1) the management of wymer corporation would like to investigate the possibility of
basing its predetermined overhead rate on activity at capacity. the company’s controller
has provided an example to illustrate how this new system would work. in this example,
the allocation base is machine-hours and the estimated amount of the allocation base for
the upcoming year is 50,000 machine-hours. in addition, capacity is 59,000
machine-hours and the actual level of activity for the year is 53,300 machine-hours. all
of the manufacturing overhead is fixed and is $1,622,500 per year. for simplicity, it is
assumed that this is the estimated manufacturing overhead for the year as well as the
manufacturing overhead at capacity. it is further assumed that this is also the actual
amount of manufacturing overhead for the year. a number of jobs were worked on
during the year, one of which was job j44v. this job required 230 machine-hours.
if the company bases its predetermined overhead rate on capacity, the amount of
manufacturing overhead charged to the job j44v is closest to:
a.$6,988.30
b.$6,325.00
c.$7,001.41
d.$6,785.00
2) what is the maximum contribution margin the company can earn per month?
a.$91,820
b.$99,920
c.$133,940
d.$96,138
3) cahalane natural dying corporation measures its activity in terms of skeins of yarn
dyed. last month, the budgeted level of activity was 11,600 skeins and the actual level
of activity was 12,000 skeins. the company’s owner budgets for dye costs, a variable
cost, at $0.31 per skein. the actual dye cost last month was $3,5 in the company’s
flexible budget performance report for last month, what would have been the spending
variance for dye costs?
a.$118 u
b.$124 u
c.$56 f
d.$180 f
4) the selling and administrative expense budget of spurlock corporation is based on
budgeted unit sales, which are 6,300 units for february. the variable selling and
administrative expense is $9.30 per unit. the budgeted fixed selling and administrative
expense is $118,440 per month, which includes depreciation of $19,530 per month. the
remainder of the fixed selling and administrative expense represents current cash flows.
the cash disbursements for selling and administrative expenses on the february selling
and administrative expense budget should be:
a.$98,910
b.$157,500
c.$58,590
d.$177,030
5) during the month of january, fisher corporation, a manufacturing company, purchased
raw materials costing $76,000. the cost of goods manufactured for the month was
$129,000. the beginning balance in the raw materials account was $26,000 and the
ending balance was $21,000. the beginning balance in the finished goods account was
$52,000 and the ending balance was $35,000.
required:
a. what was the cost of raw materials used in production during january? show your
work.
b. what was the cost of goods sold for january? show your work.
6) gabrisch inc. is a merchandising company. last month the company’s merchandise
purchases totaled $90,000. the company’s beginning merchandise inventory was
$13,000 and its ending merchandise inventory was $22,000. what was the company’s
cost of goods sold for the month?
a.$90,000
b.$99,000
c.$125,000
d.$81,000
7) the actual manufacturing overhead incurred at huberty corporation during january
was $73,000, while the manufacturing overhead applied to work in process was
$78,000. the company’s cost of goods sold was $349,000 prior to closing out its
manufacturing overhead account. the company closes out its manufacturing overhead
account to cost of goods sold. which of the following statements is true?
a.manufacturing overhead was overapplied by $5,000; cost of goods sold after closing
out the manufacturing overhead account is $354,000
b.manufacturing overhead was underapplied by $5,000; cost of goods sold after closing
out the manufacturing overhead account is $344,000
c.manufacturing overhead was underapplied by $5,000; cost of goods sold after closing
out the manufacturing overhead account is $354,000
d.manufacturing overhead was overapplied by $5,000; cost of goods sold after closing
out the manufacturing overhead account is $344,000
8) a favorable labor rate variance indicates that
a.actual hours exceed standard hours
b.standard hours exceed actual hours
c.the actual rate exceeds the standard rate
d.the standard rate exceeds the actual rate
9) 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
10) during its first year of operations, holt manufacturing company incurred the
following costs to produce 200,000 units of its only product:
holt also incurred the following costs in the sale of 180,000 units of product during its
first year:
assume that direct labor is a variable cost.
if holt’s variable costing net operating income for this first year is $397,800, what
would its absorption costing net operating income be for this first year?
a.$354,600
b.$441,000
c.$445,800
d.$473,800
11) botwinick corporation manufactures a variety of products. the following data
pertain to the company’s operations over the last two years:
what was the absorption costing net operating income last year?
a.$57,000
b.$28,000
c.$58,000
d.$88,000
12) kuczenski corporation’s cost formula for its manufacturing overhead is $45,700 per
month plus $53 per machine-hour. for the month of march, the company planned for
activity of 6,200 machine-hours, but the actual level of activity was 6,150
machine-hours. the actual manufacturing overhead for the month was $373,630.
the manufacturing overhead in the flexible budget for march would be closest to:
a.$371,650
b.$371,281
c.$373,630
d.$374,300