1) During March, the production department of a process operations system completed
and transferred to finished goods 25,000 units that were in process at the beginning of
March and 110,000 that were started and completed in March. March’s beginning
inventory units were 100% complete with respect to materials and 55% complete with
respect to labor. At the end of March, 30,000 additional units were in process in the
production department and were 100% complete with respect to materials and 30%
complete with respect to labor. The production department incurred direct labor cost of
$578,900 and its beginning inventory included labor cost of $54,700. Compute the
direct labor cost per equivalent unit for the department using the weighted-average
method.
A.$4.69.
B.$3.84.
C.$4.86.
D.$4.28.
E.$4.40.
2) To compute trend percentages the analyst should:
A.Select a base period, assign each item in the base period statement a weight of 100%,
and then express financial numbers from other periods as a percent of their base period
number.
B.Subtract the analysis period number from the base period number.
C.Subtract the base period amount from the analysis period amount, divide the result by
the analysis period amount, then multiply that amount by 100.
D.Compare amounts across industries using Dun and Bradstreet.
E.Compare amounts to a competitor.
3) A sporting goods manufacturer budgets production of 45,000 pairs of ski boots in the
first quarter and 30,000 pairs in the second quarter of the upcoming year. Each pair of
boots require 2 kg of a key raw material. The company aims to end each quarter with
ending raw materials inventory equal to 20% of the following quarter’s material needs.
Beginning inventory for this material is 18,000 kg and the cost per kg is $8. What is the
budgeted materials purchases cost for the first quarter?
A.$720,000.
B.$672,000.
C.$576,000.
D.$729,600.
E.$864,000.
4) Maxim manufactures a cat food product called Green Health. Maxim currently has
10,000 bags of Green Health on hand. The variable production costs per bag are $1.80
and total fixed costs are $10,000. The cat food can be sold as it is for $9.00 per bag or
be processed further into Premium Green and Green Deluxe at an additional $2,000
cost. The additional processing will yield 10,000 bags of Premium Green and 3,000
bags of Green Deluxe, which can be sold for $8 and $6 per bag, respectively. If Green
Health is processed further into Premium Green and Green Deluxe, the total gross profit
would be:
A.$68,000.
B.$78,000.
C.$96,000.
D.$98,000.
E.$100,000.
5) Job A3B was ordered by a customer on September 25. During the month of
September, Jaycee Corporation requisitioned $2,500 of direct materials and used $4,000
of direct labor. The job was not finished by the end of the month, but needed an
additional $3,000 of direct materials and additional direct labor of $6,500 to finish the
job in October. The company applies overhead at the end of each month at a rate of
200% of the direct labor cost incurred. What is the balance in the Work in Process
account at the end of September relative to Job A3B?
A.$5,500
B.$11,500
C.$6,500
D.$9,500
E.$14,500
6) A debit is used to record an increase in all of the following accounts except:
A.Supplies
B.Cash
C.Accounts Payable
D.Owner’s Withdrawals
E.Prepaid Insurance
7) Wickland Company installs a manufacturing machine in its production facility at the
beginning of the year at a cost of $87,000. The machine’s useful life is estimated to be 5
years, or 400,000 units of product, with a $7,000 salvage value. During its second year,
the machine produces 84,500 units of product. Determine the machines’ second year
depreciation under the straight-line method.
A.$16,900.
B.$16,000.
C.$17,400.
D.$18,379.
E.$20,880.
8) An estimated liability:
A.Is an unknown liability of a certain amount.
B.Is a known obligation of an uncertain amount that can be reasonably estimated.
C.Is a liability that may occur if a future event occurs.
D.Can be the result of a lawsuit.
E.Is not recorded until the amount is known for certain.
9) On a bank reconciliation, an unrecorded debit memorandum for printing checks is:
A.Noted as a memorandum only.
B.Added to the book balance of cash.
C.Deducted from the book balance of cash.
D.Added to the bank balance of cash.
E.Deducted from the bank balance of cash.
10) A company factored $45,000 of its accounts receivable and was charged a 4%
factoring fee. The journal entry to record this transaction would include a:
A.Debit to Cash of $45,000, a debit to Factoring Fee Expense of $1,800, and a credit to
Accounts Receivable of $46,800.
B.Debit to Cash of $45,000 and a credit to Accounts Receivable of $45,000.
C.Debit to Cash of $43,200, a debit to Factoring Fee Expense of $1,800, and a credit to
Accounts Receivable of $45,000.
D.Debit to Cash of $46,800 and a credit to Accounts Receivable of $46,800.
E.Debit to Cash of $45,000 and a credit to Notes Payable of $45,000.
11) Investment center managers are usually evaluated using performance measures
A.that combine income and assets.
B.that combine income and capital.
C.based on assets only.
D.based on income only.
E.that combine assets and capital.
12) Northington, Inc. is preparing the company’s statement of cash flows for the fiscal
year just ended. Using the following information, determine the amount of cash flows
from operating activities using the indirect method:
A.$332,200.
B.$236,800.
C.$261,400.
D.$186,800.
E.$189,400.
13) Frederick Company borrows $63,000 from First City Bank and pledges its
receivables as security. Which of the following is true regarding this transaction:
A.First City Bank is the factor in this transaction.
B.Frederick Company’s financial statements must disclose the pledging of receivables.
C.Frederick Company no longer has the risk of bad debts.
D.First City Bank takes ownership of the receivables at the time of the pledge.
E. No journal entry is required for this event.
14) Bloom and Plant organize a partnership on January 1. Bloom’s initial investment
consists of $800 cash, $1,700 equipment and a $500 note payable reflecting a bank loan
for the new business. Plant’s initial investment is cash of $2,000. These amounts are the
values agreed on by both partners. The journal entry to record Bloom’s investment is:
A.Debit Cash $800; debit Equipment $1,700; credit Note Payable $500; credit Bloom,
Capital $2,000.
B.Debit Cash $2,000; credit Bloom, Capital $2,000.
C.Debit Cash $800; debit Equipment $1,700; credit Bloom, Capital $2,500.
D.Debit Cash $800; debit Equipment $1,200; credit Bloom, Capital $2,000.
E.Debit Bloom, Capital $3,000; credit Common Stock $3,000.
15) A company reported the following data:
Required:
1> Calculate the days’ sales in inventory for each year.
2> Comment on the trend in inventory management.
16) The more _______________________ allowances an employee claims, the less
federal income tax the employer will deduct from pay.
17) A company that is a controlling investor in another company is known as the
__________.
18) A company had net income of $350,000 in Year 1 and $520,000 in Year 2. The
company had average total assets of $2,500,000 in Year 1 and $3,000,000 in Year 2.
Calculate the return on total assets for Year 1and Year 2. Comment on the results, did
the company’s performance improve?
19) The ____________ concept is the idea that cash paid (or received) in the future has
less value now than the same amount of cash paid (or received) today.
20) During November, Gliem Company allocated overhead to products at the rate of
$26.00 per direct labor hour. This figure was based on 80% of capacity or 1,600 direct
labor hours. However, Gliem Company operated at only 70% of capacity, or 1,400
direct labor hours. Budgeted overhead at 70% of capacity is $38,900, and overhead
actually incurred was $38,000. What is the company’s volume variance for November?
(Indicate whether the variance is favorable or unfavorable)
21) ____________________ is the process of monitoring planning decisions and
evaluating an organization’s activities and employees.