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1) Gabat Inc. is a merchandising company. Last month the company's merchandise
purchases totaled $67,000. The company's beginning merchandise inventory was
$19,000 and its ending merchandise inventory was $22,000. What was the company's
cost of goods sold for the month?
A) $108,000
B) $67,000
C) $64,000
D) $70,000
2) Ledezma Corporation makes a product with the following standards for direct labor
and variable overhead:
In May the company produced 2,500 units using 1,210 direct labor-hours. The actual
variable overhead cost was $9,922. The company applies variable overhead on the basis
of direct labor-hours.
The variable overhead efficiency variance for May is:
A.$328 F
B.$328 U
C.$320 F
D.$320 U
3) The following information relates to Conejo Corporation for last year:
What is Conejo's price-earnings ratio for last year?
A.1.6
B.2.4
C.8.0
D.2.0
4) The markup on absorption cost for this product would be closest to:
A.45.1%
B.36.7%
C.11.0%
D.34.1%
5) Cribb Corporation uses direct labor-hours in its predetermined overhead rate. At the
beginning of the year, the estimated direct labor-hours were 17,900 hours and the total
estimated manufacturing overhead was $341,890. At the end of the year, actual direct
labor-hours for the year were 16,700 hours and the actual manufacturing overhead for
the year was $336,890. Overhead at the end of the year was:
A.$22,920 underapplied
B.$17,920 overapplied
C.$17,920 underapplied
D.$22,920 overapplied
6) The Agate Corporation manufactures and sells two types of bookcases, standard and
deluxe. Agate expects the following operating results next year for each type of
bookcase:
Agate expects to have a total of $57,600 in fixed expenses next year. What is Agate's
break-even point next year in sales dollars?
A.$72,000
B.$144,000
C.$96,000
D.$240,000
7) Karma Corporation has total assets of $190,000 and total liabilities of $90,000. The
corporation's debt-to-equity ratio is closest to:
A.0.47
B.0.90
C.0.53
D.0.32
8) The company's return on total assets for Year 2 is closest to:
A.2.75%
B.1.64%
C.1.65%
D.2.76%
9) Assuming Comco uses the high-low method of analysis, the fixed cost of
maintenance would be estimated to be:
A) $14,500
B) $5,020
C) $13,000
D) $12,320
10) Lee Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
The company produces the same number of units every month, although the sales in
units vary from month to month. The company's variable costs per unit and total fixed
costs have been constant from month to month. Assume direct labor is a variable cost.
Required:
a. What is the unit product cost for the month under variable costing?
b. What is the unit product cost for the month under absorption costing?
c. Prepare a contribution format income statement for the month using variable costing.
d. Prepare an income statement for the month using absorption costing.
e. Reconcile the variable costing and absorption costing net operating incomes for the
month.
11) Dilbert Farm Supply is located in a small town in the rural west. Data regarding the
store's operations follow:
Sales are budgeted at $260,000 for November, $230,000 for December, and $210,000
for January.
Collections are expected to be 80% in the month of sale, 19% in the month following
the sale, and 1% uncollectible.
The cost of goods sold is 65% of sales.
The company desires to have an ending merchandise inventory at the end of each
month equal to 60% of the next month's cost of goods sold. Payment for merchandise is
made in the month following the purchase.
Other monthly expenses to be paid in cash are $20,300.
Monthly depreciation is $20,000.
Ignore taxes.
Expected cash collections in December are:
A.$230,000
B.$184,000
C.$233,400
D.$49,400
12) Noel Enterprises has budgeted sales in units for the next five months as follows:
Past experience has shown that the ending inventory for each month must be equal to
10% of the next month's sales in units. The inventory on May 31 contained 400 units.
The company needs to prepare a production budget for the second quarter of the year.
The beginning inventory in units for September is:
A.380 units
B.460 units
C.4,600 units
D.720 units
13) The labor time required to assemble a product is an example of a:
A.Unit-level activity.
B.Batch-level activity.
C.Product-level activity.
D.Organization-sustaining activity.
14) Trupp Surgical Hospital uses the direct method to allocate service department costs
to operating departments. The hospital has two service departments, Information
Technology and Administration, and two operating departments, Surgery and Recovery.
Information Technology Department costs are allocated on the basis of computer
workstations and Administration Department costs are allocated on the basis of
employees.
The total Surgery Department cost after service department allocations is closest to:
A.$540,968
B.$539,348
C.$535,993
D.$532,067
15) The net cash provided by (used in) financing activities for the year was:
A.$(9)
B.$(15)
C.$(21)
D.$3
16) The best capital budgeting method for ranking investment projects of different
dollar amounts is the:
A.project profitability index.
B.net present value method.
C.simple rate of return method.
17) Hagel Clinic uses client-visits as its measure of activity. During July, the clinic
budgeted for 2,300 client-visits, but its actual level of activity was 2,320 client-visits.
The clinic 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 overall revenue and spending variance (i.e., the variance for net operating income
in the revenue and spending variance column on the flexible budget performance
report) for July would be closest to:
A.$6,120 U
B.$5,722 F
C.$5,722 U
D.$6,120 F
18) Frantic Corporation had $130,000 in sales on account last year. The beginning
accounts receivable balance was $10,000 and the ending accounts receivable balance
was $16,000. The corporation's accounts receivable turnover was closest to:
A.5.00
B.13.00
C.10.00
D.8.13
19) Which of the intermediate products should be processed further?
A.beet fiber should be processed into industrial fiber; beet juice should be processed
into refined sugar
B.beet fiber should NOT be processed into industrial fiber; beet juice should NOT be
processed into refined sugar
C.beet fiber should be processed into industrial fiber; beet juice should NOT be
processed into refined sugar
D.beet fiber should NOT be processed into industrial fiber; beet juice should be
processed into refined sugar
20) Lartey Corporation's cost formula for its selling and administrative expense is
$22,200 per month plus $27 per unit. For the month of December, the company planned
for activity of 5,300 units, but the actual level of activity was 5,270 units. The actual
selling and administrative expense for the month was $168,150.
The selling and administrative expense in the flexible budget for December would be
closest to:
A.$164,364
B.$164,490
C.$165,300
D.$168,150
