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1) Upchurch Corporation produces and sells a single product. Data concerning that
product appear below:
Assume the company's target profit is $14,000. The dollar sales to attain that target
profit is closest to:
A.$326,180
B.$593,248
C.$494,212
D.$959,353
2) Rieben Corporation is considering a capital budgeting project that would involve
investing $120,000 in equipment with an estimated useful life of 4 years and no salvage
value at the end of the useful life. Annual incremental sales from the project would be
$320,000 and the annual incremental cash operating expenses would be $220,000. A
one-time renovation expense of $40,000 would be required in year 3. The company's
income tax rate is 30%.
The company uses straight-line depreciation on all equipment.
The income tax expense in year 3 is:
A.$9,000
B.$30,000
C.$12,000
D.$21,000
3) Zacher Corporation makes a product with the following standards for direct labor
and variable overhead:
In February the company's budgeted production was 6,900 units, but the actual
production was 7,000 units. The company used 1,980 direct labor-hours to produce this
output. The actual variable overhead cost was $10,296. The company applies variable
overhead on the basis of direct labor-hours.
The variable overhead rate variance for February is:
A.$420 U
B.$420 F
C.$396 F
D.$396 U
4) Farron Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
What is the unit product cost for the month under variable costing?
A.$69 per unit
B.$84 per unit
C.$89 per unit
D.$74 per unit
5) Masek Corporation has a standard cost system in which it applies manufacturing
overhead to products on the basis of standard machine-hours (MHs). The company has
provided the following data for the most recent month:
What was the fixed manufacturing overhead budget variance for the month?
A.$2,360 Unfavorable
B.$1,000 Unfavorable
C.$2,360 Favorable
D.$1,000 Favorable
6) How much fixed Maintenance Department cost should be charged to the Assembly
Department at the end of the year?
A.$90,000
B.$124,000
C.$135,000
D.$120,000
7) Using the high-low method, the estimate of the fixed component of inspection cost
per month is closest to:
A) $16,210
B) $7,746
C) $15,761
D) $16,111
8) The gross margin percentage is equal to:
A.(Net operating income + Selling and administrative expenses)/Sales
B.Net operating income/Sales
C.Cost of goods sold/Sales
D.Cost of goods sold/Net income
9) Alopecia Hair Tonic Corporation is considering an investment project that is
expected to generate net cash inflows of $65,000 per year for 4 years. The only initial
investment funds required will be a $150,000 increase in working capital. This will be
released at the end of the 4 years. Alopecia's after-tax cost of capital is 12% and its tax
rate is 30%. The net present value of this investment project is closest to:
A.$4,622
B.$59,222
C.$83,584
D.$99,964
10) The following information relates to the Blending Department of Kedakai Products
Corporation for the month of May. Kedakai uses a weighted-average process costing
system.
What are the Blending Department's equivalent units related to materials for May?
A.260,000
B.277,000
C.290,000
D.307,000
11) The following labor standards have been established for a particular product:
The following data pertain to operations concerning the product for the last month:
Required:
a. What is the labor rate variance for the month?
b. What is the labor efficiency variance for the month?
12) The company's working capital is:
A.$671,000
B.$665,000
C.$418,000
D.$983,000
