1) dagnon corporation uses direct labor-hours in its predetermined overhead rate. at the
beginning of the year, the total estimated manufacturing overhead was $299,130. at the
end of the year, actual direct labor-hours for the year were 17,400 hours, manufacturing
overhead for the year was overapplied by $13,850, and the actual manufacturing
overhead was $294,130. the predetermined overhead rate for the year must have been
closest to:
a.$17.70
b.$17.19
c.$18.22
d.$16.90
2) (ignore income taxes in this problem.) the management of lassonde corporation is
considering the purchase of a machine that would cost $290,000, would last for 9 years,
and would have no salvage value. the machine would reduce labor and other costs by
$56,000 per year. the company requires a minimum pretax return of 8% on all
investment projects.
the present value of the annual cost savings of $56,000 is closest to:
a.$504,000
b.$349,832
c.$175,003
d.$699,316
3) dearman company, 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 the variable costing approach?
a.$98,700
b.$64,400
c.$65,100
d.$129,500
4) the following cost data pertain to the operations of polek department stores, inc., for
the month of march.
the northridge store is just one of many stores owned and operated by the company. the
cosmetics department is one of many departments at the northridge store. the central
warehouse serves all of the company’s stores.
what is the total amount of the costs listed above that are direct costs of the cosmetics
department?
a.$66,000
b.$105,000
c.$62,000
d.$56,000
5) the concept of economic value added (eva) is most similar to:
a.residual income
b.transfer pricing
c.segment reporting
d.return on investment
6) the following materials standards have been established for a particular product:
the following data pertain to operations concerning the product for the last month:
what is the materials quantity variance for the month?
a.$9,150 u
b.$8,850 u
c.$15,921 u
d.$15,399 u
7) wander company’s comparative balance sheet and income statement for last year
appear below:
the company declared and paid $39,000 in cash dividends during the year. the following
questions pertain to the company’s statement of cash flows.
the net cash provided by (used in) investing activities last year was:
a.$80,000
b.$(80,000)
c.$70,000
d.$(70,000)
8) litke corporation, a company that produces and sells a single product, has provided
its contribution format income statement for february.
if the company sells 5,100 units, its net operating income should be closest to:
a.$15,600
b.$11,700
c.$8,400
d.$14,733
9) shiplett corporation applies overhead to products based on machine-hours. the
denominator level of activity is 8,800 machine-hours. the budgeted fixed manufacturing
overhead costs are $317,680. in march, the actual fixed manufacturing overhead costs
were $314,300 and the standard machine-hours allowed for the actual output were
8,500 machine-hours.
required:
a. compute the budget variance for march. show your work!
b. compute the volume variance for march. show your work!
10) mccaughey corporation’s most recent balance sheet and income statement appear
below:
the average sale period for year 2 is closest to:
a.55.0 days
b.50.0 days
c.29.2 days
d.213.2 days
11) moorhouse clinic uses client-visits as its measure of activity. during december, the
clinic budgeted for 3,700 client-visits, but its actual level of activity was 3,690
client-visits. the clinic has provided the following data concerning the formulas used in
its budgeting and its actual results for december:
the spending variance for medical supplies in december would be closest to:
a.$680 f
b.$680 u
c.$725 u
d.$725 f