1) Feiler Corporation has total current assets of $483,000, total current liabilities of
$347,000, total stockholders’ equity of $1,057,000, total net plant and equipment of
$1,031,000, total assets of $1,514,000, and total liabilities of $457,000. The company’s
current ratio is closest to:
A.0.32
B.0.30
C.1.39
D.0.95
2) The Consumer Products Division of Mickolick Corporation had average operating
assets of $450,000 and net operating income of $38,700 in August. The minimum
required rate of return for performance evaluation purposes is 10%.
What was the Consumer Products Division’s residual income in August?
A.$3,870
B.$6,300
C.$(3,870)
D.$(6,300)
3) Muzyka 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.
The cost of a completed unit transferred out of the department is closest to:
A.$69.88
B.$75.56
C.$60.71
D.$65.92
4) ( The Zinger Corporation is considering an investment that has the following data:
Cash inflows occur evenly throughout the year. The payback period for this investment
is:
A.3.0 years
B.3.5 years
C.4.0 years
D.4.5 years
5) Division 1 of Ace Company makes and sells wheels that can either be sold to outside
customers or transferred to Division 2. The following data are available from last
month:
Division 1:
Division 2:
If Division 1 sells the wheels to Division 2, Division 1 can avoid $2 per unit in sales
commissions.
Suppose that Division 1 sells 7,500 units per month to outside customers. According to
the formula in the text, what is the lowest acceptable transfer price from the viewpoint
of the selling division if Division 2 requires 5,000 units per month from Division 1?
A.$33 per unit
B.$35 per unit
C.$47 per unit
D.$50 per unit
6) The following information relates to last year’s operations at the Bread Division of
Rison Bakery, Inc.:
What was the Bread Division’s minimum required rate of return last year?
A.12%
B.4%
C.15%
D.20%
7) The balance in the Finished Goods inventory account at the beginning of the year
was:
A.$15,900
B.$15,400
C.$21,200
D.$36,600
8) Sioux Corporation is estimating the following sales for the first four months of next
year:
Sales are normally collected 60% in the month of sale, 35% in the month following the
sale, and the remaining 5% being uncollectible. Based on this information, how much
cash should Sioux expect to collect during the month of April?
A.$286,500
B.$320,000
C.$192,000
D.$94,500
9) Albert Manufacturing Company manufactures a single product. The standard cost of
one unit of this product is:
During the month of October, 6,000 units were produced. Selected cost data relating to
the month’s production follow:
There was no beginning inventory of raw materials. The variable overhead rate is based
on direct labor-hours.
Required:
a. For direct materials, compute the price and quantity variances for the month, and
prepare journal entries to record activity for the month.
b. For direct labor, compute the rate and efficiency variances for the month, and prepare
a journal entry to record labor activity for the month.
c. For variable overhead, compute the rate variance for the month.
10) A manufacturing company that produces a single product has provided the
following data concerning its most recent month of operations:
What is the net operating income for the month under absorption costing?
A.$2,600
B.$15,900
C.$(1,700)
D.$13,300
11) Aaker Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
What is the total period cost for the month under variable costing?
A.$230,100
B.$194,100
C.$170,100
D.$60,000
12) Louie Corporation has provided the following data:
The company’s operating cycle for Year 2 is closest to:
A.81.0 days
B.150.5 days
C.79.2 days
D.9.7 days
13) Falmouth Corporation’s debt to equity ratio is 0.6. Current liabilities are $120,000,
long term liabilities are $360,000, and working capital is $140,000. Total assets of the
corporation must be:
A.$600,000
B.$1,200,000
C.$800,000
D.$1,280,000
14) The internal rate of return for a project can be determined:
A.only if the project’s cash flows are constant.
B.by finding the discount rate that yields a zero net present value for the project.
C.by subtracting the company’s cost of capital from the project’s profitability index.
D.only if the project profitability index is greater than zero.
15) Bowe Corporation’s fixed monthly expenses are $21,000 and its contribution
margin ratio is 61%. Assuming that the fixed monthly expenses do not change, what is
the best estimate of the company’s net operating income in a month when sales are
$74,000?
A.$7,860
B.$45,140
C.$24,140
D.$53,000
16) Gough Corporation has two divisions: Domestic and Foreign. Data from the most
recent month appear below:
The break-even in sales dollars for the company as a whole is closest to:
A.$609,794
B.$502,579
C.$107,216
D.$436,424
17) Andruschack Corporation uses activity-based costing to determine product costs for
external financial reports. The company has provided the following data concerning its
activity-based costing system:
The activity rate for the batch setup activity cost pool is closest to:
A.$33.90
B.$74.50
C.$84.80
D.$56.50
18) The company’s current ratio is closest to:
A.0.26
B.2.65
C.0.50
D.0.53
19) Younis Corporation’s income statement appears below:
The company’s net profit margin percentage is closest to:
A.37.1%
B.3.5%
C.2.4%
D.1.7%
20) The standard cost card of a particular product specifies that it requires 4.5 direct
labor-hours at $12.80 per direct labor-hour. During March, 2,300 units of the product
were produced and direct labor wages of $128,300 were incurred. A total of 11,700
direct labor-hours were worked. The direct labor variances for the month were:
A.Option A
B.Option B
C.Option C
D.Option D