1) Up to how much should the company be willing to pay for one additional minute of
milling machine time if the company has made the best use of the existing milling
machine capacity? (Round your answer to the nearest whole cent.)
A.$11.00
B.$0.00
C.$4.55
D.$15.00
The company should be willing to pay up to the contribution margin per minute for the
marginal job, which is $4.55 per minute for Product A.
Tillison Corporation makes three products that use the current constraint which is a
particular type of machine. Data concerning those products appear below:
2) The average sale period for Year 2 is closest to:
A.58.5 days
B.33.4 days
C.217.3 days
D.56.2 days
3) The company’s average collection period (age of receivables) for Year 2 is closest to:
A.1.1 days
B.28.2 days
C.1.0 days
D.27.9 days
4) Goel Company, a wholesale distributor, uses activity-based costing for its overhead
costs. The company has provided the following data concerning its annual overhead
costs and its activity based costing system:
The “Other” activity cost pool consists of the costs of idle capacity and
organization-sustaining costs.
The amount of activity for the year is as follows:
Required:
Compute the activity rates (i.e., cost per unit of activity) for the Filling Orders and
Product Support activity cost pools:
5) Rawdon Corporation’s net operating income in Year 2 was $52,429, net income
before taxes was $34,429, and the net income was $24,100. Total common stock was
$360,000 at the end of both Year 2 and Year 1. The par value of common stock is $4 per
share. The company’s total stockholders’ equity at the end of Year 2 amounted to
$976,000 and at the end of Year 1 to $960,000. The company’s earnings per share for
Year 2 is closest to:
A.$0.58 per share
B.$0.38 per share
C.$0.27 per share
D.$5.84 per share
6) Poriss Corporation makes and sells a single product called a Yute. The company is in
the process of preparing its Selling and Administrative Expense Budget for the last
quarter of the year. The following budget data are available:
All of these expenses (except depreciation) are paid in cash in the month they are
incurred.
If the company has budgeted to sell 16,000 Yutes in December, then the budgeted total
cash disbursements for selling and administrative expenses for December would be:
A.$280,000
B.$494,000
C.$224,000
D.$504,000
7) The average collection period for Year 2 is closest to:
A.55.1 days
B.0.9 days
C.1.1 days
D.57.8 days
8) The direct materials cost for August is:
A.$73,000
B.$69,000
C.$81,000
D.$57,000
9) The company’s working capital at the end of Year 2 is:
A.$732,000
B.$831,000
C.$289,000
D.$590,000
10) The net present value of the entire project is closest to:
A.$246,440
B.$165,152
C.$325,152
D.$224,000
11) Schweinert Corporation manufactures a single product. The following data pertain
to the company’s operations over the last two years:
What was the absorption costing net operating income this year?
A.$55,000
B.$73,000
C.$44,000
D.$84,000
12) Traves Corporation incurred $69,000 of actual Manufacturing Overhead costs
during October. During the same period, the Manufacturing Overhead applied to Work
in Process was $68,000. The journal entry to record the application of Manufacturing
Overhead to Work in Process would include a:
A.debit to Manufacturing Overhead of $68,000
B.credit to Manufacturing Overhead of $68,000
C.debit to Work in Process of $69,000
D.credit to Work in Process of $69,000