1) pardee company plans to sell 12,000 units during the month of august. if the
company has 2,500 units on hand at the start of the month, and plans to have 2,000
units on hand at the end of the month, how many units must be produced during the
month?
a.11,500
b.12,500
c.12,000
d.14,000
2) a tile manufacturer has supplied the following data:
if the company increases its unit sales volume by 3% without increasing its fixed
expenses, then total net operating income should be closest to:
a.$459,380
b.$453,667
c.$13,380
d.$482,660
3) in a budgeted balance sheet, the merchandise inventory on february 28:
a.$4,800
b.$7,500
c.$9,600
d.$3,200
4) in a statement of cash flows, a change in prepaid expenses would be classified as:
a.an operating activity
b.a financing activity
c.an investing activity
d.a noncash item that need not appear on the statement of cash flows
5) rossiter company failed to record a credit sale at the end of the year, although the
reduction in finished goods inventories was correctly recorded when the goods were
shipped to the customer. which one of the following statements is correct?
a.accounts receivable was not affected, inventory was not affected, sales were
understated, and cost of goods sold was understated
b.accounts receivable was understated, inventory was overstated, sales were
understated, and cost of goods sold was overstated
c.accounts receivable was not affected, inventory was understated, sales were
understated, and cost of goods sold was understated
d.accounts receivable was understated, inventory was not affected, sales were
understated, and cost of goods sold was not affected
6) division a of harkin company has the capacity for making 3,000 motors per month
and regularly sells 1,950 motors each month to outside customers at a contribution
margin of $62 per motor. the variable cost per motor is $35.70. division b of harkin
company would like to obtain 1,400 motors each month from division a. what should be
the lowest acceptable transfer price from the perspective of division a?
a.$26.57
b.$51.20
c.$35.70
d.$62.00
7) condensed financial statements of miller company at the beginning and at the end of
the current year are given below:
the company paid total dividends of $15,000 during the year, of which $5,000 were to
preferred stockholders. the market price of a share of common stock at the end of the
year was $30.
required:
on the basis of the information given above, fill in the blanks with the appropriate
figures.
example: the current ratio at the end of the current year would be computed by dividing
$270,000 by $100,000
a. the acid-test ratio at the end of the current year would be computed by dividing
_______________ by _________________.
b. the inventory turnover for the year would be computed by dividing
_______________ by _________________.
c. the debt-to-equity ratio at the end of the current year would be computed by dividing
_______________ by _________________.
d. the earnings per share of common stock would be computed by dividing
_______________ by _________________.
e. the accounts receivable turnover for the year would be computed by dividing
_______________ by _________________.
f. the times interest earned for the year would be computed by dividing
_______________ by _________________.
g. the return on common stockholders’ equity for the year would be computed by
dividing _______________ by _________________.
h. the dividend yield would be computed by dividing _______________ by
_________________.
8) roswick inc. has provided the following data for the month of august. there were no
beginning inventories; consequently, the direct materials, direct labor, and
manufacturing overhead applied listed below are all for the current month.
manufacturing overhead for the month was underapplied by $3,000.
the company allocates any underapplied or overapplied overhead among work in
process, finished goods, and cost of goods sold at the end of the month on the basis of
the overhead applied during the month in those accounts.
the journal entry to record the allocation of any underapplied or overapplied overhead
for august would include the following:
a.debit to cost of goods sold of $142,300
b.credit to cost of goods sold of $2,220
c.credit to cost of goods sold of $142,300
d.debit to cost of goods sold of $2,220
9) morsell corporation has provided the following data from its activity-based costing
accounting system:
the “other” activity cost pool consists of the costs of idle capacity and
organization-sustaining costs that are not assigned to products.
how much supervisory wages and factory supplies cost would be assigned to the batch
processing activity cost pool?
a.$286,000
b.$520,000
c.$284,000
d.$260,000
10) kapinos corporation has provided the following data:
required:
compute the accounts receivable turnover for this year. show your work!
11) the break-even point in dollar sales for rice company is $360,000 and the company’s
contribution margin ratio is 30%. if rice company desires a profit of $84,000, sales
would have to total
a.$280,000
b.$640,000
c.$480,000
d.$560,000
12) wintersmith corporation estimates that its variable manufacturing overhead is
$11.60 per machine-hour and its fixed manufacturing overhead is $278,124 per period.
if the denominator level of activity is 4,300 machine-hours, the predetermined overhead
rate would be:
a.$76.28
b.$64.68
c.$1,160.00
d.$11.60
13) cole laboratories makes and sells a lawn fertilizer called fastgro. the company has
developed standard costs for one bag of fastgro as follows:
the company had no beginning inventories of any kind on jan. 1. variable overhead is
applied to production on the basis of standard direct labor-hours. during january, the
following activity was recorded by the company:
production of fastgro: 4,000 bags
direct materials purchased: 85,000 pounds at a cost of $32,300
direct labor worked: 390 hours at a cost of $4,875
variable overhead incurred: $1,475
inventory of direct materials on jan. 31: 3,000 pounds
the materials quantity variance for january is:
a.$800 u
b.$300 u
c.$300 f
d.$750 f
14) a sporting goods manufacturer buys wood as a direct material for baseball bats. the
forming department processes the baseball bats, and the bats are then transferred to the
finishing department where a sealant is applied. there was no beginning work in process
inventory in the forming department in may. the forming department began
manufacturing 10,000 casey slugger baseball bats during may. costs for the forming
department for the month of may were as follows:
a total of 8,000 bats were completed and transferred to the finishing department during
may. the ending work in process inventory was 100% complete with respect to direct
materials and 25% complete with respect to conversion costs. the company uses the
weighted-average method of process costing.
the cost of the units transferred to the finishing department during may was:
a.$50,000
b.$40,000
c.$53,000
d.$42,400
15) sweet company applies overhead to jobs on the basis of 125% of direct labor cost. if
job 107 shows $10,000 of manufacturing overhead applied, how much was the direct
labor cost on the job?
a.$8,000
b.$12,500
c.$11,250
d.$10,000
16) 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 cost to manufacture 3,200 units is closest to:
a.$675,840
b.$616,640
c.$661,040
d.$646,240
17) if sales increase by 100 units, by how much should net operating income increase?
a.$400
b.$4,800
c.$1,500
d.$2,500
18) management of parrent corporation has asked your help as an intern in preparing
some key reports for april. the company started the month with raw materials
inventories of $32,000. during the month, the company made raw materials purchases
amounting to $68,000. at the end of the month, raw materials inventories totaled
$35,000. direct labor cost was $43,000 and manufacturing overhead was $62,000. the
beginning balance in the work in process account was $19,000 and the ending balance
was $12,000. the beginning balance in the finished goods account was $35,000 and the
ending balance was $58,000. sales totaled $240,000. selling expense was $18,000 and
administrative expense was $42,000.
the cost of goods sold for april was:
a.$123,000
b.$200,000
c.$217,000
d.$154,000
19) compound c90n is a raw material used to make mosbarger corporation’s major
product. the standard cost of compound c90n is $38.20 per ounce and the standard
quantity is 8.0 ounces per unit of output. data concerning the compound for september
appear below:
the raw material was purchased on account.
the credits to the raw materials account for september would total:
a.$30,560
b.$41,250
c.$30,942
d.$42,020