1) _________________ is a method of separating a mixed cost into its fixed and
variable elements by fitting a regression line that minimizes the sum of the squared
errors.
a.quick and dirty method
b.scattergraph method
c.high-low method
d.least-square regression method
2) a company needs an increase in working capital of $30,000 in a project that will last
2 years. the company’s tax rate is 30% and its discount rate is 14%. the present value of
the release of the working capital at the end of the project is closest to:
a.$16,159
b.$9,000
c.$21,000
d.$23,084
3) the lyons company’s cost of goods manufactured was $120,000 when its sales were
$360,000 and its gross margin was $220,000. if the ending inventory of finished goods
was $30,000, the beginning inventory of finished goods must have been:
a.$20,000
b.$50,000
c.$110,000
d.$150,000
4) division x of charter corporation makes and sells a single product which is used by
manufacturers of fork lift trucks. presently it sells 12,000 units per year to outside
customers at $24 per unit. the annual capacity is 20,000 units and the variable cost to
make each unit is $1 division y of charter corporation would like to buy 10,000 units a
year from division x to use in its products. there would be no cost savings from
transferring the units within the company rather than selling them on the outside
market. what should be the lowest acceptable transfer price from the perspective of
division x?
a.$24.00
b.$21.40
c.$17.60
d.$100
5) consider the following statements:
i. a vertically integrated company is more dependent on its suppliers than a company
that is not vertically integrated.
ii. many companies feel they can control quality better by making their own parts.
iii. a vertically integrated company realizes profits from the parts it is “making” instead
of “buying” as well as profits from its regular operations.
which of the above statements represent advantages to a company that is vertically
integrated?
a.only i
b.only iii
c.only i and ii
d.only ii and iii
6) ruggeri corporation reported the following data for the month of july:
the cost of goods manufactured for july was:
a.$152,000
b.$172,000
c.$177,000
d.$162,000
7) a cost that would be included in product costs under both absorption costing and
variable costing would be:
a.supervisory salaries
b.equipment depreciation
c.variable manufacturing costs
d.variable selling expenses
8) the following information relates to the mixing department of zaglav products
company for the month of june. zaglav uses a fifo process costing system.
what are the mixing department’s equivalent units related to conversion costs for june?
a.78,300
b.81,300
c.82,300
d.84,700
9) direct materials used in production totaled $330,000. direct labor was $415,000 and
manufacturing overhead was $220,000. what were the total manufacturing costs
incurred for the month?
a.$530,000
b.$965,000
c.$745,000
d.$635,000
10) barringer manufacturing corporation has prepared the following overhead budget
for next month.
the company’s variable overhead costs are driven by machine-hours. what would be the
total budgeted overhead cost for next month if the activity level is 7,900 machine-hours
rather than 7,800 machine-hours?
a.$110,710.00
b.$109,600
c.$110,868.00
d.$111,025.38
11) gallipeau inc., which produces a single product, has provided the following data for
its most recent month of operations:
there were no beginning or ending inventories. the absorption costing unit product cost
was:
a.$219
b.$151
c.$150
d.$300
12) jasmine company uses activity-based costing. the company has two products: a and
b. the annual production and sales of product a is 10,000 units and of product b is 4,000
units. there are three activity cost pools, with estimated total cost and expected activity
as follows:
the activity-based costing cost per unit of product a is closest to:
a.$6.00
b.$9.70
c.$1.50
d.$3.00
