1) weisgarber clinic uses client-visits as its measure of activity. during august, the clinic
budgeted for 3,900 client-visits, but its actual level of activity was 3,850 client-visits.
the clinic has provided the following data concerning the formulas to be used in its
budgeting for august:
the personnel expenses in the planning budget for august would be closest to:
a.$83,940
b.$88,444
c.$83,310
d.$87,310
2) eddins corporation has provided the following production and total cost data for two
levels of monthly production volume. the company produces a single product.
the best estimate of the total variable manufacturing cost per unit is:
a.$60.10
b.$38.40
c.$21.70
d.$22.30
3) which of the following statements concerning practical standards is incorrect?
a.practical standards can be used for product costing and cash budgeting
b.practical standards can be attained by the average worker
c.when practical standards are used, there is no reason to adjust standards if an old
machine is replaced by a newer, faster machine
d.under practical standards, large variances are less likely than under ideal standards
4) luc corporation manufactures and sells a single product. the company uses units as
the measure of activity in its budgets and performance reports. during february, the
company budgeted for 5,000 units, but its actual level of activity was 4,950 units. the
company has provided the following data concerning the formulas used in its budgeting
and its actual results for february:
the direct materials in the flexible budget for february would be closest to:
a.$91,575
b.$95,985
c.$92,500
d.$94,075
5) ivenson corporation uses the weighted-average method in its process costing system.
data concerning the first processing department for the most recent month are listed
below:
note: your answers may differ from those offered below due to rounding error. in all
cases, select the answer that is the closest to the answer you computed. to reduce
rounding error, carry out all computations to at least three decimal places.
the cost per equivalent unit for materials for the month in the first processing
department is closest to:
a.$14.07
b.$12.93
c.$12.68
d.$13.79
6) the following data for a production department relate to two accounting periods:
the best estimate of the fixed departmental cost is closest to:
a.$5,250
b.$59,500
c.$187,000
d.$246,500
7) during august, sherill corporation incurred $78,000 of actual manufacturing overhead
costs. during the same period, the manufacturing overhead applied to work in process
was $81,000.
the journal entry to record the application of manufacturing overhead to work in process
would include a:
a.credit to work in process of $78,000
b.debit to manufacturing overhead of $81,000
c.credit to manufacturing overhead of $81,000
d.debit to work in process of $78,000
8) abis corporation uses the weighted-average method in its process costing system. this
month, the beginning inventory in the first processing department consisted of 800
units. the costs and percentage completion of these units in beginning inventory were:
a total of 9,200 units were started and 8,200 units were transferred to the second
processing department during the month. the following costs were incurred in the first
processing department during the month:
the ending inventory was 80% complete with respect to materials and 20% complete
with respect to conversion costs.
note: your answers may differ from those offered below due to rounding error. in all
cases, select the answer that is the closest to the answer you computed. to reduce
rounding error, carry out all computations to at least three decimal places.
the cost per equivalent unit for materials for the month in the first processing
department is closest to:
a.$11.39
b.$12.44
c.$11.82
d.$11.99
9) erie company manufactures a single product. assume the following data for the year
just completed:
there were no units in inventory at the beginning of the year. during the year 30,000
units were produced and 25,000 units were sold. each unit sells for $35.
the company’s net operating income under variable costing would be:
a.$407,500
b.$421,250
c.$431,250
d.$417,500
10) which of the following is an assumption that is not made in most cost-volume-profit
calculations?
a.selling price, variable expense per unit, and fixed expense per unit do not change
throughout the relevant range
b.there is no change in inventory levels
c.in a multiproduct company, the sales mix does not change
d.the selling price is constant
11) gokey inc. bases its manufacturing overhead budget on budgeted direct labor-hours.
the variable overhead rate is $5.10 per direct labor-hour. the company’s budgeted fixed
manufacturing overhead is $78,840 per month, which includes depreciation of $20,520.
all other fixed manufacturing overhead costs represent current cash flows. the
november direct labor budget indicates that 5,400 direct labor-hours will be required in
that month.
required:
a. determine the cash disbursement for manufacturing overhead for november.
b. determine the predetermined overhead rate for november.
12) porter company has provided the following data for the second quarter of the most
recent year:
assume that direct labor is a variable cost and that there were no beginning or ending
inventories.
the gross margin for porter company for the second quarter was:
a.$(12,500)
b.$80,000
c.$131,500
d.$135,000
13) riven corporation has a single product whose selling price is $10. at an expected
sales level of $1,000,000, the company’s variable expenses are $600,000 and its fixed
expenses are $300,000. the marketing manager has recommended that the selling price
be increased by 20%, with an expected decrease of only 10% in unit sales. what would
be the company’s net operating income if the marketing manager’s recommendation is
adopted?
a.$132,000
b.$290,000
c.$180,000
d.$240,000
14) which of the following would be considered a “use” of cash for purposes of
constructing a statement of cash flows?
a.an increase in accounts payable
b.an increase in prepaid expenses
c.an increase in accrued liabilities
d.an increase in accumulated depreciation
15) hoeper clinic uses client-visits as its measure of activity. during january, the clinic
budgeted for 2,600 client-visits, but its actual level of activity was 2,570 client-visits.
the clinic has provided the following data concerning the formulas used in its budgeting
and its actual results for january:
the administrative expenses in the planning budget for january would be closest to:
a.$5,047
b.$4,960
c.$5,106
d.$4,957