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1) 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.
what are the equivalent units for conversion costs for the month in the first processing
department?
a.4,900
b.5,880
c.6,300
d.980
2) tolla company is estimating the following sales for the first six months of next year:
sales at tolla are normally collected as 70% in the month of sale, 25% in the month
following the sale, and the remaining 5% being uncollectible. also, those customers
paying in the month of sale are given a 2% discount. based on this information, how
much cash should tolla expect to collect during the month of april?
a.$281,260
b.$361,260
c.$366,010
d.$393,760
3) springmeyer clinic uses client-visits as its measure of activity. during august, the
clinic budgeted for 2,900 client-visits, but its actual level of activity was 2,940
client-visits. the clinic has provided the following data concerning the formulas used in
its budgeting and its actual results for august:
the personnel expenses in the planning budget for august would be closest to:
a.$69,600
b.$73,800
c.$70,560
d.$73,200
4) coble company recently changed the selling price of one of its products. data
concerning sales for comparable periods before and after the price change are presented
below.
the product's variable cost is $15.70 per unit.
the product's price elasticity of demand as defined in the text is closest to:
a.-1.51
b.-1.23
c.-2.09
d.-1.47
5) if variable overhead is applied on the basis of direct labor-hours and the variable
overhead rate variance is favorable, then:
a.actual variable overhead rate exceeded the standard rate
b.standard variable overhead rate exceeded the actual rate
c.actual direct labor-hours exceeded the standard direct labor-hours allowed for the
actual output
d.standard direct labor-hours allowed for the actual output exceeded the actual hours
6) management of sourwine corporation is considering whether to purchase a new
model 320 machine costing $389,000 or a new model 280 machine costing $318,000 to
replace a machine that was purchased 6 years ago for $376,000. the old machine was
used to make product c78p until it broke down last week. unfortunately, the old
machine cannot be repaired.
management has decided to buy the new model 280 machine. it has less capacity than
the new model 320 machine, but its capacity is sufficient to continue making product
c78p.
management also considered, but rejected, the alternative of simply dropping product
c78p. if that were done, instead of investing $318,000 in the new machine, the money
could be invested in a project that would return a total of $405,000.
in making the decision to buy the model 280 machine rather than the model 320
machine, the sunk cost was:
a.$376,000
b.$318,000
c.$405,000
d.$389,000
7) labossiere corporation has provided the following data for november.
the budget variance for november is:
a.$5,590 u
b.$2,920 f
c.$5,590 f
d.$2,920 u
8) compound v61z is used to make rigby corporation's major product. the standard cost
of compound v61z is $33.60 per ounce and the standard quantity is 5.5 ounces per unit
of output. in the most recent month, 3,130 ounces of the compound were used to make
700 units of the output. when recording the use of materials in production, raw
materials would be:
a.credited for $129,360
b.credited for $105,168
c.debited for $105,168
d.debited for $129,360
9) reciprocal service department costs are:
a.allocated to producing departments under the direct method but not allocated to
producing departments at all under the step-down method
b.allocated to producing departments under the step-down method but not allocated to
producing departments at all under the direct method
c.not allocated to producing departments under either the direct or the step-down
methods
d.allocated to producing departments under both the direct and step-down methods
10) stent 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 february, the kennel budgeted
for 3,000 tenant-days, but its actual level of activity was 2,950 tenant-days. the kennel
has provided the following data concerning the formulas used in its budgeting and its
actual results for february:
the wages and salaries in the planning budget for february would be closest to:
a.$22,670
b.$24,183
c.$23,780
d.$23,000
11) pratt corporation uses the fifo method in its process costing system. data concerning
the first processing department for the most recent month are listed below:
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 conversion costs for the first department for the month is
closest to:
a.$48.18
b.$46.80
c.$48.98
d.$46.65
12) quezaire corporation, a manufacturer, uses the step-down method to allocate service
department costs to operating departments. the company has two service departments,
administration and facilities, and two operating departments, assembly and finishing.
data concerning those departments follow:
administration department costs are allocated first on the basis of labor hours and
facilities department costs are allocated second on the basis of space occupied.
in the first step of the allocation, the amount of administration department cost allocated
to the assembly department is closest to:
a.$32,640
b.$14,569
c.$34,124
d.$29,440
13) the dividend yield ratio for year 2 is closest to:
a.1.75%
b.7.02%
c.80.00%
d.8.77%
14) financial statements for marcalo company appear below:
marcalo company's average sale period for year 2 was closest to:
a.20.6 days
b.29.4 days
c.30.0 days
d.42.9 days
15) mauve company uses a standard cost system in which it applies manufacturing
overhead to units of product on the basis of standard direct labor-hours (dlhs). the
following data pertain to last month:
the fixed manufacturing overhead budget variance is:
a.$400 u
b.$500 f
c.$300 f
d.$300 u
16) the management of pundt 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 and the estimated amount of the allocation base for
the upcoming year is 15,000 machine-hours. in addition, capacity is 19,000
machine-hours and the actual level of activity for the year is 15,100 machine-hours. all
of the manufacturing overhead is fixed and is $45,600 per year. for simplicity, it is
assumed that this is the estimated manufacturing overhead for the year as well as the
manufacturing overhead at capacity. it is further assumed that this is also the actual
amount of manufacturing overhead for the year. a number of jobs were worked on
during the year, one of which was job k41p. this job required 140 machine-hours.
if the company bases its predetermined overhead rate on capacity, by how much was
manufacturing overhead underapplied or overapplied?
a.$304 overapplied
b.$9,360 underapplied
c.$9,360 overapplied
d.$304 underapplied
17) ozdemir company uses the fifo method in its process costing system. operating data
for the brazing department for the month of november appear below:
what were the equivalent units for conversion costs in the brazing department for
november?
a.57,500
b.56,680
c.56,100
d.59,020
