1) monsky corporation produces and sells a single product whose contribution margin
ratio is 60%. the company’s monthly fixed expense is $420,000 and the company’s
monthly target profit is $13,000. the dollar sales to attain that target profit is closest to:
a.$252,000
b.$259,800
c.$721,667
d.$700,000
2) which of the following variances would be useful in calling attention to possible
problems in the control of spending on overhead items?
a.choice a
b.choice b
c.choice c
d.choice d
3) the holmes division recorded operating data as follows for the past year:
for the past year, the turnover was:
a.25
b.10
c.4
d.2
4) friden company has budgeted sales and production over the next quarter as follows:
the company has 20,000 units of product on hand at april 1. a minimum of 20% of the
next month’s sales needs in units must be on hand at the end of each month. july sales
are expected to be 140,000 units. budgeted sales for june would be (in units):
a.188,000
b.160,000
c.128,000
d.184,000
5) (ignore income taxes in this problem.) if you wanted to withdraw $12,000 from a
bank account at the end of each of the next 20 years, approximately how much would
you have to invest in the account today assuming a 6% interest rate?
a.$20,924
b.$38,462
c.$74,880
d.$137,604
6) the following data have been provided by wordell corporation:
the variable overhead rate variance for indirect labor is closest to:
a.$3,004 u
b.$2,761 u
c.$3,004 f
d.$243 f
7) olivier framing’s cost formula for its supplies cost is $2,870 per month plus $16 per
frame. for the month of january, the company planned for activity of 533 frames, but
the actual level of activity was 534 frames. the actual supplies cost for the month was
$11,080. the spending variance for supplies cost in january would be closest to:
a.$334 u
b.$334 f
c.$318 u
d.$318 f
8) creelman company makes four products in a single facility. data concerning these
products appear below:
the milling machines are potentially the constraint in the production facility. a total of
13,000 minutes are available per month on these machines.
up to how much should the company be willing to pay for one additional minute of
milling machine time if the company has made the best use of the existing milling
machine capacity? (round off to the nearest whole cent.)
a.$10.40
b.$13.80
c.$0.00
d.$4.74
9) ross company produces a single product. the company has direct materials costs of
$8 per unit, direct labor costs of $6 per unit, and manufacturing overhead of $10 per
unit. sixty percent of the manufacturing overhead is for fixed costs. in addition, variable
selling and administrative costs are $2 per unit, and fixed selling and administrative
costs are $3 per unit at the current activity level. assume that direct labor is a variable
cost.
under absorption costing, the unit product cost is:
a.$24
b.$20
c.$26
d.$29
10) moulgadi 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.
the cost per equivalent unit for conversion costs for the first department for the month is
closest to:
a.$37.87
b.$39.76
c.$43.81
d.$41.20
11) valesquez corporation’s operating leverage is 8.6. if the company’s sales increase by
17%, its net operating income should increase by about:
a.8.6%
b.50.6%
c.17.0%
d.146.2%
12) lilienthal products inc. makes two productsm38o and e34g. product m38o’s selling
price is $145.00 and its unit variable cost is $87.00. product e34g’s selling price is
$300.00 and its unit variable cost is $210.00. the monthly demand is 1,590 units for
product m38o and 640 units for e34g. the constrained resource is a particular machine
that is available for 10,100 minutes each month. each unit of product m38o requires 5
minutes on this machine and each unit of product e34g requires 10 minutes on this
machine.
what is the maximum contribution margin the company can earn per month?
a.$149,820
b.$105,448
c.$111,570
d.$100,520
13) henifin corporation has provided the following data concerning its most important
raw material, compound k91j:
the raw material was purchased on account.
the materials price variance for january would be recorded as a:
a.credit of $540
b.debit of $306
c.credit of $306
d.debit of $540
14) dike hotel bases its budgets on guest-days. the hotel’s static budget for june appears
below:
the total overhead cost at an activity level of 8,400 guest-days per month should be:
a.$159,440
b.$149,650
c.$160,430
d.$172,200
15) kuczenski corporation’s cost formula for its manufacturing overhead is $45,700 per
month plus $53 per machine-hour. for the month of march, the company planned for
activity of 6,200 machine-hours, but the actual level of activity was 6,150
machine-hours. the actual manufacturing overhead for the month was $373,630.
the manufacturing overhead in the planning budget for march would be closest to:
a.$373,630
b.$371,650
c.$376,668
d.$374,300