1) the working capital at the end of year 2 is:
a.$1,020 thousand
b.$280 thousand
c.$650 thousand
d.$990 thousand
2) 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.$2,208 u
b.$2,272 u
c.$2,688 f
d.$2,688 u
3) the work in process inventory account of a manufacturing company shows a balance
of $2,400 at the end of an accounting period. the job cost sheets of the two uncompleted
jobs show charges of $400 and $200 for direct materials, and charges of $300 and $500
for direct labor. from this information, it appears that the company is using a
predetermined overhead rate, as a percentage of direct labor costs, of:
a.80%
b.125%
c.300%
d.240%
4) if a company increases advertising by $500,000, this will cause net operating income
to increase if the resulting increase in sales dollars is greater than:
a.$500,000
b.$500,000 divided by the percentage increase in advertising
c.$500,000 divided by the degree of operating leverage
d.$500,000 divided by the contribution margin ratio
5) which of the following statements is true?
a.when production exceeds sales, a manufacturing company’s variable costing net
operating income will usually be greater than its absorption costing net operating
income
b.the variable costing method is usually not used for external reporting purposes
c.the absorption costing method treats fixed production costs as period costs
d.all of these
6) smalling inc. has provided the following data for the month of november:
the cost of goods manufactured for november is:
a.$226,000
b.$218,000
c.$225,000
d.$217,000
7) sadbury corporation produces and sells a single product whose selling price is
$210.00 per unit and whose variable expense is $73.50 per unit. the company’s monthly
fixed expense is $873,600.
required:
a. assume the company’s monthly target profit is $27,300. determine the unit sales to
attain that target profit. show your work!
b. assume the company’s monthly target profit is $68,250. determine the dollar sales to
attain that target profit. show your work!
8) the mohawk-hudson company is an electric utility which has two service
departments, accounting and maintenance. it has two operating departments, generation
and transmission. the company does not distinguish between fixed and variable service
department costs. maintenance department costs are allocated on the basis of
maintenance hours. accounting department costs are allocated to operating departments
on the basis of accounting hours of service provided. budgeted costs and other data for
the coming year are as follows:
the step-down method is used to allocate service department costs, with the accounting
department being allocated first.
the amount of accounting department costs allocated to the generation department
would be:
a.$42,857
b.$57,143
c.$38,000
d.$45,000
9) foxworthy corporation’s most recent balance sheet appears below:
net income for the year was $79. cash dividends were $15. the net cash provided by
(used by) operations for the year was:
a.$80
b.$78
c.($1)
d.$113
10) the times interest earned ratio of mchugh company is 4.5. the interest expense for
the year was $20,000, and the company’s tax rate is 40%. the company’s net income is:
a.$22,000
b.$42,000
c.$54,000
d.$66,000
11) at an activity level of 4,500 machine-hours in a month, novosel corporation’s total
variable maintenance and repair cost is $394,830 and its total fixed maintenance and
repair cost is $105,570. what would be the total maintenance and repair cost, both fixed
and variable, at an activity level of 4,600 units in a month? assume that this level of
activity is within the relevant range.
a.$511,520
b.$505,960
c.$509,174
d.$500,400
12) bosril corporation uses the weighted-average method in its process costing system.
this month, the beginning inventory in the first processing department consisted of 400
units. the costs and percentage completion of these units in beginning inventory were:
a total of 5,600 units were started and 4,900 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 85% complete with respect to materials and 45% 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 cost per equivalent unit for conversion costs for the first department for the month is
closest to:
a.$18.74
b.$17.85
c.$17.68
d.$16.05
13) the economic impact of the inability to reach a target denominator level of activity
would best be measured by:
a.the amount of the volume variance
b.the contribution margin lost by failing to meet the target denominator level of activity
c.the amount of the fixed manufacturing overhead budget variance
d.the amount of the variable overhead efficiency variance
14) data concerning plaxco corporation’s single product appear below:
assume the company’s monthly target profit is $22,000. the dollar sales to attain that
target profit is closest to:
a.$1,021,010
b.$759,429
c.$1,772,000
d.$531,600
15) what is the company’s break-even in units?
a.20,000 units
b.0 units
c.18,000 units
d.12,000 units