Nelson Corporation
Nelson Corporation has the following information available for May of the current
year:
All material is added at the start of production and all products completed are
transferred out.
Refer to Nelson Corporation. Prepare an equivalent units schedule using the (a) FIFO
and (b) weighted average method.
Which of the following is typically regarded as a cost driver in traditional accounting
practices?
A. number of purchase orders processed
B. number of customers served
C. number of transactions processed
D. number of direct labor hours worked
Seminole Corporation has been manufacturing 5,000 units of Part 10541, which is used
in the manufacture of one of its products. At this level of production, the cost per unit of
manufacturing Part 10541 is as follows:
Luther Company has offered to sell Seminole 5,000 units of Part 10541 for $19 a unit.
Seminole has determined that it could use the facilities currently used to manufacture
Part 10541 to manufacture Part RAC and generate an operating profit of $4,000.
Seminole has also determined that two-thirds of the fixed overhead applied will
continue even if Part 10541 is purchased from Luther. To determine whether to accept
Luther’s offer, the net relevant costs to make are
A. $70,000.
B. $84,000.
C. $90,000.
D. $95,000.
Debits to Cost of Goods Sold typically represent the
A. transfer of completed items to Finished Goods Inventory.
B. costs of items sold.
C. selling price of items sold.
D. the cost of goods manufactured.
Most ____ are relevant to decisions to acquire capacity, but not to short-run decisions
involving the use of that capacity.
A. sunk costs
B. incremental costs
C. fixed costs
D. prime costs
Emerald Company has the following expected pattern of collections on credit sales: 70
percent collected in the month of sale, 15 percent in the month after the month of sale,
and 14 percent in the second month after the month of sale. The remaining 1 percent is
never collected. At the end of May, Emerald Company has the following accounts
receivable balances:
Emerald’s expected sales for June are $150,000. What were total sales for April?
A. $150,000
B. $72,414
C. $70,000
D. $140,000
A material requisition form should show all of the following information except
A. job number.
B. quantity required.
C. unit cost.
D. purchase order number.
What is the best cost accumulation procedure to use when many batches, each differing
as to product specifications, are produced?
A. job-order
B. process
C. actual
D. standard
The greatest degree of control for committed fixed costs is exerted
A. in the post-investment audit.
B. during the life of the investment.
C. prior to acquisition.
D. by equipment operators.
The net present value and internal rate of return methods of decision making in capital
budgeting are superior to the payback method in that they
A. are easier to implement.
B. consider the time value of money.
C. require less input.
D. reflect the effects of sensitivity analysis.
Crosson Corporation
Crosson Corporation operates its factory 300 days per year. Its annual consumption of
Material Y is 1,200,000 gallons. It carries a 10,000 gallon safety stock of Material Y
and its lead time is 12 business days.
Refer to Crosson Corporation. If the EOQ for Material Y is 30,000 gallons, and the
carrying cost per gallon per year is $.25, what is the total annual carrying cost for
Material Y?
A. $3,750
B. $7,500
C. $6,250
D. $10,000