1) the dawson corporation projects the following for the upcoming year:
the expected dividend per share of common stock is:
a.$2.10
b.$2.70
c.$1.80
d.$3.90
2) financial statements for nardella company appear below:
nardella company’s times interest earned for year 2 was closest to:
a.7.8
b.4.8
c.12.8
d.6.8
3) during the first week of april, gillian worked a total of 50 hours and had no idle time.
gillian is paid $15 per hour for regular time, and is paid time-and-a-half for all hours in
excess of a 40 hour week. the amount of gillian’s wages that should be charged to direct
labor for the week is:
a.$600
b.$225
c.$750
d.$975
4) chrisjohn beet processors, inc., processes sugar beets in batches. a batch of sugar
beets costs $51 to buy from farmers and $16 to crush in the company’s plant. two
intermediate products, beet fiber and beet juice, emerge from the crushing process. the
beet fiber can be sold as is for $23 or processed further for $18 to make the end product
industrial fiber that is sold for $47. the beet juice can be sold as is for $46 or processed
further for $20 to make the end product refined sugar that is sold for $ how much profit
(loss) does the company make by processing the intermediate product beet juice into
refined sugar rather than selling it as is?
a.($74)
b.($23)
c.($7)
d.($41)
5) the balance in white company’s work in process inventory account was $15,000 on
august 1 and $18,000 on august 31. the company incurred $30,000 in direct labor cost
during august and requisitioned $25,000 in raw materials (all direct material). if the sum
of the debits to the manufacturing overhead account total $28,000 for the month, and if
the sum of the credits totaled $30,000, then:
a.finished goods was debited for $82,000 during the month
b.finished goods was credited for $83,000 during the month
c.manufacturing overhead was underapplied by $2,000 at the end of the month
d.finished goods was debited for $85,000 during the month
6) whetstine 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 september, the kennel budgeted
for 3,200 tenant-days, but its actual level of activity was 3,180 tenant-days. the kennel
has provided the following data concerning the formulas to be used in its budgeting:
the facility expenses in the flexible budget for september would be closest to:
a.$21,320
b.$21,238
c.$21,513
d.$21,784
7) wertman corporation produces and sells a single product with the following
characteristics:
the company is currently selling 3,000 units per month. fixed expenses are $215,000 per
month. consider each of the following questions independently.
this question is to be considered independently of all other questions relating to
wertman corporation. refer to the original data when answering this question.
the marketing manager would like to introduce sales commissions as an incentive for
the sales staff. the marketing manager has proposed a commission of $20 per unit. in
exchange, the sales staff would accept a decrease in their salaries of $52,000 per month.
(this is the company’s savings for the entire sales staff.) the marketing manager predicts
that introducing this sales incentive would increase monthly sales by 300 units. what
should be the overall effect on the company’s monthly net operating income of this
change?
a.decrease of $92,800
b.increase of $263,200
c.increase of $11,200
d.increase of $46,000
8) isaza corporation produces and sells two products. in the most recent month, product
u82u had sales of $28,000 and variable expenses of $13,440. product p89w had sales of
$18,000 and variable expenses of $7,260. and the fixed expenses of the entire company
were $24,650. if the sales mix were to shift toward product u82u with total sales
remaining constant, the overall break-even point for the entire company:
a.would decrease
b.would not change
c.could increase or decrease
d.would increase
since product u82u has a lower contribution margin ratio than product p89w, a shift
towards the product with the lowest contribution margin ratio will cause the company’s
overall break-even point to increase.
9) bell company has provided the following data for maintenance costs:
using the high-low method, the cost formula for maintenance cost would be:
a.$2.00 per machine hour
b.$1.625 per machine hour
c.$18,000 plus $0.50 per machine hour
d.$24,000 plus $0.50 per machine hour
10) in job-order costing, all of the following statements are correct with respect to labor
time and cost except:
a.time tickets are kept by employees showing the amount of work on specific jobs
b.the job cost sheet for a job will contain all direct labor charges to that particular job
c.labor cost that can be traced to a job only with a great deal of effort is treated as part
of manufacturing overhead
d.a machine operator performing routine annual maintenance work on a piece of
equipment would charge the maintenance time to a specific job
11) which of the following would be the least appropriate allocation base to allocate the
cost of a human resources department to other departments?
a.sales dollars
b.labor turnover
c.hours of training
d.number of employees
12) drusilla corporation prepares its statement of cash flows using the indirect method.
which of the following would be deducted from net income in the operating activities
section of the statement?
a.choice a
b.choice b
c.choice c
d.choice d
13) van cleef company’s comparative balance sheet and income statement for last year
appear below:
the company declared and paid $18,000 in cash dividends during the year. the company
uses the direct method to determine the net cash provided by operating activities.
on the statement of cash flows, the income tax expense adjusted to a cash basis would
be:
a.$10,000
b.$33,000
c.$56,000
d.$22,000
14) capid corporation is a wholesaler of industrial goods. data regarding the store’s
operations follow:
sales are budgeted at $360,000 for november, $330,000 for december, and $320,000 for
january.
collections are expected to be 60% in the month of sale, 36% in the month following
the sale, and 4% uncollectible.
the cost of goods sold is 75% of sales.
the company purchases 40% of its merchandise in the month prior to the month of sale
and 60% in the month of sale. payment for merchandise is made in the month following
the purchase.
the november beginning balance in the accounts receivable account is $77,000.
the november beginning balance in the accounts payable account is $271,000.
required:
a. prepare a schedule of expected cash collections for november and december.
b. prepare a merchandise purchases budget for november and december.
15) (ignore income taxes in this problem.) kumanu, inc. is considering investing in new
fms equipment for its factory. this equipment will cost $80,000, is expected to last 6
years, and is expected to have a $10,000 salvage value at the end of 6 years. the new
equipment is expected to generate cost savings of $20,000 per year in each of the 6
years. kumanu’s discount rate is 16%. what is the net present value of this equipment?
a.$(2,200)
b.$3,700
c.$20,500
d.$(34,950)
