In capital budgeting computations, discounted cash flow methods:
1) A.automatically provide for recovery of initial investment.
B.can’t be used unless cash flows are uniform from year to year.
C.assume that all cash flows occur at the beginning of a period.
2) Braverman Corporation’s net income last year was $75,000 and its interest expense
was $10,000. Total assets at the beginning of the year were $650,000 and total assets at
the end of the year were $610,000. The corporation’s income tax rate was 30%. The
corporation’s return on total assets for the year was closest to:
A.13.5%
B.12.4%
C.13.0%
D.11.9%
3) Farron Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
What is the unit product cost for the month under absorption costing?
A.$74 per unit
B.$89 per unit
C.$69 per unit
D.$84 per unit
4) Baker Corporation has provided the following production and average 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) $89.50
B) $18.40
C) $71.10
D) $30.90
5) The following information relates to the Assembly Department of Jataca Corporation
for the month of November. Jataca uses a weighted-average process costing system. All
materials at Jataca are added at the beginning of the production process.
On November 1, the work in process inventory account contained $6,400 of material
cost and $4,400 of conversion cost. Cost per equivalent unit for November was $1.50
for materials and $2.80 for conversion costs.
What total amount of cost should be assigned to the units transferred out during
November?
A.$1,337,300
B.$1,348,100
C.$1,369,500
D.$1,380,300
6) What is the differential cost of Alternative B over Alternative A, including all of the
relevant costs?
A.$150,000
B.$100,000
C.$125,000
D.$50,000
7) Eacher Wares is a division of a major corporation. The following data are for the
latest year of operations:
Required:
a. What is the division’s margin?
b. What is the division’s turnover?
c. What is the division’s return on investment (ROI)?
d. What is the division’s residual income?
8) Which of the following would be classified as an internal failure cost on a quality
cost report?
A.Re-entering data because of keying errors.
B.Final product testing and inspection.
C.Supplies used in testing and inspection.
D.Depreciation of test equipment.
9) Glocker Company makes three products in a single facility. These products have the
following unit product costs:
Additional data concerning these products are listed below.
The mixing machines are potentially the constraint in the production facility. A total of
5,900 minutes are available per month on these machines.
Direct labor is a variable cost in this company.
Required:
a. How many minutes of mixing machine time would be required to satisfy demand for
all three products?
b. How much of each product should be produced to maximize net operating income?
(Round off to the nearest whole unit.)
c. Up to how much should the company be willing to pay for one additional hour of
mixing machine time if the company has made the best use of the existing mixing
machine capacity? (Round off to the nearest whole cent.)
10) Delfavero Corporation has provided the following data:
The company’s earnings per share for Year 2 is closest to:
A.$10.33 per share
B.$0.52 per share
C.$0.34 per share
D.$0.79 per share
11) Based solely on the information above, the net cash provided by (used in) investing
activities on the statement of cash flows would be:
A.$(280,000)
B.$(390,000)
C.$(760,000)
D.$(1,286,000)
12) On the statement of cash flows, the sales adjusted to a cash basis would be:
A.$700,000
B.$688,000
C.$677,000
D.$712,000
13) Up to how much should the company be willing to pay for one additional minute of
grinding machine time if the company has made the best use of the existing grinding
machine capacity? (Round off to the nearest whole cent.)
A) $10.60
B) $21.90
C) $0
D) $19.25
14) All of Porter Corporation’s sales are on account. Sixty percent of the credit sales are
collected in the month of sale, 25% in the month following sale, and 10% in the second
month following sale. The remainder are uncollectible. The following are budgeted
sales data for the company:
Cash receipts in April are expected to be:
A.$420,000
B.$545,000
C.$605,000
D.$185,000
15) A tile manufacturer has supplied the following data:
The company’s contribution margin ratio is closest to:
A.29.4%
B.4.7%
C.63.3%
D.36.7%
16) The current ratio at the end of Year 2 is closest to:
A.0.32
B.0.38
C.1.25
D.1.20