Archives: Quiz

The general model for calculating a price variance is: A) actual quantity of inputs × (actual price – standard price). B) standard price × (actual quantity of inputs – standard quantity allowed for output). C) (actual quantity of inputs at […]

Selected financial data from Osterville Company for the most recent year appear below: The income tax rate is 40%. Net operating income as a percentage of sales was: A. 40% B. 30% C. 10% D. 5% Answer: Scheidel Enterprises, Inc. […]

Prestwich Company has budgeted production for next year as follows: Two pounds of material A are required for each unit produced. The company has a policy of maintaining a stock of material A on hand at the end of each […]

Kaelker Corporation has provided the following data: The inventory turnover for this year is closest to: A. 3.36 B. 0.87 C. 1.15 D. 3.15 Answer: The following monthly data are available for the Eager Company and its only product: The […]

Brarin Corporation is a small wholesaler of gourmet food products. Data regarding the store’s operations follow: o Sales are budgeted at $340,000 for November, $360,000 for December, and $350,000 for January. o Collections are expected to be 55% in the […]

Ahsan Company makes 60,000 units per year of a part it uses in the products it manufactures. The unit product cost of this part is computed as follows: An outside supplier has offered to sell the company all of these […]

Carpon Lumber sells lumber and general building supplies to building contractors in a medium-sized town in Montana. Data regarding the store’s operations follow: o Sales are budgeted at $340,000 for November, $350,000 for December, and $370,000 for January. o Collections […]

Threets Corporation’s most recent comparative balance sheet appears below: The company’s net income for the year was $109 and it paid a cash dividend. It did not dispose of any property, plant, and equipment during the year. The company did […]

Financial statements for Narita Company appear below: Narita Company’s debt-to-equity ratio at the end of Year 2 was closest to: A. 0.17 B. 0.58 C. 0.25 D. 0.42 Answer: Intask Company uses the FIFO method in its process costing system. […]

Hartzog Corporation’s most recent balance sheet and income statement appear below: Dividends on common stock during Year 2 totaled $60 thousand. Dividends on preferred stock totaled $5 thousand. The market price of common stock at the end of Year 2 […]

Schlender Corporation produces and sells two products. In the most recent month, Product L40O had sales of $22,000 and variable expenses of $8,580. Product Y27L had sales of $49,000 and variable expenses of $17,690. The fixed expenses of the entire […]

Last year, Farrer Corporation had sales of $1,500,000, variable expenses of $900,000, and fixed expenses of $400,000. What would be the dollar sales at the break-even point? A. $1,300,000 B. $1,000,000 C. $1,380,000 D. $1,200,000 Answer: Hartzog Corporation’s most recent […]

Wesi Corporation prepares its statement of cash flows using the direct method. Which of the following should Wesi classify as an operating activity on its statement? A. Option A B. Option B C. Option C D. Option D Answer: Pedulla […]

Ribb Corporation produces and sells a single product. Data concerning that product appear below: Fixed expenses are $913,000 per month. The company is currently selling 9,000 units per month. Management is considering using a new component that would increase the […]

Hocking Corporation’s comparative balance sheet appears below: The company’s net income (loss) for the year was $10,000 and its cash dividends were $1,000. It did not sell or retire any property, plant, and equipment during the year. The company uses […]

With regard to the CVP graph, which of the following statements is not correct? A. The CVP graph assumes that volume is the only factor affecting total cost. B. The CVP graph assumes that selling prices do not change. C. […]

An outdoor barbecue grill manufacturer has a standard costing system based on standard direct labor-hours (DLHs) as the measure of activity. Data from the company’s flexible budget for manufacturing overhead are given below: The following data pertain to operations for […]

When a decision is made among a number of alternatives, the benefit that is lost by choosing one alternative over another is the: A. realized cost. B. opportunity cost. C. conversion cost. D. accrued cost. Answer: In computing its predetermined […]

The following data pertain to the Whalen Division of Northern Industries. The margin at Whalen was exactly the same in Year 2 as it was in Year 1. The return on investment in Year 1 was: A. 48.00% B. 32.50% […]

In a statement of cash flows, all of the following would be classified as financing activities except: A. the collection of cash related to a loan made to another entity. B. the payment of a cash dividend on the company’s […]

Niemiec Corporation keeps careful track of the time required to fill orders. The times recorded for a particular order appear below: The manufacturing cycle efficiency (MCE) was closest to: A. 0.20 B. 0.06 C. 0.12 D. 0.96 Answer: Stock Manufacturing […]

The Steff Company has the following flexible budget (in condensed form) for manufacturing overhead: The following data concerning production pertain to last year’s operations: – The company used a denominator activity of 15,000 direct labor-hours to compute the predetermined overhead […]

Bakker Corporation has provided the following production and average cost data for two levels of monthly production volume. The company produces a single product. The best estimate of the total variable manufacturing cost per unit is: A. $89.70 B. $131.80 […]

Reference: 8-33 Tidd Corporation makes a product with the following standard costs: The company reported the following results concerning this product in November. The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is […]

Ingerson Company, which has only one product, has provided the following data concerning its most recent month of operations: What is the unit product cost for the month under variable costing? A. $109 B. $79 C. $99 D. $89 Answer: […]

Jurper Corporation used $150,000 of direct materials during April. At the end of April, Jurper’s direct materials inventory was $25,000 more than it was at the beginning of the month. Direct materials purchases during the April amounted to: A. $0 […]

Schleich Corporation’s most recent balance sheet appears below: Net income for the year was $274. Cash dividends were $53. The company did not sell or retire any property, plant, and equipment during the year. The net cash provided by (used […]

Raybould Corporation has provided the following data concerning its most important raw material, compound M31P: When recording the purchase of materials, Raw Materials would be: A. credited for $49,950. B. credited for $51,300. C. debited for $49,950. D. debited for […]

The standards for product C54L specify 4.5 direct labor-hours per unit at $12.40 per direct labor-hour. Last month 1,560 units of product C54L were produced using 7,000 direct labor-hours at a total direct labor wage cost of $86,100. Required: a. […]

The Odle Company makes and sells a single product called a Kitt. Odle uses a standard costing system. Each Kitt has a standard cost of 5 pounds of material at $12 per pound and 0.9 direct labor-hours at $15 per […]

Zippy Company has a process costing system. Information about units processed and processing costs incurred during a recent month in the Refining Department follow: The beginning work in process inventory had $10,946 of processing cost attached to it at the […]

Segment margin is sales minus: A. variable expenses. B. traceable fixed expenses. C. variable expenses and common fixed expenses. D. variable expenses and traceable fixed expenses. Answer: Bordes Corporation has provided the following data concerning its most important raw material, […]

The most recent balance sheet and income statement of Heldt Corporation appear below: The company paid a cash dividend and it did not dispose of any property, plant, and equipment. The company did not purchase any bonds payable or repurchase […]

Reference: 8-30 Snuggs Corporation makes a product with the following standard costs: The company reported the following results concerning this product in October. The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is […]

Brarin Corporation is a small wholesaler of gourmet food products. Data regarding the store’s operations follow: o Sales are budgeted at $340,000 for November, $360,000 for December, and $350,000 for January. o Collections are expected to be 55% in the […]

Callander Corporation is a wholesaler that sells a single product. Management has provided the following cost data for two levels of monthly sales volume. The company sells the product for $151.60 per unit. The best estimate of the total variable […]

Kramer Corporation uses the weighted-average method in its process costing system. Data concerning the first processing department for the most recent month are listed below: Note: Your answers may differ from those offered below due to rounding error. In all […]

The following is Allison Corporation’s contribution format income statement for last month: The company has no beginning or ending inventories. The company produced and sold 10,000 units last month. What is the company’s break-even sales in dollars? A. $0 B. […]

The West Division of Shekarchi Corporation had average operating assets of $620,000 and net operating income of $80,100 in March. The minimum required rate of return for performance evaluation purposes is 14%. What was the West Division’s residual income in […]

The following data were taken from the accounting records of the Hazel Corporation which uses the weighted-average method in its process costing system: The equivalent units for conversion costs was: A. 102,000 units B. 112,000 units C. 111,000 units D. […]

Heroman Corporation applies manufacturing overhead to products on the basis of standard machine-hours. The budgeted fixed manufacturing overhead cost for the most recent month was $26,550 and the actual fixed manufacturing overhead cost for the month was $26,570. The company […]

Gordon Company produces a single product that sells for $10 per unit. Last year there were no beginning inventories, 100,000 units were produced, and 80,000 units were sold. The company has the following cost structure: Net operating income under variable […]

Porl 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 […]

Reference: 8-27 The Litton Company has established standards as follows: Direct material: 3 pounds per unit @ $4 per pound = $12 per unit Direct labor: 2 hours per unit @ $8 per hour = $16 per unit Variable manufacturing […]

If by dropping a product a firm can avoid more in fixed costs than it loses in contribution margin, then the firm is better off economically if the product is dropped. Answer: Generally, a product line should be dropped when […]

Under the FIFO method, the equivalent units of production relate only to work done during the current period. Answer: Advertising costs are considered product costs for external financial reports because they are incurred in order to promote specific products. Answer: […]

Avoidable costs are also called relevant costs. Answer: Standard costs should generally be based on the actual costs of prior periods. Answer: False If a company’s return on assets is substantially higher than its cost of borrowing, then the common […]

Direct material costs are generally variable costs. Answer: If the actual rate per direct labor-hour exceeds the standard rate per direct labor-hour, then the journal entry to record the Direct Labor Rate Variance would be a credit. Answer: FALSE As […]

Reichelderfer Corporation has provided data concerning the company’s Manufacturing Overhead account for the month of August. Prior to the closing of the overapplied or underapplied balance to Cost of Goods Sold, the total of the debits to the Manufacturing Overhead […]

Under the indirect method of determining the net cash provided by operating activities on the statement of cash flows, a decrease in accounts receivable is added to net income. Answer: Cash payments to retire bonds payable are reported as a […]