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1) A company made the following merchandise purchases and sales during the current
month:
There was no beginning inventory. If the company uses the last-in, first-out perpetual
inventory system, what would be the cost of the ending inventory?
2) Erlander Company uses a job order cost accounting system. On November 1,
$15,000 of direct materials and $3,500 of indirect materials were requisitioned for
production. Prepare the general journal entry to record this requisition.
3) A company sells a single product that has a contribution margin ratio of 24%. If the
company's total fixed costs are $84,000, what is the break-even point in dollar sales?
4) A company had net income of $76,000 in Year 1 and $88,000 in Year 2. Its net sales
were $640,000 in Year 1 and $611,000 in Year 2. Its average total assets in Year 1 were
$670,000 and $712,000 in Year 2. Calculate the profit margin, total asset turnover and
return on total assets for both years. Comment on the results.
5) A current ratio of 2.1 suggests that a company has ____________ current assets to
cover current liabilities.
