1) Data from Keniston Corporation’s most recent balance sheet and income statement
appear below:
The average collection period for this year is closest to:
A.39.1 days
B.45.1 days
C.54.3 days
D.57.5 days
2) The company’s accounts receivable turnover for Year 2 is closest to:
A.0.97
B.10.38
C.1.03
D.10.22
3) Manton Corporation uses an activity based costing system to assign overhead costs
to products. In the first stage, two overhead costs-equipment expense and indirect
labor-are allocated to the three activity cost pools-Processing, Supervising, and
Other-based on resource consumption. Data to perform these allocations appear below:
In the second stage, Processing costs are assigned to products using machine-hours
(MHs) and Supervising costs are assigned to products using the number of batches. The
costs in the Other activity cost pool are not assigned to products. Activity data for the
company’s two products follow:
What is the overhead cost assigned to Product Z5 under activity-based costing?
A.$5,280
B.$6,264
C.$20,500
D.$11,544
4) Epley Corporation makes a product with the following standard costs:
In July the company produced 3,300 units using 12,240 pounds of the direct material
and 2,760 direct labor-hours. During the month, the company purchased 13,000 pounds
of the direct material at a cost of $35,100. The actual direct labor cost was $51,612 and
the actual variable overhead cost was $20,148.
The company applies variable overhead on the basis of direct labor-hours. The direct
materials purchases variance is computed when the materials are purchased.
The materials price variance for July is:
A.$3,465 U
B.$3,900 F
C.$3,465 F
D.$3,900 U
5) Tani Corporation’s most recent balance sheet appears below:
The company’s net income for the year was $18 and it did not sell or retire any property,
plant, and equipment during the year. Cash dividends were $4. The net cash provided
by (used in) investing activities for the year was:
A.($45)
B.$45
C.($3)
D.$3
6) Spacer Corporation has two service departments and two operating departments.
Budgeted costs and budgeted activity in the various departments for last year are shown
below:
Service department costs are allocated to operating departments with the costs of
Custodial Services allocated on the basis of square feet of space occupied and the costs
of the Cafeteria on the basis of number of employees. The departmental costs for the
cutting and assembly departments are overhead costs. Predetermined overhead rates in
the Cutting and Assembly departments are based on machine-hours.
Assume that the company uses the direct method of allocation. The predetermined
overhead rate in the Assembly Department would be closest to:
A.$15.00
B.$16.27
C.$15.87
D.$16.00
7) During the month of May, Marian Manufacturing Corporation purchased materials
that had a total standard cost of $37,000. The Materials Price Variance on these
materials was $6,000 favorable. What summary journal entry would Domino make to
record this purchase and variance for May?
A.
B.
C.
D.
8) Hoang Corporation makes three products that use compound W, the current
constrained resource. Data concerning those products appear below:
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) RP,KI,LH
B) RP,LH,KI
C) KI,RP,LH
D) LH,RP,KI
9) The total cash flow net of income taxes in year 2 is:
A.$110,000
B.$117,000
C.$150,000
D.$33,000
10) Epley Corporation makes a product with the following standard costs:
In July the company produced 3,300 units using 12,240 pounds of the direct material
and 2,760 direct labor-hours. During the month, the company purchased 13,000 pounds
of the direct material at a cost of $35,100. The actual direct labor cost was $51,612 and
the actual variable overhead cost was $20,148.
The company applies variable overhead on the basis of direct labor-hours. The direct
materials purchases variance is computed when the materials are purchased.
The variable overhead efficiency variance for July is:
A.$960 F
B.$960 U
C.$876 F
D.$876 U
11) The company’s debt-to-equity ratio at the end of Year 2 is closest to:
A.0.30
B.0.36
C.0.41
D.0.60
12) The company’s return on equity for Year 2 is closest to:
A.67.25%
B.2.27%
C.1.47%
D.4.19%
Return on equity = Net income Average stockholders’ equity*
= $13,000 $882,500 = 1.47% (rounded)
*Average stockholders’ equity = ($885,000 + $880,000) 2 = $882,500
Garrott Corporation’s total assets were $1,505,000 at the end of Year 2 and $1,520,000
at the end of Year 1. Its total stockholders’ equity was $1,197,000 at the end of Year 2
and $1,180,000 at the end of Year 1.
13) Fortmann 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 September, the kennel
budgeted for 2,000 tenant-days, but its actual level of activity was 2,010 tenant-days.
The kennel has provided the following data concerning the formulas to be used in its
budgeting:
The activity variance for net operating income in September would be closest to:
A.$135 F
B.$715 U
C.$715 F
D.$135 U
14) The cost of goods sold for August after allocation of any underapplied or
overapplied manufacturing overhead for the month is closest to:
A.$75,180
B.$77,140
C.$69,140
D.$71,100
15) Kadle Corporation has two divisions: Division L and Division Q. Data from the
most recent month appear below:
The break-even in sales dollars for Division Q is closest to:
A.$262,742
B.$506,955
C.$153,030
D.$199,121
16) Phoeuk 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 41,000 units and sold 40,000 units. The company’s only product is sold for
$231 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.$88 per unit
B.$110 per unit
C.$209 per unit
D.$166 per unit
17) The best estimate of the total variable cost per unit is:
A) $131.80
B) $53.10
C) $66.40
D) $120.90