1) The markup percentage on the new product would be closest to:
A.15.0%
B.46.6%
C.31.6%
D.50.0%
2) Noel Enterprises has budgeted sales in units for the next five months as follows:
Past experience has shown that the ending inventory for each month must be equal to
10% of the next month’s sales in units. The inventory on May 31 contained 400 units.
The company needs to prepare a production budget for the second quarter of the year.
The total number of units to be produced in July is:
A.5,580 units
B.5,400 units
C.6,120 units
D.5,220 units
3) The cost of goods manufactured for August is:
A.$227,000
B.$229,000
C.$219,000
D.$217,000
4) Berends Corporation makes a product with the following standard costs:
The company reported the following results concerning this product in April.
The company applies variable overhead on the basis of direct labor-hours. The direct
materials purchases variance is computed when the materials are purchased.
The materials quantity variance for April is:
A.$8,430 U
B.$8,430 F
C.$7,868 U
D.$7,868 F
5) Kingsolver Corporation has provided the following data concerning an investment
project that it is considering:
The working capital would be released for use elsewhere at the end of the project. The
net present value of the project is closest to:
A.$(118,495)
B.$(51,000)
C.$(89,791)
D.$(105,791)
6) The direct materials cost was:
A.$8,000
B.$10,000
C.$7,400
D.$4,600
7) The new product would require an investment of $1,200,000 on which the company
would like to earn a return of 22 percent. The markup using the absorption costing
approach would be:
A.93.8%
B.32.6%
C.71.3%
D.57.5%
8) Grable Corporation uses the step-down method to allocate service department costs
to operating departments. The company has two service departments, General
Management and Physical Plant, and two operating departments, Sales and After-Sales.
Data concerning those departments follow:
General Management Department costs are allocated first on the basis of employee time
and Physical Plant Department costs are allocated second on the basis of space
occupied. The total After-Sales Department cost after allocations is closest to:
A.$309,430
B.$306,713
C.$293,590
D.$309,883
9) Dratif Corporation’s working capital is $33,000 and its current liabilities are $80,000.
The corporation’s current ratio is closest to:
A.1.41
B.0.59
C.3.42
D.0.41
10) Kari 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 May, the kennel budgeted for
3,200 tenant-days, but its actual level of activity was 3,230 tenant-days. The kennel has
provided the following data concerning the formulas used in its budgeting and its actual
results for May:
Data used in budgeting:
Actual results for May:
The facility expenses in the flexible budget for May would be closest to:
A.$20,394
B.$20,778
C.$19,700
D.$19,805
11) Weightman Corporation’s net operating income in Year 2 was $76,385, net income
before taxes was $55,385, and the net income was $36,000. Total common stock was
$200,000 at the end of both Year 2 and Year 1. The par value of common stock is $4 per
share. The company’s total stockholders’ equity at the end of Year 2 amounted to
$983,000 and at the end of Year 1 to $950,000. The market price per share at the end of
Year 2 was $7.92. The company’s price-earnings ratio for Year 2 is closest to:
A.7.14
B.0.58
C.5.18
D.11.00
12) In a standard cost system, overhead is applied to production on the basis of:
A.the denominator hours chosen for the period.
B.the actual hours required to complete the actual output of the period.
C.the standard hours allowed to complete the actual output of the period.
13) The total cash flow net of income taxes in year 2 is:
A.$90,000
B.$54,000
C.$130,000
D.$103,000
14) Prehn Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
The company does not have any variable manufacturing overhead costs or variable
selling and administrative costs. During its first year of operations, the company
produced 36,000 units and sold 30,000 units. The company’s only product is sold for
$251 per unit.
The unit product cost under super-variable costing is:
A.$81 per unit
B.$109 per unit
C.$227 per unit
D.$179 per unit
15) The company’s net cash provided by operating activities is:
A.$29,000
B.$19,000
C.$27,000
D.$21,000
16) In the most recent month, Shoemaker Corporation’s total contribution margin was
$29,600 and its net operating income $3,000.
Required:
a. Compute the degree of operating leverage to two decimal places.
b. Using the degree of operating leverage, estimate the percentage change in net
operating income that should result from a 10% increase in sales.
17) Pushkin 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.$43.65
B.$41.57
C.$42.67
D.$43.33
18) In capital budgeting computations, discounted cash flow methods:
A.automatically provide for recovery of initial investment.
B.can’t be used unless cash flows are uniform from year to year.
C.assume that all cash flows occur at the beginning of a period.
19) What is one of the accounts that Chelm should credit when goods are sold?
A.Finished Goods
B.Work in Process
C.Cost of Goods Sold
D.Manufacturing Overhead
E.Cost of Goods Manufactured