Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
The Pacific Company manufactures a single product. The following data relate to the
year just completed:
During the last year, 5,000 units were produced and 4,800 units were sold. There were
no beginning inventories.
The carrying value of finished goods inventory at the end of the year under variable
costing would be:
A. $8,800 greater than under absorption costing.
B. $8,800 less than under absorption costing.
C. $5,800 less than under absorption costing.
D. The same as absorption costing.
Answer:
Scheney Company uses the weighted-average method in its process costing system. The
company's work in process inventory on March 31 consisted of 20,000 units. The units
in the ending work in process inventory were 100% complete with respect to materials
and 70% complete with respect to labor and overhead. If the cost per equivalent unit for
March was $2.50 for materials and $4.75 for labor and overhead, the total cost in the
March 31 work in process inventory was:
A. $145,000
B. $116,500
C. $101,500
D. $78,500
Answer:
Franklin Glass Works uses a standard cost system in which manufacturing overhead is
applied on the basis of standard direct labor-hours. Each unit requires two standard
hours of direct labor for completion. The denominator activity for the year was based
on budgeted production of 200,000 units. Total overhead was budgeted at $900,000 for
the year, and the fixed manufacturing overhead rate was $1.50 per direct labor-hour.
The actual data pertaining to the manufacturing overhead for the year are presented
below:
Franklin's fixed manufacturing overhead budget variance for the year is:
A. $19,000 favorable
B. $25,000 favorable
C. $25,000 unfavorable
D. $19,000 unfavorable
Answer:
Last year Cumber Company reported a cost of goods sold of $70,000. Inventories
decreased by $12,000 during the year, and accounts payable increased by $8,000. The
company uses the direct method to determine the net cash provided by operating
activities on the statement of cash flows. The cost of goods sold adjusted to a cash basis
would be:
A. $90,000
B. $62,000
C. $58,000
D. $50,000
Answer:
Botelho Corporation keeps careful track of the time required to fill orders. Data
concerning a particular order appear below:
The delivery cycle time was:
A. 33.1 hours
B. 3.7 hours
C. 12.6 hours
D. 30.9 hours
Answer:
Blore Corporation reports that at an activity level of 7,300 units, its total variable cost is
$511,803 and its total fixed cost is $76,650. What would be the total cost, both fixed
and variable, at an activity level of 7,500 units? Assume that this level of activity is
within the relevant range.
A. $604,575
B. $602,475
C. $596,514
D. $588,453
Answer:
Dosier Corporation has a standard cost system in which it applies manufacturing
overhead to products on the basis of standard machine-hours (MHs). The company has
provided the following data for the most recent month:
What was the fixed manufacturing overhead budget variance for the month?
A. $2,000 unfavorable
B. $2,000 favorable
C. $610 unfavorable
D. $610 favorable
Answer:
Irastan Company, a retailer, had cost of goods sold of $250,000 last year. The beginning
inventory balance was $28,000 and the ending inventory balance was $20,000. The
company's average sale period was closest to:
A. 40.88 days
B. 29.20 days
C. 35.03 days
D. 70.08 days
Answer:
Management of Modugno Corporation is considering whether to purchase a new model
370 machine costing $441,000 or a new model 240 machine costing $387,000 to
replace a machine that was purchased 7 years ago for $429,000. The old machine was
used to make product M25A until it broke down last week. Unfortunately, the old
machine cannot be repaired.
Management has decided to buy the new model 240 machine. It has less capacity than
the new model 370 machine, but its capacity is sufficient to continue making product
M25A.
Management also considered, but rejected, the alternative of simply dropping product
M25A. If that were done, instead of investing $387,000 in the new machine, the money
could be invested in a project that would return a total of $430,000.
In making the decision to invest in the model 240 machine, the opportunity cost was:
A. $430,000
B. $441,000
C. $387,000
D. $429,000
Answer:
The Pacific Company manufactures a single product. The following data relate to the
year just completed:
During the last year, 5,000 units were produced and 4,800 units were sold. There were
no beginning inventories.
Under absorption costing, the cost of goods sold for the year would be:
A. $206,400
B. $345,600
C. $278,400
D. $360,000
Answer:
Pia Corporation has provided the following data from its most recent income statement:
The times interest earned ratio is closest to:
A. 2.09
B. 1.09
C. 0.76
D. 2.98
Answer:
