1) The net cash provided by (used in) operating activities for the year was:
A.$23
B.$133
C.$157
D.$87
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 minimum required return in August?
A.$3,870
B.$38,700
C.$48,870
D.$45,000
3) Yoder Corporation uses the weighted-average method in its process costing system.
The following data pertain to operations in the first processing department for a recent
month:
What was the cost per equivalent unit for materials during the month?
A.$0.30
B.$0.25
C.$0.20
D.$0.15
4) The company has received a special, one-time-only order for 500 units of component
D53. There would be no variable selling expense on this special order and the total
fixed manufacturing overhead and fixed selling and administrative expenses of the
company would not be affected by the order. Assuming that Dockwiller has excess
capacity and can fill the order without cutting back on the production of any product,
what is the minimum price per unit below which the company should not accept the
special order?
A.$67 per unit
B.$30 per unit
C.$150 per unit
D.$47 per unit
5) Clay Corporation has projected sales and production in units for the second quarter
of the coming year as follows:
Cash-related production costs are budgeted at $5 per unit produced. Of these production
costs, 40% are paid in the month in which they are incurred and the balance in the
following month. Selling and administrative expenses will amount to $100,000 per
month. The accounts payable balance on March 31 totals $190,000, which will be paid
in April.
All units are sold on account for $14 each. Cash collections from sales are budgeted at
60% in the month of sale, 30% in the month following the month of sale, and the
remaining 10% in the second month following the month of sale. Accounts receivable
on April 1 totaled $500,000 ($90,000 from February’s sales and $410,000 from March’s
sales).
Required:
a. Prepare a schedule for each month showing budgeted cash disbursements for Clay
Corporation.
b. Prepare a schedule for each month showing budgeted cash receipts for Clay
Corporation.
6) The management of Digges Corporation would like to investigate the possibility of
basing its predetermined overhead rate on activity at capacity. The Corporation’s
controller has provided an example to illustrate how this new system would work. In
this example, the allocation base is machine-hours and the estimated amount of the
allocation base for the upcoming year is 51,000 machine-hours. In addition, capacity is
63,000 machine-hours and the actual level of activity for the year is 53,300
machine-hours. All of the manufacturing overhead is fixed and is $1,702,890 per year.
For simplicity, it is assumed that this is the estimated manufacturing overhead for the
year as well as the manufacturing overhead at capacity. It is further assumed that this is
also the actual amount of manufacturing overhead for the year. If the Corporation bases
its predetermined overhead rate on capacity, by how much was manufacturing overhead
underapplied or overapplied?
A.$76,797 Overapplied
B.$262,191 Overapplied
C.$262,191 Underapplied
D.$76,797 Underapplied
7) Widman, Inc. makes and sells only one product and uses standard costing. The
standard cost sheet for one unit of product includes the following:
Direct materials: 5 grams at $0.35 per gram
Direct labor: 1 hour at $8 per hour
Last period the company had the following results:
5,000 grams of direct materials purchased at $0.40 per gram
4,000 grams of direct materials used in production
900 units of product were made
850 hours of direct labor were used at $8.50 per hour
The journal entry to record the use of direct materials in production last period would
include:
A.Work in process $1,400, Debit; materials quantity variance $175, Debit
B.Work in process $1,575, Debit; materials quantity variance $175, Credit
C.Work in process $1,400, Debit; materials quantity variance $175, Credit
D.Work in process $1,575, Debit; materials quantity variance $175, Debit
8) Santistevan Corporation has provided the following information concerning a capital
budgeting project:
The company uses straight-line depreciation on all equipment. Assume cash flows
occur at the end of the year except for the initial investments. The company takes
income taxes into account in its capital budgeting.
The net present value of the project is closest to:
A.$58,218
B.$98,370
C.$112,000
D.$36,168
9) Gary Corporation produces products X, Y, and Z from a single raw material input.
Budgeted data for the next month is as follows:
If the cost of raw material input is $150,000, which of the products should be processed
beyond the split-off point?
A.Option A
B.Option B
C.Option C
D.Option D
10) Crossbow Corp. produces a single product. Data concerning June’s operations
follow:
Under absorption costing, ending inventory on the balance sheet would be valued at:
A.$10,000
B.$7,000
C.$9,000
D.$12,000
11) Last year Easton Corporation reported sales of $720,000, a contribution margin
ratio of 30% and a net loss of $24,000. Based on this information, the break-even point
was:
A.$640,000
B.$880,000
C.$744,000
D.$800,000
12) Canevari Corporation makes a product that uses a material with the following
standards:
The company budgeted for production of 1,300 units in April, but actual production was
1,200 units. The company used 3,750 kilos of direct material to produce this output.
The company purchased 4,100 kilos of the direct material at a total cost of $8,610. The
direct materials purchases variance is computed when the materials are purchased.
The materials price variance for April is:
A.$360 F
B.$410 U
C.$410 F
D.$360 U
13) Lastufka Corporation is considering a capital budgeting project. The project would
require an investment of $240,000 in equipment with a 4 year expected life and zero
salvage value. The company uses straight-line depreciation and the annual depreciation
expense will be $60,000. Annual incremental sales would be $500,000 and annual
incremental cash operating expenses would be $390,000. The company’s income tax
rate is 35% and the after-tax discount rate is 8%. The company takes income taxes into
account in its capital budgeting. Assume cash flows occur at the end of the year except
for the initial investments.
The net present value of the project is closest to:
A.$66,360
B.$306,360
C.$130,000
D.$124,320
14) At an activity level of 8,800 units, Pember Corporation’s total variable cost is
$146,520 and its total fixed cost is $219,296.
Required:
For the activity level of 8,900 units, compute: (a) the total variable cost; (b) the total
fixed cost; (c) the total cost; (d) the average variable cost per unit; (e) the average fixed
cost per unit; and (f) the average total cost per unit. Assume that this activity level is
within the relevant range.
15) Lepage Corporation has provided its contribution format income statement for
January. The company produces and sells a single product.
If the company sells 4,700 units, its total contribution margin should be closest to:
A.$83,600
B.$18,373
C.$89,300
D.$98,000
16) Ok Corporation keeps careful track of the time required to fill orders. Data
concerning a particular order appear below:
The manufacturing cycle efficiency (MCE) was closest to:
A.0.47
B.0.02
C.0.07
D.0.12
17) ( Given the following data:
The life of the equipment must be:
A.it is impossible to determine from the data given
B.5 years
C.10 years
D.15 years
18) The company is considering launching a new product that would have a variable
cost of $119.00 per unit. It would require 17 minutes of the constrained resource. The
absolute minimum acceptable selling price for the new product should be:
A.$119.00
B.$180.20
C.$122.60
D.$183.60
Production of product B27D would be 3,200 minutes / 16 minutes per unit of B27D =
200 units of B27D.
Because unsatisfied demand exists for product B27D, its profitability index establishes
the opportunity cost for the constrained resource.
19) Higgins Labs, Inc. uses a process costing system. The following data are available
for one department for October:
The department started 45,000 units into production during the month and completed
and transferred 50,000 units to the next department.
Assuming the weighted-average method is used, the equivalent units for conversion for
October would be:
A.55,000 units
B.50,000 units
C.53,500 units
D.56,500 units