1) 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 rate variance for the month?
a.$2,955 f
b.$4,935 f
c.$2,955 u
d.$1,890 u
2) legaard corporation produces and sells a single product. data concerning that product
appear below:
fixed expenses are $220,000 per month. the company is currently selling 4,000 units per
month.
required:
the marketing manager would like to cut the selling price by $15 and increase the
advertising budget by $11,000 per month. the marketing manager predicts that these
two changes would increase monthly sales by 1,500 units. what should be the overall
effect on the company’s monthly net operating income of this change? show your work!
3) hanson corporation uses the weighted-average 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. 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.360
b.6,700
c.6,100
d.6,460
4) the materials quantity variance for september would be recorded as a:
a.debit of $382
b.credit of $11,078
c.credit of $382
d.debit of $11,078
5) spettel corporation’s comparative balance sheet appears below:
the company’s net income (loss) for the year was $11,000 and its cash dividends were
$2,000.
which of the following classifications of changes in balance sheet accounts as sources
and uses is correct?
a.the change in accounts payable is a use; the change in accrued wages and salaries
payable is a use
b.the change in accounts payable is a source; the change in accrued wages and salaries
payable is a use
c.the change in accounts payable is a source; the change in accrued wages and salaries
payable is a source
d.the change in accounts payable is a use; the change in accrued wages and salaries
payable is a source
6) vanfleet corporation uses an activity-based costing system with three activity cost
pools. the company has provided the following data concerning its costs:
how much cost, in total, would be allocated in the first-stage allocation to the
fabricating activity cost pool?
a.$120,000
b.$216,000
c.$161,000
d.$108,000
7) (ignore income taxes in this problem.) the keego company is planning a $200,000
equipment investment which has an estimated five-year life with no estimated salvage
value. the company has projected the following annual cash flows for the investment.
assuming that the cash inflows occur evenly over the year, the payback period for the
investment is:
a.0.75 years
b.1.67 years
c.4.91 years
d.2.50 years
8) when would the direct method and the step-down method of service department cost
allocation result in identical allocations being made to the operating departments?
a.when there is only one service department
b.when all of the costs in the service departments are fixed costs
c.when there is an equal amount of service departments and operating departments
d.both a and b above
9) in deciding whether to manufacture a part or buy it from an outside supplier, which
of the following costs are relevant?
a.choice a
b.choice b
c.choice c
d.choice d
10) a weakness of the internal rate of return method for screening investment projects is
that it:
a.does not consider the time value of money
b.implicitly assumes that the company is able to reinvest cash flows from the project at
the company’s discount rate
c.implicitly assumes that the company is able to reinvest cash flows from the project at
the internal rate of return
d.does not take into account all of the cash flows from a project
11) 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.$5,955 u
b.$9,240 u
c.$9,240 f
d.$6,090 u
12) when applying manufacturing overhead to jobs, the formula to calculate the amount
is as follows:
a.predetermined overhead rate divided by the actual manufacturing overhead incurred
on the particular job
b.predetermined overhead rate times the actual manufacturing overhead incurred on the
particular job
c.predetermined overhead rate divided by the actual units of allocation base charged to
the particular job
d.predetermined overhead rate times the actual units of allocation base charged to the
particular job