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1) Hoppy Corporation compares monthly operating results to a static budget prepared at
the beginning of the month. When the actual level of activity is less than budgeted,
which of the following would be true?
A.Variable costs would show favorable variances.
B.Variable costs would show unfavorable variances.
C.Fixed costs would show favorable variances.
D.Fixed costs would show unfavorable variances.
2) A cement manufacturer has supplied the following data:
If the company increases its unit sales volume by 5% without increasing its fixed
expenses, then total net operating income should be closest to:
A.$5,000
B.$123,100
C.$105,000
D.$102,500
3) Roddey Corporation is a specialty component manufacturer with idle capacity.
Management would like to use its extra capacity to generate additional profits. A
potential customer has offered to buy 2,900 units of component GEE. Each unit of GEE
requires 3 units of material R39 and 8 units of material I59. Data concerning these two
materials follow:
Material R39 is in use in many of the company's products and is routinely replenished.
Material I59 is no longer used by the company in any of its normal products and
existing stocks would not be replenished once they are used up.
What would be the relevant cost of the materials, in total, for purposes of determining a
minimum acceptable price for the order for product GEE?
A) $224,605
B) $196,765
C) $228,204
D) $193,285
4) The net cash provided by (used in) operating activities last year was:
A.$105,000
B.$58,000
C.$130,000
D.$152,000
5) If a cost object such as a product or customer has a positive red margin, then:
A.its green margin will be positive.
B.its green margin may be positive, negative, or zero.
C.its green margin will be negative.
D.its green margin will be zero.
6) Up to how much should the company be willing to pay to obtain enough of the
constrained resource to satisfy demand for the two existing products?
A.$20.40 per minute
B.$3.60 per minute
C.$54.00 per minute
D.$6.80 per minute
Therefore, production of product E25Y would be 3,270 minutes / 15 minutes per unit of
E25Y = 218 units of E25Y. This means that there still exists unsatisfied demand for 302
units ( = 520 units - 218 units) of product E25Y. When used to produce this product,
each minute is worth $3.60. Therefore, the company should be willing to pay up to
$3.60 per minute to obtain more of the constrained resource.
7) Tabeling Corporation manufactures and sells a single product. The company uses
units as the measure of activity in its budgets and performance reports. During August,
the company budgeted for 6,500 units, but its actual level of activity was 6,540 units.
The company has provided the following data concerning the formulas used in its
budgeting and its actual results for August:
Data used in budgeting:
Actual results for August:
The net operating income in the flexible budget for August would be closest to:
A.$21,908
B.$21,300
C.$11,005
D.$10,871
8) Phoeuk Corporation manufactures and sells one product. The following information
pertains to the company's first year of operations:
The company does not have any variable manufacturing overhead costs or variable
selling and administrative costs. During its first year of operations, the company
produced 41,000 units and sold 40,000 units. The company's only product is sold for
$231 per unit.
The net operating income for the year under super-variable costing is:
A.$802,000
B.$714,000
C.$880,000
D.$824,000
9) Epley Corporation makes a product with the following standard costs:
In July the company produced 3,300 units using 12,240 pounds of the direct material
and 2,760 direct labor-hours. During the month, the company purchased 13,000 pounds
of the direct material at a cost of $35,100. The actual direct labor cost was $51,612 and
the actual variable overhead cost was $20,148.
The company applies variable overhead on the basis of direct labor-hours. The direct
materials purchases variance is computed when the materials are purchased.
The labor rate variance for July is:
A.$828 F
B.$828 U
C.$792 U
D.$792 F
10) Odonell Corporation estimates that its variable manufacturing overhead is $11.20
per machine-hour and its fixed manufacturing overhead is $563,640 per period.
If the denominator level of activity is 6,100 machine-hours, the predetermined overhead
rate would be:
A.$11.20 per machine-hour
B.$1,120.00 per machine-hour
C.$92.40 per machine-hour
D.$103.60 per machine-hour
11) On the Schedule of Cost of Goods Manufactured, the final Cost of Goods
Manufactured figure represents:
A.the amount of cost charged to Work in Process during the period.
B.the amount of cost transferred from Finished Goods to Cost of Goods Sold during the
period.
C.the amount of cost placed into production during the period.
D.the amount of cost of goods completed during the current year whether they were
started before or during the current year.
12) Mussenden 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 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:
How much overhead cost is allocated to the Order Filling activity cost pool under
activity-based costing?
A.$400
B.$4,700
C.$14,700
D.$5,100
