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1) the following data pertain to activity and costs for two recent months:
assuming that these activity levels are within the relevant range, the mixed costs for
november were:
a.$40,000
b.$35,000
c.$25,000
d.$20,000
2) the richmond company uses the weighted-average method in its process costing
system. the company has only a single processing department. the company's ending
work in process inventory on august 31 consisted of 18,000 units. the units in the
ending work in process inventory were 100% complete with respect to materials and
60% complete with respect to labor and overhead. if the cost per equivalent unit for
august was $2.75 for materials and $4.25 for labor and overhead, the total cost assigned
to the ending work in process inventory was:
a.$126,000
b.$75,600
c.$80,100
d.$95,400
3) henley company uses a standard cost system in which it applies manufacturing
overhead to units of product on the basis of standard direct labor-hours. for the month
of january, the fixed manufacturing overhead volume variance was $2,220 favorable.
the company uses a fixed manufacturing overhead rate of $1.85 per direct labor-hour.
during january, the standard direct labor-hours allowed for the month's output:
a.exceeded denominator hours by 1,000
b.fell short of denominator hours by 1,000
c.exceeded denominator hours by 1,200
d.fell short of denominator hour by 1,200
4) the koski company has established standards as follows:
actual production figures for the past year were as follows:
the variable overhead efficiency variance is:
a.$500 f
b.$500 u
c.$245 f
d.$250 f
5) creelman company makes four products in a single facility. data concerning these
products appear below:
the milling machines are potentially the constraint in the production facility. a total of
13,000 minutes are available per month on these machines.
which product makes the most profitable use of the milling machines?
a.product a
b.product b
c.product c
d.product d
6) postma corporation's balance sheet and income statement appear below:
cash dividends were $29. the company sold equipment for $19 that was originally
purchased for $14 and that had accumulated depreciation of $11. the net cash provided
by (used by) operations for the year was:
a.$177
b.$148
c.$164
d.$168
7) excerpts from shelton corporation's most recent balance sheet appear below:
sales on account in year 2 amounted to $1,320 and the cost of goods sold was $890.
the average collection period for year 2 is closest to:
a.1.1 days
b.69.1 days
c.0.9 days
d.66.4 days
8) grundhoefer kennel uses tenant-days as its measure of activity; an animal housed in
the kennel for one day is counted as one tenant-day. during april, the kennel budgeted
for 2,000 tenant-days, but its actual level of activity was 1,990 tenant-days. the kennel
has provided the following data concerning the formulas used in its budgeting and its
actual results for april:
the activity variance for administrative expenses in april would be closest to:
a.$1 f
b.$79 f
c.$79 u
d.$1 u
9) (ignore income taxes in this problem.) joe flubup is the president of flubup, inc. he is
considering buying a new machine that would cost $25,470. joe has determined that the
new machine promises an internal rate of return of 14%, but joe has misplaced the
paper which tells the annual cost savings promised by the new machine. he does
remember that the machine has a projected life of 12 years. based on these data, the
annual cost savings are:
a.it is impossible to determine from the given data
b.$2,122.50
c.$4,500.00
d.$4,650.00
10) the following costs were incurred in august:
prime costs during the month totaled:
a.$39,000
b.$59,000
c.$96,000
d.$38,000
11) the following production and average cost data for two levels of monthly
production volume have been supplied by a company that produces a single product:
the best estimate of the total variable manufacturing cost per unit is:
a.$116.40
b.$137.20
c.$20.80
d.$76.70
12) beak industries is a division of a major corporation. last year the division had total
sales of $10,600,000, net operating income of $1,070,600, and average operating assets
of $4,000,000.
the division's margin is closest to:
a.37.7%
b.26.8%
c.47.8%
d.10.1%
13) the garnet company uses a job-order costing system. the following data were
recorded for february:
overhead is charged to jobs at the rate of 140% of direct labor cost.
jobs 1, 2, and 3 were completed during february and transferred to
finished goods. job 3 has been delivered to the customer.
the cost of goods sold during february was:
a.$5,100
b.$3,000
c.$12,120
d.$8,120
14) andracki housecleaning provides housecleaning services to its clients. the company
uses an activity-based costing system for its overhead costs. the company has provided
the following data from its activity-based costing system.
the "other" activity cost pool consists of the costs of idle capacity and
organization-sustaining costs.
one particular client, the lason family, requested 46 jobs during the year that required a
total of 92 hours of housecleaning. for this service, the client was charged $2,230.
required:
a. compute the activity rates (i.e., cost per unit of activity) for the activity cost pools.
round off all calculations to the nearest whole cent.
b. using the activity-based costing system, compute the customer margin for the lason
family. round off all calculations to the nearest whole cent.
c. assume the company decides instead to use a traditional costing system in which all
costs are allocated to customers on the basis of cleaning hours. compute the margin for
the lason family. round off all calculations to the nearest whole cent.
15) dufour corporation uses the weighted-average method in its process costing system.
this month, the beginning inventory in the first processing department consisted of 600
units. the costs and percentage completion of these units in beginning inventory were:
a total of 5,700 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 70% 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 materials for the month in the first processing
department is closest to:
a.$20.92
b.$21.95
c.$20.22
d.$22.71
16) meleski corporation's recent utility costs are listed below:
management believes that utility cost is a mixed cost that depends on machine-hours.
using the least-squares regression method, the estimate of the fixed component of utility
cost per month is closest to:
a.$4,649
b.$5,028
c.$16,975
d.$16,850
