1) staley co. manufactures computer monitors. the following is a summary of its basic
cost and revenue data:
assume that staley co. is currently selling 600 computer monitors per month and
monthly fixed costs are $80,000.
staley co.’s margin of safety ratio (mos%) if 600 units are sold, is calculated to be:
a.33.4%
b.17.7%
c.20.5%
d.19.5%
e.79.5%
2) the authorization function of budgets is especially important for government and
not-for-profit (nfp) entities, where budgeted amounts often serve both as approvals of
planned activities (or programs) and as:
a.measures of quality
b.indicators of performance
c.certification of actions
d.ceilings for expenditures
e.the basis for contract negotiations
3) dave’s lighting inc. produces lamps for the construction industry. during the year, the
company incurred the following costs:
inventories for the year were:
required:
prepare a statement of cost of goods manufactured and cost of goods sold.
4) neary co. produces three products x, y, and z from a joint process. each product may
be sold at the split-off point or processed further. additional processing requires no
special facilities, and production costs of further processing are entirely variable and
traceable to the products involved. last year all three products were processed beyond
split-off. joint production costs for the year were $80,000. sales values and costs needed
to evaluate neary’s production policy follow.
the amount of joint costs allocated to product z using the net realizable value 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.$14,333
b.$15,158
c.$18,624
d.$17,667
e.$32,454
5) dual allocation is a cost allocation approach that separates direct and indirect costs,
tracing the direct costs directly to the cost object that:
a.can bear the cost
b.relates best to the cost
c.is first identified with the cost
d.caused the cost
e.is most impacted by the cost
6) the sales and cost data for two companies in the transportation industry are as
follows:
the annual breakeven point in sales dollars for x company is:
a.$102,857
b.$90,000
c.$63,000
d.$110,769
e.$91,657
7) which of the following companies (industries) would not use a process cost system?
a.georgia-pacific corporation (lumber & paper)
b.durham integrative medical care (medical practice)
c.bayer pharmaceuticals (drugs)
d.reichhold chemical co. (chemicals)
e.accenture (consulting)
8) which of the following is a technique most suited to deal with uncertainty regarding
the inputs to a cvp (profit-planning) model?
a.sensitivity analysis
b.regression analysis
c.constrained optimization analysis
d.net present value (npv) analysis
e.linear programming
9) when using relevant cost analysis, it is a common mistake for untrained managers to
include in their analysis all the following except:
a.sunk costs
b.allocated fixed costs
c.average fixed costs
d.unit variable costs
e.total fixed costs
10) landry co. had the following information for the month of december. all direct
materials were one hundred percent complete, and beginning materials cost $14,000.
total equivalent units for materials under the fifo method are calculated to be:
a.1,110 equivalent units
b.1,080 equivalent units
c.1,032 equivalent units
d.1,008 equivalent units
e.1,320 equivalent units
11) sheen co. manufacturers laser printers. it has outlined the following overhead cost
drivers:
sheen co. has an order for 1,000 laser printers that has the following production
requirements:
using activity-based costing, applied machine repetition overhead for the 1,000 laser
printers order is:
a.$7,800
b.$10,000
c.$10,500
d.$150
e.$21,600
12) leminton company expects the following credit sales for the first five months of the
year: january, $25,000; february, $40,000; march, $30,000; april, $36,000, may
$40,000. experience has shown that payment for the credit sales is received as follows:
60% in the month of sale, 25% in the first month after sale, 12% in the second month
after sale, and the remainder is uncollectible. how much cash can leminton company
expect to collect in march as a result of credit sales?
a.$18,000
b.$28,600
c.$30,000
d.$31,000
e.$32,040