1) creelman company makes four products in a single facility. data concerning these
products appear below:
the milling machines are potentially the constraint in the production facility. a total of
13,000 minutes are available per month on these machines.
which product makes the least profitable use of the milling machines?
a.product a
b.product b
c.product c
d.product d
2) henkel clinic uses client-visits as its measure of activity. during november, the clinic
budgeted for 3,600 client-visits, but its actual level of activity was 3,550 client-visits.
the clinic has provided the following data concerning the formulas used in its budgeting
and its actual results for november:
the personnel expenses in the planning budget for november would be closest to:
a.$74,120
b.$71,432
c.$70,440
d.$74,640
3) zoopsia hospital has two service departments and three operating departments.
selected information on the five departments for last year is as follows:
zoopsia allocates power generation cost first on the basis of kilowatt hours. zoopsia
then allocates laundry cost on the basis of the number of employees. operating costs in
power generation for last year were $250,000. operating costs in laundry for last year
were $60,000. no distinction is made between variable and fixed costs.
if service department costs are allocated using the direct method, what is the total
amount of service cost that would be allocated to the emergency room?
a.$147,100
b.$161,000
c.$182,750
d.$192,250
4) which of the following represents value-added time in the manufacturing cycle?
a.inspection time
b.queue time
c.move time
d.process time
5) abdol company, which has only one product, has provided the following data
concerning its most recent month of operations:
the total gross margin for the month under the absorption costing approach is:
a.$13,000
b.$91,800
c.$273,000
d.$84,500
6) couey corporation, which produces highway lighting poles, has provided the
following data:
the variable overhead efficiency variance for supplies is:
a.$1,220 u
b.$1,385 f
c.$1,385 u
d.$165 u
7) freeman company uses a predetermined overhead rate based on direct labor-hours to
apply manufacturing overhead to jobs. at the beginning of the year, the company
estimated manufacturing overhead would be $150,000 and direct labor-hours would be
10,000. the actual figures for the year were $186,000 for manufacturing overhead and
12,000 direct labor-hours. the cost records for the year will show:
a.overapplied overhead of $30,000
b.underapplied overhead of $30,000
c.underapplied overhead of $6,000
d.overapplied overhead of $6,000
8) a flexible budget:
a.classifies budget requests by activity and estimates the benefits arising from each
activity
b.presents a statement of expectations for a period of time but does not present a firm
commitment
c.presents the plan for only one level of activity and does not adjust to changes in the
level of activity
d.presents the plan for a range of activity so that the plan can be adjusted for changes in
activity levels
9) mateo company’s average cost per unit is $1.425 at the 16,000 unit level of activity
and $1.38 at the 20,000 unit level of activity. assume that all of the activity levels
mentioned in this problem are within the relevant range.
required:
predict the following items for mateo company:
a. variable cost per unit.
b. total fixed cost per period.
c. total expected costs at the 18,000 unit level of activity.
10) discover motor company uses a standard cost system to collect costs related to the
production of its toothpick motors. the direct labor standard for each toothpick motor is
1.25 hours at a standard cost of $9.50 per hour.
during the month of may, discover’s toothpick motor production used 5,900 direct
labor-hours at a total direct labor cost of $54,575. this resulted in production of 4,800
toothpick motors for may. what is discover’s labor efficiency variance for the month of
may?
a.$950 favorable
b.$1,475 favorable
c.$8,975 unfavorable
d.$10,450 unfavorable
11) management of solman corporation has asked your help as an intern in preparing
some key reports for june. the beginning balance in the raw materials inventory account
was $20,000. during the month, the company made raw materials purchases amounting
to $69,000. at the end of the month, the balance in the raw materials inventory account
was $32,000. direct labor cost was $24,000 and manufacturing overhead was $71,000.
the beginning balance in the work in process account was $24,000 and the ending
balance was $19,000. the beginning balance in the finished goods account was $53,000
and the ending balance was $58,000. selling expense was $20,000 and administrative
expense was $35,000.
the prime cost for june was:
a.$95,000
b.$93,000
c.$81,000
d.$55,000
12) a manufacturer of industrial equipment 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:
how much overhead was applied to products during the period to the nearest dollar?
a.$77,645
b.$73,255
c.$74,715
d.$75,594
13) which of the following would be classified as a prevention cost on a quality cost
report?
a.warranty repairs and replacements
b.quality engineering
c.test and inspection of in-process goods
d.net cost of scrap
14) financial statements for marcalo company appear below:
marcalo company’s average collection period for year 2 was closest to:
a.20.6 days
b.29.4 days
c.30.0 days
d.42.9 days
15) altona corporation’s vice president in charge of marketing believes that every 3%
increase in the selling price of one of the company’s products would lead to a 5%
decrease in the product’s total unit sales. the product’s absorption costing unit product
cost is $13.50. the variable production cost is $7.80 per unit and the variable selling and
administrative cost is $2.30 per unit.
the product’s price elasticity of demand as defined in the text is closest to:
a.-1.51
b.-1.33
c.-1.14
d.-1.74
16) terres corporation produces and sells a single product. data concerning that product
appear below:
the break-even in monthly dollar sales is closest to:
a.$889,273
b.$438,000
c.$293,460
d.$540,244
17) all of schnider company’s sales and expenses last year were for cash. the tax rate
was 30%. if the net cash inflow (after taxes) last year was $18,900, and if the total gross
cash sales were $75,000, then the total cash expenses before taxes must have been:
a.$27,000
b.$48,000
c.$52,000
d.$37,000
18) last year, black company reported sales of $640,000, a contribution margin of
$160,000, and a net loss of $40,000. based on this information, the break-even point
was:
a.$640,000
b.$480,000
c.$800,000
d.$960,000