1) The contribution margin for April was:
A) $1,017,600
B) $1,465,600
C) $600,400
D) $3,512,400
2) The following labor standards have been established for a particular product:
The following data pertain to operations concerning the product for the last month:
What is the labor rate variance for the month?
A.$1,295 F
B.$2,877 F
C.$4,246 F
D.$4,246 U
3) The acid-test ratio at the end of Year 2 is closest to:
A.0.72
B.0.83
C.0.59
D.1.25
4) Saffold Corporation has provided the following data for December.
The budget variance for December is:
A.$10,050 U
B.$6,540 U
C.$6,540 F
D.$10,050 F
5) If the company bases its predetermined overhead rate on capacity, the predetermined
overhead rate is closest to:
The management of Cordona Corporation would like to investigate the possibility of
basing its predetermined overhead rate on activity at capacity. The company’s controller
has provided an example to illustrate how this new system would work. In this
example, the allocation base is machine-hours and the estimated amount of the
allocation base for the upcoming year is 27,000 machine-hours. In addition, capacity is
33,000 machine-hours and the actual level of activity for the year is 27,900
machine-hours. All of the manufacturing overhead is fixed and is $231,660 per year.
For simplicity, it is assumed that this is the estimated manufacturing overhead for the
year as well as the manufacturing overhead at capacity. It is further assumed that this is
also the actual amount of manufacturing overhead for the year. A number of jobs were
worked on during the year, one of which was Job I86N. This job required 370
machine-hours.
A.$8.30
B.$7.02
C.$8.74
D.$8.58
6) The following information was taken from the production budget of Paeke
Corporation for next quarter:
How many units is the company expecting to sell in the month of February?
A.132,000
B.138,000
C.135,000
D.140,000
7) Jester Corporation’s most recent income statement appears below:
The beginning balance of total assets was $360,000 and the ending balance was
$320,000. The return on total assets is closest to:
A.26.5%
B.18.5%
C.22.6%
D.32.4%
8) Chirico Clinic uses client-visits as its measure of activity. During February, the clinic
budgeted for 2,500 client-visits, but its actual level of activity was 2,550 client-visits.
The clinic has provided the following data concerning the formulas used in its
budgeting and its actual results for February:
Data used in budgeting:
Actual results for February:
The occupancy expenses in the flexible budget for February would be closest to:
A.$14,450
B.$14,575
C.$14,948
D.$14,368
9) Muecke Inc. is working on its cash budget for April. The budgeted beginning cash
balance is $40,000. Budgeted cash receipts total $150,000 and budgeted cash
disbursements total $158,000. The desired ending cash balance is $50,000.
The excess (deficiency) of cash available over disbursements for April will be:
A.$32,000
B.$190,000
C.$48,000
D.($8,000)
10) Arenz Corporation processes sugar cane in batches. The company purchases a batch
of sugar cane for $53 from farmers and then crushes the cane in the company’s plant at
the cost of $15. Two intermediate products, cane fiber and cane juice, emerge from the
crushing process. The cane fiber can be sold as is for $24 or processed further for $18 to
make the end product industrial fiber that is sold for $40. The cane juice can be sold as
is for $41 or processed further for $25 to make the end product molasses that is sold for
$72. Which of the intermediate products should be processed further?
A) Cane fiber should be processed into industrial fiber; Cane juice should be processed
into molasses
B) Cane fiber should NOT be processed into industrial fiber; Cane juice should NOT be
processed into molasses
C) Cane fiber should be processed into industrial fiber; Cane juice should NOT be
processed into molasses
D) Cane fiber should NOT be processed into industrial fiber; Cane juice should be
processed into molasses
11) ( Villena Corporation is considering a project that would require an investment of
$48,000. No other cash outflows would be involved. The present value of the cash
inflows would be $52,800. The profitability index of the project is closest to:
A.0.90
B.0.10
C.1.10
D.0.09
12) A manufacturing company that produces a single product has provided the
following data concerning its most recent month of operations:
What is the total period cost for the month under absorption costing?
A.$50,000
B.$7,200
C.$39,600
D.$10,400
13) Stoppkotte Corporation has provided its contribution format income statement for
April.
The degree of operating leverage is closest to:
A.3.46
B.0.11
C.0.29
D.9.40
14) Carolfi Corporation has two divisions: Division A and Division B. Data from the
most recent month appear below:
The break-even in sales dollars for Division A is closest to:
A.$389,524
B.$541,238
C.$230,952
D.$704,261
15) Assume that Jebb is currently selling only 50,000 heads of lettuce per year instead
of 60,000. Under this scenario, what will be Jebb’s increase or decrease in profit for the
year if he chooses to start slicing up the lettuce instead of selling it whole?
A.$2,000 increase
B.$2,500 decrease
C.$3,000 increase
D.$3,500 decrease
16) Jarvix Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
The company produces the same number of units every month, although the sales in
units vary from month to month. The company’s variable costs per unit and total fixed
costs have been constant from month to month.
What is the unit product cost for the month under absorption costing?
A.$90 per unit
B.$74 per unit
C.$81 per unit
D.$83 per unit
17) Cameron Corporation had 50,000 shares of common stock issued and outstanding
that it originally issued for $40 per share. The following information pertains to these
shares:
The total dividend on common stock for the year was $400,000. Cameron Corporation’s
dividend yield ratio for the year was:
A.20.00%
B.11.43%
C.9.41%
D.8.89%
18) Brosnan Corporation has two operating divisions–a North Division and a South
Division. The company’s Logistics Department services both divisions. The variable
costs of the Logistics Department are budgeted at $39 per shipment. The Logistics
Department’s fixed costs are budgeted at $242,000 for the year. The fixed costs of the
Logistics Department are determined based on peak-period demand.
At the end of the year, actual Logistics Department variable costs totaled $245,830 and
fixed costs totaled $247,360. The North Division had a total of 3,300 shipments and the
South Division had a total of 2,800 shipments for the year.
Required:
a. Prepare a report showing how much of the Logistics Department’s costs should be
charged to each of the operating divisions at the end of the year.
b. How much of the actual Logistics Department costs should not be charged to the
operating divisions at the end of the year? Who should be held responsible for these
uncharged costs?
19) Tabeling Corporation manufactures and sells a single product. The company uses
units as the measure of activity in its budgets and performance reports. During August,
the company budgeted for 6,500 units, but its actual level of activity was 6,540 units.
The company has provided the following data concerning the formulas used in its
budgeting and its actual results for August:
Data used in budgeting:
Actual results for August:
The activity variance for net operating income in August would be closest to:
A.$10,362 F
B.$608 F
C.$10,362 U
D.$608 U