1) (ignore income taxes in this problem.) jones and company has just purchased a new
piece of equipment, the cost characteristics of which are given below:
the company uses a required rate of return of 10% and depreciates equipment using the
straight-line method.
the payback period for the investment is:
a.5 years
b.15 years
c.2 years
d.7.143 years
2) nadell corporation reported the following data for the month of april:
if the company transferred $234,000 of completed goods from work in process to
finished goods inventory during april, what was the cost of goods sold for the month?
a.$234,000
b.$235,000
c.$220,000
d.$248,000
3) caruana corporation’s maintenance department provides services to the company’s
two operating divisions-the paints division and the stains division. the variable costs of
the maintenance department are budgeted based on the number of cases produced by
the operating departments. the fixed costs of the maintenance department are
determined by the number of cases produced by the operating departments during the
peak period. data appear below:
how much actual maintenance department cost should not be allocated to the operating
divisions at the end of the year?
a.$5,401
b.$0
c.$4,460
d.$9,861
4) 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 book value per share of common stock at december 31, year 2, was closest to:
a.$10.00
b.$11.25
c.$19.33
d.$18.33
5) overland, inc., uses the weighted-average method in its process costing system. the
company’s work in process inventory on april 30 consists of 25,000 units. the units in
the ending inventory are 100% complete with respect to materials and 75% complete
with respect to conversion costs. if the cost per equivalent unit is $3.00 for materials
and $5.50 for conversion costs, the total cost in the april 30 work in process inventory
is:
a.$212,500
b.$178,125
c.$159,375
d.$109,375
6) the same constrained resource is used by four different products at debruin
corporation. data concerning those products appear below:
the company does not have enough of the constrained resource to satisfy for demand of
all four products. from the standpoint of the entire company, if it is a choice between
sales of one unit of one product versus another, which product should the salespersons
emphasize?
a.r400
b.r300
c.r100
d.r200
7) the management of mcneff corporation would like to investigate the possibility of
basing its predetermined overhead rate on activity at capacity. the company’s controller
has provided an example to illustrate how this new system would work. in this example,
the allocation base is machine-hours.
if the company bases its predetermined overhead rate on capacity, by how much was
manufacturing overhead underapplied or overapplied?
a.$27,144 underapplied
b.$353,808 underapplied
c.$27,144 overapplied
d.$353,808 overapplied
8) guynn corporation’s most recent balance sheet and income statement appear below:
dividends on common stock during year 2 totaled $10 thousand. dividends on preferred
stock totaled $5 thousand. the market price of common stock at the end of year 2 was
$7.05 per share.
the dividend yield ratio for year 2 is closest to:
a.2.13%
b.0.71%
c.66.67%
d.1.42%
9) weise corporation produces and sells two products. data concerning those products
for the most recent month appear below:
fixed expenses for the entire company were $38,200.
the break-even point for the entire company is closest to:
a.$48,200
b.$38,200
c.$47,750
d.$11,800
10) the following data have been recorded for recently completed job 501 on its job cost
sheet. direct materials cost was $3,067. a total of 30 direct labor-hours and 104
machine-hours were worked on the job. the direct labor wage rate is $12 per labor-hour.
the company applies manufacturing overhead on the basis of machine-hours. the
predetermined overhead rate is $11 per machine-hour. the total cost for the job on its
job cost sheet would be:
a.$4,571
b.$3,757
c.$3,090
d.$3,427