1) blake company has $15,000 cash at the beginning of june and anticipates $50,000 in
cash receipts and $34,500 in cash disbursements. the company requires a minimum
cash balance of $20,000. any excess cash over the minimum desired balance is used to
pay down debts. blake has an agreement with its bank to borrow as needed or to repay
loans as funds become available. as of may 31, the company owes $15,000 to the bank.
the balance of the loan on june 30 will be:
a.$4,500
b.$9,500
c.$15,000
d.$19,500
e.$25,500
2) factory overhead costs for a given period were 1.5 times as much as the direct
material costs. prime costs totaled $15,500. conversion costs totaled $22,725. what are
the direct labor costs for the period?
a.$1,200
b.$1,050
c.$1,075
d.$1,155
3) the five steps of strategic decision making include all of the following steps except:
a.obtain information and conduct analyses
b.determine the organization’s strategy
c.identify the alternative actions
d.continue an on-going evaluation of the problem
e.choose and implement the desired action
4) in a production cost report using process costing, transferred-in costs are similar to:
a.materials costs added at the end of the process
b.materials costs added at the beginning of the process
c.conversion costs added during the process
d.conversion costs transferred to the next process
e.conversion costs included in beginning inventory
5) talamoto co. manufactures a single product that goes through two processes mixing
and cooking. the following data pertains to the mixing department for september.
material p is added at the beginning of work in the mixing department. material q is also
added in the mixing department, but not until units of product are forty percent
completed with regard to conversion. conversion costs are incurred uniformly during
the process.
total equivalent units for conversion under the weighted-average method are calculated
to be:
a.104,000 equivalent units
b.71,600 equivalent units
c.85,400 equivalent units
d.72,000 equivalent units
e.94,000 equivalent units
6) a hybrid costing system that uses job costing to assign direct materials costs, and
process costing to assign conversion costs to products or services is:
a.process costing
b.operation costing
c.actual costing
d.product costing
e.job costing
7) target costing:
a.determines cost based on an expected market demand for the product
b.determines cost based on a budget
c.determines cost based on standard cost
d.determines cost based upon market price and desired profit
8) barstow manufacturing company has two service departments product design and
engineering support, and two production departments assembly and finishing. the
distribution of each service department’s efforts to the other departments is shown
below:
the direct operating costs of the departments (including both variable and fixed costs)
were as follows:
the total cost accumulated in the assembly department using the direct method is
(calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and
round all dollar amounts to the nearest whole dollar):
a.$1,033,333
b.$1,690,000
c.$686,667
d.$646,667
e.$693,333
9) one of the key management functions is to perform a regular review of product
profitability. which question(s) below would not be asked when performing the
analysis?
a.are the products priced properly?
b.which products are the most profitable?
c.which products should be advertised more aggressively?
d.should any product manager be rewarded?
e.what was the product manager paid last year?
10) which of the following aspects of the contemporary business environment involves
using statistical methods such as regression or correlation analysis to predict consumer
behavior, to measure customer satisfaction, or to develop models for setting prices,
among other uses.
a.business intelligence
b.target costing
c.life cycle costing
d.benchmarking
e.business process improvement
11) gorberchev food processing expects to have 20,000 units of finished goods
inventory on hand on march 31 and reports the following expected sales (in units) for
the first four months:
at the end of each month the company desires its finished goods ending inventory to be
20% of the next month’s projected sales (in units).
the budgeted production (in units) for gorberchev food processing for may should be:
a.112,000
b.134,000
c.140,000
d.142,000
e.146,000
12) for short-run product-mix decisions, relevant costs (for the seller) include short-run
_________ costs plus any ____________ costs.
a.direct material; direct labor
b.variable; opportunity
c.fixed; differential
d.support; distribution
e.capital; opportunity
13) from a strategic management perspective, the primary reason a firm performs cvp
analysis is to find the level of sales that:
a.produces a desired (or targeted) level of profit for the firm
b.will allow the firm to compete in a market place
c.will just cover all fixed costs
d.promises a satisfactory growth in revenue
e.reduces the threat of bankruptcy
14) williams instruments manufactures specialized surgical equipment for hospitals and
clinics throughout the world. one of williams’ most popular products, comprising 40%
of its revenues and 35% of its profits, is a blood pressure measuring device. average
production and sales are 400 units per month. williams has achieved its success in the
market through excellent customer service and product reliability. the manufacturing
process consists primarily of assembly of components purchased from various
electronic firms, plus a small amount of metalworking and finishing. the manufacturing
operations cost $600 per unit. the purchased parts cost williams $800, of which $300 is
for parts which williams could manufacture in its existing facility for $100 in materials
for each unit, plus an investment in labor and equipment which would cost $175,000
per month.
also, williams is considering outsourcing to another firm, matrix concepts, inc., the
marketing, distribution, and servicing for its units. this would save williams $75,000 in
monthly materials and labor costs. the cost of the contract would be $125 per product.
required:
(1) prepare a value chain analysis for williams to assist in the decision whether to
manufacture or buy the parts, and whether to contract out the marketing, distribution,
and servicing of the units.
(2) should williams continue to: (a) purchase the parts or manufacture them? (b)
provide the marketing, distribution and service, or outsource this activity to matrix?
explain your answers.
15) graham corporation’s budgeted production schedule for the coming year is as
follows:
quarter 1 = 22,500 units
quarter 2 = 19,000 units
quarter 3 = 17,000 units
quarter 4 = 24,000 units
each unit of product requires three pounds of direct material. the company’s policy is to
begin each quarter with 30% of that quarter’s direct materials production requirements.
graham expects to have 50,000 pounds of direct materials on hand at the beginning of
quarter 1 .
what would be graham’s budgeted direct materials purchases in the first quarter?
a.17,500 pounds
b.34,600 pounds
c.37,750 pounds
d.67,100 pounds
e.84,600 pounds