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 a useful life of 8 years. The machine would reduce cash operating costs by
$76,125 per year. The machine would have a salvage value of $60,900 at the end of the
project.
Required:
a. Compute the payback period for the machine.
b. Compute the simple rate of return for the machine.
3) What would the selling price per unit of Product P need to be after processing in
order for Paulsen Corporation to be economically indifferent between selling P at the
split-off point or processing P further?
A.$7.85
B.$8.58
C.$9.49
D.$11.68
4) The DVD Division of Sound Company makes and sells compact DVD players
(DVDP) that it presently sells to outside customers. Budgeted costs next month for the
DVD Division are as follows:
MaxiSound, another division of Sound Company, would like to buy 1,000 of the
DVDPs from the DVD Division. An outside supplier has offered to sell similar DVDPs
to MaxiSound for $170 each.
Assume that DVD Division’s monthly production capacity is 3,200 units. If the DVD
Division sells 1,000 DVDPs to MaxiSound for $170 each, the effect on the monthly
profits of Sound Company as a whole will be a:
A.$9,000 decrease
B.$74,000 decrease
C.$20,000 increase
D.$11,000 increase
5) Francke Corporation would like to determine the relative profitability of a number of
jobs. For example, job H29O has revenues of $86,400 and avoidable costs of $69,120,
resulting in an incremental profit of $17,280. The job requires 160 hours of the
constrained resource. The job is responsible for 13% of the company’s total profit for
the period. What is the profitability index for job H29O?
A.$108 per hour
B.$540 per hour
C.0.13
D.0.20
6) What would be the total internal failure cost appearing on the quality cost report?
A.$104,000
B.$65,000
C.$79,000
D.$52,000
7) What is the total amount of the costs listed above that are NOT direct costs of the
Brentwood Store?
A) $161,000
B) $86,000
C) $32,000
D) $38,000
8) Delfavero Corporation has provided the following data:
The company’s earnings per share for Year 2 is closest to:
A.$10.33 per share
B.$0.52 per share
C.$0.34 per share
D.$0.79 per share
9) Nelson 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.
Required:
a. Prepare a contribution format income statement for the month using variable costing.
b. Prepare an income statement for the month using absorption costing.
10) Fongeallaz Corporation’s income statement for Year 2 appears below:
The company’s total stockholders’ equity at the end of Year 2 amounted to $841,000 and
at the end of Year 1 to $810,000. The company’s return on equity for Year 2 is closest
to:
A.64.40%
B.8.93%
C.6.75%
D.4.72%
11) If Talbot chooses to buy the wheel from the outside supplier, then annual net
operating income would:
A) increase by $35,000.
B) decrease by $10,000.
C) increase by $45,000.
D) increase by $70,000.