Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
1) dantuono corporation manufactures and sells a single product. the company uses
units as the measure of activity in its budgets and performance reports. during
november, the company budgeted for 7,700 units, but its actual level of activity was
7,720 units. the company has provided the following data concerning the formulas used
in its budgeting and its actual results for november:
the direct labor in the planning budget for november would be closest to:
a.$44,004
b.$42,744
c.$42,633
d.$43,890
2) hofbauer corporation's two products have the following characteristics:
the constrained resource is a particular machine that is available for 10,400 minutes
each month. each unit of product m73o requires 6 minutes on this machine and each
unit of product m26b requires 8 minutes on this machine.
up to how much should the company be willing to pay to obtain enough of the
constrained resource to satisfy demand for the two existing products?
a.$3.60 per minute
b.$28.80 per minute
c.$28.80 per minute
d.$4.80 per minute
3) brabo corporation uses direct labor-hours in its predetermined overhead rate. at the
beginning of the year, the estimated direct labor-hours were 15,700 hours. at the end of
the year, actual direct labor-hours for the year were 16,700 hours, the actual
manufacturing overhead for the year was $352,960, and manufacturing overhead for the
year was overapplied by $27,800. the estimated manufacturing overhead at the
beginning of the year used in the predetermined overhead rate must have been:
a.$327,124
b.$357,960
c.$380,760
d.$347,960
4) chabud corporation uses the weighted-average method in its process costing system.
this month, the beginning inventory in the first processing department consisted of 500
units. the costs and percentage completion of these units in beginning inventory were:
a total of 8,100 units were started and 7,300 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 40% 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.7,820
c.7,300
d.520
5) the activity variance for selling and administrative expense in march would be
closest to:
a.$24,340 f
b.$24,340 u
c.$3,760 u
d.$3,760 f
6) a manufacturer of tiling grout has supplied the following data:
the company's degree of operating leverage is closest to:
a.9.77
b.1.36
c.3.53
d.2.47
7) nolin corporation uses the direct method to allocate service department costs to
operating departments. the company has two service departments, administrative and
facilities, and two operating departments, assembly and wholesaling.
administrative costs are allocated on the basis of employee hours and facilities costs are
allocated on the basis of space occupied. the total wholesaling department cost after the
allocations of service department costs is closest to:
a.$418,700
b.$406,160
c.$416,273
d.$418,390
8) qtech 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. to reduce
rounding error, carry out all computations to at least three decimal places.
how many units were started and completed during the month in the first processing
department?
a.8,900
b.9,500
c.8,100
d.7,500
9) misemer corporation is developing standards for its products. one product requires an
input that is purchased for $57.00 per kilogram from the supplier. by paying cash, the
company gets a discount of 8% off this purchase price. shipping costs from the
supplier's warehouse amount to $3.60 per kilogram. receiving costs are $0.26 per
kilogram. the standard price per kilogram of this input should be:
a.$57.70
b.$56.30
c.$65.42
d.$57.00
10) ceder products is a division of a major corporation. last year the division had total
sales of $21,520,000, net operating income of $538,000, and average operating assets of
$8,000,000. the company's minimum required rate of return is 18%.
the division's return on investment (roi) is closest to:
a.0.2%
b.6.7%
c.1.8%
d.18.0%
11) the dawson corporation projects the following for the upcoming year:
if dawson corporation's common stock has a price-earnings ratio of eight, the market
price per share (to the nearest dollar) would be:
a.$125
b.$56
c.$72
d.$68
12) the changes in tench company's balance sheet account balances for last year appear
below:
the company's income statement for the year appears below:
the company declared and paid $70,000 in cash dividends during the year. the company
uses the direct method to determine the net cash provided by operating activities.
on the statement of cash flows, the operating expenses adjusted to a cash basis would
be:
a.$440,000
b.$365,000
c.$300,000
d.$370,000
13) in december, one of the processing departments at stiel corporation had ending
work in process inventory of $38,000. during the month, $119,000 of costs were added
to production and the cost of units transferred out from the department was $92,000.
in the department's cost reconciliation report for december, the cost of beginning work
in process inventory for the department would be:
a.$54,000
b.$65,000
c.$11,000
d.$81,000
14) lisa inc.'s balance sheet appears below:
the company's sales for the year were $300 thousand, its cost of goods sold was $220
thousand, and its net income was $35 thousand. all sales were on credit. preferred
dividends for the year were $5 thousand.
lisa inc.'s inventory turnover for year 2 was closest to:
a.3.7
b.4.0
c.4.4
d.5.0
15) (ignore income taxes in this problem.) the management of kniffin corporation is
investigating the purchase of a new satellite routing system with a useful life of 9 years.
the company uses a discount rate of 9% in its capital budgeting. the net present value of
the investment, excluding its intangible benefits, is -$717,002.
required:
how large would the additional cash flow per year from the intangible benefits have to
be to make the investment in the automated equipment financially attractive?
16) cotillo corporation uses customers served as its measure of activity. during
december, the company budgeted for 29,000 customers, but actually served 27,000
customers. the company bases its budgets on the following information: revenue should
be $4.40 per customer served. wages and salaries should be $33,300 per month plus
$1.80 per customer served. supplies should be $0.60 per customer served. insurance
should be $8,900 per month. miscellaneous expenses should be $4,600 per month plus
$0.10 per customer served. the company reported the following actual results for
december:
required:
prepare the company's flexible budget performance report for december. label each
variance as favorable (f) or unfavorable (u).
17) lague corporation's balance sheet and income statement appear below:
cash dividends were $12.
required:
prepare a statement of cash flows using the indirect method.
18) thews clinic uses patient-visits as its measure of activity. during august, the clinic
budgeted for 2,000 patient-visits, but its actual level of activity was 2,200 patient-visits.
the clinic has provided the following data concerning the formulas used in its budgeting
and its actual results for august:
required:
prepare the clinic's flexible budget performance report for august. label each variance as
favorable (f) or unfavorable (u).
19) mascioli corporation produces a single product and has the following cost structure:
required:
compute the unit product cost under variable costing. show your work!
20) glinski corporation is working on its direct labor budget for the next two months.
each unit of output requires 0.29 direct labor-hours. the direct labor rate is $7.00 per
direct labor-hour. the production budget calls for producing 5,600 units in june and
6,100 units in july.
required:
construct the direct labor budget for the next two months, assuming that the direct labor
work force is fully adjusted to the total direct labor-hours needed each month.
21) bures jeep tours operates jeep tours in the heart of the colorado rockies. the
company bases its budgets on two measures of activity (i.e., cost drivers), namely
guests and jeeps. one vehicle used in one tour on one day counts as a jeep. each jeep has
one tour guide. the company uses the following data in its budgeting:
in april, the company budgeted for 360 guests and 134 jeeps. the actual activity for the
month was 335 guests and 136 jeeps.
required:
prepare a report showing the company's activity variances for april. label each variance
as favorable (f) or unfavorable (u).
22) taketa corporation uses the step-down method to allocate service department costs
to operating departments. the company has two service departments, administration and
facilities, and two operating departments, assembly and finishing.
administration department costs are allocated first on the basis of employee time and
facilities department costs are allocated second on the basis of space occupied.
required:
allocate the service department costs to the operating departments using the step-down
method.
