1) The company has received a special, one-time-only order for 300 units of component
D53. There would be no variable selling expense on this special order and the total
fixed manufacturing overhead and fixed selling and administrative expenses of the
company would not be affected by the order. However, assume that Dockwiller has no
excess capacity and this special order would require 30 minutes of the constraining
resource, which could be used instead to produce products with a total contribution
margin of $1,800. What is the minimum price per unit on the special order below which
the company should not go?
A) $73 per unit
B) $36 per unit
C) $53 per unit
D) $6 per unit
2) Palomo Corporation sells a product for $170 per unit. The product’s current sales are
35,200 units and its break-even sales are 25,344 units. The margin of safety as a
percentage of sales is closest to:
A.72%
B.39%
C.28%
D.61%
3) Yoder Corporation uses the weighted-average method in its process costing system.
The following data pertain to operations in the first processing department for a recent
month:
How many units were completed and transferred to the next department during the
month?
A.750,000 units
B.790,000 units
C.760,000 units
D.740,000 units
4) Which of the following budgets are prepared before the production budget?
A.Option A
B.Option B
C.Option C
D.Option D
5) Morie Corporation is working on its direct labor budget for the next two months.
Each unit of output requires 0.75 direct labor-hours. The direct labor rate is $8.10 per
direct labor-hour. The production budget calls for producing 2,000 units in March and
2,300 units in April. The company guarantees its direct labor workers a 40-hour paid
work week. With the number of workers currently employed, that means that the
company is committed to paying its direct labor work force for at least 1,760 hours in
total each month even if there is not enough work to keep them busy. What would be
the total combined direct labor cost for the two months?
A.$28,512.00
B.$26,406.00
C.$28,228.50
D.$26,122.50
6) The following materials standards have been established for a particular product:
The following data pertain to operations concerning the product for the last month:
The direct materials purchases variance is computed when the materials are purchased.
What is the materials quantity variance for the month?
A.$1,260 U
B.$1,309 U
C.$11,220 U
D.$10,800 U
7) Tillinghast Corporation estimates that its variable manufacturing overhead is $9.60
per machine-hour and its fixed manufacturing overhead is $14,630 per period.
If the denominator level of activity is 1,100 machine-hours, the predetermined overhead
rate would be:
A.$960.00 per machine-hour
B.$9.60 per machine-hour
C.$13.30 per machine-hour
D.$22.90 per machine-hour
8) Schaad Corporation has entered into an 8 year lease for a piece of equipment. The
annual payment under the lease will be $2,500, with payments being made at the
beginning of each year. If the discount rate is 14%, the present value of the lease
payments is closest to:
A.$20,000
B.$7,011
C.$17,544
D.$14,097
9) Claris Corporation (a multi-product company) produces and sells 7,000 units of
Product X each year. Each unit of Product X sells for $12 and has a contribution margin
of $4. If Product X is discontinued, $19,000 of the $32,000 in fixed costs charged to
Product X could be eliminated. If Product X is discontinued, the company’s overall
operating income would:
A) decrease by $4,000 per year.
B) increase by $4,000 per year.
C) decrease by $7,000 per year.
D) increase by $7,000 per year.
10) Phoenix Company makes custom covers for air conditioning units for homes and
businesses. The company uses an activity-based costing system for its overhead costs.
The company has provided the following data concerning its annual overhead costs and
its activity cost pools:
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:
a. Prepare the first-stage allocation of overhead costs to the activity cost pools by filling
in the table below:
b. Compute the activity rates (i.e., cost per unit of activity) for the Making Awnings and
Job Support activity cost pools by filling in the table below:
c. Prepare an action analysis report in good form of a job that involves making 50 yards
of covers and has direct materials and direct labor cost of $1,500. The sales revenue
from this job is $2,500.
For purposes of this action analysis report, direct materials and direct labor should be
classified as a Green cost; production overhead as a Red cost; and office expense as a
Yellow cost.
11) David Corporation uses the weighted-average method in its process costing system.
The first processing department, the Welding Department, started the month with
20,000 units in its beginning work in process inventory that were 80% complete with
respect to conversion costs. The conversion cost in this beginning work in process
inventory was $123,200. An additional 65,000 units were started into production during
the month. There were 19,000 units in the ending work in process inventory of the
Welding Department that were 10% complete with respect to conversion costs. A total
of $389,250 in conversion costs were incurred in the department during the month.
What would be the cost per equivalent unit for conversion costs for the month? (Round
off to three decimal places.)
A.$7.547
B.$7.700
C.$4.634
D.$5.988
