1) The company’s dividend yield ratio is closest to:
A.1.7%
B.17.1%
C.1.3%
D.26.3%
2) A customer has requested that Gamba Corporation fill a special order for 3,000 units
of product Q41 for $25.00 a unit. While the product would be modified slightly for the
special order, product Q41’s normal unit product cost is $21.40:
Direct labor is a variable cost. The special order would have no effect on the company’s
total fixed manufacturing overhead costs. The customer would like modifications made
to product Q41 that would increase the variable costs by $7.00 per unit and that would
require an investment of $15,000 in special molds that would have no salvage value.
This special order would have no effect on the company’s other sales. The company has
ample spare capacity for producing the special order. If the special order is accepted,
the company’s overall net operating income would increase (decrease) by:
A.$(5,700)
B.$(21,300)
C.$(25,200)
D.$10,800
3) Sabino Corporation’s total common stock was $500,000 at the end of both Year 2 and
Year 1. The par value of common stock is $5 per share. The company’s total
stockholders’ equity at the end of Year 2 amounted to $1,125,000 and at the end of Year
1 to $1,090,000. The company’s total liabilities and stockholders’ equity at the end of
Year 2 amounted to $1,581,000 and at the end of Year 1 to $1,540,000. The company’s
retained earnings at the end of Year 2 amounted to $545,000 and at the end of Year 1 to
$510,000. The company’s net income in Year 2 was $39,000. The company’s book value
per share at the end of Year 2 is closest to:
A.$0.39 per share
B.$15.81 per share
C.$11.25 per share
D.$5.45 per share
4) Barbu Corporation has provided the following data concerning its direct labor costs
for June:
The Labor Rate Variance for June would be recorded as a:
A.credit of $6,305.
B.credit of $6,500.
C.debit of $6,305.
D.debit of $6,500.
5) Moccio Enterprises, Inc., produces and sells a single product whose selling price is
$120.00 per unit and whose variable expense is $37.20 per unit. The company’s
monthly fixed expense is $356,040.
Assume the company’s target profit is $5,000. The unit sales to attain that target profit is
closest to:
A.5,496 units
B.2,198 units
C.3,786 units
D.3,664 units
6) From the standpoint of the entire company, if it is a choice between sales of one unit
of one product versus another, which product should the salespersons emphasize?
A.I200
B.I100
C.I400
D.I300
The company would prefer that a unit of I200, the product with the highest profitability
index, be sold.
Jacobus Corporation has four products that use the same constrained resource. Data
concerning those products appear below:
7) During the year just ended, the retailer James Corporation purchased $425,000 of
inventory. The inventory balance at the beginning of the year was $175,000. If the cost
of goods sold for the year was $450,000, then the inventory turnover for the year was:
A.2.77
B.2.57
C.3.00
D.2.62
8) Reidenbach Corporation applies manufacturing overhead to products on the basis of
standard machine-hours. The budgeted fixed manufacturing overhead cost for the most
recent month was $17,100 and the actual fixed manufacturing overhead cost for the
month was $17,450. The company based its original budget on 4,500 machine-hours.
The standard hours allowed for the actual output of the month totaled 4,810
machine-hours. What was the overall fixed manufacturing overhead budget variance for
the month?
A.$1,178 Unfavorable
B.$350 Unfavorable
C.$350 Favorable
D.$1,178 Favorable
9) Arvay Corporation has provided data concerning the Corporation’s Manufacturing
Overhead account for the month of October. Prior to the closing of the overapplied or
underapplied balance to Cost of Goods Sold, the total of the debits to the Manufacturing
Overhead account was $62,000 and the total of the credits to the account was $52,000.
Which of the following statements is true?
A.Actual manufacturing overhead incurred during the month was $52,000.
B.Manufacturing overhead applied to Work in Process for the month was $62,000.
C.Manufacturing overhead for the month was underapplied by $10,000.
D.Manufacturing overhead transferred from Finished Goods to Cost of Goods Sold
during the month was $62,000.
10) Pevy Corporation has two divisions: Southern Division and Northern Division. The
following data are for the most recent operating period:
The common fixed expenses have been allocated to the divisions on the basis of sales.
The Southern Division’s break-even sales is closest to:
A.$150,746
B.$183,582
C.$286,163
D.$205,254
11) Winkle Corporation uses the FIFO method in its process costing system. Beginning
inventory in the mixing processing center consisted of 5,000 units, 90% complete with
respect to conversion costs. Ending work in process inventory consisted of 2,000 units,
60% complete with respect to conversion costs. If 10,000 units were transferred to the
next processing center during the period, the equivalent units for conversion costs
would be:
A.13,200 units
B.6,700 units
C.10,000 units
D.12,000 units
12) If the company bases its predetermined overhead rate on the estimated amount of
the allocation base for the upcoming year, the predetermined overhead rate is closest to:
The management of Richbourg Corporation would like to investigate the possibility of
basing its predetermined overhead rate on activity at capacity. The company’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 63,000 machine-hours. In addition, capacity is
70,000 machine-hours and the actual level of activity for the year is 66,200
machine-hours. All of the manufacturing overhead is fixed and is $2,866,500 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.
A.$11.52
B.$12.56
C.$9.28
D.$10.34
13) The company’s book value per share at the end of Year 2 is closest to:
A.$17.94 per share
B.$28.26 per share
C.$0.19 per share
D.$11.54 per share
14) The cost of factory machinery purchased last year is:
A) an opportunity cost.
B) a differential cost.
C) a direct materials cost.
D) a sunk cost.