1) harrington corporation produces three products, a, b, and c. pertinent information on
these products is as follows:
the objective function for a linear program to maximize contribution margin from the
three products is:
a.max z = $3a + $3b + $4c
b.max z = $3a + $2.50b + $5c
c.max z = $4a + $3.50b + $6c
d.max z = a + b + c
e.max z = a + $0.50b $2c
2) tierney construction, inc. recently lost a portion of its financial records in an office
theft. the following accounting information remained in the office files:
direct labor cost incurred during the period amounted to 2.5 times the factory overhead.
the cfo of tierney construction, inc. has asked you to recalculate the following accounts
and to report to him by the end of tomorrow.
what should be the amount in the finished goods inventory at december 31, 2013?
a.$55,500
b.$35,000
c.$43,000
d.$49,000
3) which one of the following cost estimation methods is the most accurate?
a.regression analysis
b.visual fit
c.subjective forecasting
d.the high-low method
4) in least squares regression analysis, the cost to be estimated is the:
a.independent variable
b.dependent variable
c.cost object
d.outlier
e.dummy variable
5) a firm has many products, some produced in an automated production process and
some produced in a manual production process. using direct labor hours to assign
manufacturing overhead to a product manufactured with a highly automated process is
likely to:
a.overstate overhead of the product
b.understate overhead of the product
c.overapply overhead to the period
d.underapply overhead to the period
e.have no effect on overhead of the product
6) operating at or near full capacity will require a firm considering a special sales order
to potentially recognize the:
a.opportunity cost from lost sales
b.value of full employment
c.the use of operating leverage
d.need for good management
e.importance of facility-level cost drivers
7) which of the following does not represent a possible opportunity for a manufacturing
firm as a part of swot analysis?
a.demographic trends
b.technological advances in the industry
c.a patent developed by another firm for manufacturing a product
d.changes in regulation of the industry
e.changes in the economic environment facing all industries
8) in measuring variable cost per unit for cost-volume-profit (cvp) analysis purposes:
a.only variable production costs are included
b.only variable selling/distribution costs are included
c.both variable production and variable selling/distribution costs are included
d.only variable and semi-variable production costs are included
e.the amount assumed is a function of anticipated output volume
9) stylish sitting is a retailer of office chairs located in san francisco, california. due to
increased market competition, the cfo of stylish sitting has grown worried about the
firm’s upcoming income stream. the cfo asked you to use the company financial
information provided below.
the annual breakeven point in dollar sales is calculated to be:
a.$1,300,000
b.$1,500,000
c.$1,100,000
d.$1,600,000
e.$1,800,000
10) certain workers are assigned the task of unpacking production materials received
from suppliers. these workers place the material in a storage area pending subsequent
use in the production process. the labor cost of such workers is normally classified as:
a.direct labor
b.direct materials
c.indirect labor
d.indirect materials
11) which one of the following is used by the production department supervisor to
request the materials for production?
a.purchase order
b.material requisition
c.bill of materials
d.product job cost schedule
e.job cost sheet
12) in the current year, becker sofa company expected to sell 12,000 leather sofas. fixed
costs for the year were expected to be $8,400,000; unit sales price was budgeted at
$4,600; and unit variable costs were expected to be $2,200.
becker sofa company’s margin of safety (mos) in units is:
a.8,800
b.8,000
c.9,900
d.9,100
e.8,500