1) Based solely on the information above, the net cash provided by (used in) investing
activities on the statement of cash flows would be:
A.$110,000
B.$55,000
C.$150,000
D.$130,000
2) Florea Corporation has provided the following data concerning its most important
raw material, compound K09B:
The raw material was purchased on account.
The credits to the Raw Materials account for August would total:
A.$40,050
B.$14,840
C.$39,750
D.$15,900
3) Broch Corporation’s income statement appears below:
The company’s times interest earned is closest to:
A.4.87
B.1.41
C.3.16
D.2.16
4) Callicott Corporation produces a product that sells for $120 per unit. The product’s
current sales are 25,400 units and its break-even sales are 18,542 units.
The margin of safety as a percentage of sales is closest to:
A.27%
B.37%
C.63%
D.73%
5) Ortman Corporation makes a product with the following standard costs:
The company reported the following results concerning this product in May.
The company applies variable overhead on the basis of direct labor-hours. The direct
materials purchases variance is computed when the materials are purchased.
The labor rate variance for May is:
A.$1,008 F
B.$981 U
C.$981 F
D.$1,008 U
6) The net present value of the proposed project is closest to:
A.$1,338
B.$(8,849)
C.$(14,048)
D.$(2,778)
7) Kovack Corporation’s net operating income in Year 2 was $66,571, net income
before taxes was $46,571, and the net income was $32,600. Total common stock was
$120,000 at the end of both Year 2 and Year 1. The par value of common stock is $2 per
share. The company’s total stockholders’ equity at the end of Year 2 amounted to
$962,000 and at the end of Year 1 to $930,000. The company declared and paid $600
dividends on common stock. The market price per share was $4.37. The company’s
dividend yield ratio for Year 2 is closest to:
A.0.2%
B.1.3%
C.1.9%
D.0.5%
8) Prehn Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
The company does not have any variable manufacturing overhead costs or variable
selling and administrative costs. During its first year of operations, the company
produced 36,000 units and sold 30,000 units. The company’s only product is sold for
$251 per unit.
Assume that the company uses a variable costing system that assigns $28 of direct labor
cost to each unit that is produced. The unit product cost under this costing system is:
A.$179 per unit
B.$227 per unit
C.$109 per unit
D.$81 per unit
9) Dancause Corporation manufactures and sells a single product. The company uses
units as the measure of activity in its budgets and performance reports. During October,
the company budgeted for 5,100 units, but its actual level of activity was 5,090 units.
The company has provided the following data concerning the formulas to be used in its
budgeting:
The manufacturing overhead in the flexible budget for October would be closest to:
A.$54,453
B.$54,470
C.$52,739
D.$52,947
10) Chuang Corporation’s activity-based costing system has three activity cost
pools-Machining, Setting Up, and Other. The company’s overhead costs have already
been allocated to these cost pools as follows:
Costs in the Machining cost pool are assigned to products based on machine-hours
(MHs) and costs in the Setting Up cost pool are assigned to products based on the
number of batches. Costs in the Other cost pool are not assigned to products. The
following table shows the machine-hours and number of batches associated with each
of the company’s two products:
Additional data concerning the company’s products appears below:
Required:
a. Calculate activity rates for each activity cost pool using activity-based costing.
b. Determine the amount of overhead cost that would be assigned to each product using
activity-based costing.
c. Determine the product margins for each product using activity-based costing.
11) The Prattle Corporation makes and sells only one product called a Deb. The
company is in the process of preparing its Selling and Administrative Expense Budget
for next year. The following budget data are available:
All of these expenses (except depreciation) are paid in cash in the month they are
incurred.
If the budgeted cash disbursements for selling and administrative expenses for April
total $144,390, then how many Debs does the company plan to sell in April?
A.17,500 units
B.18,250 units
C.20,000 units
D.19,300 units
12) If a cost object such as a product or customer has a negative green margin, then:
A.its yellow margin will be positive.
B.its yellow margin may be either positive or negative.
C.its yellow margin will be negative.
D.its yellow margin will be zero.