1) waldvogel corporation has provided data concerning the company’s manufacturing
overhead account for the month of april. prior to the closing of the overapplied or
underapplied balance to cost of goods sold, the total of the debits to the manufacturing
overhead account was $55,000 and the total of the credits to the account was $56,000.
which of the following statements is true?
a.manufacturing overhead for the month was underapplied by $1,000
b.manufacturing overhead applied to work in process for the month was $56,000
c.actual manufacturing overhead incurred during the month was $56,000
d.manufacturing overhead transferred from finished goods to cost of goods sold during
the month was $55,000
2) management of sourwine corporation is considering whether to purchase a new
model 320 machine costing $389,000 or a new model 280 machine costing $318,000 to
replace a machine that was purchased 6 years ago for $376,000. the old machine was
used to make product c78p until it broke down last week. unfortunately, the old
machine cannot be repaired.
management has decided to buy the new model 280 machine. it has less capacity than
the new model 320 machine, but its capacity is sufficient to continue making product
c78p.
management also considered, but rejected, the alternative of simply dropping product
c78p. if that were done, instead of investing $318,000 in the new machine, the money
could be invested in a project that would return a total of $405,000.
in making the decision to buy the model 280 machine rather than the model 320
machine, the differential cost was:
a.$58,000
b.$13,000
c.$29,000
d.$71,000
3) how much opportunity cost is represented in the following information concerning a
machine?
a.$80,000
b.$14,000
c.$25,000
d.$68,000
4) weisenborn corporation uses the direct method to allocate service department costs to
operating departments. the company has two service departments, information
technology and personnel, and two operating departments, fabrication and
customization.
information technology department costs are allocated on the basis of computer
workstations and personnel department costs are allocated on the basis of employees.
the total amount of information technology department cost allocated to the two
operating departments is closest to:
a.$28,688
b.$66,435
c.$18,427
d.$25,500
5) on july 1, woolard corporation had $20,000 of raw materials on hand. during the
month, the company purchased an additional $53,000 of raw materials. during july,
$49,000 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 $5,000.
prepare journal entries to record these events.
the credits to the raw materials account for the month of july total:
a.$53,000
b.$49,000
c.$20,000
d.$73,000
6) spettel corporation’s comparative balance sheet appears below:
the company’s net income (loss) for the year was $11,000 and its cash dividends were
$2,000.
which of the following classifications of changes in balance sheet accounts as sources
and uses is correct?
a.the change in property, plant, and equipment is a source; the change in long-term debt
is a source
b.the change in property, plant, and equipment is a use; the change in long-term debt is
a source
c.the change in property, plant, and equipment is a source; the change in long-term debt
is a use
d.the change in property, plant, and equipment is a use; the change in long-term debt is
a use
7) guthridge inc. is working on its cash budget for february. the budgeted beginning
cash balance is $26,000. budgeted cash receipts total $104,000 and budgeted cash
disbursements total $100,000. the desired ending cash balance is $40,000. to attain its
desired ending cash balance for february, the company needs to borrow:
a.$0
b.$10,000
c.$40,000
d.$70,000
8) the management of austin corporation is considering dropping product r97c. data
from the company’s accounting system appear below:
in the company’s accounting system all fixed expenses of the company are fully
allocated to products. further investigation has revealed that $34,000 of the fixed
manufacturing expenses and $20,000 of the fixed selling and administrative expenses
are avoidable if product r97c is discontinued. what would be the effect on the
company’s overall net operating income if product r97c were dropped?
a.overall net operating income would increase by $20,000
b.overall net operating income would increase by $10,000
c.overall net operating income would decrease by $20,000
d.overall net operating income would decrease by $10,000
9) sales in store j totaled:
a.$400,000
b.$250,000
c.$150,000
d.$100,000
10) the selling and administrative expense in the flexible budget for march would be
closest to:
a.$547,200
b.$522,860
c.$543,360
d.$543,440
11) data from murrish corporation’s most recent balance sheet appear below:
a total of 200,000 shares of common stock and 40,000 shares of preferred stock were
outstanding at the end of the year. the book value per share is closest to:
a.$5.00
b.$5.70
c.$2.65
d.$4.70
12) aase corporation has a standard cost system in which it applies manufacturing
overhead to products on the basis of standard machine-hours (mhs). the company has
provided the following data for the most recent month:
what was the total of the variable overhead rate and fixed manufacturing overhead
budget variances for the month?
a.$2,040 favorable
b.$600 unfavorable
c.$2,640 favorable
d.$600 favorable
13) product l28n has been considered a drag on profits at beets corporation for some
time and management is considering discontinuing the product altogether. data from the
company’s accounting system appear below:
in the company’s accounting system all fixed expenses of the company are fully
allocated to products. further investigation has revealed that $41,000 of the fixed
manufacturing expenses and $25,000 of the fixed selling and administrative expenses
are avoidable if product l28n is discontinued. what would be the effect on the
company’s overall net operating income if product l28n were dropped?
a.overall net operating income would decrease by $73,000
b.overall net operating income would increase by $10,000
c.overall net operating income would decrease by $10,000
d.overall net operating income would increase by $73,000
14) tassone corporation has provided the following data concerning its only product:
the margin of safety as a percentage of sales is closest to:
a.37%
b.73%
c.27%
d.63%