods inventory). Cost of goods manufactured equals all manufacturing adjusted for the change in work-in progress.
Consequently, the gross margin was US $4,800,000 $9,000,000 $1,800,000 DM $720,000 DL $ 1,080,000 VOH $6000,000 FOH), given no beginning or ending finished goods or work-in-process inventories. Data regarding Year 1 operations for an enterprise that had no beginning or ending inventories are as follows:

The enterprise estimates that next year direct materials costs will increase by 101 and direct labor costs will increase by US $0.60 unit to US $5.40 per unit. In addition fixed selling expenses will increase by US $29,520. All other costs will be increased at the same rates or amounts as the, current year.

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If a control total were to be computed on each of the following data items, which would best be identified as a hash total for a payroll computer application?

• A.Hours worked.
• B.Total debits and total credits.
• C.Net pay
• D.Department numbers.

Correct Answer: D

The three types of control totals are record counts, financial totals, and hash totals Record counts establish the number of source documents and reconcile it to the number of output records. Financial totals compute dollar totals from source documents e.g.. the total dollar amount of invoices processes) and reconcile them with the output records. Hash totals add numbers on input documents that are not normally added e.g., department numbers), resulting in a total that is "meaningless" for any purpose other than this control.
Batchelder Company has the following invoices in a batch:

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At December 31, Year 1, an entity had the following equity accounts:

Each of the 40,000 ordinary shares outstanding was issued at a price of US $26. On January 2, Year 2, 2,000 shares were reacquired for US $30 per share. The cost method is used in accounting for these treasury shares. Which of the following correctly describes the effect of the acquisition of the treasury shares?

• A.Ordinary shares is reduced by US $20,000.
• B.Share premium from issuance of ordinary shares is reduced by US $32,000.
• C.The retained earnings account balance is reduced by US $8,000.
• D.Total equity is reduced by US $60,000.

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Which of the following is a major advantage of decentralized organizations, compared to centralized organizations?

• A.Decentralized organizations tend to be more responsive to market changes.
• B.Decentralized organizations are more focused on organizational goals.
• C.Decentralized organizations streamline organizational structure.
• D.Decentralized organizations tend to be less expensive to operate.

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Under the share <List A>, the par value per outstanding share will <List B>, List A List B:

• A.Option A
• B.Option B
• C.Option C
• D.Option D

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