1) Which product makes the LEAST profitable use of the milling machines?
A.Product A
B.Product B
C.Product C
D.Product D
2) Glassing Clinic uses client-visits as its measure of activity. During September, the
clinic budgeted for 3,700 client-visits, but its actual level of activity was 3,660
client-visits. The clinic has provided the following data concerning the formulas to be
used in its budgeting:
The activity variance for administrative expenses in September would be closest to:
A.$132 F
B.$12 U
C.$132 U
D.$12 F
3) The total cash flow net of income taxes in year 3 is:
A.$130,000
B.$80,000
C.$74,000
D.$50,000
4) Gabbert Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
The total contribution margin for the month under variable costing is:
A.$62,800
B.$95,200
C.$183,600
D.$156,400
5) Bard Hotel bases its budgets on guest-days. The hotel’s static budget for January
appears below:
The total cost at the activity level of 10,300 guest-days per month should be:
A.$225,570
B.$217,100
C.$217,640
D.$210,240
6) The best estimate of the total variable manufacturing cost per unit is:
A) $32.40
B) $44.80
C) $66.20
D) $21.40
7) Sagon Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
The company does not have any variable manufacturing overhead costs or variable
selling and administrative costs. During its first year of operations, the company
produced 29,000 units and sold 23,000 units. The company’s only product is sold for
$231 per unit.
The net operating income for the year under super-variable costing is:
A.$782,000
B.$446,000
C.$(202,000)
D.$296,000
8) In a company’s standard costing system direct labor-hours are used as the base for
applying variable manufacturing overhead costs. The standard direct labor rate is twice
the variable overhead rate. Last period the labor efficiency variance was unfavorable.
From this information one can conclude that last period the variable overhead efficiency
variance was:
A.unfavorable and half the labor efficiency variance.
B.favorable and half the labor efficiency variance.
C.unfavorable and twice the labor efficiency variance.
D.favorable and twice the labor efficiency variance.
9) Dorich Corporation would like to determine the relative profitability of a number of
jobs. For illustration purposes, the company has provided the following data for job
P86M:
The amount of the constrained resource used by the job is 340 hours.
What is the profitability index for job P86M?
A.$87 per hour
B.$290 per hour
C.$203 per hour
D.0.30
10) ( Sturn Corporation purchased a machine with an estimated useful life of seven
years. The machine will generate cash inflows of $9,000 each year over the next seven
years. If the machine has no salvage value at the end of seven years, if Stutz’s discount
rate is 10%, and if the net present value of this investment is $17,000 then the purchase
price of the machine was closest to:
A.$43,812
B.$26,812
C.$17,000
D.$22,195
11) How much Order Fulfillment Department cost should be allocated to the
Commercial Division at the end of the year?
A.$760,281
B.$749,352
C.$728,120
D.$782,904
12) The medical services department of Bantam Company budgeted $20 of variable
medical expenses per employee for the year, based on 1,500 employees in the operating
departments. During the year, an average of 1,200 employees were employed in
operating departments. Actual variable medical expenses totaled $28,800 for the year.
How much variable medical expenses should be charged to operating departments at
year-end?
A.$28,800
B.$24,000
C.$23,040
D.$28,000
13) The following direct labor standards have been established for product S57S:
The following data pertain to last month’s operations:
Required:
a. What was the labor rate variance for the month?
b. What was the labor efficiency variance for the month?
14) Dodd Corporation uses the weighted-average method in its process costing system.
This month, the beginning inventory in the first processing department consisted of 400
units. The costs and percentage completion of these units in beginning inventory were:
A total of 5,400 units were started and 4,700 units were transferred to the second
processing department during the month. The following costs were incurred in the first
processing department during the month:
The ending inventory was 85% complete with respect to materials and 30% complete
with respect to conversion costs.
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.
How many units are in ending work in process inventory in the first processing
department at the end of the month?
A.700
B.5,000
C.900
D.1,100
15) Joly Corporation produces and sells a single product. Data concerning that product
appear below:
Fixed expenses are $511,000 per month. The company is currently selling 5,000 units
per month. The marketing manager would like to cut the selling price by $16 and
increase the advertising budget by $33,000 per month. The marketing manager predicts
that these two changes would increase monthly sales by 800 units. What should be the
overall effect on the company’s monthly net operating income of this change?
A.decrease of $59,800
B.increase of $59,800
C.increase of $130,200
D.decrease of $20,200
16) The records of the Dodge Corporation show the following results for the most
recent year:
Given these data, the unit contribution margin was:
A.$16
B.$4
C.$2
D.$6
17) Maraby Corporation’s current ratio at the end of Year 2 was closest to:
A.1.34
B.1.72
C.0.60
D.0.44