Archives: Quiz

1) Eberley Corporation’s cost formula for its manufacturing overhead is $25,700 per month plus $10 per machine-hour. For the month of July, the company planned for activity of 5,900 machine-hours, but the actual level of activity was 5,920 machine-hours. The […]

1) If a company has computed a project profitability index of -0.015 for an investment project, then: A.the project’s internal rate of return is less than the discount rate. B.the project’s internal rate of return is greater than the discount […]

1) At a volume of 8,000 units, Pwerson Company incurred $32,000 in factory overhead costs, including $12,000 in fixed costs. If volume increases to 9,000 units and both 8,000 units and 9,000 units are within the relevant range, then the […]

1) The payback period for the investment is: A.0.27 years B.3.75 years C.10.00 years D.2.13 years 2) Mussenden Corporation has an activity-based costing system with three activity cost pools-Machining, Order Filling, and Other. In the first stage allocations, costs in […]

1) Degeare Corporation’s balance sheet and income statement appear below: Cash dividends were $10. The company sold equipment for $18 that was originally purchased for $10 and that had accumulated depreciation of $5. The net cash provided by (used in) […]

1) Barker Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 300 units. The costs and percentage completion of these units in beginning inventory were: A total […]

1) The company’s debt-to-equity ratio at the end of Year 2 is closest to: A.0.22 B.0.27 C.0.45 D.0.19 2) Spirer Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and […]

1) Iaci 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 $133.60 per unit. The best estimate of the total […]

1) When a multi-product factory operates at full capacity, decisions must be made about what products to emphasize. In making such decisions, products should be ranked based on: A) selling price per unit B) contribution margin per unit C) contribution […]

1) Harris Corporation, a retailer, had cost of goods sold of $290,000 last year. The beginning inventory balance was $26,000 and the ending inventory balance was $24,000. The corporation’s inventory turnover was closest to: A.12.08 B.11.60 C.5.80 D.11.15 2) An […]

1) Sorrow Kennel uses tenant-days as its measure of activity; an animal housed in the kennel for one day is counted as one tenant-day. During November, the kennel budgeted for 2,300 tenant-days, but its actual level of activity was 2,350 […]

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 […]

1) The income tax expense in year 3 is: A.$21,000 B.$6,000 C.$9,000 D.$15,000 2) Which of the following comparisons best isolates the impact that changes in operating efficiency have on performance? A.static planning budget and flexible budget B.static planning budget […]

1) Dennisport Corporation has an acid-test ratio of 2.5. It has current liabilities of $40,000 and noncurrent assets of $70,000. The corporation’s current assets consist of cash, marketable securities, accounts receivable, prepaid expenses, and inventory; it has no short-term notes […]

1) Which one of the following statements about book value per share is most correct? A.Market price per common share usually approximates book value per common share. B.Book value per common share is based on past transactions whereas the market […]

1) The management of Brockington Corporation is considering introducing a new product–a compact barbecue. At a selling price of $80 per unit, management projects sales of 70,000 units. Launching the barbecue as a new product would require an investment of […]

1) Monce Corporation has two divisions: Home Division and Commercial Division. The following report is for the most recent operating period: The common fixed expenses have been allocated to the divisions on the basis of sales. Required: a. What is […]

1) The company’s dividend payout ratio for Year 2 is closest to: A.1.6% B.21.1% C.2.6% D.14.7% 2) Kampmann Corporation is presently making part Z95 that is used in one of its products. A total of 5,000 units of this part […]

1) The income tax expense in year 3 is: A.$28,000 B.$10,500 C.$7,000 D.$17,500 2) The Gomez Corporation is considering two projects, T and V. The following information has been gathered on these projects: Based on this information, which of the […]

1) The net cash provided by (used in) operating activities for the year was: A.$23 B.$133 C.$157 D.$87 2) The Consumer Products Division of Mickolick Corporation had average operating assets of $450,000 and net operating income of $38,700 in August. […]

1) The North Division of Barter Company makes and sells a single product, which is a part used in manufacturing trucks. The annual production capacity is 35,000 units and the variable cost of each unit is $24. Presently the North […]

1) Up to how much should the company be willing to pay for one additional minute of grinding machine time if the company has made the best use of the existing grinding machine capacity? (Round off to the nearest whole […]

1) Karma Corporation has total assets of $190,000 and total liabilities of $90,000. The corporation’s debt-to-equity ratio is closest to: A.0.47 B.0.90 C.0.53 D.0.32 2) The Dillon Corporation makes and sells a single product. Overhead costs are applied on the […]

1) What is the net monetary advantage (disadvantage) of processing Product Y beyond the split-off point? A.$3,500 B.$7,900 C.$29,900 D.$25,500 2) The Dean Corporation produces and sells a single product. The following data refer to the year just completed: Assume […]

1) Fortmann Kennel uses tenant-days as its measure of activity; an animal housed in the kennel for one day is counted as one tenant-day. During September, the kennel budgeted for 2,000 tenant-days, but its actual level of activity was 2,010 […]

1) Last year Javer Corporation had a net income of $200,000, income tax expense of $74,000, and interest expense of $20,000. The corporation’s times interest earned was closest to: A.10.0 B.11.0 C.5.3 D.14.7 2) Ebsen Corporation keeps careful track of […]

1) Zelinsky Inc. has provided the following data for the month of April. There were no beginning inventories; consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month. Manufacturing overhead for the […]

1) The management of Roger Corporation would like to investigate the possibility of basing its predetermined overhead rate on activity at capacity rather than on the estimated amount of activity for the year. The company’s controller has provided an example […]

1) The average collection period for Year 2 is closest to: A.64.0 days B.0.9 days C.61.3 days D.1.1 days 2) Hal currently works as the fry guy at Burger Haven but is thinking of quitting his job to attend college […]

1) Munar Corporation uses activity-based costing to compute product margins. Overhead costs have already been allocated to the company’s three activity cost pools-Machining, Order Filling, and Other. The costs in those activity cost pools appear below: Machining costs are assigned […]

1) Pearse Kennel uses tenant-days as its measure of activity; an animal housed in the kennel for one day is counted as one tenant-day. During December, the kennel budgeted for 3,000 tenant-days, but its actual level of activity was 2,980 […]

1) Frankin Corporation’s net cash provided by operating activities was $192; its capital expenditures were $154; and its cash dividends were $27. The company’s free cash flow was: A.$38 B.$373 C.$11 D.$165 2) The management of Westrope Corporation would like […]

1) ( An investment project has the following characteristics: The life of the equipment is closest to: A.It is impossible to determine from the data given. B.7 years C.12 years D.4.56 years. 2) If the company bases its predetermined overhead […]

1) Crooks Corporation processes sugar beets in batches that it purchases from farmers for $57 a batch. A batch of sugar beets costs $12 to crush in the company’s plant. Two intermediate products, beet fiber and beet juice, emerge from […]

1) Last year Marton Corporation reported a cost of goods sold of $720,000 on its income statement. The following additional data were taken from the company’s comparative balance sheet for the year: The company uses the direct method to determine […]

1) The net present value of overhauling the present system is closest to: A.$(321,084) B.$(532,516) C.$(560,536) D.$(592,516) 2) BieryCorporation makes a product with the following standard costs: The company produced 4,100 units in April using 5,380 liters of direct material […]

1) The company’s accounts receivable turnover for Year 2 is closest to: A.1.06 B.5.06 C.5.21 D.0.94 2) The total cash flow net of income taxes in year 2 is: A.$137,000 B.$170,000 C.$67,000 D.$110,000 Answer: A Depreciation expense = (Original cost […]

1) The constraint at Fulena Inc. is an expensive milling machine. The three products listed below use this constrained resource. Required: a. Rank the products in order of their current profitability from the most profitable to the least profitable. In […]

1) Barrus Corporation makes 30,000 motors to be used in the productions of its power lawn mowers. The average cost per motor at this level of activity is as follows: This motor has recently become available from an outside supplier […]

1) Onorato Corporation has provided the following information concerning a capital budgeting project: The company uses straight-line depreciation on all equipment. The total cash flow net of income taxes in year 2 is: A.$133,000 B.$160,000 C.$90,000 D.$98,000 2) Calin Corporation […]

1) The company’s equity multiplier at the end of Year 2 is closest to: A.0.64 B.1.65 C.1.57 D.0.61 Equity multiplier = Average total assets* Average stockholders’ equity* = $1,179,000 $716,000 = 1.65 (rounded) *Average total assets = ($1,198,000 + $1,160,000) […]

1) Schwering Corporation uses activity-based costing to assign overhead costs to products. Overhead costs have already been allocated to the company’s three activity cost pools as follows: Machining, $20,800; Order Filling, $30,400; and Other, $48,800. Machining costs are assigned to […]

1) Ignoring any cash flows from intangible benefits, to the nearest whole dollar how large would the salvage value of the automated equipment have to be to make the investment in the automated equipment financially attractive? A.$24,318 B.$514,020 C.$673,637 D.$127,991 […]

1) Are the materials costs and processing costs relevant in the choice between alternatives A and B? (Ignore the equipment rental and occupancy costs in this question.) A) Both materials costs and processing costs are relevant B) Only materials costs […]

1) Shelby Boat Wash’s cost formula for its cleaning equipment and supplies is $2,200 per month plus $34 per boat. For the month of September, the company planned for activity of 82 boats, but the actual level of activity was […]

1) Gabbert Corporation, which has only one product, has provided the following data concerning its most recent month of operations: The total gross margin for the month under the absorption costing approach is: A.$95,200 B.$156,400 C.$6,800 D.$107,600 2) The income […]

1) Braverman Corporation’s net income last year was $75,000 and its interest expense was $10,000. Total assets at the beginning of the year were $650,000 and total assets at the end of the year were $610,000. The corporation’s income tax […]

1) How much actual Maintenance Department cost should not be allocated to the operating divisions at the end of the year? A.$4,640 B.$0 C.$34,628 D.$29,988 2) ( Alesi Corporation is considering purchasing a machine that would cost $243,600 and have […]

1) Rhoda Corporation manufactures and sells one product. In the company’s first year of operations, the variable cost consisted solely of direct materials of $87 per unit. The annual fixed costs were $912,000 of direct labor cost, $2,128,000 of fixed […]

1) On the statement of cash flows, the cost of goods sold adjusted to a cash basis would be: A.$546,000 B.$536,000 C.$544,000 D.$540,000 2) Data from Estrin Corporation’s most recent balance sheet and income statement appear below: The average sale […]