1) Harry has just inherited $300,000. Harry has decided to quit his job and go to school
full time for the next five years by living off this inheritance. Harry will invest the
$300,000 in a money market account that has an 8% interest rate. If Harry’s goal is to
use up the entire inheritance, approximately what amount can he withdraw from the
money market account each year for the next five years? Assume that his first
withdrawal will be one year from the day that he sets up the account.
A.$64,800
B.$74,400
C.$75,131
D.$84,000
2) Galla Corporation makes a product with the following standard costs:
The company budgeted for production of 2,400 units in June, but actual production was
2,500 units. The company used 19,850 pounds of direct material and 980 direct
labor-hours to produce this output. The company purchased 21,700 pounds of the direct
material at $6.70 per pound. The actual direct labor rate was $19.20 per hour and the
actual variable overhead rate was $1.80 per hour.
The company applies variable overhead on the basis of direct labor-hours. The direct
materials purchases variance is computed when the materials are purchased.
The variable overhead efficiency variance for June is:
A.$36 U
B.$36 F
C.$40 U
D.$40 F
3) A manufacturer of cedar shingles has supplied the following data:
The company’s contribution margin ratio is closest to:
A.66.2%
B.73.0%
C.27.0%
D.33.8%
4) Compound K52E is a raw material used to make Pinkos Corporation’s major product.
The standard cost of compound K52E is $46.00 per ounce and the standard quantity is
5.0 ounces per unit of output. Data concerning the compound for March appear below:
The raw material was purchased on account.
The debits to the Raw Materials account for March would total:
A.$170,200
B.$172,420
C.$184,000
D.$164,220
5) Kircher, Inc., manufactures a product with the following costs:
The company uses the absorption costing approach to cost-plus pricing described in the
text. The pricing calculations are based on budgeted production and sales of 81,000
units per year.
The company has invested $220,000 in this product and expects a return on investment
of 15%.
The selling price based on the absorption costing approach would be closest to:
A.$71.90
B.$72.31
C.$53.29
D.$93.67
6) 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 the absorption costing?
A.$42,000
B.$7,200
C.$49,200
D.$28,500
7) What is the net monetary advantage (disadvantage) of processing Product X beyond
the split-off point?
A) $1,600
B) $22,400
C) $27,600
D) $(3,600)
8) Andruschack Corporation uses activity-based costing to determine product costs for
external financial reports. The company has provided the following data concerning its
activity-based costing system:
The total amount of overhead cost allocated to Product X would be closest to:
A.$339,000
B.$298,000
C.$296,100
D.$372,600
9) The following transactions occurred last year at Jogger Corporation:
Based solely on the above information, the net cash provided by financing activities for
the year on the statement of cash flows would be:
A.$424,000
B.$(138,000)
C.$(1,000)
D.$7,000
Financing activities:
10) The WRT Corporation makes collections on sales according to the following
schedule:
25% in month of sale
65% in month following sale
5% in second month following sale
5% uncollectible
The following sales have been budgeted:
Budgeted cash collections in June would be:
A.$27,500
B.$98,500
C.$71,000
D.$115,500