1) excerpts from shelton corporation’s most recent balance sheet appear below:
sales on account in year 2 amounted to $1,320 and the cost of goods sold was $890.
the current ratio at the end of year 2 is closest to:
a.0.35
b.1.21
c.1.13
d.0.39
2) gargymal company would like to estimate the variable and fixed components of its
electrical costs and has compiled the following data for the last five months of
operations.
using the high-low method of analysis, the estimated fixed cost per month for electricity
is closest to:
a.$1,306.50
b.$870.00
c.$1,290.00
d.$1,150.00
3) recent maintenance costs of pavelko corporation are listed below:
management believes that maintenance cost is a mixed cost that depends on
machine-hours.
using the least-squares regression method, the estimate of the variable component of
maintenance cost per machine-hour is closest to:
a.$3.26
b.$13.45
c.$2.00
d.$2.96
4) which of the following statements is true for a company that uses variable costing?
a.the unit product cost changes as a result of changes in the number of units
manufactured
b.both variable selling costs and variable production costs are included in the unit
product cost
c.net operating income moves in the same direction as sales
d.net operating income is greatest in periods when production is highest
5) mincks corporation incurred $64,000 of actual manufacturing overhead costs during
november. during the same period, the manufacturing overhead applied to work in
process was $61,000. the journal entry to record the application of manufacturing
overhead to work in process would include a:
a.debit to work in process of $64,000
b.credit to manufacturing overhead of $61,000
c.credit to work in process of $64,000
d.debit to manufacturing overhead of $61,000
6) deano products is a division of a major corporation. the following data are for the last
year of operations:
the division’s margin is closest to:
a.9.9%
b.3.1%
c.34.5%
d.31.4%
7) clopton clinic uses the step-down method to allocate service department costs to
operating departments. the clinic has two service departments, personnel and
information technology (it), and two operating departments, family medicine and
geriatric medicine. data concerning those departments follow:
personnel costs are allocated first on the basis of employees and it costs are allocated
second on the basis of pcs.
the total geriatric medicine department cost after allocations is closest to:
a.$113,020
b.$134,101
c.$139,700
d.$139,601
8) pardise company plans the following beginning and ending inventory levels (in
units) for july:
two units of raw material are needed to produce each unit of finished product.
if 500,000 finished units were to be manufactured during july, the units of raw material
needed to be purchased would be:
a.1,000,000 units
b.1,020,000 units
c.1,010,000 units
d.990,000 units
9) earll company’s quality cost report is to be based on the following data:
what would be the total internal failure cost appearing on the quality cost report?
a.$127,000
b.$26,000
c.$84,000
d.$150,000
10) howe company increased its roi from 20% to 25%. net operating income and sales
remained at their previous levels of $40,000 and $1,000,000 respectively. the increase
in roi was attributed to a reduction in operating assets brought about by the sale of
obsolete inventory at cost (the proceeds from the sale were used to reduce bank loans).
by how much was inventory reduced?
a.$8,000
b.$40,000
c.$10,000
d.it is impossible to determine from the data given
11) horizontal analysis of financial statements is accomplished through:
a.placing statement items on an after-tax basis
b.common-size statements
c.computing both earnings per share and the price-earnings ratio
d.trend percentages