Hunnicutt Company is a construction company that builds greenhouses on special
request. What is the proper classification of the carpenters’ wages?
A. yes yes no
B. yes no yes
C. no no no
D. no yes yes
Ultimate Vision Corporation
Ultimate Vision Corporation has two product lines: LCD televisions and projection
televisions. The company has budgeted the following production and overhead costs for
the upcoming year:
Refer to Ultimate Vision Corporation. If the company uses total direct labor hours to
allocate factory overhead, the materials handing cost allocated to LCD TVs would be:
A. $23,077
B. $28,125
C. $30,000
D. $45,000
Which of the following methods of assigning indirect service department costs
recognizes on a partial basis the reciprocal relationships among the departments?
A. step method
B. direct method
C. indirect method
D. algebraic method
Julie Collins recently invested in a project that promised an internal rate of return of 15
percent. If the project has an expected annual cash inflow of $12,000 for six years, with
no salvage value, how much did Julie pay for the project?
Present value tables or a financial calculator are required.
A. $35,000
B. $45,414
C. $72,000
D. $31,708
Presently, the Software Division of Bennett Publishing Corporation has a profit margin
of 30%. If total sales rise by $100,000, the net result will be
A. an increase in the profit margin ratio to above 30%.
B. a decrease in the profit margin ratio to below 30%.
C. no change in the profit margin ratio.
D. a change in the profit margin ratio that cannot be determined from this information.
Riley Company
Riley Company produces two products from a joint process: A and C. Joint processing
costs for this production cycle are $9,000.
If A and C are processed further, no disposal costs will be incurred or such costs will be
borne by the buyer.
Refer to Riley Company. Using sales value at split-off, what amount of joint processing
cost is allocated to Product C (round to the nearest dollar)?
A. $2,938
B. $3,682
C. $4,500
D. $6,062
Unabsorbed fixed overhead costs in an absorption costing system are
A. fixed manufacturing costs not allocated to units produced.
B. variable overhead costs not allocated to units produced.
C. excess variable overhead costs.
D. costs that cannot be controlled.
Davis Company
Davis Company uses a job-order costing system. Assume that Job #504 is the only one
in process. The following information is available:
Refer to Davis Company. What is the overhead application rate if Davis uses a
predetermined overhead application rate based on direct labor hours (rounded to the
nearest whole dollar)?
A. $ 0.20
B. $ 5.00
C. $ 5.38
D. $38.89
Wyman Company is a graphic design shop that produces jobs to customer
specifications. During January, Job #3051 was worked on and the following
information is available:
What was the total cost of Job #3051 for January?
A. $2,713
B. $2,770
C. $2,812
D. $3,052
Hickman Company uses a FIFO process costing system. The company had 6,000 units
that were 75 percent complete as to conversion costs at the beginning of the month. The
company started 25,000 units this period and had 8,000 units in ending Work in Process
Inventory that were 40 percent complete as to conversion costs. What are equivalent
units for material, if material is added at the beginning of the process?
A. 18,500
B. 25,000
C. 26,500
D. 31,000
A process costing system
A. cannot use standard costs.
B. restates Work in Process Inventory in terms of completed units.
C. accumulates costs by job rather than by department.
D. assigns direct labor and manufacturing overhead costs separately to units of
production.
Shiny Floors Company
Shiny Floors Company produces four floor cleaners from the same process: C, D, E,
and G. Joint product costs are $9,000. (Round all answers to the nearest dollar.)
If Shiny Floors sells the products after further processing, the following disposal costs
will be incurred: C, $2.50; D, $1.00; E, $3.50; G, $6.00.
Refer to Shiny Floors Company. Using net realizable value at split-off, what amount of
joint processing cost is allocated to Product E?
A. $1,017
B. $1,550
C. $2,170
D. $4,263
A prospective project under consideration by the Internet Division of Communications
Corporation. has an estimated residual income of $(20,000). If the project requires an
investment of $400,000, the
A. project generates a negative return on investment.
B. project’s return on investment is zero.
C. project’s return on investment is 5% less than the company’s target rate.
D. company’s target rate is 15%
Putnam Company
Below is an income statement for Putnam Company:
Refer to Putnam Company. Based on the cost and revenue structure on the income
statement, what was Putnam’s break-even point in dollars?
A. $300,000
B. $400,000
C. $425,000
D. $450,000
All other factors equal, a decrease in the order quantity will
A. decrease the annual carrying costs.
B. decrease the annual ordering costs.
C. increase the lead time.
D. reduce the safety stock.
If there is no “a” value in a linear cost equation, this is an indication that the cost is
A. fixed.
B. mixed.
C. variable.
D. either fixed or mixed.
In the least-squares equation, y = a + bX, a represents
A. the coefficient of determination.
B. the level of activity.
C. the fixed component of a cost.
D. the variable cost per unit.
Benchmarking
A. yes no
B. no yes
C. yes yes
D. no no
Terrell Corporation
Terrell Corporation produces various products used in the construction industry. The
Plumbing Division produces and sells 100,000 copper fittings each month. Relevant
information for last month follows:
Top-level managers are trying to determine how a transfer price can be set on a transfer
of 10,000 of the copper fittings from the Plumbing Division to the Bathroom Products
Division.
Refer to Terrell Corporation. A transfer price based on market price would be set at
____ per unit.
A. $2.10
B. $2.50
C. $1.60
D. $2.25
Compliance costs include
A. yes no no
B. no yes yes
C. yes yes no
D. yes yes yes