1) Gandrud Kennel uses tenant-days as its measure of activity; an animal housed in the
kennel for one day is counted as one tenant-day. During June, the kennel budgeted for
2,600 tenant-days, but its actual level of activity was 2,580 tenant-days. The kennel has
provided the following data concerning the formulas to be used in its budgeting:
The facility expenses in the flexible budget for June would be closest to:
A.$16,308
B.$16,360
C.$16,223
D.$15,974
2) Vanderhyde Kennel uses tenant-days as its measure of activity; an animal housed in
the kennel for one day is counted as one tenant-day. During May, the kennel budgeted
for 3,300 tenant-days, but its actual level of activity was 3,340 tenant-days. The kennel
has provided the following data concerning the formulas used in its budgeting and its
actual results for May:
Data used in budgeting:
Actual results for May:
The net operating income in the planning budget for May would be closest to:
A.$13,020
B.$19,025
C.$13,436
D.$19,489
3) Wienecke Corporation manufactures and sells one product. The following
information pertains to the company’s first year of operations:
The company does not have any variable manufacturing overhead costs or variable
selling and administrative costs. During its first year of operations, the company
produced 44,000 units and sold 41,000 units. The company’s only product is sold for
$239 per unit.
Assume that the company uses a variable costing system that assigns $16 of direct labor
cost to each unit that is produced. The unit product cost under this costing system is:
A.$104 per unit
B.$174 per unit
C.$88 per unit
D.$213 per unit
4) If salespersons are paid commissions that are a set percentage of sales, which product
would they prefer to sell? In other words, if it is a choice between selling one unit of
one product and one unit of another, which product would they prefer to sell?
A.I400
B.I300
C.I200
D.I100
5) The company’s working capital at the end of Year 2 is:
A.$732,000
B.$831,000
C.$289,000
D.$590,000
6) Bode Corporation has two divisions: East and West. Data from the most recent
month appear below:
The company’s common fixed expenses total $47,300. If the company operates at
exactly the break-even sales of the East Division and West Division, what would be the
company’s overall net operating income?
A.$0
B.($293,300)
C.$51,470
D.($47,300)
7) Lafoe Corporation produces two intermediate products, A and B, from a common
input. Intermediate product A can be further processed into end product X. Intermediate
product B can be further processed into Product Y. The common input is purchased in
batches that cost $40 each and the cost of processing a batch to produce intermediate
products A and B is $18. Intermediate product A can be sold as is for $28 or processed
further for $19 to make Product X that is sold for $50. Intermediate product B can be
sold as is for $30 or processed further for $21 to make product Y that is sold for $49.
Required:
a. Assuming that no other costs are involved in processing potatoes or in selling
products, how much money does the company make from processing one batch of the
common input into the products X and Y? Show your work!
b. Should each of the intermediate products, A and B, be sold as is or processed further?
Explain.
8) Granger Corporation had $180,000 in sales on account last year. The beginning
accounts receivable balance was $10,000 and the ending accounts receivable balance
was $18,000. The corporation’s average collection period was closest to:
A.20.3 days
B.28.4 days
C.36.5 days
D.56.8 days
9) Nitrol Corporation manufactures brass vases using a standard cost system with
standard machine-hours as the activity base for overhead. The following information
relates to vase production at Nitrol for last year:
The standard machine-hours per vase is 1.25. Last year Nitrol produced 84,000 vases.
What was Nitrol’s variable overhead rate variance for last year?
A.$1,000 Favorable
B.$1,060 Unfavorable
C.$2,060 Unfavorable
D.$9,500 Unfavorable
10) If the actual manufacturing overhead cost for the year totaled $145,000, then
overhead was:
A.overapplied by $25,000
B.overapplied by $10,000
C.underapplied by $25,000
D.underapplied by $10,000