Deck 17: Accounting and Engineering Economy

Question 1

Case Study 17
Given: The financial data below for Tech Engineering in 2016.
$$\begin{array} { | l | l | } \hline \text { Category } & \begin{array} { l } \text { Dollar } \\\text { Amount }\end{array} \\\hline \text { Cash } & \$ 800,000 \\\hline \text { Accounts receivable } & 1,000,000 \\\hline \text { Inventories } & 600,000 \\\hline \text { Intangibles } & 100,000 \\\hline \text { Accounts payable } & 650,000 \\\hline \text { Accrued Expenses } & 180,000 \\\hline\end{array}$$

-Determine the working capital for the company.

A) $1,470,000
B) $1,570,000
C) $1,670,000
D) None of these

Answer 1

None of these

Question 2

Case Study 17
Given: The financial data below for Tech Engineering in 2016.
$$\begin{array} { | l | l | } \hline \text { Category } & \begin{array} { l } \text { Dollar } \\\text { Amount }\end{array} \\\hline \text { Cash } & \$ 800,000 \\\hline \text { Accounts receivable } & 1,000,000 \\\hline \text { Inventories } & 600,000 \\\hline \text { Intangibles } & 100,000 \\\hline \text { Accounts payable } & 650,000 \\\hline \text { Accrued Expenses } & 180,000 \\\hline\end{array}$$

-Compute the current ratio from the financial data provided.

A) 1.57
B) 3.01
C) 2.72
D) 1.78

Answer 2

3.01

Question 3

Case Study 17
Given: The financial data below for Tech Engineering in 2016.
$$\begin{array} { | l | l | } \hline \text { Category } & \begin{array} { l } \text { Dollar } \\\text { Amount }\end{array} \\\hline \text { Cash } & \$ 800,000 \\\hline \text { Accounts receivable } & 1,000,000 \\\hline \text { Inventories } & 600,000 \\\hline \text { Intangibles } & 100,000 \\\hline \text { Accounts payable } & 650,000 \\\hline \text { Accrued Expenses } & 180,000 \\\hline\end{array}$$

-What is the acid-test ratio for the company in 2016?

A) 2.17
B) 1.61
C) 1.21
D) None of these

Answer 3

2.17

Question 4

This is classified as current asset for accounting purposes.

A) Equipment
B) Land
C) Buildings
D) Finished goods Inventories

Question 5

Given the data for two products being made at Putnam Manufacturing, determine:

A) Overhead expenses based on labor cost for each of the two products.
B) Manufacturing cost of each product.
$$\begin{array} { | c | c | c | } \hline & \text { Stardard } & \text { Deluxe } \\\hline \text { \# of urits produced / year } & 500,000 & 40,000 \\\hline \text { Labor cost } / \text { unit } & \$ 100 & \$ 180 \\\hline \text { Material cost } / \text { urit } & \$ 250 & \$ 320 \\\hline\end{array}$$

Question 6

The total overhead expenses for a company are $10 M. The total labor cost for the whole company is $18 M. If a particular product has a direct labor of $3.6 M then the overhead expenses for this product is $6.4 M if overhead is based on direct labor costs.

Question 7

An example of indirect costs in manufacturing engineered products is salaries of design engineers.

Question 8

The total liabilities of a company from the balance sheet are found to be $30.78 M. If the equity is stated as $40.15 M, the asset of the company is $9.37.