1) mccaughey corporation’s most recent balance sheet and income statement appear
below:
the accounts receivable turnover for year 2 is closest to:
a.1.15
b.9.62
c.0.87
d.8.93
2) the lee company uses a job-order costing system. the following data were recorded
for june:
overhead is charged to production at 80% of direct materials cost. jobs 235, 237, and
238 were completed during june and transferred to finished goods. jobs 235 and 238
have been delivered to customers.
lee’s work in process inventory balance on june 30 was:
a.$4,100
b.$3,940
c.$3,300
d.$9,450
3) reenu company manufactures wigs out of used dental floss. the variable cost
standards for wig production developed by reenu are as follows:
variable overhead at reenu is based on direct labor-hours. the actual results for the
month of october were as follows:
what is reenu’s materials price variance for october?
a.$1,680 favorable
b.$12,760 unfavorable
c.$14,440 unfavorable
d.$15,420 unfavorable
4) ismail corporation uses the fifo method in its process costing system. the first
processing department, the forming department, started the month with 21,000 units in
its beginning work in process inventory that were 10% complete with respect to
conversion costs. the conversion cost in this beginning work in process inventory was
$6,090. an additional 98,000 units were started into production during the month and
95,000 units were completed and transferred to the next processing department. there
were 24,000 units in the ending work in process inventory of the forming department
that were 30% complete with respect to conversion costs. a total of $269,269 in
conversion costs were incurred in the department during the month.
what would be the cost per equivalent unit for conversion costs for the month? (round
off to three decimal places.)
a.$2.900
b.$2.748
c.$2.690
d.$2.314
5) which of the following persons would occupy a line position in a department store?
i. sales manager
ii. manager, furniture department
iii. manager, advertising department
iv. manager, personnel department
a.only i
b.only i and ii
c.only i, ii, iii
d.i, ii, iii, iv
6) a manufacturing company uses a standard costing system in which standard
machine-hours (mhs) is the measure of activity. data from the company’s flexible
budget for manufacturing overhead are given below:
the following data pertain to operations for the most recent period:
what was the variable overhead efficiency variance for the period to the nearest dollar?
a.$898 f
b.$1,875 u
c.$227 u
d.$224 u
7) lauter printing uses two measures of activity, press runs and book set-ups, in the cost
formulas in its budgets and performance reports. the cost formula for wages and salaries
is $5,300 per month plus $480 per press run plus $1,080 per book set-up. the company
expected its activity in october to be 169 press runs and 64 book set-ups, but the actual
activity was 167 press runs and 60 book set-ups. the actual cost for wages and salaries
in october was $155,690.
the wages and salaries in the flexible budget for october would be closest to:
a.$155,540
b.$155,690
c.$150,260
d.$153,699
8) tanner company’s most recent contribution format income statement is presented
below:
the company sells its only product for $15 per unit. there were no beginning or ending
inventories.
required:
a. compute the company’s break-even point in units sold.
b. compute the total variable expenses at the break-even point.
c. how many units would have to be sold to earn a target profit of $9,000?
d. the sales manager is convinced that a $6,000 increase in the advertising budget would
increase total sales by $25,000. would you advise the increased advertising outlay?
9) during the month of august, direct labor cost totaled $13,000 and direct labor cost
was 20% of prime cost. if total manufacturing costs during august were $88,000, the
manufacturing overhead was:
a.$75,000
b.$23,000
c.$65,000
d.$52,000
10) compound a39a is used by ashline corporation to make one of its products. the
standard cost of compound a39a is $32.00 per ounce and the standard quantity is 8.5 per
unit of output. data concerning the compound in the most recent month appear below:
the raw material was purchased on account.
required:
a. record the purchase of the raw material in a journal entry.
b. record the use of the raw material in production in a journal entry.
11) lesmerises corporation’s most recent balance sheet and income statement appear
below:
dividends on common stock during year 2 totaled $40 thousand. dividends on preferred
stock totaled $10 thousand. the market price of common stock at the end of year 2 was
$2.85 per share.
the earnings per share of common stock for year 2 is closest to:
a.$0.69
b.$0.35
c.$0.30
d.$0.50
12) wang corporation would like to determine the relative profitability of a number of
jobs. for example, the revenue from job q86d is $105,300 and its avoidable costs
amount to $63,180, resulting in an incremental profit of $42,120. furthermore, the job
requires 270 hours of the constrained resource. what is the profitability index for job
q86d?
a.0.40
b.$234 per hour
c.$156 per hour
d.$390 per hour
13) mukluk company uses the fifo method in its process costing system. the conversion
cost for the month of april is $5.00 per equivalent unit and the material cost is $2.90 per
equivalent unit. at the beginning of the month, 1,000 units were in process that were
100% complete with respect to materials and 30% complete with respect to conversion,
with a total cost at that point of $2,400. if these units are fully complete by the end of
the month, their total cost will be:
a.$3,500
b.$3,900
c.$5,900
d.$8,000
14) the costs of direct materials are classified as:
a.choice a
b.choice b
c.choice c
d.choice d
15) the james company has four departments with data as follows:
cafeteria costs are allocated on the basis of number of employees. if the step-down
method is used with costs of the cafeteria allocated first, the amount of cost allocated
from the cafeteria to maintenance would be:
a.$0
b.$625
c.$698
d.$750
16) a company had the following results last year: sales, $700,000; return on
investment, 28%; and margin, 8%. the average operating assets last year were:
a.$200,000
b.$2,450,000
c.$540,000
d.$2,500,000
17) the cost of goods sold in a merchandising company typically would be classified as
a:
a.fixed cost
b.variable cost
c.step-variable cost
d.mixed cost
18) florez corporation’s two products have the following characteristics:
the constrained resource is a particular machine that is available for 10,000 minutes
each month. each unit of product u98w requires 19 minutes on this machine and each
unit of product m01s requires 7 minutes on this machine.
what is the maximum contribution margin the company can earn per month?
a.$22,822
b.$31,928
c.$23,948
d.$21,554
19) (ignore income taxes in this problem.) fast food, inc., has purchased a new donut
maker. it cost $16,000 and has an estimated life of 10 years. the following annual donut
sales and expenses are projected:
the simple rate of return for the new machine is closest to:
a.20%
b.37.5%
c.27.5%
d.80.0%