1) cost of goods manufactured will usually include:
a.only costs incurred during the current period
b.only direct labor and direct materials costs
c.some costs incurred during the prior period as well as costs incurred during the
current period
d.some period costs as well as some product costs
2) weisinger corporation has provided the following data for the month of january:
required:
prepare a schedule of cost of goods manufactured and a schedule of cost of goods sold
in good form.
3) the following cost data pertain to the operations of lefthand department stores, inc.,
for the month of december.
the brentwood store is just one of many stores owned and operated by the company. the
shoe department is one of many departments at the brentwood store. the central
warehouse serves all of the company’s stores.
what is the total amount of the costs listed above that are not direct costs of the
brentwood store?
a.$78,000
b.$43,000
c.$162,000
d.$36,000
4) haram corporation is a wholesaler that sells a single product. management has
provided the following cost data for two levels of monthly sales volume. the company
sells the product for $182.10 per unit.
the best estimate of the total variable cost per unit is:
a.$120.40
b.$158.40
c.$167.90
d.$96.30
5) grodin catering uses activity-based costing for its overhead costs. the company has
provided the following data concerning the activity rates in its activity-based costing
system:
the number of meals served is the measure of activity for the preparing meals activity
cost pool. the number of functions catered is used as the activity measure for the
arranging functions activity cost pool.
management would like to know whether the company made any money on a recent
function at which 180 meals were served. the company catered the function for a fixed
price of $15.00 per meal. the cost of the raw ingredients for the meals was $9.65 per
meal. this cost is in addition to the costs of wages, supplies, and other expenses detailed
above.
for the purposes of preparing action analyses, management has assigned ease of
adjustment codes to the costs as follows: wages are classified as a yellow cost; supplies
and raw ingredients as a green cost; and other expenses as a red cost.
according to the activity-based costing system, what was the total cost (including the
costs of raw ingredients) of the function mentioned above? (round to the nearest whole
dollar.)
a.$1,969
b.$1,819
c.$2,469
d.$2,669
6) the consumer products division of garafalo corporation had average operating assets
of $300,000 and net operating income of $46,900 in march. the minimum required rate
of return for performance evaluation purposes is 16%.
what was the consumer products division’s minimum required return in march?
a.$55,504
b.$48,000
c.$7,504
d.$46,900
7) the herald company has 50,000 shares of common stock outstanding. earnings per
share of common stock for the year is $15.00. the dividend paid to the preferred
stockholders during the year was $2.00 per share. common stockholders received
dividends totaling $150,000. the dividend payout ratio for the year was closest to:
a.38.4%
b.33.3%
c.23.1%
d.20.0%
8) reardon retail company consists of two stores, a and b. store a had sales of $80,000
during march, a contribution margin ratio of 30%, and a segment margin of $11,000. the
company as a whole had sales of $200,000, a contribution margin ratio of 36%, and
segment margins for the two stores totaling $31,000. if net operating income for the
company was $15,000 for the month, the traceable fixed expenses in store b must have
been:
a.$16,000
b.$20,000
c.$31,000
d.$28,000
9) last year, bartberger corporation’s dividend on common stock was $10.20 per share
and the dividend on preferred stock was $3.60 per share. the market price of common
stock at the end of the year was $51.70 per share. the dividend yield ratio is closest to:
a.0.74
b.0.07
c.0.20
d.0.27
10) a partial listing of costs incurred at peggs corporation during september appears
below:
the total of the product costs listed above for september is:
a.$351,000
b.$669,000
c.$71,000
d.$318,000
11) letter corporation has two service departments (a and b) that provide service to each
other and to two operating departments (x and y). a provides 20% of its service to b,
30% of its service to x, and 50% of its service to y. b provides 10% of its service to a,
45% of its service to x, and 45% of its service to y. operating costs in a are $300,000.
operating costs in b are $180,000. cost allocations are made starting with department a.
no distinction is made between variable and fixed costs.
if service department costs are allocated using the step-down method, what is the total
amount of service cost that will be allocated to y?
a.$231,000
b.$240,000
c.$258,000
d.$270,000
12) selected financial data (in thousands of dollars) for barnstable company appear
below:
for year 2, the net operating income as a percentage of sales was:
a.70%
b.8%
c.10%
d.40%
13) cotty clinic uses client-visits as its measure of activity. during march, the clinic
budgeted for 3,000 client-visits, but its actual level of activity was 2,970 client-visits.
the clinic has provided the following data concerning the formulas used in its budgeting
and its actual results for march:
the occupancy expenses in the flexible budget for march would be closest to:
a.$13,400
b.$12,770
c.$13,349
d.$13,029
14) hoeper clinic uses client-visits as its measure of activity. during january, the clinic
budgeted for 2,600 client-visits, but its actual level of activity was 2,570 client-visits.
the clinic has provided the following data concerning the formulas used in its budgeting
and its actual results for january:
the medical supplies in the flexible budget for january would be closest to:
a.$19,733
b.$18,932
c.$19,940
d.$19,377
15) lesinski snow removal’s cost formula for its vehicle operating cost is $1,770 per
month plus $483 per snow-day. for the month of february, the company planned for
activity of 19 snow-days, but the actual level of activity was 24 snow-days. the actual
vehicle operating cost for the month was $13,070. the spending variance for vehicle
operating cost in february would be closest to:
a.$2,123 u
b.$292 f
c.$2,123 f
d.$292 u
16) the lfm company makes and sells a single product, product t. each unit of product t
requires 1.3 hours of direct labor at a rate of $9.10 per direct labor-hour. lfm company
needs to prepare a direct labor budget for the second quarter of next year.
the company has budgeted to produce 25,000 units of product t in june. the finished
goods inventories on june 1 and june 30 were budgeted at 500 and 700 units,
respectively. budgeted direct labor costs for june would be:
a.$293,384
b.$304,031
c.$295,750
d.$227,500
17) hofbauer corporation’s two products have the following characteristics:
the constrained resource is a particular machine that is available for 10,400 minutes
each month. each unit of product m73o requires 6 minutes on this machine and each
unit of product m26b requires 8 minutes on this machine.
the company is considering launching a new product that would have a variable cost of
$169.00 per unit and no avoidable fixed costs. it would require 16 minutes of the
constrained resource. the absolute minimum acceptable selling price for the new
product should be:
a.$226.60
b.$245.80
c.$169.00
d.$172.60
18) (ignore income taxes in this problem.) dokes, inc. is considering the purchase of a
machine that would cost $440,000 and would last for 9 years. at the end of 9 years, the
machine would have a salvage value of $62,000. the machine would reduce labor and
other costs by $81,000 per year. additional working capital of $8,000 would be needed
immediately. all of this working capital would be recovered at the end of the life of the
machine. the company requires a minimum pretax return of 13% on all investment
projects. the net present value of the proposed project is closest to:
a.-$24,308
b.-$8,998
c.-$27,030
d.-$3,662