The following data pertains to activity and costs for two months:
Assuming that these activity levels are within the relevant range, the mixed cost for July
was:
A. $10,000
B. $35,000
C. $15,000
D. $40,000
Answer:
Bargas Framings cost formula for its supplies cost is $2,240 per month plus $6 per
frame. For the month of May, the company planned for activity of 808 frames, but the
actual level of activity was 810 frames. The actual supplies cost for the month was
$7,090. The supplies cost in the flexible budget for May would be closest to:
A) $7,088
B) $7,090
C) $7,106
D) $7,100
Answer:
Hartzog Corporation’s most recent balance sheet and income statement appear below:
Dividends on common stock during Year 2 totaled $60 thousand. Dividends on
preferred stock totaled $5 thousand. The market price of common stock at the end of
Year 2 was $7.04 per share.
The gross margin percentage for Year 2 is closest to:
A. 41.5%
B. 70.9%
C. 15.2%
D. 658.8%
Answer:
At an activity level of 9,200 machine-hours in a month, Nooner Corporation’s total
variable production engineering cost is $761,300 and its total fixed production
engineering cost is $154,008. What would be the total production engineering cost per
unit, both fixed and variable, at an activity level of 9,300 machine-hours in a month?
Assume that this level of activity is within the relevant range.
A. $98.42
B. $99.49
C. $99.31
D. $98.96
Answer:
Data concerning Bouerneuf Company’s common stock follow:
The price-earnings ratio would be:
A. 2.00
B. 2.67
C. 3.00
D. 4.00
Answer:
Frymire Corporation produces and sells a single product. Data concerning that product
appear below:
The unit sales to attain that the target profit of $36,000 is closest to:
A. 13,327 units
B. 4,398 units
C. 6,564 units
D. 8,096 units
Answer:
Reference: 8-13
Foxworthy Kennel uses tenant-days as its measure of activity; an animal housed in the
kennel for one day is counted as one tenant-day. During July, the kennel budgeted for
2,000 tenant-days, but its actual level of activity was 2,050 tenant-days. The kennel has
provided the following data concerning the formulas to be used in its budgeting:
The net operating income in the planning budget for July would be closest to:
A) $6,645
B) $4,141
C) $4,351
D) $6,000
Answer:
Reference: 8-39
The Geurtz Company uses standard costing. The company makes and sells a single
product called a Roff. The following data are for the month of August:
– Actual cost of direct material purchased and used: $65,560
– Material price variance: $5,960 unfavorable
– Total materials variance: $22,360 unfavorable
– Standard cost per pound of material: $4
– Standard cost per direct labor-hour: $5
– Actual direct labor-hours: 6,500 hours
– Labor efficiency variance: $3,500 favorable
– Standard number of direct labor-hours per unit of Roff: 2 hours
– Total labor variance: $400 unfavorable
The total number of units of Roff produced during August was:
A) 10,800
B) 14,400
C) 3,600
D) 6,500
Answer:
Toye Corporation has provided its contribution format income statement for March.
If the company’s sales increase by 12%, its net operating income should increase by
about:
A. 5%
B. 12%
C. 223%
D. 76%
Answer:
Galos Corporation uses the FIFO method in its process costing system. The Grinding
Department started the month with 3,000 units in its beginning work in process
inventory that were 70% complete with respect to conversion costs. An additional
82,000 units were transferred in from the prior department during the month to begin
processing in the Grinding Department. During the month 74,000 units were completed
in the Grinding Department and transferred to the next processing department. There
were 11,000 units in the ending work in process inventory of the Grinding Department
that were 10% complete with respect to conversion costs.
What were the equivalent units for conversion costs in the Grinding Department for the
month?
A. 74,000
B. 75,100
C. 90,000
D. 73,000
Answer:
A manufacturing company uses a standard costing system in which standard
machine-hours (MHs) is the measure of activity. Data from the company’s flexible
budget for manufacturing overhead are given below:
The following data pertain to operations for the most recent period:
How much overhead was applied to products during the period to the nearest dollar?
A. $128,140
B. $130,601
C. $130,900
D. $127,160
Answer:
When computing standard cost variances, the difference between actual and standard
price multiplied by actual quantity yields a(n):
A) combined price and quantity variance.
B) efficiency variance.
C) price variance.
D) quantity variance.
Answer:
Lund Company applies manufacturing overhead to jobs using a predetermined
overhead rate of 75% of direct labor cost. Any underapplied or overapplied
manufacturing overhead cost is closed out to Cost of Goods Sold at the end of the
month. During March, the following transactions were recorded by the company:
The Cost of Goods Manufactured for March was:
A. $66,500
B. $61,500
C. $59,500
D. $63,000
Answer:
Jumper Company uses the weighted-average method in its process costing system. The
following data pertain to operations in the first processing department for a recent
month:
How much cost, in total, was transferred to the next department during the month?
A. $315,200
B. $306,000
C. $312,000
D. $317,100
Answer:
The Cox Company uses standard costing. The following data are available for April:
The standard quantity of material allowed for April production is:
A) 14,200 gallons
B) 12,700 gallons
C) 11,700 gallons
D) 10,200 gallons
Answer:
The information below was obtained from the records of the first processing department
of Moore Company for the month of May. The company uses the weighted-average
method in its process costing system.
All materials are added at the beginning of the process.
The equivalent units for materials for the month of May were:
A. 60,000 units
B. 74,000 units
C. 64,000 units
D. 69,800 units
Answer:
Whitney, Inc., produces a single product. The following data pertain to one month’s
operations:
The carrying value on the balance sheet of the ending finished goods inventory under
absorption costing would be:
A. $16,000
B. $10,000
C. $12,000
D. $21,000
Answer:
Hadlock Company, which has only one product, has provided the following data
concerning its most recent month of operations:
What is the net operating income for the month under variable costing?
A. $15,200
B. $4,000
C. $(9,200)
D. $19,200
Answer:
The following partially completed T-accounts summarize the transactions of Belson
Company for last year:
At the end of the year, the company closes out the balance in the Manufacturing
Overhead account to Cost of Goods Sold.
The cost of goods sold (after adjustment for underapplied or overapplied manufacturing
overhead) is:
A. $61,000
B. $62,000
C. $63,000
D. $64,000
Answer:
Temores Corporation applies manufacturing overhead to products on the basis of
standard machine-hours. The companys predetermined overhead rate for fixed
manufacturing overhead is $1.50 per machine-hour and the denominator level of
activity is 5,600 machine-hours. In the most recent month, the total actual fixed
manufacturing overhead was $8,510 and the company actually worked 5,840
machine-hours during the month. The standard hours allowed for the actual output of
the month totaled 5,980 machine-hours. What was the overall fixed manufacturing
overhead volume variance for the month?
A) $360 favorable
B) $360 unfavorable
C) $570 favorable
D) $210 favorable
Answer:
Hartzog Corporation’s most recent balance sheet and income statement appear below:
Dividends on common stock during Year 2 totaled $60 thousand. Dividends on
preferred stock totaled $5 thousand. The market price of common stock at the end of
Year 2 was $7.04 per share.
The current ratio at the end of Year 2 is closest to:
A. 2.03
B. 0.35
C. 0.75
D. 0.46
Answer:
Mannarelli Corporation uses the FIFO method in its process costing system. Operating
data for the Casting Department for the month of September appear below:
According to the company’s records, the conversion cost in beginning work in process
inventory was $15,660 at the beginning of September. Additional conversion costs of
$526,524 were incurred in the department during the month.
The cost per equivalent unit for conversion costs for September is closest to: (Round off
to three decimal places.)
A. $5.916
B. $5.340
C. $5.220
D. $5.213
Answer:
The following cost data pertain to the operations of Swestka Department Stores, Inc.,
for the month of July.
The Northridge Store is just one of many stores owned and operated by the company.
The Cosmetics Department is one of many departments at the Northridge Store. The
central warehouse serves all of the company’s stores.
What is the total amount of the costs listed above that are NOT direct costs of the
Northridge Store?
A. $40,000
B. $34,000
C. $141,000
D. $78,000
Answer:
Haar Inc. is a merchandising company. Last month the company’s cost of goods sold
was $61,000. The company’s beginning merchandise inventory was $11,000 and its
ending merchandise inventory was $21,000. What was the total amount of the
company’s merchandise purchases for the month?
A. $61,000
B. $51,000
C. $71,000
D. $93,000
Answer:
The terms standard quantity allowed or standard hours allowed means:
A) the actual output in units multiplied by the standard output allowed.
B) the actual input in units multiplied by the standard output allowed.
C) the actual output in units multiplied by the standard input allowed.
D) the standard output in units multiplied by the standard input allowed.
Answer:
The Willsey Merchandise Company has budgeted $40,000 in sales for the month of
December. The company’s cost of goods sold is 30% of sales. If the company has
budgeted to purchase $18,000 in merchandise during December, then the budgeted
change in inventory levels over the month of December is:
A. $6,000 increase
B. $10,000 decrease
C. $22,000 decrease
D. $15,000 increase
Answer:
Emilio Corporation reports that at an activity level of 3,400 units, its total variable cost
is $59,058 and its total fixed cost is $101,150.
What would be the total variable cost at an activity level of 3,500 units? Assume that
this level of activity is within the relevant range.
A. $59,058
B. $160,208
C. $60,795
D. $104,125
Answer:
Fiene Sales, Inc., a merchandising company, reported sales of 2,200 units in June at a
selling price of $600 per unit. Cost of goods sold, which is a variable cost, was $364 per
unit. Variable selling expenses were $23 per unit and variable administrative expenses
were $33 per unit. The total fixed selling expenses were $30,500 and the total
administrative expenses were $55,300.
The contribution margin for June was:
A. $1,111,000
B. $396,000
C. $310,200
D. $519,200
Answer:
Net operating income reported under absorption costing will exceed net operating
income reported under variable costing for a given period if:
A. production equals sales for that period.
B. production exceeds sales for that period.
C. sales exceed production for that period.
D. the variable manufacturing overhead exceeds the fixed manufacturing overhead.
Answer:
The following materials standards have been established for a particular product:
The following data pertain to operations concerning the product for the last month:
What is the materials price variance for the month?
A) $15,405 F
B) $5,775 U
C) $5,925 U
D) $1,600 U
Answer:
Gaucher Corporation has provided the following data from its activity-based costing
accounting system:
The activity rate for the “designing products” activity cost pool is closest to:
A. $78 per product design hour
B. $582,016 per product design hour
C. $128 per product design hour
D. $89 per product design hour
Answer: