1) Compound K52E is a raw material used to make Pinkos Corporation’s major product.
The standard cost of compound K52E is $46.00 per ounce and the standard quantity is
5.0 ounces per unit of output. Data concerning the compound for March appear below:
The raw material was purchased on account.
The credits to the Raw Materials account for March would total:
A.$172,420
B.$184,000
C.$170,200
D.$164,220
2) Hagel Clinic uses client-visits as its measure of activity. During July, the clinic
budgeted for 2,300 client-visits, but its actual level of activity was 2,320 client-visits.
The clinic has provided the following data concerning the formulas used in its
budgeting and its actual results for July:
Data used in budgeting:
Actual results for July:
The revenue variance for July would be closest to:
A.$2,570 F
B.$1,678 U
C.$1,678 F
D.$2,570 U
3) Ricric Corporation has provided the following data for one of its products:
The throughput time for this operation is:
A.8 days
B.3 days
C.17 days
D.7.7 days
4) Dreary Credit Agency uses a standard cost system for the processing of its credit
applications. The labor standard at Dreary is 10 applications per 8 hour day at a
standard cost of $15 per hour.
During the last pay period, Dreary’s credit agents worked 1,920 hours and processed
2,500 applications. The total labor cost for the agents during this period was $29,184.
What was Dreary’s labor efficiency variance for this last pay period?
A.$384 Unfavorable
B.$816 Favorable
C.$1,200 Favorable
D.$1,500 Favorable
5) Boenisch Corporation produces and sells a single product with the following
characteristics:
The company is currently selling 8,000 units per month. Fixed expenses are $406,000
per month. Consider each of the following questions independently.
The marketing manager would like to cut the selling price by $12 and increase the
advertising budget by $30,000 per month. The marketing manager predicts that these
two changes would increase monthly sales by 1,800 units. What should be the overall
effect on the company’s monthly net operating income of this change?
A.decrease of $25,200
B.increase of $254,400
C.increase of $70,800
D.decrease of $70,800
6) Adah Corporation prepares its statement of cash flows using the indirect method.
Which of the following would be subtracted from net income in the operating activities
section of the statement?
A.Option A
B.Option B
C.Option C
D.Option D
7) Which one of the following transactions should be classified as a financing activity
on the statement of cash flows?
A.Purchase of equipment.
B.Purchase of the company’s own stock.
C.Sale of a long-term investment.
D.Payment of interest to a lender.
8) Keske Corporation has an activity-based costing system with three activity cost
pools-Machining, Order Filling, and Other. In the first stage allocations, costs in the two
overhead accounts, equipment depreciation and supervisory expense, are allocated to
the three activity cost pools based on resource consumption. Data used in the first stage
allocations follow:
Machining costs are assigned to products using machine-hours (MHs) and Order Filling
costs are assigned to products using the number of orders. The costs in the Other
activity cost pool are not assigned to products. Activity data for the company’s two
products follow:
Finally, the costs of Machining and Order Filling are combined with the following sales
and direct cost data to determine product margins.
The activity rate for the Order Filling activity cost pool under activity-based costing is
closest to:
A.$73.00 per order
B.$5.00 per order
C.$12.50 per order
D.$22.90 per order
9) Poor quality materials could have an unfavorable effect on which of the following
variances?
A.Option A
B.Option B
C.Option C
D.Option D
10) To the nearest whole dollar, what should be the total cost of operating the helpline
costs at a volume of 33,800 calls in a month? (Assume that this call volume is within
the relevant range.)
A) $369,000
B) $327,515
C) $392,370
D) $415,740