1) Tulip Midwifery’s cost formula for its wages and salaries is $2,420 per month plus
$388 per birth. For the month of January, the company planned for activity of 119
births, but the actual level of activity was 123 births. The actual wages and salaries for
the month was $50,540. The wages and salaries in the flexible budget for January
would be closest to:
A.$50,540
B.$48,592
C.$50,144
D.$50,225
2) Gabbert Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
What is the total period cost for the month under variable costing?
A.$93,600
B.$154,800
C.$88,400
D.$182,000
3) 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.
The total cost transferred from the first processing department to the next processing
department during the month is closest to:
A.$334,200
B.$367,616
C.$294,947
D.$308,600
4) Last year Anderson Corporation reported a cost of goods sold of $100,000. The
company’s inventory at the beginning of the year was $11,000, and its inventory at the
end of the year was $19,000. The prepaid expense account increased by $2,000 between
the beginning and end of the year, and the accounts payable account decreased by
$4,000. Cost of goods sold adjusted to the cash basis under the direct method would be:
A.$94,000
B.$106,000
C.$112,000
D.$110,000
5) The fixed manufacturing overhead budget variance is:
A.the difference between budgeted fixed manufacturing overhead cost and actual fixed
manufacturing overhead cost.
B.the difference between actual fixed manufacturing overhead cost and applied fixed
manufacturing overhead cost.
C.the difference between budgeted fixed manufacturing overhead cost and applied fixed
manufacturing overhead cost.
D.the difference between fixed overhead at the planned level of activity and the flexible
budget for actual activity.
6) In a job-order costing system, the use of indirect materials that have been previously
purchased is recorded as a credit to:
A.Work in Process inventory.
B.Manufacturing Overhead.
C.Raw Materials inventory.
D.Finished Goods inventory.
7) Muzyka Corporation uses the FIFO method in its process costing system. Data
concerning the first processing department for the most recent month are listed below:
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.
The total cost transferred from the first processing department to the next processing
department during the month is closest to:
A.$369,163
B.$317,192
C.$331,100
D.$340,000
8) Hardenburg Corporation keeps careful track of the time required to fill orders. The
times required for a particular order appear below:
Required:
a. Determine the throughput time. Show your work!
b. Determine the manufacturing cycle efficiency (MCE), Show your work!
c. Determine the delivery cycle time. Show your work!
9) The cost of warranty repairs would be classified as a(n):
A.prevention cost.
B.appraisal cost.
C.internal failure cost.
D.external failure cost.
10) The inventory turnover for Year 2 is closest to:
A.0.92
B.6.50
C.1.08
D.6.24
11) Falsetta Corporation makes three products that use the current constraint, which is a
particular type of machine. Data concerning those products appear below:
Required:
a. Rank the products in order of their current profitability from the most profitable to
the least profitable. In other words, rank the products in the order in which they should
be emphasized. Show your work!
b. Assume that sufficient constraint time is available to satisfy demand for all but the
least profitable product. Up to how much should the company be willing to pay to
acquire more of the constrained resource?
12) Perwin Corporation estimates that an investment of $400,000 would be needed to
produce and sell 30,000 units of Product B each year. At this level of activity, the unit
product cost would be $25. Selling and administrative expenses would total $350,000
each year. The company uses the absorption costing approach to cost-plus pricing
described in the text. If a 15% rate of return on investment is desired, then the required
markup for Product B would be closest to:
A.15%
B.49%
C.55%
D.58%
13) Gremel Corporation has provided the following financial data:
14) The company’s earnings per share for Year 2 is closest to:
A.$6.33 per share
B.$0.29 per share
C.$0.45 per share
D.$0.62 per share
15) The conversion cost for December was:
A) $134,000
B) $109,000
C) $192,000
D) $129,000
16) Falsetta Corporation makes three products that use the current constraint, which is a
particular type of machine. Data concerning those products appear below:
Required:
a. Rank the products in order of their current profitability from the most profitable to
the least profitable. In other words, rank the products in the order in which they should
be emphasized. Show your work!
b. Assume that sufficient constraint time is available to satisfy demand for all but the
least profitable product. Up to how much should the company be willing to pay to
acquire more of the constrained resource?
17) According to the company’s accounting system, what is the net operating income
earned by product I11S? Include all costs in this calculationwhether relevant or not.
A.$410,000
B.$46,000
C.$(46,000)
D.$(410,000)