1) The following information was obtained from the records of the first processing
department of Bapst Corporation for the month of May. The company uses the FIFO
method in its process costing system.
All materials are added at the beginning of the manufacturing process.
The equivalent units for materials for the month is:
A.21,600 units
B.22,500 units
C.16,000 units
D.20,000 units
2) The times interest earned ratio of Whitney Corporation is 3.0. The interest expense
for the year is $21,000, and the corporation’s tax rate is 40%. The corporation’s after-tax
net income must be:
A.$63,000
B.$25,200
C.$30,000
D.$42,000
3) Jarvix Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
The company produces the same number of units every month, although the sales in
units vary from month to month. The company’s variable costs per unit and total fixed
costs have been constant from month to month.
What is the net operating income for the month under absorption costing?
A.$2,100
B.$25,900
C.$18,500
D.$17,800
4) Dul Corporation has provided the following data concerning an investment project
that it is considering:
The working capital would be released for use elsewhere at the end of the project in 3
years. The company’s discount rate is 7%. The net present value of the project is closest
to:
A.$(61,872)
B.$(9,648)
C.$10,000
D.$54,352
5) Vosquez Corporation’s Maintenance Department provides services to the company’s
two operating divisions–the Paints Division and the Stains Division. The variable costs
of the Maintenance Department are budgeted based on the number of cases produced by
the operating departments. The fixed costs of the Maintenance Department are budgeted
based on the number of cases produced by the operating departments during the
peak-period. Data appear below:
For performance evaluation purposes, how much Maintenance Department cost should
be charged to the Stains Division at the end of the year?
A.$502,770
B.$543,108
C.$527,890
D.$517,306
6) Melrose Corporation makes a product that uses a material with the following
standards:
The company budgeted for production of 5,800 units in September, but actual
production was 5,900 units. The company used 50,210 pounds of direct material to
produce this output. The company purchased 55,100 pounds of the direct material at
$5.80 per pound.
The direct materials purchases variance is computed when the materials are purchased.
The materials quantity variance for September is:
A.$3,770 F
B.$3,900 U
C.$3,770 U
D.$3,900 F
7) Sproull Inc., which produces a single product, has provided the following data for its
most recent month of operation:
The company had no beginning or ending inventories.
Required:
a. Compute the unit product cost under absorption costing. Show your work!
b. Compute the unit product cost under variable costing. Show your work!
8) Data concerning Massing Corporation’s single product appear below:
The company is currently selling 9,000 units per month. Fixed expenses are $837,000
per month. The marketing manager believes that a $16,000 increase in the monthly
advertising budget would result in a 150 unit increase in monthly sales. What should be
the overall effect on the company’s monthly net operating income of this change?
A.increase of $1,250
B.decrease of $16,000
C.decrease of $1,250
D.increase of $17,250
9) The Khaki Corporation has the following budgeted sales data:
The regular pattern of collection of credit sales is 40% in the month of sale, 50% in the
month following sale, and the remainder in the second month following the month of
sale. There are no bad debts.
The budgeted accounts receivable balance on February 28 would be:
A.$250,000
B.$210,000
C.$175,000
D.$215,000
10) The company’s total asset turnover for Year 2 is closest to:
A.1.25
B.0.80
C.6.57
D.0.15
11) The following data have been provided by Kilmartin Corporation from its
activity-based costing accounting system:
Distribution of Resource Consumption across Activity Cost Pools:
The “Other” activity cost pool consists of the costs of idle capacity and
organization-sustaining costs that are not assigned to products.
Required:
a. Determine the total amount of supervisory wages and factory utilities costs that
would be allocated to the Machining activity cost pool. Show your work!
b. Determine the total amount of supervisory wages and factory utilities costs that
would NOT be assigned to products. Show your work!