1) On the statement of cash flows, the cost of goods sold adjusted to a cash basis would
be:
A.$546,000
B.$536,000
C.$544,000
D.$540,000
2) Data from Estrin Corporation’s most recent balance sheet and income statement
appear below:
The average sale period for this year is closest to:
A.101 days
B.50 days
C.108 days
D.45 days
3) Zumbrunnen Corporation uses activity-based costing to compute product margins.
Overhead costs have already been allocated to the company’s three activity cost
pools-Processing, Supervising, and Other. The costs in those activity cost pools appear
below:
Processing costs are assigned to products using machine-hours (MHs) and Supervising
costs are assigned to products using the number of batches. The costs in the Other
activity cost pool are not assigned to products. Activity data appear below:
Finally, sales and direct cost data are combined with Processing and Supervising costs
to determine product margins.
What is the overhead cost assigned to Product H2 under activity-based costing?
A.$41,000
B.$6,840
C.$14,040
D.$20,880
4) Federick Clinic uses client-visits as its measure of activity. During October, the clinic
budgeted for 3,000 client-visits, but its actual level of activity was 3,040 client-visits.
The clinic has provided the following data concerning the formulas used in its
budgeting and its actual results for October:
Data used in budgeting:
Actual results for October:
The spending variance for occupancy expenses in October would be closest to:
A.$848 U
B.$780 U
C.$848 F
D.$780 F
5) How many units of product B27D should be produced each month?
A.390
B.200
C.0
D.784
6) ( Baber Corporation is planning an investment with the following characteristics:
The initial cost of the equipment is closest to:
A.$300,000
B.$216,300
C.$2,500,000
D.Cannot be determined from the given information.
7) A furniture manufacturer uses a standard costing system in which standard
machine-hours (MHs) is 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:
The predetermined overhead rate is closest to:
A.$21.90 per hour
B.$21.80 per hour
C.$21.16 per hour
D.$21.26 per hour
8) Paradise Corporation budgets on an annual basis for its fiscal year. The following
beginning and ending inventory levels (in units) are planned for next year.
*Three pounds of raw material are needed to produce each unit of finished product.
If Paradise Corporation plans to sell 480,000 units during next year, the number of units
it would have to manufacture during the year would be:
A.440,000 units
B.480,000 units
C.510,000 units
D.450,000 units
9) Nouri Corporation uses the FIFO method in its process costing system. Data
concerning the first processing department for the most recent month are listed below:
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 per equivalent unit for conversion costs for the first department for the month
is closest to:
A.$14.48
B.$14.82
C.$15.20
D.$15.56
10) Roddey Corporation is a specialty component manufacturer with idle capacity.
Management would like to use its extra capacity to generate additional profits. A
potential customer has offered to buy 2,900 units of component GEE. Each unit of GEE
requires 3 units of material R39 and 8 units of material I59. Data concerning these two
materials follow:
Material R39 is in use in many of the company’s products and is routinely replenished.
Material I59 is no longer used by the company in any of its normal products and
existing stocks would not be replenished once they are used up.
What would be the relevant cost of the materials, in total, for purposes of determining a
minimum acceptable price for the order for product GEE?
A.$224,605
B.$196,765
C.$228,204
D.$193,285
11) Epley Corporation makes a product with the following standard costs:
In July the company produced 3,300 units using 12,240 pounds of the direct material
and 2,760 direct labor-hours. During the month, the company purchased 13,000 pounds
of the direct material at a cost of $35,100. The actual direct labor cost was $51,612 and
the actual variable overhead cost was $20,148.
The company applies variable overhead on the basis of direct labor-hours. The direct
materials purchases variance is computed when the materials are purchased.
The labor efficiency variance for July is:
A.$2,280 U
B.$2,244 U
C.$2,280 F
D.$2,244 F
12) Using the least-squares regression method, the estimated total fixed cost per month
for maintenance is closest to:
A.$470
B.$416
C.$400
D.$378
13) Karmen Corporation uses the FIFO method in its process costing system. Operating
data for the Enameling Department for the month of May appear below:
What were the equivalent units for conversion costs in the Enameling Department for
May?
A.85,000
B.85,960
C.93,200
D.80,800
14) The management of Chaloux Corporation would like to investigate the possibility
of basing its predetermined overhead rate on activity at capacity. The Corporation’s
controller has provided an example to illustrate how this new system would work. In
this example, the allocation base is machine-hours.
If the Corporation bases its predetermined overhead rate on capacity, by how much was
manufacturing overhead underapplied or overapplied?
A.$9,792 Overapplied
B.$1,344 Overapplied
C.$9,792 Underapplied
D.$1,344 Underapplied
15) Hamed Corporation would like to determine the relative profitability of the
company’s products for purposes of making volume trade-off decisions. The company
has provided the following data for product U57S:
What is the profitability index for product U57S?
A.$41,440
B.0.40
C.$7.00 per minute
D.$2.80 per minute
16) Smee Inc. produces and sells a single product. The selling price of the product is
$130.00 per unit and its variable cost is $52.00 per unit. The fixed expense is $281,580
per month.
The break-even in monthly unit sales is closest to:
A.3,730 units
B.5,415 units
C.2,166 units
D.3,610 units
17) The net present value of project X is closest to:
A.$2,915
B.$(11,708)
C.$5,283
D.$6,317
18) Using the least-squares regression equation, the total maintenance cost for March is:
A.above the regression line.
B.on the regression line.
C.below the regression line.
D.outside the relevant range.
19) Jameson Corporation uses a predetermined overhead rate based on direct
labor-hours to apply manufacturing overhead to jobs. The Corporation has provided the
following estimated costs for the next year:
Jameson estimates that 24,000 direct labor-hours will be worked during the year. The
predetermined overhead rate per hour will be:
A.$2.00
B.$2.79
C.$3.00
D.$4.00