1) tabcomp inc. is a retail distributor for mzb-33 computer hardware and related
software. tabcomp prepares annual sales forecasts of which the first six months of the
coming year are presented below.
cash sales account for 25% of tabcomp’s total sales, 30% of the total sales are paid by
bank credit card, and the remaining 45% are on open account (tabcomp’s own charge
accounts). the cash and bank credit card sale payments are received in the month of the
sale. bank credit card sales are subject to a 4 % discount which is deducted
immediately. the cash receipts for sales on open account are 70% in the month
following the sale, 28% in the second month following the sale, and the remaining are
uncollectible.
tabcomp’s month-end inventory requirements for computer hardware units are 30% of
the next month’s sales. the units must be ordered two months in advance due to long
lead times quoted by the manufacturer.
required:
a. calculate the cash that tabcomp can expect to collect during april. show all of your
calculations.
b. determine the number of computer hardware units that should be ordered in january.
show all of your calculations.
2) clubb company, which has only one product, has provided the following data
concerning its most recent month of operations:
the total contribution margin for the month under the variable costing approach is:
a.$38,000
b.$92,000
c.$170,200
d.$119,600
3) the contribution margin is:
a.$240,000
b.$560,000
c.$632,000
d.$72,000
4) deano products is a division of a major corporation. the following data are for the last
year of operations:
the division’s residual income is closest to:
a.$591,480
b.$(128,520)
c.$(1,698,120)
d.$1,311,480
5) suppose that division a is operating at capacity and can sell all of its output to outside
customers at its usual selling price. if division a sells the parts to division b at $24 per
unit (division b’s outside price), the company as a whole will be:
a.better off by $5,000 each period
b.worse off by $15,000 each period
c.worse off by $5,000 each period
d.there will be no change in the status of the company as a whole
6) abis corporation uses the weighted-average method in its process costing system. this
month, the beginning inventory in the first processing department consisted of 800
units. the costs and percentage completion of these units in beginning inventory were:
a total of 9,200 units were started and 8,200 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 80% complete with respect to materials and 20% 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.
the total cost transferred from the first processing department to the next processing
department during the month is closest to:
a.$512,700
b.$452,300
c.$420,414
d.$436,400
7) abis corporation uses the weighted-average method in its process costing system. this
month, the beginning inventory in the first processing department consisted of 800
units. the costs and percentage completion of these units in beginning inventory were:
a total of 9,200 units were started and 8,200 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 80% complete with respect to materials and 20% 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.
the cost per equivalent unit for conversion costs for the first department for the month is
closest to:
a.$40.77
b.$33.24
c.$38.83
d.$37.68
8) the best estimate of the total monthly fixed cost is:
a.$24,000
b.$478,050
c.$427,600
d.$528,500
9) excerpts from shelton corporation’s most recent balance sheet appear below:
sales on account in year 2 amounted to $1,320 and the cost of goods sold was $890.
the working capital at the end of year 2 is:
a.$370 thousand
b.$1,010 thousand
c.$910 thousand
d.$680 thousand
10) merced corporation has provided the following budgeted data:
if the variable expense per unit is increased by 10 percent, and if the total fixed
expenses are increased by $20,000 with the selling price remaining unchanged at $20,
the break-even point in units will be:
a.14,706 units
b.9,091 units
c.17,647 units
d.15,000 units
11) management of sourwine corporation is considering whether to purchase a new
model 320 machine costing $389,000 or a new model 280 machine costing $318,000 to
replace a machine that was purchased 6 years ago for $376,000. the old machine was
used to make product c78p until it broke down last week. unfortunately, the old
machine cannot be repaired.
management has decided to buy the new model 280 machine. it has less capacity than
the new model 320 machine, but its capacity is sufficient to continue making product
c78p.
management also considered, but rejected, the alternative of simply dropping product
c78p. if that were done, instead of investing $318,000 in the new machine, the money
could be invested in a project that would return a total of $405,000.
in making the decision to invest in the model 280 machine, the opportunity cost was:
a.$376,000
b.$389,000
c.$405,000
d.$318,000
12) laboe 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 february, the kennel budgeted
for 2,900 tenant-days, but its actual level of activity was 2,940 tenant-days. the kennel
has provided the following data concerning the formulas to be used in its budgeting:
the net operating income in the planning budget for february would be closest to:
a.$7,191
b.$7,391
c.$7,900
d.$8,260
13) lampert corporation manufactures and sells a single product. the company uses units
as the measure of activity in its budgets and performance reports. during march, the
company budgeted for 6,100 units, but its actual level of activity was 6,060 units. the
company has provided the following data concerning the formulas used in its budgeting
and its actual results for march:
the selling and administrative expenses in the planning budget for march would be
closest to:
a.$26,560
b.$27,647
c.$27,466
d.$26,536
14) in july, one of the processing departments at feickert corporation had beginning
work in process inventory of $23,000 and ending work in process inventory of $16,000.
during the month, $268,000 of costs were added to production and the cost of units
transferred out from the department was $275,000. in the department’s cost
reconciliation report for july, the total cost to be accounted for would be:
a.$559,000
b.$291,000
c.$582,000
d.$39,000
15) which of the following should be classified as an investing activity on a statement
of cash flows?
a.cash used to purchase land
b.cash collected on a loan made to a supplier
c.cash received from the sale of a stock investment
d.both a and c above
e.all of these
16) annarummo inc., an escrow agent, has provided the following data concerning its
office expenses:
management believes that office expense is a mixed cost that depends on the number of
escrows completed. note: real estate purchases usually involve the services of an escrow
agent that holds funds and prepares documents to complete the transaction.
using the high-low method, the estimate of the variable component of office expense
per escrow completed is closest to:
a.$196.11
b.$95.37
c.$99.50
d.$292.71
17) castanada corporation has provided the following data concerning its direct labor
costs for august:
the labor efficiency variance for august would be recorded as a:
a.credit of $24,864
b.debit of $24,864
c.debit of $23,088
d.credit of $23,088
