1) Mars Corporation has provided the following data for Year 2:
The company’s total stockholders’ equity at the end of Year 2 amounted to $1,095,000
and at the end of Year 1 to $1,060,000. The company’s return on equity for Year 2 is
closest to:
A.5.91%
B.7.40%
C.3.84%
D.71.20%
2) _________________ is a method of separating a mixed cost into its fixed and
variable elements by fitting a line to the data that minimizes the sum of the squared
errors.
A.Account analysis
B.Scattergraph
C.High-low
D.Least-square regression
3) The actual direct labor-hours worked during November totaled:
A.2,800 hours
B.3,300 hours
C.3,500 hours
D.3,600 hours
4) Data concerning Bunck Corporation’s single product appear below:
Fixed expenses are $202,000 per month. The company is currently selling 2,000 units
per month. Management is considering using a new component that would increase the
unit variable cost by $18. Since the new component would increase the features of the
company’s product, the marketing manager predicts that monthly sales would increase
by 400 units. What should be the overall effect on the company’s monthly net operating
income of this change?
A.decrease of $47,200
B.decrease of $11,200
C.increase of $47,200
D.increase of $11,200
5) Are the materials costs and processing costs relevant in the choice between
alternatives X and Y? (Ignore the equipment rental and occupancy costs in this
question.)
A.Only processing costs are relevant
B.Both materials costs and processing costs are relevant
C.Only materials costs are relevant
D.Neither materials costs nor processing costs are relevant
6) Guerlane Fragrance Corporation has a perfume division, Essense, and a cologne
division, Karisma. The following information relates to last year’s operations at each
division. The minimum required rate of return is the same for both divisions.
Required:
Compute the unknown quantities above [(a) through (g)]. SHOW YOUR
COMPUTATIONS.
7) Coderre Corporation manufactures and sells a single product. The company uses
units as the measure of activity in its budgets and performance reports. During July, the
company budgeted for 7,800 units, but its actual level of activity was 7,780 units. The
company has provided the following data concerning the formulas used in its budgeting
and its actual results for July:
Data used in budgeting:
Actual results for July:
The activity variance for direct labor in July would be closest to:
A.$766 F
B.$766 U
C.$136 F
D.$136 U
8) Vancuren Corporation has two operating divisions–an East Division and a West
Division. The company’s Logistics Department services both divisions. The variable
costs of the Logistics Department are budgeted at $31 per shipment. The Logistics
Department’s fixed costs are budgeted at $274,400 for the year. The fixed costs of the
Logistics Department are determined based on peak-period demand.
At the end of the year, actual Logistics Department variable costs totaled $215,820 and
fixed costs totaled $294,690. The East Division had a total of 3,200 shipments and the
West Division had a total of 3,400 shipments for the year.
How much Logistics Department cost should be allocated to the West Division at the
end of the year?
A.$246,758
B.$262,990
C.$317,463
D.$297,480
9) Data concerning Nazario Corporation’s single product appear below:
The break-even in monthly unit sales is closest to:
A.819
B.2,214
C.1,300
D.1,444
10) Lore Corporation has provided the following information:
Lore’s break-even point in dollar sales is:
A.$50,000
B.$10,000
C.$12,500
D.$40,000
11) Lasseter Corporation has provided its contribution format income statement for
August. The company produces and sells a single product.
If the company sells 3,900 units, its net operating income should be closest to:
A.$15,800
B.$21,600
C.$19,000
D.$16,654
12) Excerpts from Deblois Corporation’s comparative balance sheet appear below:
Which of the following is the correct treatment within the operating activities section of
the statement of cash flows using the indirect method?
A.The change in Accounts Payable is added to net income; The change in Accrued
Liabilities is subtracted from net income
B.The change in Accounts Payable is added to net income; The change in Accrued
Liabilities is added to net income
C.The change in Accounts Payable is subtracted from net income; The change in
Accrued Liabilities is added to net income
D.The change in Accounts Payable is subtracted from net income; The change in
Accrued Liabilities is subtracted from net income