1) the management of jahns corporation is considering introducing a new producta
compact barbecue. at a selling price of $59 per unit, management projects sales of
30,000 units. launching the barbecue as a new product would require an investment of
$500,000. the desired return on investment is 19%. the target cost per barbecue is
closest to:
a.$66.44
b.$59.00
c.$70.21
d.$55.83
2) which of the following will not result in an increase in return on investment (roi),
assuming other factors remain the same?
a.a reduction in expenses
b.an increase in net operating income
c.an increase in operating assets
d.an increase in sales
3) during may at landreth corporation, $81,000 of raw materials were requisitioned
from the storeroom for use in production. these raw materials included both direct and
indirect materials. the indirect materials totaled $7,000. the journal entry to record the
requisition from the storeroom would include a:
a.debit to raw materials of $81,000
b.debit to work in process of $81,000
c.credit to manufacturing overhead of $7,000
d.debit to work in process of $74,000
4) gluth corporation has provided the following data for the month of july. the
beginning balance in the finished goods inventory account was $56,000 and the ending
balance was $49,000. sales totaled $290,000. cost of goods manufactured was
$147,000, selling expense was $17,000, and administrative expense was $68,000.
the net operating income for july was:
a.$58,000
b.$143,000
c.$150,000
d.$51,000
5) hudgens corporation’s most recent balance sheet appears below:
the net income for the year was $49. cash dividends were $10. the net cash provided by
(used by) operations for the year was:
a.$70
b.$78
c.$20
d.$29
6) genito corporation’s static planning budget for october appears below. the company
bases its budgets on machine-hours.
in october, the actual number of machine-hours was 8,800, the actual supplies cost was
$69,450, the actual power cost was $34,190, the actual salaries cost was $86,490, and
the actual equipment depreciation was $37,600.
the spending variance for power cost in the flexible budget performance report for the
month should be:
a.$1,510 f
b.$2,770 u
c.$1,510 u
d.$2,770 f
7) kaaihue detailing’s cost formula for its materials and supplies is $2,750 per month
plus $17 per vehicle. for the month of april, the company planned for activity of 95
vehicles, but the actual level of activity was 135 vehicles. the actual materials and
supplies for the month was $4,850.
the activity variance for materials and supplies in april would be closest to:
a.$680 u
b.$485 f
c.$680 f
d.$485 u
8) (ignore income taxes in this problem.) stratford company purchased a machine with
an estimated useful life of seven years. the machine will generate cash inflows of
$90,000 each year over the next seven years. if the machine has no salvage value at the
end of seven years, and assuming the company’s discount rate is 10%, what is the
purchase price of the machine if the net present value of the investment is $170,000?
a.$221,950
b.$170,000
c.$268,120
d.$438,120
9) which of the following would be classified as an internal failure cost on a quality
cost report?
a.supplies used in testing and inspection
b.test and inspection of incoming materials
c.plant utilities in the inspection area
d.downtime caused by quality problems
10) which of the following comparisons best isolates the impact that changes in prices
of inputs and outputs have on performance?
a.static planning budget and flexible budget
b.static planning budget and actual results
c.flexible budget and actual results
d.master budget and static planning budget
11) in january, one of the processing departments at sessum corporation had beginning
work in process inventory of $17,000. during the month, $172,000 of costs were added
to production and the cost of units transferred out from the department was $178,000.
the company uses the fifo method in its process costing system.
in the department’s cost reconciliation report for january, the cost of ending work in
process inventory would be:
a.$17,000
b.$5,000
c.$11,000
d.$23,000
12) grading company’s cash and cash equivalents consist of cash and marketable
securities. last year the company’s cash account decreased by $14,000 and its
marketable securities account increased by $18,000. cash provided by operating
activities was $21,000. net cash used for financing activities was $22,000. based on this
information, the net cash flow from investing activities on the statement of cash flows
was:
a.a net $13,000 decrease
b.a net $1,000 increase
c.a net $3,000 decrease
d.a net $5,000 increase
13) abdol company, which has only one product, has provided the following data
concerning its most recent month of operations:
what is the unit product cost for the month under variable costing?
a.$73
b.$44
c.$79
d.$38