1) hackney company, which has only one product, has provided the following data
concerning its most recent month of operations:
what is the net operating income for the month under variable costing?
a.$4,700
b.$(5,300)
c.$1,500
d.$3,200
2) bessey hospital bases its budgets on patient-visits. the hospital’s static planning
budget for january appears below:
the spending variance for occupancy costs in the flexible budget performance report for
the month is:
a.$330 f
b.$2,090 f
c.$330 u
d.$2,090 u
3) dolney corporation has provided the following data for a recent period:
the variable overhead rate variance for supplies is closest to:
a.$2,847 f
b.$3,507 f
c.$3,507 u
d.$660 f
4) cahin corporation applies manufacturing overhead on the basis of machine-hours. at
the beginning of the most recent year, the company based its predetermined overhead
rate on total estimated overhead of $21,060. actual manufacturing overhead for the year
amounted to $13,000 and actual machine-hours were 1,380. the company’s
predetermined overhead rate for the year was $16.20 per machine-hour.
the applied manufacturing overhead for the year was closest to:
a.$23,732
b.$21,060
c.$22,356
d.$13,800
5) last year, wardrup corporation’s variable costing net operating income was $67,200.
fixed manufacturing overhead costs released from inventory under absorption costing
amounted to $600. what was the absorption costing net operating income last year?
a.$67,800
b.$66,600
c.$67,200
d.$600
6) carner lumber sells lumber and general building supplies to building contractors in a
medium-sized town in montana. data regarding the store’s operations follow:
sales are budgeted at $370,000 for november, $360,000 for december, and $340,000 for
january.
collections are expected to be 85% in the month of sale, 13% in the month following
the sale, and 2% uncollectible.
the cost of goods sold is 70% of sales.
the company purchases 30% of its merchandise in the month prior to the month of sale
and 70% 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 $24,600.
monthly depreciation is $17,000.
ignore taxes.
the net income for december would be:
a.$59,200
b.$83,400
c.$66,400
d.$72,600
7) herne manufacturing corporation has a traditional costing system in which it applies
manufacturing overhead to its products using a predetermined overhead rate based on
direct labor-hours (dlhs). the company has two products, g58o and e80z, about which it
has provided the following data:
the company’s estimated total manufacturing overhead for the year is $1,116,900 and
the company’s estimated total direct labor-hours for the year is 30,000.
the company is considering using a variation of activity-based costing to determine its
unit product costs for external reports. data for this proposed activity-based costing
system appear below:
required:
a. determine the manufacturing overhead cost per unit of each of the company’s two
products under the traditional costing system.
b. determine the manufacturing overhead cost per unit of each of the company’s two
products under activity-based costing system.
8) walsh company produces a single product. last year, the company manufactured
25,000 units and sold 22,000 units. production costs were as follows:
sales totaled $440,000, variable selling and administrative expenses were $110,000, and
fixed selling and administrative expenses were $45,000. there was no beginning
inventory. assume that direct labor is a variable cost.
under absorption costing, the unit product cost would be:
a.$9.00
b.$12.00
c.$13.40
d.$14.00
9) massie corporation, which produces commercial safes, has provided the following
data:
the variable overhead rate variance for supplies is closest to:
a.$22,997 u
b.$22,997 f
c.$18,947 f
d.$18,947 u
10) a manufacturer of playground equipment has a standard costing system based on
standard direct labor-hours (dlhs) as 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:
what was the fixed manufacturing overhead budget variance for the period to the
nearest dollar?
a.$1,100 f
b.$1,153 f
c.$1,797 u
d.$3,010 u