1) Consider the following production and cost data for two products, Q and P:
A total of 24,000 machine minutes are available each period and there is unlimited
demand for each product. What is the largest possible total contribution margin that can
be realized each period?
A.$120,000
B.$144,000
C.$456,000
D.$132,000
2) Hettinger Hospital bases its budgets on patient-visits. The hospital’s static budget for
March appears below:
The total cost at the activity level of 7,300 patient-visits per month should be:
A.$187,680
B.$194,200
C.$201,480
D.$193,430
3) A project requires an initial investment of $70,000 and has a project profitability
index of 0.932. The present value of the future cash inflows from this investment is:
A.$70,000
B.$36,231
C.$135,240
D.Cannot be determined from the data provided.
4) Delta Company’s long-run average and actual machine-hours for last year appear
below:
Fixed maintenance costs of the company’s maintenance service department are
budgeted at $60,000 per year. These fixed costs are incurred in order to support
long-run average demand. How much of this cost should be charged to Department B at
the end of the year?
A.$30,000
B.$22,500
C.$24,000
D.$18,000
5) The Moab Corporation had sales of $300,000 and expenses of $175,000 last year. All
sales were cash sales and all expenses were cash expenses. Moab Corporation’s tax rate
is 30%. The after-tax net cash inflow at Moab last year was:
A.$210,000
B.$37,500
C.$52,500
D.$87,500
6) The total of the manufacturing overhead costs listed above for September is:
A) $669,000
B) $366,000
C) $34,000
D) $59,000
7) A manufacturing company uses a standard costing system in which standard
machine-hours (MHs) is the measure of activity. Data from the company’s flexible
budget for manufacturing overhead are given below:
The following data pertain to operations for the most recent period:
The fixed manufacturing overhead volume variance for the period is closest to:
A.$1,359 U
B.$2,550 F
C.$3,902 U
D.$1,352 U
8) Laborn Inc.’s inspection costs are listed below:
Management believes that inspection cost is a mixed cost that depends on the number
of units produced. Using the least-squares regression method, the estimates of the
variable and fixed components of inspection cost would be closest to:
A.$43.04 per unit plus $10,648 per month
B.$34.63 per unit plus $2,089 per month
C.$34.78 per unit plus $2,044 per month
D.$36.00 per unit plus $1,714 per month
9) Brannum Corporation has provided the following data from its activity-based costing
accounting system:
Distribution of Resource Consumption across Activity Cost Pools:
The “Other” activity cost pool consists of the costs of idle capacity and
organization-sustaining costs that are not assigned to products.
Required:
a. Determine the total amount of supervisory wages and factory utilities costs that
would be allocated to the Unit Processing activity cost pool. Show your work!
b. Determine the total amount of supervisory wages and factory utilities costs that
would NOT be assigned to products. Show your work!
10) The manufacturing overhead that would be applied to a unit of product P85G under
the company’s traditional costing system is closest to:
Koszyk Manufacturing Corporation has a traditional costing system in which it applies
manufacturing overhead to its products using a predetermined overhead rate based on
direct labor-hours (DLHs). The company has two products, P85G and C43S, about
which it has provided the following data:
The company’s estimated total manufacturing overhead for the year is $2,264,000 and
the company’s estimated total direct labor-hours for the year is 40,000.
The company is considering using a variation of activity-based costing to determine its
unit product costs for external reports. Data for this proposed activity-based costing
system appear below:
A.$89.67
B.$45.28
C.$44.39
D.$23.20
11) The net cash provided (used) by financing activities would be:
A.$(8,000)
B.$(13,000)
C.$20,000
D.$(3,000)
