1) lisby, inc., allocates service department costs to operating departments using the
step-down method. the company has two service departments, administration and
physical plant, and two operating departments, assembly and testing. data concerning
those departments follow:
administration department costs are allocated first on the basis of employee time and
physical plant department costs are allocated second on the basis of space occupied. the
total testing department cost after allocations is closest to:
a.$226,258
b.$225,800
c.$211,940
d.$224,077
2) worker recreational facilities is an example of a cost that would ordinarily be
considered to be:
a.unit-level
b.batch-level
c.product-level
d.organization-sustaining
3) which of the following terms could be used to correctly describe the wages paid to
the data entry clerk who enters customer order information into the company’s
computer system?
a.choice a
b.choice b
c.choice c
d.choice d
4) the medical services department of carey company budgeted $20 of variable medical
expenses per employee for may, based on 1,000 employees in operating departments.
during may an average of 1,050 employees were employed in operating departments.
actual variable medical expenses totaled $23,100 for the month. how much variable
medical expenses should be charged to operating departments at the end of may for
performance evaluation purposes?
a.$21,000
b.$23,100
c.$20,000
d.$22,000
5) 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 acid-test ratio at the end of year 2 is closest to:
a.1.55
b.2.19
c.1.81
d.1.17
6) if a cost object such as a product or customer has a negative yellow margin, then:
a.its green margin will be positive
b.its green margin may be positive, negative, or zero
c.its green margin will be negative
d.its green margin will be zero
7) wriphoff company uses a standard cost system to collect costs related to the
production of its clay bud vases. manufacturing overhead at wriphoff is applied to
production on the basis of standard direct labor-hours. the overhead standards used at
wriphoff are as follows:
the standards above were based on an expected annual volume of 40,000 bud vases or
36,000 direct labor-hours. the actual results for last year were as follows:
what total amount of manufacturing overhead cost (variable and fixed) did wriphoff
apply to the 35,600 vases produced during last year?
a.$512,640
b.$548,000
c.$564,800
d.$569,600
8) data concerning enslow corporation’s single product appear below:
the break-even in monthly unit sales is closest to:
a.6,711
b.4,390
c.12,495
d.3,249
9) financial statements for oram company appear below:
dividends during year 2 totaled $161 thousand, of which $10 thousand were preferred
dividends. the market price of a share of common stock on december 31, year 2 was
$610.
oram company’s current ratio at the end of year 2 was closest to:
a.1.24
b.0.37
c.1.20
d.0.47
10) doubleday corporation produces and sells a single product. the company has
provided its contribution format income statement for august.
if the company sells 3,000 units, its total contribution margin should be closest to:
a.$20,813
b.$115,200
c.$96,600
d.$108,000
11) mitch corporation’s contribution margin ratio is 14% and its fixed monthly expenses
are $87,000. if the company’s sales for a month are $678,000, what is the best estimate
of the company’s net operating income? assume that the fixed monthly expenses do not
change.
a.$591,000
b.$496,080
c.$94,920
d.$7,920
12) the following information relates to poblano company for last year:
what is poblano’s dividend yield ratio for last year?
a.1.6%
b.2.5%
c.6.4%
d.10.0%
13) erdmann corporation has provided its contribution format income statement for july.
the company produces and sells a single product.
if the company sells 7,500 units, its total contribution margin should be closest to:
a.$55,063
b.$184,800
c.$210,000
d.$221,200
14) dilom farm supply is located in a small town in the rural west. data regarding the
store’s operations follow:
sales are budgeted at $260,000 for november, $230,000 for december, and $210,000 for
january.
collections are expected to be 55% in the month of sale, 40% in the month following
the sale, and 5% uncollectible.
the cost of goods sold is 80% of sales.
the company purchases 50% of its merchandise in the month prior to the month of sale
and 50% in the month of sale. payment for merchandise is made in the month following
the purchase.
other monthly expenses to be paid in cash are $21,700.
monthly depreciation is $17,000.
ignore taxes.
the excess (deficiency) of cash available over disbursements for december would be:
a.$12,800
b.$8,600
c.$17,000
d.$4,200
15) the information below was obtained from the records of the first processing
department of christine corporation for the month of july. the company uses the
weighted-average method in its process costing system.
all materials are added at the beginning of the manufacturing process.
the equivalent units for labor and overhead for the month is:
a.70,000
b.90,000
c.80,000
d.82,500
16) during august, the cost of goods manufactured was $73,000. the beginning finished
goods inventory was $15,000 and the ending finished goods inventory was $21,000.
what was the cost of goods sold for the month?
a.$79,000
b.$109,000
c.$67,000
d.$73,000
17) during its first year of operations, holt manufacturing company incurred the
following costs to produce 200,000 units of its only product:
holt also incurred the following costs in the sale of 180,000 units of product during its
first year:
assume that direct labor is a variable cost.
what would be the cost per unit of holt’s finished goods inventory at the end of the first
year of operations under the absorption costing method?
a.$2.34
b.$2.74
c.$4.50
d.$6.30