1) geneva steel corporation produces large sheets of heavy gauge steel. the company
showed the following amounts relating to its production for the year just completed:
the balance of the finished goods inventory at the end of the year was:
a.$95,000
b.$50,000
c.$193,000
d.$45,000
2) super drive is a computer hard drive manufacturer. the company’s balance sheet for
the fiscal year ended on november 30 appears below:
additional information regarding super drive’s operations appear below:
sales are budgeted at $520,000 for december and $500,000 for january.
collections are expected to be 60% in the month of sale and 40% in the month
following sale. there are no bad debts.
80% of the disk drive components are purchased in the month prior to the month of the
sale, and 20% are purchased in the month of the sale. purchased components comprise
40% of the cost of goods sold.
payment for components purchased is made in the month following the purchase.
assume that the cost of goods sold is 80% of sales.
the balance in accounts payable on the budgeted balance sheet for december 31 should
be:
a.$161,280
b.$326,400
c.$165,120
d.$403,200
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.
the cost of ending work in process inventory in the first processing department
according to the company’s cost system is closest to:
a.$24,812
b.$17,294
c.$32,666
d.$38,431
4) wable inc. has provided the following data to be used in evaluating a proposed
investment project:
for tax purposes, the entire initial investment without any reduction for salvage value
will be depreciated over 5 years. the company uses a discount rate of 16%.
when computing the net present value of the project, what are the annual after-tax cash
expenses?
a.$94,000
b.$193,700
c.$44,700
d.$104,300
5) the changes in tench company’s balance sheet account balances for last year appear
below:
the company’s income statement for the year appears below:
the company declared and paid $70,000 in cash dividends during the year. the company
uses the direct method to determine the net cash provided by operating activities.
on the statement of cash flows, the cost of goods sold adjusted to a cash basis would be:
a.$390,000
b.$410,000
c.$430,000
d.$395,000
6) lindgren corporation’s most recent comparative balance sheet appears below:
the net cash provided by (used by) operations for the year was:
a.$134
b.($5)
c.$99
d.$89
7) hofbauer corporation’s two products have the following characteristics:
the constrained resource is a particular machine that is available for 10,400 minutes
each month. each unit of product m73o requires 6 minutes on this machine and each
unit of product m26b requires 8 minutes on this machine.
what is the maximum contribution margin the company can earn per month?
a.$43,805
b.$47,232
c.$67,392
d.$40,512
8) the upton company uses a standard costing system in which variable overhead is
assigned to production on the basis of standard direct labor-hours. data for the month of
february include the following:
variable overhead cost incurred: $48,700
total variable overhead variance: $300 f
standard hours allowed for actual production: 7,000
actual direct labor-hours worked: 6,840
the standard variable overhead rate per direct labor-hour is:
a.$6.91
b.$6.95
c.$7.00
d.$7.12
9) during october, kreitner inc. transferred $73,000 from work in process to finished
goods and recorded a cost of goods sold of $76,000. the journal entries to record these
transactions would include a:
a.credit to work in process of $73,000
b.credit to cost of goods sold of $76,000
c.debit to finished goods of $76,000
d.credit to finished goods of $73,000
10) which of the following situations always results in underapplied overhead?
a.actual overhead is greater than applied overhead
b.actual overhead is less than applied overhead
c.estimated overhead is greater than actual overhead
d.estimated overhead is less than actual overhead
11) sitz corporation’s most recent comparative balance sheet and income statement
appear below:
cash dividends were $11. the net cash provided by (used by) operations for the year
was:
a.$11
b.$93
c.$41
d.$74
12) hoeper clinic uses client-visits as its measure of activity. during january, the clinic
budgeted for 2,600 client-visits, but its actual level of activity was 2,570 client-visits.
the clinic has provided the following data concerning the formulas used in its budgeting
and its actual results for january:
the spending variance for medical supplies in january would be closest to:
a.$787 f
b.$787 u
c.$580 f
d.$580 u
13) a manufacturer of playground equipment has a standard costing system based on
standard direct labor-hours (dlhs) as the measure of activity. data from the company’s
flexible budget for manufacturing overhead are given below:
the following data pertain to operations for the most recent period:
what was the fixed manufacturing overhead volume variance for the period to the
nearest dollar?
a.$1,910 f
b.$697 f
c.$676 f
d.$1,213 u
14) 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 indirect labor cost is:
a.$5,000
b.$12,000
c.$15,000
d.$35,000
15) woofter corporation manufactures and sells a single product. the company uses
units as the measure of activity in its budgets and performance reports. during january,
the company budgeted for 7,600 units, but its actual level of activity was 7,560 units.
the company has provided the following data concerning the formulas used in its
budgeting and its actual results for january:
the overall revenue and spending variance (i.e., the variance for net operating income in
the revenue and spending variance column on the flexible budget performance report)
for january would be closest to:
a.$12,816 f
b.$12,280 u
c.$12,816 u
d.$12,280 f
16) megenity company’s net income last year was $194,000. changes in the company’s
balance sheet accounts for the year appear below:
the company declared and paid cash dividends of $132,000 last year. the following
questions pertain to the company’s statement of cash flows.
the net cash provided by (used in) investing activities last year was:
a.$(75,000)
b.$75,000
c.$(95,000)
d.$95,000
17) consider a decision facing a company of either accepting or rejecting a special offer
for one of its products. a cost that is not relevant is:
a.direct materials
b.variable overhead
c.fixed overhead that will be avoided if the special offer is accepted
d.common fixed overhead that will continue if the special offer is not accepted
18) which of the following entries would correctly record the charging of direct labor
costs to work in process given an unfavorable labor efficiency variance and a favorable
labor rate variance?
a.
b.
c.
d.
19) the following data have been taken from your company’s financial records for the
current year:
the price-earnings ratio is:
a.1.67
b.15.0
c.9.0
d.7.0