1) a manufacturing company that produces a single product has provided the following
data concerning its most recent month of operations:
what is the variable costing unit product cost for the month?
a.$97
b.$90
c.$68
d.$75
2) guynn corporation’s most recent balance sheet and income statement appear below:
dividends on common stock during year 2 totaled $10 thousand. dividends on preferred
stock totaled $5 thousand. the market price of common stock at the end of year 2 was
$7.05 per share.
the dividend payout ratio for year 2 is closest to:
a.20.0%
b.30.0%
c.1000.0%
d.18.2%
3) squillace corporation uses customers served as its measure of activity. during
october, the company budgeted for 38,000 customers, but actually served 35,000
customers. the company has provided the following data concerning the formulas used
in its budgeting and its actual results for october:
required:
prepare the company’s flexible budget performance report for october. label each
variance as favorable (f) or unfavorable (u).
4) a manufacturer of tiling grout has supplied the following data:
the company’s break-even in unit sales is closest to:
a.272,308
b.98,333
c.92,055
d.60,488
5) look manufacturing corporation has a traditional costing system in which it applies
manufacturing overhead to its products using a predetermined overhead rate based on
direct labor-hours (dlhs). the company has two products, n06d and m09k, about which it
has provided the following data:
the company’s estimated total manufacturing overhead for the year is $2,532,200 and
the company’s estimated total direct labor-hours for the year is 44,000.
the company is considering using a variation of activity-based costing to determine its
unit product costs for external reports. data for this proposed activity-based costing
system appear below:
the unit product cost of product p93s under the company’s traditional costing system is
closest to:
a.$68.48
b.$63.26
c.$30.70
d.$40.30
6) a segment of a business responsible for both revenues and expenses would be called:
a.a cost center
b.an investment center
c.a profit center
d.residual income
7) (ignore income taxes in this problem.) jones and company has just purchased a new
piece of equipment, the cost characteristics of which are given below:
the company uses a required rate of return of 10% and depreciates equipment using the
straight-line method.
the simple rate of return for the investment (rounded to the nearest tenth of a percent)
is:
a.20.0%
b.13.3%
c.18.0%
d.10.0%
8) outram corporation is presently making part i14 that is used in one of its products. a
total of 8,000 units of this part are produced and used every year. the company’s
accounting department reports the following costs of producing the part at this level of
activity:
an outside supplier has offered to make and sell the part to the company for $14.80
each. if this offer is accepted, the supervisor’s salary and all of the variable costs can be
avoided. the special equipment used to make the part was purchased many years ago
and has no salvage value or other use. the allocated general overhead represents fixed
costs of the entire company, none of which would be avoided if the part were purchased
instead of produced internally. if management decides to buy part i14 from the outside
supplier rather than to continue making the part, what would be the annual impact on
the company’s overall net operating income?
a.net operating income would decline by $15,200 per year
b.net operating income would increase by $15,200 per year
c.net operating income would increase by $52,800 per year
d.net operating income would decline by $52,800 per year
9) janet company produces a game that sells for $17 per game. variable expenses are $9
per game and fixed expenses total $172,000 annually.
the contribution margin ratio is closest to:
a.47.1%
b.2.1%
c.1.9%
d.52.9%
10) which of the following would be classified as a financing activity on the statement
of cash flows?
a.interest paid on bonds issued by the reporting company
b.dividends paid to shareholders of the company on the company’s common stock
c.interest received on investments in another company’s bonds
d.dividends received on investments in another company’s common stock
11) rennin dairy corporation is considering a plant expansion decision that has an
estimated useful life of 20 years. this project has an internal rate of return of 15% and a
payback period of 9.6 years. how would a decrease in the expected salvage value from
this project in 20 years affect the following for this project?
a.choice a
b.choice b
c.choice c
d.choice d
e.choice e
12) (ignore income taxes in this problem.) the connelly company has funds available to
invest in the following project:
the working capital needed now would be released at the end of the seven years for
investment elsewhere.
the present value of the stream of annual net cash inflows from operations is:
a.$228,720
b.$420,000
c.$209,880
d.$150,640
13) robert smith earns $6 per hour. for each hour over 40 he works, he is paid
time-and-a-half. during a given week he worked 45 hours and had no idle time. how
much of his weekly wages would be charged to the manufacturing overhead account?
a.$30
b.$45
c.$15
d.$0
14) the following are budgeted data:
each unit requires 0.75 hours of direct labor at a cost of $6.50 per hour. what is the cost
of direct labor for may?
a.$73,125
b.$82,875
c.$63,375
d.$78,000
15) in a plant expansion capital budgeting decision, which of the following amounts
would be affected by a change in the tax rate?
a.the present value of the cash inflows from increased sales
b.the present value of the tax savings from the depreciation tax shield
c.the present value of the cost of building repairs needed in year 8 of the project
d.all of these
16) excerpts from shelton corporation’s most recent balance sheet appear below:
sales on account in year 2 amounted to $1,320 and the cost of goods sold was $890.
the inventory turnover for year 2 is closest to:
a.0.93
b.6.15
c.1.08
d.6.38