1) during august, sherill corporation incurred $78,000 of actual manufacturing overhead
costs. during the same period, the manufacturing overhead applied to work in process
was $81,000.
the journal entry to record the incurrence of the actual manufacturing overhead costs
would include a:
a.debit to manufacturing overhead of $78,000
b.credit to work in process of $81,000
c.credit to manufacturing overhead of $78,000
d.debit to work in process of $81,000
2) the selling and administrative expense in the planning budget for march would be
closest to:
a.$522,860
b.$547,200
c.$543,440
d.$526,555
3) bosril corporation uses the weighted-average method in its process costing system.
this month, the beginning inventory in the first processing department consisted of 400
units. the costs and percentage completion of these units in beginning inventory were:
a total of 5,600 units were started and 4,900 units were transferred to the second
processing department during the month. the following costs were incurred in the first
processing department during the month:
the ending inventory was 85% complete with respect to materials and 45% complete
with respect to conversion costs.
note: your answers may differ from those offered below due to rounding error. in all
cases, select the answer that is the closest to the answer you computed. to reduce
rounding error, carry out all computations to at least three decimal places.
how many units are in ending work in process inventory in the first processing
department at the end of the month?
a.1,100
b.5,200
c.900
d.700
4) beak industries is a division of a major corporation. last year the division had total
sales of $10,600,000, net operating income of $1,070,600, and average operating assets
of $4,000,000.
the division’s return on investment (roi) is closest to:
a.26.8%
b.21.1%
c.2.7%
d.7.3%
5) desktop co. presently has a current ratio of 1.2 and an acid-test ratio of 0.8. prepaying
next year’s office rent of $50,000 will:
a.have no effect on either the company’s current ratio or its acid-test ratio
b.have no effect on the company’s current ratio but will decrease its acid-test ratio
c.decrease the company’s current ratio and decrease its acid-test ratio
d.increase the company’s current ratio and increase its acid-test ratio
6) dwelmont hotel bases its budgets on guest-days. the hotel’s static budget for may
appears below:
the total fixed cost at the activity level of 2,900 guest-days per month should be:
a.$78,200
b.$57,420
c.$98,600
d.$45,540
7) nasson corporation manufactures and sells a single product. the company uses units
as the measure of activity in its budgets and performance reports. during august, the
company budgeted for 6,700 units, but its actual level of activity was 6,730 units. the
company has provided the following data concerning the formulas used in its budgeting
and its actual results for august:
the net operating income in the flexible budget for august would be closest to:
a.$22,506
b.$18,317
c.$17,930
d.$22,708
8) hooper corporation produces and sells two models of vacuum cleaners, standard and
deluxe. the company records show the following monthly data relating to these two
products:
the company’s total monthly fixed cost is $15,000.
if the expected monthly sales in units were divided equally between the two models
(900 standard and 900 deluxe), the break-even level of sales would be:
a.the same as with the expected sales mix
b.higher than with the expected sales mix
c.lower than with the expected sales mix
d.cannot be determined with the available data
9) compound c90n is a raw material used to make mosbarger corporation’s major
product. the standard cost of compound c90n is $38.20 per ounce and the standard
quantity is 8.0 ounces per unit of output. data concerning the compound for september
appear below:
the raw material was purchased on account.
the materials price variance for september would be recorded as a:
a.credit of $567
b.credit of $770
c.debit of $567
d.debit of $770
10) becky works on the assembly line of a manufacturing company where she installs a
component part for one of the company’s products. she is paid $16 per hour for regular
time and time and a half for all work in excess of 40 hours per week.
becky works 46 hours in a given week but is idle for 4 hours during the week due to
equipment breakdowns. the allocation of becky’s wages for the week between direct
labor cost and manufacturing overhead cost would be:
a.choice a
b.choice b
c.choice c
d.choice d
11) ringstaff corporation produces and sells a single product. data concerning that
product appear below:
the company is currently selling 7,000 units per month. fixed expenses are $615,000 per
month. the marketing manager believes that a $21,000 increase in the monthly
advertising budget would result in a 180 unit increase in monthly sales. what should be
the overall effect on the company’s monthly net operating income of this change?
a.increase of $600
b.decrease of $600
c.decrease of $21,000
d.increase of $21,600
12) dadisman corporation’s most recent balance sheet and income statement appear
below:
dividends on common stock during year 2 totaled $30 thousand. dividends on preferred
stock totaled $20 thousand. the market price of common stock at the end of year 2 was
$6.75 per share.
the return on total assets for year 2 is closest to:
a.4.64%
b.4.61%
c.5.76%
d.5.79%
13) financial data for beaker company for last year appear below:
the company paid dividends of $2,100 last year. the “investment in cedar company” on
the statement of financial position represents an investment in the stock of another
company.
required:
a. compute the company’s margin, turnover, and return on investment for last year.
b. the board of directors of beaker company has set a minimum required return of 20%.
what was the company’s residual income last year?
14) mcferrin corporation manufactures a variety of products. last year, the company’s
variable costing net operating income was $53,200. fixed manufacturing overhead costs
released from inventory under absorption costing amounted to $32,900. what was the
absorption costing net operating income last year?
a.$86,100
b.$20,300
c.$32,900
d.$53,200