1) merone company allocates materials handling cost to the company’s two products
using the below data:
the total materials handling cost for the year is expected to be $218,790.
if the materials handling cost is allocated on the basis of material moves, how much of
the total materials handling cost would be allocated to the modular homes? (round off
your answer to the nearest whole dollar.)
a.$182,325
b.$170,170
c.$93,552
d.$109,395
2) the management of harlow corporation, a manufacturing company, would like your
help in contrasting the traditional and contribution approaches to the income statement.
the company has provided the following financial data for january:
the company had no beginning or ending inventories
the gross margin for january was:
a.$166,000
b.$110,000
c.$42,000
d.$172,000
3) calcagno corporation’s variable overhead is applied on the basis of direct labor-hours.
the company has established the following variable overhead standards for product
b47w:
the following data pertain to the most recent month’s operations during which 520 units
of product b47w were made:
required:
a. what was the variable overhead rate variance for the month?
b. what was the variable overhead efficiency variance for the month?
4) filson inc., a company that produces and sells a single product, has provided its
contribution format income statement for february.
if the company sells 9,700 units, its total contribution margin should be closest to:
a.$252,200
b.$74,026
c.$247,000
d.$263,200
5) a manufacturing company that produces a single product has provided the following
data concerning its most recent month of operations:
what is the net operating income for the month under variable costing?
a.$15,800
b.$5,000
c.$20,800
d.$3,800
6) dasilva company had only one job in process on may 1. the job had been charged
with $1,400 of direct materials, $6,192 of direct labor, and $5,712 of manufacturing
overhead cost. the company assigns overhead cost to jobs using the predetermined
overhead rate of $11.90 per direct labor-hour. during may, the following activity was
recorded:
work in process inventory on may 30 contains $4,773 of direct labor cost. raw materials
consist solely of items that are classified as direct materials.
the balance in the raw materials inventory account on may 30 was:
a.$4,700
b.$43,300
c.$3,800
d.$39,500
7) the axle division of labate company makes and sells only one product. annual data on
the axle division’s single product follow:
if axle sells 15,000 units per year, the residual income should be:
a.$30,000
b.$100,000
c.$50,000
d.$10,000
8) palczewski corporation manufactures and sells a single product. the company uses
units as the measure of activity in its budgets and performance reports. during
december, the company budgeted for 5,000 units, but its actual level of activity was
4,980 units. the company has provided the following data concerning the formulas to be
used in its budgeting:
the activity variance for selling and administrative expenses in december would be
closest to:
a.$14 u
b.$14 f
c.$1,206 f
d.$1,206 u
9) data from sawin corporation’s most recent balance sheet appear below:
the company’s acid-test ratio is closest to:
a.0.12
b.0.39
c.0.70
d.0.87
10) stent kennel uses tenant-days as its measure of activity; an animal housed in the
kennel for one day is counted as one tenant-day. during february, the kennel budgeted
for 3,000 tenant-days, but its actual level of activity was 2,950 tenant-days. the kennel
has provided the following data concerning the formulas used in its budgeting and its
actual results for february:
the facility expenses in the flexible budget for february would be closest to:
a.$16,000
b.$15,875
c.$15,738
d.$16,276
11) (ignore income taxes in this problem.) picado, inc. is investigating an investment in
equipment that would have a useful life of 8 years. the company uses a discount rate of
9% in its capital budgeting. the net present value of the investment, excluding the
salvage value, is -$389,000. to the nearest whole dollar how large would the salvage
value of the equipment have to be to make the investment in the equipment financially
attractive?
a.$774,900
b.$35,010
c.$389,000
d.$4,322,222
12) poulsen corporation manufactures and sells a single product. the company uses
units as the measure of activity in its budgets and performance reports. during july, the
company budgeted for 7,300 units, but its actual level of activity was 7,270 units. the
company has provided the following data concerning the formulas to be used in its
budgeting:
the net operating income in the flexible budget for july would be closest to:
a.$9,234
b.$9,310
c.$19,262
d.$19,580
13) wertman corporation produces and sells a single product with the following
characteristics:
the company is currently selling 3,000 units per month. fixed expenses are $215,000 per
month. consider each of the following questions independently.
this question is to be considered independently of all other questions relating to
wertman corporation. refer to the original data when answering this question.
the marketing manager believes that a $7,000 increase in the monthly advertising
budget would result in a 110 unit increase in monthly sales. what should be the overall
effect on the company’s monthly net operating income of this change?
a.decrease of $7,000
b.increase of $2,240
c.decrease of $2,240
d.increase of $9,240
14) (ignore income taxes in this problem) the management of rousseau corporation is
considering the purchase of a machine that would cost $340,000, would last for 8 years,
and would have no salvage value. the machine would reduce labor and other costs by
$67,000 per year. the company requires a minimum pretax return of 15% on all
investment projects. the net present value of the proposed project is closest to:
a.$196,000
b.-$120,437
c.-$39,371
d.$64,073