1) The following information is available for three companies. The information relates
to the companies’ plant assets. For each of the companies, determine the unknown
amounts.
Fox Co. Wolf Co. Coyote Co.
Beginning plant assets, net of depreciation $860,000 $715,000 $489,700
Ending plant assets, net of depreciation 950,000 702,400 288,300
Depreciation expense 55,300 49,500 (c)
Gain (loss) on sale of plant assets 5,600 (b) (15,200)
Cost of plant assets acquired 240,600 129,000 54,600
Proceeds from the sale of plant assets (a) 73,500 192,300
2) Brittany Furniture manufactures two products: Futons and Recliners. The following
data are available:
The company can manufacture two futons per machine hour and one recliner per
machine hour. The company’s production capacity is 900 machine hours per month.
What is the contribution margin per machine hour for recliners?
A) $1,080
B) $720
C) $600
D) $360
3) Pink Ribbon Shoppe, a clothing retailer, had the following total costs as grouped by
value chain element:
What were the company’s period costs?
A) $205,000
B) $277,000
C) $100,000
D) $135,000
4) In order for cost benchmarks to be effective, standard costs must be
A) based on historical costs
B) updated regularly
C) reviewed by salaried assembly-line workers
D) practical and attainable
5) The Sarbanes-Oxley Act was enacted
A) to allow companies to adopt International Financial Reporting Standards
B) to restore trust in publicly traded companies
C) to hire better qualified managerial accountants
D) none of the above
6) Active Lifestyle Beverages gathered the following information for Job #928:
What is the direct materials quantity variance?
A) $1,250.00 favorable
B) $1,250.00 unfavorable
C) $1,187.50 unfavorable
D) $1,187.50 favorable
7) Bernard Corporation gathered the following information for the year just ended:
During the year, Bernard produced and sold 50,000 units of product at a selling price of
$9.00 per unit. There was no beginning inventory of product at the start of the year.
What is the operating income (loss) for the year?
A) $266,000
B) $450,000
C) $126,000
D) $310,000
8) Hewitt Company expects cash sales for July of $15,000, and a 22% monthly increase
during August and September. Credit sales of $10,000 in July should be followed by
30% increases during August and September. What are budgeted cash sales and
budgeted credit sales for September respectively?
A) $19,500 and $12,200
B) $25,350 and $14,884
C) $22,326 and $16,900
D) $18,300 and $13,000
9) Joe’s Bottling Company provided the following expense information for July:
What is the total cost for the design category of the value chain?
A) $244,000
B) $186,000
C) $179,000
D) $123,000
10) The high-low method basically fits a line through the highest and lowest ________
points.
A) fixed cost
B) variable cost
C) volume
D) none of the above
11) The income statement for Lovely Locks is divided by its two product lines, Curling
Irons and Straighteners, as follows:
If fixed costs remain unchanged and Lovely Locks discontinues the Straightener line,
how will operating income change?
A) Will decrease by $150,000
B) Will increase by $50,000
C) Will increase by $150,000
D) Will decrease by $50,000
12) Wallace Incorporated wanted to determine the relationship between its monthly
operating costs and a potential cost driver, machine hours. The output of a regression
analysis showed the following information (note: only a portion of the regression
analysis results is presented here):
What is the variable cost per machine hour (rounded to the nearest cent)?
A) $67.59
B) $2,945.95
C) $0.99
D) $0.72
13) The number of on-time deliveries would be an example of measuring which
perspective?
A) Customer
B) Financial
C) Internal business
D) Learning and growth
14) If the sales price per unit increases while the variable cost per unit and total fixed
costs remain constant, which of the following statements is TRUE?
A) The contribution margin decreases and the breakeven point decreases
B) The contribution margin increases and the breakeven point decreases
C) The contribution margin increases and the breakeven point increases
D) The contribution margin decreases and the breakeven point increases