1) Compute the amount of raw materials used during August if $25,000 of raw
materials were purchased during the month and the inventories were as follows:
A.$16,000
B.$19,000
C.$23,000
D.$27,000
2) Schweinert 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 last year?
A.$47,000
B.$49,000
C.$58,000
D.$69,000
3) Barker Corporation uses the weighted-average method in its process costing system.
This month, the beginning inventory in the first processing department consisted of 300
units. The costs and percentage completion of these units in beginning inventory were:
A total of 9,100 units were started and 8,700 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 85% complete with respect to materials and 20% 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 cost per equivalent unit for conversion costs for the first department for the month
is closest to:
A.$26.31
B.$27.42
C.$29.38
D.$27.98
4) If a cost is a common cost of the segments on a segmented income statement, the
cost should:
A.be allocated to the segments on the basis of segment sales.
B.not be allocated to the segments.
C.excluded from the income statement.
D.treated as a product cost rather than as a period cost.
5) Cuda Manufacturing Corporation uses a standard cost system with machine-hours
(MHs) as the activity base for overhead. The following information relates to Cuda’s
operations last year:
What was Cuda’s variable overhead rate variance?
A.$6,000 Unfavorable
B.$15,000 Favorable
C.$20,000 Unfavorable
D.$21,000 Favorable
6) Nicolini 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 October, the kennel budgeted
for 2,200 tenant-days, but its actual level of activity was 2,250 tenant-days. The kennel
has provided the following data concerning the formulas used in its budgeting and its
actual results for October:
Data used in budgeting:
Actual results for October:
The activity variance for wages and salaries in October would be closest to:
A.$580 F
B.$370 F
C.$370 U
D.$580 U
7) Fabian Corporation uses the weighted-average method in its process costing system.
The Assembly Department started the month with 9,000 units in its beginning work in
process inventory that were 70% complete with respect to conversion costs. An
additional 90,000 units were transferred in from the prior department during the month
to begin processing in the Assembly Department. During the month 87,000 units were
completed in the Assembly Department and transferred to the next processing
department. There were 12,000 units in the ending work in process inventory of the
Assembly Department that were 20% complete with respect to conversion costs.
What were the equivalent units for conversion costs in the Assembly Department for the
month?
A.93,000
B.83,100
C.87,000
D.89,400
8) Borunda Air uses two measures of activity, flights and passengers, in the cost
formulas in its budgets and performance reports. The cost formula for plane operating
costs is $37,020 per month plus $2,731 per flight plus $6 per passenger. The company
expected its activity in July to be 73 flights and 253 passengers, but the actual activity
was 75 flights and 251 passengers. The actual cost for plane operating costs in July was
$231,770. The activity variance for plane operating costs in July would be closest to:
A.$6,131 F
B.$5,450 F
C.$6,131 U
D.$5,450 U
9) Mcallister Corporation has provided the following data concerning its only product:
The margin of safety as a percentage of sales is closest to:
A.73%
B.79%
C.21%
D.27%
10) Sosinski Corporation has two divisions: Domestic Division and Foreign Division.
The following data are for the most recent operating period:
The common fixed expenses have been allocated to the divisions on the basis of sales.
The Domestic Division’s break-even sales is closest to:
A.$252,632
B.$466,116
C.$178,947
D.$316,737
11) Which of the following would be classified as a financing activity on the statement
of cash flows?
A.Paying suppliers for inventory purchases.
B.Interest paid to lenders.
C.Lending money to another company.
D.Repurchasing capital stock from owners.