1) kets corporation uses the fifo method in its process costing system. operating data for
the enameling department for the month of may appear below:
what were the equivalent units for conversion costs in the enameling department for
may?
a.83,190
b.80,600
c.83,800
d.84,400
2) deleston boat wash’s cost formula for its cleaning equipment and supplies is $2,150
per month plus $21 per boat. for the month of september, the company planned for
activity of 79 boats, but the actual level of activity was 39 boats. the actual cleaning
equipment and supplies for the month was $3,110.
the spending variance for cleaning equipment and supplies in september would be
closest to:
a.$699 f
b.$699 u
c.$141 f
d.$141 u
3) jatry corporation’s budgeted sales are $300,000, its budgeted variable expenses are
$210,000, and its budgeted fixed expenses are $60,000. the company’s break-even in
dollar sales is:
a.$200,000
b.$330,000
c.$210,000
d.$270,000
4) which terms below correctly describe the cost of the black paint used to paint the
dots on a pair of dice?
a.choice a
b.choice b
c.choice c
d.choice d
5) dewiel corporation manufactures a variety of products. the following data pertain to
the company’s operations over the last two years:
what was the absorption costing net operating income last year?
a.$90,900
b.$96,900
c.$84,900
d.$92,100
6) the controller occupies:
a.a line position
b.a staff position
c.neither a line nor a staff position, since the accounting department must be
independent
d.both a line and a staff position
7) one of the steps in the lean thinking model is to organize work arrangements around
the flow of the business process. this is often accomplished by:
a.automating the business process
b.implementing an enterprise system
c.instituting a six sigma program
d.creating a manufacturing cell
8) razor kennel uses tenant-days as its measure of activity; an animal housed in the
kennel for one day is counted as one tenant-day. during november, the kennel budgeted
for 3,000 tenant-days, but its actual level of activity was 3,010 tenant-days. the kennel
has provided the following data concerning the formulas used in its budgeting and its
actual results for november:
the revenue variance for november would be closest to:
a.$1,607 u
b.$1,910 u
c.$1,607 f
d.$1,910 f
9) (ignore income taxes in this problem.) the following data pertain to an investment:
the net present value of the proposed investment is:
a.$3,355
b.$(3,430)
c.$0
d.$621
10) fryer corporation uses the weighted-average method in its process costing system.
this month, the beginning inventory in the first processing department consisted of 700
units. the costs and percentage completion of these units in beginning inventory were:
a total of 7,300 units were started and 6,200 units were transferred to the second
processing department during the month. the following costs were incurred in the first
processing department during the month:
the ending inventory was 80% complete with respect to materials and 45% complete
with respect to conversion costs.
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 total cost transferred from the first processing department to the next processing
department during the month is closest to:
a.$229,301
b.$295,872
c.$249,700
d.$271,200
11) the upton company uses a standard costing system in which variable overhead is
assigned to production on the basis of standard direct labor-hours. data for the month of
february include the following:
variable overhead cost incurred: $48,700
total variable overhead variance: $300 f
standard hours allowed for actual production: 7,000
actual direct labor-hours worked: 6,840
the variable overhead rate variance is:
a.$820 f
b.$820 u
c.$740 f
d.$740 u
12) 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 debits to the work in process account as a consequence of the raw materials
transactions in july total:
a.$53,000
b.$44,000
c.$0
d.$49,000
13) o’bannion company, which has only one product, has provided the following data
concerning its most recent month of operations:
required:
a. prepare a contribution format income statement for the month using variable costing.
b. prepare an income statement for the month using absorption costing.
14) lampert corporation manufactures and sells a single product. the company uses units
as the measure of activity in its budgets and performance reports. during march, the
company budgeted for 6,100 units, but its actual level of activity was 6,060 units. the
company has provided the following data concerning the formulas used in its budgeting
and its actual results for march:
the manufacturing overhead in the flexible budget for march would be closest to:
a.$48,822
b.$51,384
c.$51,440
d.$49,468
15) straus company, a manufacturer of electronic products, wants to introduce a new
calculator. to compete effectively, the calculator could not be priced at more than $40.
the company requires a 20% rate of return on investment on all new products. in order
to produce and sell 30,000 calculators each year, the company would have to make an
investment of $850,000. the target cost per calculator would be:
a.$16.50
b.$23.50
c.$28.33
d.$34.33
16) carner lumber sells lumber and general building supplies to building contractors in a
medium-sized town in montana. data regarding the store’s operations follow:
sales are budgeted at $370,000 for november, $360,000 for december, and $340,000 for
january.
collections are expected to be 85% in the month of sale, 13% in the month following
the sale, and 2% uncollectible.
the cost of goods sold is 70% of sales.
the company purchases 30% of its merchandise in the month prior to the month of sale
and 70% in the month of sale. payment for merchandise is made in the month following
the purchase.
other monthly expenses to be paid in cash are $24,600.
monthly depreciation is $17,000.
ignore taxes.
the accounts receivable balance, net of uncollectible accounts, at the end of december
would be:
a.$94,900
b.$46,800
c.$90,200
d.$54,000
17) part wy4 costs the eastern division of tyble corporation $26 to make-direct materials
are $10, direct labor is $4, variable manufacturing overhead is $9, and fixed
manufacturing overhead is $3. the eastern division can sell all of part wy4 they can
make to other companies for $30. the western division of tyble corporation can use part
wy4 in one of its products. what is the lowest transfer price at which the eastern
division would be willing to sell part wy4 to the central division?
a.$30
b.$26
c.$23
d.$27
18) standford corporation has provided the following data for the month of february:
required:
a. prepare a schedule of cost of goods manufactured in good form for february.
b. prepare an income statement in good form for february.
