1) brummitt corporation is working on its direct labor budget for the next two months.
each unit of output requires 0.05 direct labor-hours. the direct labor rate is $7.50 per
direct labor-hour. the production budget calls for producing 9,100 units in may and
8,800 units in june. if the direct labor work force is fully adjusted to the total direct
labor-hours needed each month, what would be the total combined direct labor cost for
the two months?
a.$3,300.00
b.$3,412.50
c.$6,712.50
d.$3,356.25
2) financial statements for larkins company appear below:
dividends during year 2 totaled $135 thousand, of which $12 thousand were preferred
dividends. the market price of a share of common stock on december 31, year 2 was
$150.
larkins company’s return on common stockholders’ equity for year 2 was closest to:
a.23.5%
b.25.9%
c.26.9%
d.24.4%
3) oran refiners, inc., processes sugar cane that it purchases from farmers. sugar cane is
processed in batches. a batch of sugar cane costs $76 to buy from farmers and $18 to
crush in the company’s plant. two intermediate products, cane fiber and cane juice,
emerge from the crushing process. the cane fiber can be sold as is for $21 or processed
further for $12 to make the end product industrial fiber that is sold for $43. the cane
juice can be sold as is for $47 or processed further for $21 to make the end product
molasses that is sold for $88.
how much profit (loss) does the company make by processing one batch of sugar cane
into the end products industrial fiber and molasses?
a.($127)
b.$30
c.($26)
d.$4
4) tart corporation reported the following data for the month of september:
the prime cost for september was:
a.$50,000
b.$83,000
c.$86,000
d.$103,000
5) an investment of $180,000 made now will yield an annual net after-tax cash
operating inflow of $24,000 for each of the next ten years. the tax rate is 40%. the
annual net before-tax cash operating inflow is:
a.$60,000
b.$14,400
c.$9,600
d.$40,000
6) activity rates from hample corporation’s activity-based costing system are listed
below. the company uses the activity rates to assign overhead costs to products:
last year, product j27w involved 30 customer orders, 152 assembly hours, and 54
batches. how much overhead cost would be assigned to product j27w using the
activity-based costing system?
a.$24,702.12
b.$5,419.38
c.$4,634.28
d.$104.67
7) data concerning sonderegger company’s operations last year appear below:
required:
a. prepare an income statement for the year using absorption costing.
b. prepare a contribution format income statement for the year using variable costing.
c. prepare a report reconciling the difference in net operating income between
absorption and variable costing for the year.
8) walton manufacturing company gathered the following data for the month.
how much net operating income will be reported for the period?
a.$54,000
b.$17,000
c.$52,000
d.cannot be determined
9) burgett corporation’s balance sheet and income statement appear below:
cash dividends were $41. the company sold equipment for $15 that was originally
purchased for $4 and that had accumulated depreciation of $4.
the net cash provided by (used by) operations for the year was:
a.$235
b.$171
c.$156
d.$197
10) licuado juice company has four product lines; orange, tomato, carrot, and grape.
shown below is last year’s income statement segmented by product line:
net operating income last year for licuado company as a whole was $24,800.
if the carrot product line would have been dropped at the beginning of last year, how
would this have changed the net operating income of licuado company as a whole?
a.$2,400 increase
b.$3,000 decrease
c.$5,400 increase
d.$12,000 decrease
11) smith company makes and sells a single product called a pod. each pod requires 1.4
hours of labor at a labor rate of $9.60 per hour. smith company needs to prepare a direct
labor budget for the second quarter of the year.
in june the company has budgeted to produce 22,000 pods. the finished goods inventory
on june 1 and june 30 were budgeted at 500 and 800 units, respectively. budgeted direct
labor costs incurred in june would be:
a.$470,400
b.$295,680
c.$240,000
d.$211,200
12) the selling price based on the absorption costing approach is closest to:
a.$78.50
b.$54.10
c.$79.15
d.$108.62