1) which of the following accounts would be included in the calculation of the acid-test
ratio?
a.choice a
b.choice b
c.choice c
d.choice d
2) under a standard cost system, the materials price variances are usually the
responsibility of the:
a.production manager
b.sales manager
c.purchasing manager
d.engineering manager
3) marple company’s budgeted production in units and budgeted raw materials
purchases over the next three months are given below:
two pounds of raw materials are required to produce one unit of product. the company
wants raw materials on hand at the end of each month equal to 30% of the following
month’s production needs. the company is expected to have 36,000 pounds of raw
materials on hand on january 1. budgeted production for february should be:
a.105,000 units
b.82,500 units
c.150,000 units
d.75,000 units
4) on april 1, histron corporation had 10,000 units of work in process in department a
that were 100% complete with respect to material costs and 20% complete with respect
to conversion costs. during april, 80,000 units were started in department a and 85,000
units were completed and transferred to department b. the work in process at the end of
april was 100% complete with respect to materials costs and 40% complete with respect
to conversion costs. by what amount would the equivalent units for conversion costs for
april differ if the fifo method were used instead of the weighted-average method?
a.10,000 decrease
b.8,000 decrease
c.4,000 decrease
d.2,000 decrease
5) graciana corporation’s most recent comparative balance sheet and income statement
appear below:
cash dividends were $28.
the net cash provided by (used by) operations for the year was:
a.$146
b.$104
c.$179
d.$21
6) cost of goods manufactured for the year was:
a.$171,000
b.$160,000
c.$243,000
d.$244,000
7) the following data pertains to activity and utility costs for two recent years:
using the high-low method, the cost formula for utilities is:
a.$1.50 per unit
b.$8,000 plus $0.50 per unit
c.$1.25 per unit
d.$6,000 plus $0.75 per unit
8) for the current year, paxman company incurred $150,000 in actual manufacturing
overhead cost. the manufacturing overhead account showed that overhead was
overapplied in the amount of $6,000 for the year. if the predetermined overhead rate
was $8.00 per direct labor-hour, how many hours were worked during the year?
a.19,500 hours
b.18,000 hours
c.18,750 hours
d.17,750 hours
9) data for september for mossman corporation and its two major business segments,
north and south, appear below:
in addition, common fixed expenses totaled $319,000 and were allocated as follows:
$160,000 to the north business segment and $159,000 to the south business segment.
the contribution margin of the south business segment is:
a.$211,000
b.$673,000
c.$51,000
d.$392,000
10) hinsey corporation produces and sells a single product. data concerning the product
appear below:
fixed expenses are $300,000 per month. the company is currently selling 4,000 units per
month. consider each of the following questions independently.
this question is to be considered independently of all other questions relating to hinsey
corporation. refer to the original data when answering this question.
the marketing manager would like to introduce sales commissions as an incentive for
the sales staff. the marketing manager has proposed a commission of $11 per unit. in
exchange, the sales staff would accept a decrease in their salaries of $37,000 per month.
(this is the company’s savings for the entire sales staff.) the marketing manager predicts
that introducing this sales incentive would increase monthly sales by 200 units. what
should be the overall effect on the company’s monthly net operating income of this
change?
a.increase of $34,800
b.increase of $8,400
c.decrease of $65,600
d.increase of $360,400
11) mieras corporation uses customers served as its measure of activity. during january,
the company budgeted for 37,000 customers, but actually served 36,000 customers. the
company uses the following revenue and cost formulas in its budgeting, where q is the
number of customers served:
revenue: $2.80q
wages and salaries: $22,800 + $0.90q
supplies: $0.50q
insurance: $7,500
miscellaneous: $3,800 + $0.30q
the company reported the following actual results for january:
required:
prepare a report showing the company’s revenue and spending variances for january.
label each variance as favorable (f) or unfavorable (u).
12) during november, jiminez corporation recorded the following:
required:
prepare t-accounts for raw materials, work in process, finished goods, and
manufacturing overhead, and cost of goods sold. record the beginning balances and
each of the transactions listed above. finally, determine the ending balances.
13) when mr. ding l. berry, president and chief executive of berry, inc., first saw the
segmented income statement below, he flew into his usual rage: “when will we ever
start showing a real profit? i’m starting immediate steps to eliminate those two
unprofitable lines!”
*these traceable expenses could be eliminated if the product lines to which they are
traced were discontinued.
required:
recommend which segments, if any, should be eliminated. prepare a report in good form
to support your answer.
14) carver company’s comparative balance sheet and income statement for last year
appear below:
the company declared and paid $50,000 in cash dividends during the year.
required:
construct in good form the operating activities section of the company’s statement of
cash flows for the year using the direct method.
15) during may, phong clinic budgeted for 2,900 patient-visits, but its actual level of
activity was 3,100 patient-visits. revenue should be $31.30 per patient-visit. personnel
expenses should be $23,700 per month plus $8.10 per patient-visit. medical supplies
should be $700 per month plus $6.20 per patient-visit. occupancy expenses should be
$7,000 per month plus $1.50 per patient-visit. administrative expenses should be $3,400
per month plus $0.40 per patient-visit.
required:
prepare the clinic’s flexible budget for may based on the actual level of activity for the
month.
16) comparative financial statements for parr company follow:
additional data for the year included:
* during the year, parr company sold equipment for $3,000 that had cost $15,000 and
on which there was accumulated depreciation of $8,000.
* equipment was purchased for $12,000 cash.
* cash dividends totaling $8,000 were paid.
* long-term investments that cost $18,000 when purchased were sold for $22,000.
* common stock was issued for $10,000.
* depreciation expense for the year was $5,000.
required:
prepare a statement of cash flows using the direct method.
