1) Zelinsky Inc. has provided the following data for the month of April. There were no
beginning inventories; consequently, the direct materials, direct labor, and
manufacturing overhead applied listed below are all for the current month.
Manufacturing overhead for the month was underapplied by $2,000.
The Corporation allocates any underapplied or overapplied manufacturing overhead
among work in process, finished goods, and cost of goods sold at the end of the month
on the basis of the manufacturing overhead applied during the month in those accounts.
The journal entry to record the allocation of any underapplied or overapplied
manufacturing overhead for April would include the following:
A.credit to Cost of Goods Sold of $1,440
B.credit to Cost of Goods Sold of $108,560
C.debit to Cost of Goods Sold of $1,440
D.debit to Cost of Goods Sold of $108,560
2) The net cash provided by (used in) investing activities for the year was:
A.$100,000
B.$(100,000)
C.$(400,000)
D.$400,000
3) Barker Corporation uses the weighted-average method in its process costing system.
This month, the beginning inventory in the first processing department consisted of 300
units. The costs and percentage completion of these units in beginning inventory were:
A total of 9,100 units were started and 8,700 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 20% 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.
The total cost transferred from the first processing department to the next processing
department during the month is closest to:
A.$482,700
B.$513,466
C.$495,000
D.$475,229
4) The following labor standards have been established for a particular product:
The following data pertain to operations concerning the product for the last month:
What is the labor efficiency variance for the month?
A.$19,017 F
B.$19,017 U
C.$16,029 F
D.$16,577 F
5) Carmon Corporation uses the weighted-average method in its process costing
system. This month, the beginning inventory in the first processing department
consisted of 700 units. The costs and percentage completion of these units in beginning
inventory were:
A total of 7,900 units were started and 6,900 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 70% complete with respect to materials and 35% 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.
What are the equivalent units for conversion costs for the month in the first processing
department?
A.8,600
B.7,495
C.6,900
D.595
6) Ofarrell Corporation, a company that produces and sells a single product, has
provided its contribution format income statement for March.
If the company sells 5,400 units, its net operating income should be closest to:
A.$19,008
B.$17,600
C.$24,000
D.$34,000
7) Which of the following costs at a manufacturing company would be treated as a
product cost under both absorption costing and variable costing?
A.Option A
B.Option B
C.Option C
D.Option D
8) The company’s return on equity for Year 2 is closest to:
A.3.31%
B.8.50%
C.5.09%
D.50.52%
9) Havely International Corporation’s only product sells for $200.00 per unit and its
variable expense is $70.00. The company’s monthly fixed expense is $390,000 per
month. The unit sales to attain the company’s monthly target profit of $10,000 is closest
to:
A.5,714
B.3,077
C.3,597
D.2,000
10) Anderson Corporation has two service departments and two producing departments.
The costs of the Personnel Department are allocated to other departments on the basis
of the number of employees in the departments. Departments and number of employees
are as follows:
The amount of Personnel Department cost that would be allocated to Producing
Department 2 under the direct method is closest to:
A.$0
B.$261,000
C.$269,072
D.$296,591
11) Which of the following is correct regarding the operating activities section of the
statement of cash flows?
A.The change in Accounts Receivable will be subtracted from net income; The change
in Inventory will be added to net income
B.The change in Accounts Receivable will be added to net income; The change in
Inventory will be subtracted from net income
C.The change in Accounts Receivable will be added to net income; The change in
Inventory will be added to net income
D.The change in Accounts Receivable will be subtracted from net income; The change
in Inventory will be subtracted from net income
An increase in a current asset is subtracted from net income; a decrease in a current
asset is added to net income.
12) Keyton Corporation’s net operating income in Year 2 was $43,714, net income
before taxes was $30,714, and the net income was $21,500. Total common stock was
$200,000 at the end of both Year 2 and Year 1. The par value of common stock is $4 per
share. The company’s total stockholders’ equity at the end of Year 2 amounted to
$1,148,000 and at the end of Year 1 to $1,130,000. The company declared and paid
$3,500 dividends on common stock in Year 2. The market price per share was $8.43 at
the end of Year 2. The company’s dividend payout ratio for Year 2 is closest to:
A.0.8%
B.1.8%
C.16.3%
D.11.4%
13) The company’s operating cycle for Year 2 is closest to:
A.70.8 days
B.10.0 days
C.87.7 days
D.148.5 days
14) The Adams Corporation, a merchandising firm, has budgeted its activity for
November according to the following information:
Sales at $450,000, all for cash.
Merchandise inventory on October 31 was $200,000.
The cash balance November 1 was $18,000.
Selling and administrative expenses are budgeted at $60,000 for November and are paid
for in cash.
Budgeted depreciation for November is $25,000.
The planned merchandise inventory on November 30 is $230,000.
The cost of goods sold is 70% of the selling price.
All purchases are paid for in cash.
There is no interest expense or income tax expense.
The budgeted cash disbursements for November are:
A.$345,000
B.$375,000
C.$530,000
D.$405,000
15) Carsten Wedding Fantasy Corporation makes very elaborate wedding cakes to
order. The owner of the company has provided the following data concerning the
activity rates in its activity-based costing system:
The measure of activity for the size-related activity cost pool is the number of planned
guests at the wedding reception. The greater the number of guests, the larger the cake.
The measure of complexity is the number of tiers in the cake. The activity measure for
the order-related cost pool is the number of orders. (Each wedding involves one order.)
The activity rates include the costs of raw ingredients such as flour, sugar, eggs, and
shortening. The activity rates do not include the costs of purchased decorations such as
miniature statues and wedding bells, which are accounted for separately.
Data concerning two recent orders appear below:
Assuming that the company charges $485.85 for the Karmo wedding cake, what would
be the overall margin on the order?
A.$84.32
B.$141.18
C.$401.53
D.$168.35
16) Grisham Corporation produces and sells a single product. The company has
provided its contribution format income statement for February.
If the company sells 5,900 units, its total contribution margin should be closest to:
A.$148,000
B.$128,800
C.$135,700
D.$21,493