1) the alpha company produces toys for national distribution. standards for a particular
toy are:
materials: 12 ounces per unit at 56 per ounce.
labor: 2 hours per unit at $2.75 per hour.
during the month of december, the company produced 1,000 units. information for the
month follows:
materials: 14,000 ounces were purchased and used at a total cost of $7,140.
labor: 2,500 hours worked at a total cost of $8,000.
the materials price variance is:
a.$700 u
b.$420 u
c.$420 f
d.$700 f
2) compound c90n is a raw material used to make mosbarger corporation’s major
product. the standard cost of compound c90n is $38.20 per ounce and the standard
quantity is 8.0 ounces per unit of output. data concerning the compound for september
appear below:
the raw material was purchased on account.
the debits to the raw materials account for september would total:
a.$41,250
b.$30,942
c.$30,560
d.$42,020
3) the adams company, a merchandising firm, has budgeted its activity for november
according to the following information:
sales at $450,000, all for cash
merchandise inventory on october 31 was $200,000.
the cash balance november 1 was $18,000.
selling and administrative expenses are budgeted at $60,000 for november and are paid
for in cash.
budgeted depreciation for november is $25,000.
the planned merchandise inventory on november 30 is $230,000.
the cost of goods sold is 70% of the selling price.
all purchases are paid for in cash.
the budgeted cash receipts for november are:
a.$315,000
b.$450,000
c.$135,000
d.$475,000
4) lauser clinic uses client-visits as its measure of activity. during july, the clinic
budgeted for 3,700 client-visits, but its actual level of activity was 3,690 client-visits.
the clinic has provided the following data concerning the formulas used in its budgeting
and its actual results for july:
the personnel expenses in the planning budget for july would be closest to:
a.$54,730
b.$54,641
c.$52,341
d.$52,483
5) pitzer corporation, a manufacturing company, has provided data concerning its
operations for march. the beginning balance in the raw materials account was $29,000
and the ending balance was $38,000. raw materials purchases during the month totaled
$74,000. manufacturing overhead cost incurred during the month was $106,000, of
which $7,000 consisted of raw materials classified as indirect materials. the direct
materials cost for march was:
a.$83,000
b.$58,000
c.$74,000
d.$65,000
6) (ignore income taxes in this problem.) the following information concerns a
proposed investment:
the internal rate of return is (do not interpolate):
a.14%
b.12%
c.10%
d.5%
7) spanner company recorded the following events last year:
on the statement of cash flows, some of these events are classified as operating
activities, some are classified as investing activities, and some are classified as
financing activities.
based solely on the information above, the net cash provided by (used in) financing
activities on the statement of cash flows would be:
a.$(26,000)
b.$(8,000)
c.$89,000
d.$935,000
8) an unfavorable fixed manufacturing overhead volume variance would be caused by:
a.actual fixed manufacturing overhead costs being greater than budgeted fixed
manufacturing overhead costs
b.actual fixed manufacturing overhead costs being greater than applied fixed
manufacturing overhead costs
c.fixed manufacturing overhead cost being overapplied for the period
d.the denominator hours exceeding the standard hours allowed for the output of a
period
9) the controller of joyco has requested a quick estimate of the manufacturing supplies
needed for the month of july when production is expected to be 470,000 units. below
are actual data from the prior three months of operations.
using these data and the high-low method, what is the best estimate of the cost of
manufacturing supplies that would be needed for july? (assume that this activity is
within the relevant range.)
a.$805,284
b.$1,188,756
c.$755,196
d.$752,060
10) the manufacturing overhead budget at waycaster corporation is based on budgeted
direct labor-hours. the direct labor budget indicates that 6,000 direct labor-hours will be
required in february. the variable overhead rate is $3.40 per direct labor-hour. the
company’s budgeted fixed manufacturing overhead is $81,600 per month, which
includes depreciation of $18,000. all other fixed manufacturing overhead costs
represent current cash flows.
the february cash disbursements for manufacturing overhead on the manufacturing
overhead budget should be:
a.$20,400
b.$63,600
c.$102,000
d.$84,000
11) nadell corporation reported the following data for the month of april:
if the raw materials purchased during april totaled $63,000, what was the cost of the
raw materials used in production for the month?
a.$63,000
b.$61,000
c.$62,000
d.$65,000
12) a self-imposed budget or ________________ budget is a budget that is prepared
with the full cooperation of managers at all levels.
a.perpetual
b.master
c.participative
d.responsibility
13) jupiter inc. has provided the following data for the month of august. there were no
beginning inventories; consequently, the direct materials, direct labor, and
manufacturing overhead applied listed below are all for the current month.
manufacturing overhead for the month was underapplied by $2,000.
the company allocates any underapplied or overapplied overhead among work in
process, finished goods, and cost of goods sold at the end of the month on the basis of
the overhead applied during the month in those accounts.
the journal entry to record the allocation of any underapplied or overapplied overhead
for august would include the following:
a.debit to cost of goods sold of $89,200
b.credit to cost of goods sold of $1,360
c.debit to cost of goods sold of $1,360
d.credit to cost of goods sold of $89,200
14) finestra corporation produces a single product that it currently sells for $10. fixed
expenses are $120,000 for the year and variable expenses are $6 per unit. in addition,
finestra’s salespersons are paid a commission of 10% of their sales.
a customer has just approached finestra to make a special, one-time purchase of 10,000
units. these units would not be sold by the salespeople, and therefore no commission
would have to be paid. the price finestra would have to charge on this special order to
earn an additional profit of $40,000 is:
a.$9.00 per unit
b.$10.00 per unit
c.$5.00 per unit
d.$11.20 per unit
15) finkler legal services, llc, uses the step-down method to allocate service department
costs to operating departments. the firm has two service departments, personnel and
information technology (it), and two operating departments, family law and corporate
law. data concerning those departments follow:
personnel costs are allocated first on the basis of employees and it costs are allocated
second on the basis of pcs.
the total corporate law department cost after allocations is closest to:
a.$389,318
b.$380,375
c.$346,910
d.$388,872