1) Ragins Corporation produces a single product and has the following cost structure:
The absorption costing unit product cost is:
A.$219 per unit
B.$154 per unit
C.$159 per unit
D.$252 per unit
2) Liscomb Tech is a for-profit vocational school. The school bases its budgets on two
measures of activity (i.e., cost drivers), namely student and course. The school uses the
following data in its budgeting:
In October, the school budgeted for 1,520 students and 113 courses. The school’s
income statement showing the actual results for the month appears below:
Required:
Prepare a report showing the school’s activity variances for October. Label each
variance as favorable (F) or unfavorable (U).
3) Jarvix Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
The company produces the same number of units every month, although the sales in
units vary from month to month. The company’s variable costs per unit and total fixed
costs have been constant from month to month.
What is the unit product cost for the month under variable costing?
A.$83 per unit
B.$74 per unit
C.$90 per unit
D.$81 per unit
4) How much fixed Maintenance Department cost should be charged to the Milling
Department at year-end?
A.$93,000
B.$60,000
C.$62,000
D.$46,500
5) A proper journal entry to record issuing raw materials to be used on a job would be:
A.Option A
B.Option B
C.Option C
D.Option D
6) Froio Corporation produces and sells two products. Data concerning those products
for the most recent month appear below:
Fixed expenses for the entire company were $26,570.
The break-even point for the entire company is closest to:
A.$43,557
B.$26,570
C.$22,430
D.$45,680
7) Calin Corporation has total current assets of $615,000, total current liabilities of
$230,000, total stockholders’ equity of $1,183,000, total net plant and equipment of
$958,000, total assets of $1,573,000, and total liabilities of $390,000. The company’s
working capital is:
A.$615,000
B.$1,183,000
C.$385,000
D.$958,000
8) On the statement of cash flows, the income tax expense adjusted to a cash basis
would be:
A.$39,000
B.$69,000
C.$9,000
D.$25,000
9) To the nearest whole dollar, what should be the total sales commissions at a sales
volume of 36,100 units? (Assume that this sales volume is within the relevant range.)
A) $525,000
B) $509,003
C) $533,250
D) $541,500
10) The following is Arkadia Corporation’s contribution format income statement for
last month:
The company has no beginning or ending inventories and produced and sold 20,000
units during the month.
Required:
a. What is the company’s contribution margin ratio?
b. What is the company’s break-even in units?
c. If sales increase by 100 units, by how much should net operating income increase?
d. How many units would the company have to sell to attain a target profit of $125,000?
e. What is the company’s margin of safety in dollars?
f. What is the company’s degree of operating leverage?