1) hutton corporation keeps careful track of the time required to fill orders. data
concerning a particular order appear below:
the throughput time was:
a.25 hours
b.13.5 hours
c.20.9 hours
d.4.1 hours
2) in january, the universal solutions division of zima corporation had average operating
assets of $520,000 and net operating income of $97,600. the company uses residual
income, with a minimum required rate of return of 18%, to evaluate the performance of
its divisions. what was the universal solutions division’s residual income in january?
a.$4,000
b.($4,000)
c.$17,568
d.($17,568)
3) management of berndt corporation has asked your help as an intern in preparing
some key reports for august. the beginning balance in the raw materials inventory
account was $33,000. during the month, the company made raw materials purchases
amounting to $62,000. at the end of the month, the balance in the raw materials
inventory account was $30,000. direct labor cost was $46,000 and manufacturing
overhead was $74,000. the beginning balance in the work in process account was
$13,000 and the ending balance was $19,000. the beginning balance in the finished
goods account was $54,000 and the ending balance was $50,000. sales totaled
$270,000. selling expense was $18,000 and administrative expense was $49,000.
the net operating income for august was:
a.$20,000
b.$21,000
c.$87,000
d.$83,000
4) demeester corporation’s two products have the following characteristics:
the constrained resource is a particular machine that is available for 9,900 minutes each
month. each unit of product y56g requires 10 minutes on this machine and each unit of
product k46x requires 3 minutes on this machine.
what is the maximum contribution margin the company can earn per month?
a.$23,100
b.$25,020
c.$31,500
d.$21,420
5) mccraig corporation would like to determine the relative profitability of a number of
jobs. for example, job s35a has revenues of $52,000 and avoidable costs of $36,400,
resulting in an incremental profit of $15,600. the job requires 260 hours of the
constrained resource. the job is responsible for 8% of the company’s total profit for the
period. what is the profitability index for job s35a?
a.$60 per hour
b.$200 per hour
c.0.30
d.0.08
6) the materials price variance should be computed:
a.when materials are purchased
b.when materials are used in production
c.based upon the amount of materials used in production when only a portion of
materials purchased is actually used
d.based upon the difference between the actual quantity of inputs and the standard
quantity allowed for output times the standard price
7) 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 acid-test ratio at december 31, year 2, was closest to:
a.0.6
b.1.1
c.1.8
d.2.0
8) buffo company fabricates metal folding chairs. data concerning the company’s
revenue and cost structure follow:
if buffo expects to produce and sell 5,000 units next month, the expected net operating
income would be:
a.$51,250
b.$42,750
c.$71,000
d.$62,500
9) (ignore income taxes in this problem.) the wisbley company is contemplating the
purchase of a helicopter for its executives to use in their business trips. this helicopter
could be either purchased or leased from the manufacturer. the useful life of the
helicopter is four years. data concerning these two alternatives follow:
if the helicopter is leased, it would be returned to the manufacturer in four years.
wisbley’s required rate of return is 22%.
the present value of the cash outflows for repairs, assuming the helicopter is purchased,
would be:
a.$(14,000)
b.$(8,682)
c.$(2,000)
d.$(8,440)
10) yimron corporation uses the weighted-average method in its process costing system.
information for the month of march concerning department a, the first stage of the
company’s production process, follows:
materials are added at the beginning of the process. the ending work in process is 50%
complete with respect to conversion costs. what cost would be recorded for the ending
work in process inventory?
a.$3,400
b.$1,700
c.$4,400
d.$2,200
11) werber clinic uses client-visits as its measure of activity. during january, the clinic
budgeted for 2,700 client-visits, but its actual level of activity was 2,730 client-visits.
the clinic has provided the following data concerning the formulas used in its budgeting
and its actual results for january:
the activity variance for personnel expenses in january would be closest to:
a.$661 u
b.$261 u
c.$261 f
d.$661 f
12) on july 1, woolard corporation had $20,000 of raw materials on hand. during the
month, the company purchased an additional $53,000 of raw materials. during july,
$49,000 of raw materials were requisitioned from the storeroom for use in production.
these raw materials included both direct and indirect materials. the indirect materials
totaled $5,000.
prepare journal entries to record these events.
the debits to the raw materials account for the month of july total:
a.$53,000
b.$20,000
c.$73,000
d.$49,000
13) the following are the wyeth company’s unit costs of making and selling an item at a
volume of 10,000 units per month (which represents the company’s capacity):
present sales amount to 9,000 units per month. an order has been received from a
customer in a foreign market for 1,000 units. the order would not affect current sales.
fixed costs, both manufacturing and selling and administrative, are constant within the
relevant range between 8,000 and 10,000 units per month. the variable selling and
administrative costs would have to be incurred for this special order as well as all other
sales. assume direct labor is a variable cost.
how much will the company’s net operating income be increased or (decreased) if it
prices the 1,000 units in the special order at $6 each?
a.$(500)
b.$400
c.$2,500
d.$1,000
14) last year lawton company reported sales of $110,000 on its income statement.
during the year, accounts receivable decreased by $10,000 and accounts payable
decreased by $15,000. the company uses the direct method to determine the net cash
provided by operating activities on the statement of cash flows. the sales revenue
adjusted to a cash basis for the year would be:
a.$125,000
b.$120,000
c.$115,000
d.$105,000
15) the management of harper corporation, a manufacturing company, has provided the
following financial data for december:
the contribution margin for december was:
a.$204,000
b.$64,000
c.$340,000
d.$319,000
16) harnish corporation is developing standards for its products. one product requires an
input that is purchased for $55.00 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 $5.17 per kilogram. receiving costs are $0.28 per
kilogram. each unit of output of the product requires 0.75 kilogram of this input. the
allowance for waste and spoilage is 0.04 kilogram of this input for each unit of output.
the allowance for rejects is 0.11 kilogram of this input for each unit of output.
the standard quantity in kilograms of this input per unit of output should be:
a.0.75
b.0.71
c.0.90
d.0.60