1) hurst co. manufacturers and sells a single product. price and cost data regarding this
product are as follows:
how many units need to be sold to earn an annual net operating income equal to 10% of
sales?
a.44,000 units
b.53,200 units
c.54,500 units
d.47,500 units
2) murphree clinic uses client-visits as its measure of activity. during april, the clinic
budgeted for 3,300 client-visits, but its actual level of activity was 3,350 client-visits.
the clinic has provided the following data concerning the formulas used in its budgeting
and its actual results for april:
the overall revenue and spending variance (i.e., the variance for net operating income in
the revenue and spending variance column on the flexible budget performance report)
for april would be closest to:
a.$5,390 f
b.$6,265 u
c.$5,390 u
d.$6,265 f
3) sharp company has a process costing system. the following data relate to the
company’s mixing department for a recent month:
all materials are added at the beginning of the mixing process.
required:
a. compute the equivalent units of production for materials using the fifo method.
b. compute the equivalent units of production for conversion using the fifo method.
c. compute the equivalent units of production for materials using the weighted-average
method.
d. compute the equivalent units of production for conversion using the
weighted-average method.
4) the clemson company reported the following results last year for the manufacture and
sale of one of its products known as a tam.
clemson company is trying to determine whether or not to discontinue the manufacture
and sale of tams. the operating results reported above for last year are expected to
continue in the foreseeable future if the product is not dropped. the fixed manufacturing
overhead represents the costs of production facilities and equipment that the tam
product shares with other products produced by clemson. if the tax product were
dropped, there would be no change in the fixed manufacturing costs of the company.
assume that discontinuing the tam product would result in a $120,000 increase in the
contribution margin of other product lines. how many tams would have to be sold next
year for the company to be as well off as if it just dropped the line and enjoyed the
increase in contribution margin from other products?
a.5,000 units
b.6,000 units
c.6,500 units
d.7,000 units
5) whetstine 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 september, the kennel budgeted
for 3,200 tenant-days, but its actual level of activity was 3,180 tenant-days. the kennel
has provided the following data concerning the formulas to be used in its budgeting:
the expendables in the flexible budget for september would be closest to:
a.$27,630
b.$27,864
c.$27,517
d.$27,800
6) the pump division of nord co. produces pumps which it sells for $20 each to outside
customers. the pump division’s cost per pump, based on normal volume of 500,000
units per period, is shown below:
nord has recently purchased a small company which makes automatic dishwashers. this
new company is presently purchasing 100,000 pumps each year from another
manufacturer. since the pump division has a capacity of 600,000 pumps per year and is
now selling only 500,000 pumps to outside customers, management would like the new
dishwasher division to begin purchasing its pumps internally. the dishwasher division is
now paying $20 per pump, less a 10% quantity discount. the pump division could avoid
$1 per unit in variable costs on any sales to the dishwasher division.
required:
a. treating each division as an independent profit center, within what price range should
the internal sales price fall?
b. now assume that the pump division is selling 600,000 pumps per year on the outside.
determine the appropriate transfer price. show all computations.
7) 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 total manufacturing cost for august was:
a.$185,000
b.$182,000
c.$120,000
d.$74,000
8) dadisman corporation’s most recent balance sheet and income statement appear
below:
dividends on common stock during year 2 totaled $30 thousand. dividends on preferred
stock totaled $20 thousand. the market price of common stock at the end of year 2 was
$6.75 per share.
the dividend payout ratio for year 2 is closest to:
a.42.9%
b.100.0%
c.60.0%
d.2,000.0%
9) the following data pertain to wistron company’s two products:
if fixed expenses for the company as a whole are $60,000 and the product mix is
constant, the overall break-even point for the company would be:
a.$150,000
b.$153,846
c.$100,000
d.$132,000
10) how many units would the company have to sell to attain the target profit of
$150,000?
a.22,000
b.37,500
c.25,000
d.26,667
11) gluth corporation has provided the following data for the month of july. the
beginning balance in the finished goods inventory account was $56,000 and the ending
balance was $49,000. sales totaled $290,000. cost of goods manufactured was
$147,000, selling expense was $17,000, and administrative expense was $68,000.
the cost of goods sold for july was:
a.$232,000
b.$140,000
c.$154,000
d.$147,000