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1) The payback period for the investment is:
A.0.27 years
B.3.75 years
C.10.00 years
D.2.13 years
2) Mussenden Corporation has an activity-based costing system with three activity cost
pools-Machining, Order Filling, and Other. In the first stage allocations, costs in the two
overhead accounts, equipment depreciation and supervisory expense, are allocated to
three activity cost pools based on resource consumption. Data used in the first stage
allocations follow:
Machining costs are assigned to products using machine-hours (MHs) and Order Filling
costs are assigned to products using the number of orders. The costs in the Other
activity cost pool are not assigned to products. Activity data for the company's two
products follow:
The activity rate for the Order Filling activity cost pool under activity-based costing is
closest to:
A.$2.86 per order
B.$49.00 per order
C.$5.10 per order
D.$2.00 per order
3) Deflorio Corporation's inventory at the end of Year 2 was $156,000 and its inventory
at the end of Year 1 was $140,000. The company's total assets at the end of Year 2 were
$1,416,000 and its total assets at the end of Year 1 were $1,390,000. Sales amounted to
$1,320,000 in Year 2. The company's total asset turnover for Year 2 is closest to:
A.0.94
B.1.06
C.5.38
D.0.19
4) What is the minimum amount the company should accept for Product X if it is to be
sold at the split-off point?
A.$22,400
B.$43,400
C.$20,800
D.$45,000
5) Ebsen Corporation keeps careful track of the time required to fill orders. Data
concerning a particular order appear below:
The manufacturing cycle efficiency (MCE) was closest to:
A.0.84
B.0.04
C.0.17
D.0.09
6) Gustavson Corporation uses the direct method to allocate service department costs to
operating departments. The company has two service departments, Administrative and
Facilities, and two operating departments, Assembly and Wholesaling.
Administrative costs are allocated on the basis of employee hours and Facilities costs
are allocated on the basis of space occupied. The total Wholesaling Department cost
after the allocations of service department costs is closest to:
A.$337,530
B.$331,090
C.$340,240
D.$340,426
7) Schoultz Corporation has provided the following data concerning an investment
project that it is considering:
The life of the project is 4 years. The company's discount rate is 12%. The net present
value of the project is closest to:
A.$700,000
B.$364,000
C.$108,108
D.$808,108
8) Rank the products in order of their current profitability from most profitable to least
profitable. In other words, rank the products in the order in which they should be
emphasized.
A.TC,KA,PA
B.PA,TC,KA
C.TC,PA,KA
D.KA,TC,PA
9) The following accounts are from last year's books at Sharp Manufacturing:
Sharp uses job-order costing and applies manufacturing overhead to jobs based on
direct labor costs. What is the amount of cost of goods manufactured for the year?
A.$255,000
B.$251,000
C.$223,000
D.$226,000
10) Schaadt 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 23,000 units and sold 16,000 units. The company's only product is sold for
$243 per unit.
Assume that the company uses a variable costing system that assigns $22 of direct labor
cost to each unit that is produced. The unit product cost under this costing system is:
A.$212 per unit
B.$84 per unit
C.$167 per unit
D.$106 per unit
11) If the discount rate is 12%, the net present value of the investment is closest to:
A.$330,000
B.$539,365
C.$119,365
D.$420,000
