1) Chown Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
The total gross margin for the month under the absorption costing approach is:
A.$196,800
B.$179,400
C.$390,000
D.$7,800
2) The net cash provided by (used in) investing activities for the year was:
A.$(69)
B.$69
C.$136
D.$(136)
3) The following data relate to the Blending Department of Tru-Color Paint Corporation
for a recent month:
All materials are added prior to the beginning of work in the Blending Department.
Assuming that Tru-Color Paint Corporation uses the weighted-average method, the
equivalent units for conversion costs would be:
A.44,400
B.42,600
C.46,000
D.48,000
4) The following standards have been established for a raw material used to make
product I92:
The following data pertain to a recent month’s operations:
The direct materials purchases variance is computed when the materials are purchased.
Required:
a. What is the materials price variance for the month?
b. What is the materials quantity variance for the month?
5) The accounts receivable for Note Corporation was $240,000 at the beginning of the
year and $260,000 at the end of the year. If the accounts receivable turnover for the year
was 8 and 20% of the total sales were cash sales, the total sales for the year were:
A.$2,600,000
B.$2,000,000
C.$2,400,000
D.$2,500,000
6) To the nearest whole cent, what should be the average sales commission per unit at a
sales volume of 33,600 units? (Assume that this sales volume is within the relevant
range.)
A) $14.54
B) $15.00
C) $15.63
D) $15.32
7) When sales are constant, but the number of units produced fluctuates, net operating
income determined by the absorption costing method will:
A.tend to fluctuate in the same direction as fluctuations in the number of units
produced.
B.tend to remain constant.
C.tend to fluctuate in the opposite direction as fluctuations in the number of units
produced.
D.fluctuate without any relation to the number of units produced.
8) Which project has the highest ranking according to the net present value and the
project profitability index criteria?
A.Option A
B.Option B
C.Option C
D.Option D
9) The manufacturing overhead that would be applied to a unit of product R58G under
the company’s traditional costing system is closest to:
Binegar Manufacturing Corporation has a traditional costing system in which it applies
manufacturing overhead to its products using a predetermined overhead rate based on
direct labor-hours (DLHs). The company has two products, R58G and R09O, about
which it has provided the following data:
The company’s estimated total manufacturing overhead for the year is $1,617,600 and
the company’s estimated total direct labor-hours for the year is 24,000.
The company is considering using a form of activity-based costing to determine its unit
product costs for external reports. Data for this proposed activity-based costing system
appear below:
A.$6.74
B.$16.10
C.$22.84
D.$2.90
10) Olivera Corporation’s flexible budget performance report for last month shows that
actual indirect materials cost, a variable cost, was $31,178 and that the spending
variance for indirect materials cost was $2,261 unfavorable. During that month, the
company worked 11,900 machine-hours. Budgeted activity for the month had been
12,200 machine-hours. The cost formula per machine-hour for indirect materials cost
must have been closest to:
A.$2.74
B.$2.81
C.$2.37
D.$2.43
11) Suppose there is ample idle capacity to produce the units required by the overseas
customer and the special discounted price on the special order is $76.40 per unit. By
how much would this special order increase (decrease) the company’s net operating
income for the month?
A) $(17,000)
B) $13,400
C) $48,000
D) $(5,000)
12) Baad Industries is a division of a major corporation. Last year the division had total
sales of $20,440,000, net operating income of $1,860,040, and average operating assets
of $7,000,000.
The division’s return on investment (ROI) is closest to:
A.21.0%
B.26.6%
C.6.8%
D.2.5%
13) Diemert Corporation bases its budgets on machine-hours. The company’s static
planning budget for June appears below:
Actual results for the month were:
The spending variance for equipment depreciation in the flexible budget performance
report for the month should be:
A.$4,250 U
B.$620 F
C.$4,250 F
D.$620 U