1) The company’s debt-to-equity ratio at the end of Year 2 is closest to:
A.0.22
B.0.27
C.0.45
D.0.19
2) Spirer Corporation manufactures and sells a single product. The company uses units
as the measure of activity in its budgets and performance reports. During September,
the company budgeted for 6,700 units, but its actual level of activity was 6,750 units.
The company has provided the following data concerning the formulas used in its
budgeting and its actual results for September:
Data used in budgeting:
Actual results for September:
The activity variance for selling and administrative expenses in September would be
closest to:
A.$30 F
B.$800 U
C.$30 U
D.$800 F
3) Carter Lumber sells lumber and general building supplies to building contractors in a
medium-sized town in Montana. Data regarding the store’s operations follow:
Sales are budgeted at $380,000 for November, $390,000 for December, and $400,000
for January.
Collections are expected to be 70% in the month of sale, 27% in the month following
the sale, and 3% uncollectible.
The cost of goods sold is 65% of sales.
The company desires to have an ending merchandise inventory equal to 80% of the
following month’s cost of goods sold. Payment for merchandise is made in the month
following the purchase.
Other monthly expenses to be paid in cash are $22,000.
Monthly depreciation is $20,000.
Ignore taxes.
The cash balance at the end of December would be:
A.$182,400
B.$114,400
C.$13,000
D.$195,400
4) How much profit (loss) does the company make by processing one batch of sugar
cane into the end products industrial fiber and molasses?
A) $(96)
B) $1
C) $7
D) $6
5) Miao Clinic uses client-visits as its measure of activity. During July, the clinic
budgeted for 3,000 client-visits, but its actual level of activity was 2,980 client-visits.
The clinic has provided the following data concerning the formulas used in its
budgeting and its actual results for July:
Data used in budgeting:
Actual results for July:
The occupancy expenses in the flexible budget for July would be closest to:
A.$10,907
B.$11,054
C.$11,180
D.$11,200
6) Hatzenbuhler Manufacturing Corporation has prepared the following overhead
budget for next month.
The company’s variable overhead costs are driven by machine-hours.
What would be the total budgeted overhead cost for next month if the activity level is
6,600 machine-hours rather than 6,800 machine-hours?
A.$107,824.00
B.$110,600.00
C.$108,300.00
D.$107,347.06
7) Zelenka Clinic uses client-visits as its measure of activity. During June, the clinic
budgeted for 2,700 client-visits, but its actual level of activity was 2,710 client-visits.
The clinic has provided the following data concerning the formulas to be used in its
budgeting for June:
The medical supplies in the flexible budget for June would be closest to:
A.$17,717
B.$17,587
C.$18,502
D.$18,440
8) The net cash provided by (used in) operating activities for the year was:
A.$60
B.$95
C.$94
D.$85
9) Darver Inc. uses the FIFO method in its process costing system. The following data
concern the operations of the company’s first processing department for a recent month.
Required:
Using the FIFO method:
a. Determine the equivalent units of production for materials and conversion costs.
b. Determine the cost per equivalent unit for materials and conversion costs.
c. Determine the cost of ending work in process inventory.
d. Determine the cost of units transferred out of the department during the month.
10) Canevari Corporation makes a product that uses a material with the following
standards:
The company budgeted for production of 1,300 units in April, but actual production was
1,200 units. The company used 3,750 kilos of direct material to produce this output.
The company purchased 4,100 kilos of the direct material at a total cost of $8,610. The
direct materials purchases variance is computed when the materials are purchased.
The materials quantity variance for April is:
A.$315 F
B.$300 U
C.$300 F
D.$315 U
11) The company’s return on total assets for Year 2 is closest to:
A.1.77%
B.2.46%
C.1.80%
D.2.42%
12) The total cash flow net of income taxes in year 3 is:
A.$46,500
B.$11,500
C.$111,500
D.$50,000
Depreciation expense = (Original cost – Salvage value) / Useful life
= ($160,000 – $0) / 4 years = $40,000 per year
13) Spincic Corporation has provided the following data:
The market price of common stock at the end of Year 2 was $4.13 per share. The
company’s price-earnings ratio for Year 2 is closest to:
A.0.52
B.8.10
C.6.16
D.12.52