1) Last year Marton Corporation reported a cost of goods sold of $720,000 on its
income statement. The following additional data were taken from the company’s
comparative balance sheet for the year:
The company uses the direct method to determine the net cash provided by operating
activities on the statement of cash flows. The cost of goods sold adjusted to a cash basis
would be:
A.$740,000
B.$767,000
C.$747,000
D.$673,000
2) Guo Corporation uses the weighted-average method in its process costing system.
This month, the beginning inventory in the first processing department consisted of 500
units. The costs and percentage completion of these units in beginning inventory were:
A total of 9,700 units were started and 9,100 units were transferred to the second
processing department during the month. The following costs were incurred in the first
processing department during the month:
The ending inventory was 85% complete with respect to materials and 75% complete
with respect to conversion costs.
Note: Your answers may differ from those offered below due to rounding error. In all
cases, select the answer that is the closest to the answer you computed. To reduce
rounding error, carry out all computations to at least three decimal places.
What are the equivalent units for conversion costs for the month in the first processing
department?
A.9,925
B.10,200
C.9,100
D.825
3) Manufacturing Cycle Efficiency (MCE) is computed as:
A.Throughput Time Delivery Cycle Time.
B.Process Time Delivery Cycle Time.
C.Value-Added Time Throughput Time.
D.Value-Added Time Delivery-Cycle Time.
4) Tomlin Corporation prepares its statement of cash flows using the indirect method.
Which of the following would be subtracted from net income in the operating activities
section of the statement?
A.Option A
B.Option B
C.Option C
D.Option D
5) Pierce Corporation uses a standard cost system in which it applies manufacturing
overhead to its product on the basis of standard direct labor-hours (DLHs). Below is the
standard cost card for the product:
Last year, the company produced 6,000 units of product using 17,000 direct
labor-hours. The actual total fixed manufacturing overhead cost for the year was
$140,000 and the volume variance was $12,000, favorable.
Required:
a. Determine the budgeted amount of total fixed manufacturing overhead cost.
b. Determine the denominator activity figure that the company used in computing
predetermined overhead rates.
6) The company’s net profit margin percentage for Year 2 is closest to:
A.1.9%
B.2.7%
C.3.3%
D.38.1%
7) Klutz Dance Studio had net income of $167,000 for the year just ended. Klutz
collected the following additional information to prepare its statement of cash flows for
the year:
Klutz uses the indirect method to prepare its statement of cash flows. What is Klutz’s
net cash provided (used) by operating activities?
A.$95,000
B.$137,000
C.$185,000
D.$207,000
8) Laverde Corporation has provided the following data:
The company’s total asset turnover for Year 2 is closest to:
A.1.22
B.7.60
C.0.13
D.0.82
9) Kudej Printing uses two measures of activity, press runs and book set-ups, in the cost
formulas in its budgets and performance reports. The cost formula for wages and
salaries is $8,360 per month plus $570 per press run plus $910 per book set-up. The
company expected its activity in May to be 194 press runs and 74 book set-ups, but the
actual activity was 195 press runs and 72 book set-ups. The actual cost for wages and
salaries in May was $188,370.
The activity variance for wages and salaries in May would be closest to:
A.$1,250 F
B.$2,090 F
C.$2,090 U
D.$1,250 U
10) The Forbes Corporation uses a standard cost system in which overhead costs are
applied to products on the basis of standard direct labor-hours (DLHs). The following
data applied to the company’s activities for June:
The volume variance for June is:
A.$44,954 Unfavorable
B.$39,000 Favorable
C.$39,000 Unfavorable
D.$44,954 Favorable
11) ( Tidwell Corporation is considering the purchase of a machine costing $18,000.
Tidwell estimates that this machine will save $5,000 per year in cash operating
expenses for the next five years. If the machine has no salvage value at the end of five
years and the discount rate used by Tidwell is 8%, then the machine’s internal rate of
return is closest to:
A.8%
B.10%
C.12%
D.14%