1) gowin inc. has provided the following data for the month of september. 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 overapplied by $13,000.
the company allocates any underapplied or overapplied overhead among work in
process, finished goods, and cost of goods sold at the end of the month on the basis of
the overhead applied during the month in those accounts.
the journal entry to record the allocation of any underapplied or overapplied overhead
for september would include the following:
a.debit to work in process of $260
b.credit to work in process of $260
c.debit to work in process of $5,590
d.credit to work in process of $5,590
2) wiley corporation bases its predetermined overhead rate on variable manufacturing
overhead cost of $13.90 per machine-hour and fixed manufacturing overhead cost of
$944,300 per period. if the denominator level of activity is 7,100 machine-hours, the
predetermined overhead rate would be:
a.$1,390.00
b.$146.90
c.$13.90
d.$133.00
3) the optimal selling price for a product depends
a.only on the variable cost per unit
b.only on the sensitivity of unit sales to changes in price
c.on the level of total fixed costs and the variable cost per unit
d.on the variable cost per unit and the sensitivity of unit sales to changes in price
4) lempka corporation produces and sells a single product. data concerning that product
appear below:
the unit sales to attain the company’s monthly target profit of $17,000 is closest to:
a.4,172
b.4,520
c.2,169
d.3,620
5) in august, clarey corporation, a manufacturing company, reported the following
financial data:
the company had no beginning or ending inventories.
required:
a. prepare an income statement in good form for august using the traditional approach.
b. prepare an income statement in good form for august using the contribution
approach.
6) allen company’s average collection period for accounts receivable was 40 days last
year, but increased to 60 days this year. which of the following would most likely
account for this change?
a.a decrease in accounts receivable relative to sales
b.a decrease in sales
c.a relaxation of credit policies
d.an increase in sales
7) (ignore income taxes in this problem) the management of boie corporation is
considering the purchase of a machine that would cost $330,980 and would have a
useful life of 6 years. the machine would have no salvage value. the machine would
reduce labor and other operating costs by $76,000 per year. the internal rate of return on
the investment in the new machine is closest to:
a.11%
b.10%
c.12%
d.7%
8) hoops corporation applies manufacturing overhead to products on the basis of
standard machine-hours. the company’s predetermined overhead rate for fixed
manufacturing overhead is $1.30 per machine-hour and the denominator level of
activity is 3,700 machine-hours. in the most recent month, the total actual fixed
manufacturing overhead was $4,450 and the company actually worked 4,000
machine-hours during the month. the standard hours allowed for the actual output of the
month totaled 3,880 machine-hours. what was the overall fixed manufacturing overhead
volume variance for the month?
a.$390 favorable
b.$234 favorable
c.$156 unfavorable
d.$390 unfavorable
9) micro computer company has set up a toll-free telephone line for customer inquiries
regarding computer hardware produced by the company. the cost of this toll-free line
would be classified as which of the following?
a.product cost
b.manufacturing overhead
c.direct labor
d.period cost
10) the contribution margin per unit was:
a.$17.50
b.$32.50
c.$27.30
d.$25.70
11) capizzi corporation has provided the following data concerning its direct labor costs
for february:
the labor efficiency variance for february would be recorded as a:
a.debit of $45,562
b.credit of $45,562
c.debit of $44,726
d.credit of $44,726
12) gargymal company would like to estimate the variable and fixed components of its
electrical costs and has compiled the following data for the last five months of
operations.
using the high-low method, the estimated variable electrical cost per machine hour is:
a.$0.40
b.$0.65
c.$0.70
d.$0.67
13) in a statement of cash flows, a change in the inventories account would be classified
as:
a.an operating activity
b.a financing activity
c.an investing activity
d.a noncash item that need not appear on the statement of cash flows
14) dickey corporation’s most recent income statement appears below:
required:
compute the gross margin percentage.
15) the management of granger sports equipment has been maintaining delivery
performance data in order to improve the company’s customer service. data for the most
recent month follows:
what is the process time?
a.4 days
b.5 days
c.6 days
d.9 days
16) the charade company is preparing its manufacturing overhead budget for the fourth
quarter of the year. the budgeted variable factory overhead is $5.00 per direct
labor-hour; the budgeted fixed factory overhead is $75,000 per month, of which
$15,000 is factory depreciation.
if the budgeted cash disbursements for factory overhead for december total $105,000,
then the budgeted direct labor-hours for december must be:
a.6,000 hours
b.21,000 hours
c.9,000 hours
d.3,000 hours