1) 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 per equivalent unit for materials for the month in the first processing
department is closest to:
a.$15.73
b.$17.09
c.$16.62
d.$16.18
2) the management of matsuura corporation would like to set the selling price on a new
product using the absorption costing approach to cost-plus pricing. the company’s
accounting department has supplied the following estimates for the new product:
management plans to produce and sell 1,000 units of the new product annually. the new
product would require an investment of $254,000 and has a required return on
investment of 10%.
the absorption costing unit product cost is:
a.$90
b.$97
c.$67
d.$69
3) salling corporation bases its budgets on machine-hours. the company’s static
planning budget for may appears below:
the spending variance for equipment depreciation in the flexible budget performance
report for the month should be:
a.$540 f
b.$10 f
c.$10 u
d.$540 u
4) north company sells a single product. the product has a selling price of $30 per unit
and variable expenses of 70% of sales. if the company’s fixed expenses total $60,000
per year, then it will have a break-even of:
a.$60,000
b.$85,714
c.$42,000
d.$200,000
5) abc company has a cash balance of $9,000 on april 1. the company must maintain a
minimum cash balance of $6,000. during april expected cash receipts are $45,000.
expected cash disbursements during the month total $52,000. during april the company
will need to borrow:
a.$2,000
b.$4,000
c.$6,000
d.$8,000
6) noda 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.
what are the equivalent units for materials for the month in the first processing
department?
a.630
b.6,675
c.7,200
d.6,000
7) if company a has a higher degree of operating leverage than company b, then:
a.company a has higher variable expenses
b.company a’s profits are more sensitive to percentage changes in sales
c.company a is more profitable
d.company a is less risky
8) the more sensitive customers are to price,
a.the smaller (in absolute value) is the price elasticity of demand
b.the more inelastic is the demand for a product
c.the larger (in absolute value) is the price elasticity of demand
d.the more likely price elasticity of demand will be greater than +1
9) setting up equipment is an example of a:
a.unit-level activity
b.batch-level activity
c.product-level activity
d.organization-sustaining activity
10) quezaire corporation, a manufacturer, uses the step-down method to allocate service
department costs to operating departments. the company has two service departments,
administration and facilities, and two operating departments, assembly and finishing.
data concerning those departments follow:
administration department costs are allocated first on the basis of labor hours and
facilities department costs are allocated second on the basis of space occupied.
the total finishing department cost after allocations is closest to:
a.$528,859
b.$525,110
c.$528,790
d.$519,190