1) Delvin Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
What is the total period cost for the month under variable costing?
A.$42,000
B.$49,200
C.$35,700
D.$7,200
2) Romasanta Corporation manufactures a single product. The following data pertain to
the company’s operations over the last two years:
What was the absorption costing net operating income this year?
A.$65,500
B.$51,700
C.$61,900
D.$53,300
3) Data for March for Lazarus Corporation and its two major business segments, North
and South, appear below:
In addition, common fixed expenses totaled $156,000 and were allocated as follows:
$84,000 to the North business segment and $72,000 to the South business segment.
A properly constructed segmented income statement in a contribution format would
show that the segment margin of the North business segment is:
A.$213,000
B.$102,000
C.$83,000
D.$18,000
4) Linscott Corporation manufactures and sells a single product. The company uses
units as the measure of activity in its budgets and performance reports. During July, the
company budgeted for 5,400 units, but its actual level of activity was 5,380 units. The
company has provided the following data concerning the formulas used in its budgeting
and its actual results for July:
Data used in budgeting:
Actual results for July:
The manufacturing overhead in the flexible budget for July would be closest to:
A.$52,175
B.$51,789
C.$53,022
D.$53,060
5) The average sale period for Year 2 is closest to:
A.63.0 days
B.89.2 days
C.236.3 days
D.97.3 days
6) Cerrone Inc. has provided the following data for the month of July. The balance in
the Finished Goods inventory account at the beginning of the month was $39,000 and at
the end of the month was $47,000. The cost of goods manufactured for the month was
$188,000. The actual manufacturing overhead cost incurred was $71,000 and the
manufacturing overhead cost applied to Work in Process was $67,000. The adjusted
cost of goods sold that would appear on the income statement for July is:
A.$196,000
B.$184,000
C.$180,000
D.$188,000
7) Linzey Corporation has provided the following data:
The company’s net income in Year 2 was $33,000. The company’s book value per share
at the end of Year 2 is closest to:
A.$22.45 per share
B.$12.45 per share
C.$0.55 per share
D.$15.45 per share
8) Zelenka Clinic uses client-visits as its measure of activity. During June, the clinic
budgeted for 2,700 client-visits, but its actual level of activity was 2,710 client-visits.
The clinic has provided the following data concerning the formulas to be used in its
budgeting for June:
The administrative expenses in the planning budget for June would be closest to:
A.$5,671
B.$5,511
C.$5,531
D.$5,670
9) The company’s price-earnings ratio for Year 2 is closest to:
A.0.38
B.4.53
C.5.70
D.8.11
10) Davey Corporation is preparing its Manufacturing Overhead Budget for the fourth
quarter of the year. The budgeted variable manufacturing overhead rate is $3.00 per
direct labor-hour; the budgeted fixed manufacturing overhead is $66,000 per month, of
which $10,000 is factory depreciation.
If the budgeted direct labor time for October is 6,000 hours, then the total budgeted
manufacturing overhead for October is:
A.$28,000
B.$56,000
C.$74,000
D.$84,000
11) The controller of Hartis Corporation estimates the amount of materials handling
overhead cost that should be allocated to the company’s two products using the data that
are given below:
The total materials handling cost for the year is expected to be $38,448.
If the materials handling cost is allocated on the basis of direct labor-hours, the total
materials handling cost allocated to the wall mirrors is closest to:
A.$19,696
B.$16,020
C.$19,224
D.$17,280
12) The amount of direct labor cost in the November 30 Work in Process inventory was:
A.$2,800
B.$3,300
C.$3,500
D.$6,300
13) ( Frick Road Paving Corporation is considering an investment in a curb-forming
machine. The machine will cost $180,000, will last 10 years, and will have a $30,000
salvage value at the end of 10 years. The machine is expected to generate net cash
inflows of $40,000 per year in each of the 10 years. Frick’s discount rate is 10%. The
net present value of the proposed investment is closest to:
A.$250,000
B.$65,800
C.$245,800
D.$77,380
14) The target cost per unit is closest to:
A.$21.00
B.$18.60
C.$23.52
D.$20.83
15) ( Swaggerty Corporation is considering purchasing a machine that would cost
$462,000 and have a useful life of 7 years. The machine would reduce cash operating
costs by $115,500 per year. The machine would have no salvage value.
Required:
a. Compute the payback period for the machine.
b. Compute the simple rate of return for the machine.
16) Kopas Corporation has provided the following data:
The inventory turnover for this year is closest to:
A.3.09
B.0.98
C.1.03
D.3.05
17) Zabarkes Corporation is considering a capital budgeting project that would require
an initial investment of $640,000 and working capital of $79,000. The working capital
would be released for use elsewhere at the end of the project in 3 years. The investment
would generate annual cash inflows of $205,000 for the life of the project. At the end of
the project, equipment that had been used in the project could be sold for $29,000. The
company’s discount rate is 7%. The net present value of the project is closest to:
A.$(13,952)
B.$(92,952)
C.$(157,416)
D.$(25,000)
18) Quilling Corporation uses the FIFO method in its process costing system. Data
concerning the first processing department for the most recent month are listed below:
Note: Your answers may differ from those offered below due to rounding error. In all
cases, select the answer that is the closest to the answer you computed. To reduce
rounding error, carry out all computations to at least three decimal places.
The cost per equivalent unit for conversion costs for the first department for the month
is closest to:
A.$33.72
B.$34.74
C.$36.67
D.$35.41