1) thiel inc. is working on its cash budget for october. the budgeted beginning cash
balance is $35,000. budgeted cash receipts total $166,000 and budgeted cash
disbursements total $162,000. the desired ending cash balance is $50,000. the excess
(deficiency) of cash available over disbursements for october will be:
a.$31,000
b.$39,000
c.$4,000
d.$201,000
2) macha corporation has four different products that use the same constrained resource.
data concerning those products appear below:
the company does not have enough of the constrained resource to satisfy for demand of
all four products. from the standpoint of the entire company, if it is a choice between
sales of one unit of one product versus another, which product should the salespersons
emphasize?
a.n400
b.n300
c.n200
d.n100
3) munos publishing company uses a job-order costing system to collect costs related to
the manufacture of specialty publications for corporate training.
what journal entry would munos make to record the completion of job kn668 at a total
cost of $7,600?
a.
b.
c.
d.
4) the garnet company uses a job-order costing system. the following data were
recorded for february:
overhead is charged to jobs at the rate of 140% of direct labor cost.
jobs 1, 2, and 3 were completed during february and transferred to
finished goods. job 3 has been delivered to the customer.
the manufacturing costs added to jobs during the month totaled:
a.$8,250
b.$11,880
c.$12,500
d.$15,180
5) 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:
what is the predetermined overhead rate to the nearest cent?
a.$25.25
b.$24.97
c.$25.34
d.$25.06
6) dodge company makes two products from a common input. joint processing costs up
to the split-off point total $44,800 a year. the company allocates these costs to the joint
products on the basis of their total sales values at the split-off point. each product may
be sold at the split-off point or processed further.
what is the net monetary advantage (disadvantage) of processing product y beyond the
split-off point?
a.$39,600
b.$51,000
c.$13,000
d.$1,600
7) kane company is in the process of purchasing a new machine for its production line.
it is near the end of the year, and the machine is being offered at a special discount if
purchased before the end of the year. kane has determined that the depreciation
deduction for tax purposes on the new machine for the year of purchase would be
$13,000. the tax rate is 30%. if kane purchases the machine and reports a positive net
operating income for the year, then the tax savings from the deprecation tax shield
related to this machine for the year of purchase would be:
a.$3,900
b.$9,100
c.$13,000
d.$0
8) the hadfield company manufactures and sells a unique electronic part. the company’s
plant is highly automated with low variable and high fixed manufacturing costs.
operating results on an absorption costing basis for the first three years of activity were
as follows:
additional information about the company is as follows:
– variable manufacturing costs (direct labor, direct materials, and variable
manufacturing overhead) total $3 per unit, and fixed manufacturing overhead costs total
$400,000.
– fixed manufacturing costs are applied to units of product on the basis of the number of
units produced each year (i.e., a new fixed manufacturing overhead rate is computed
each year).
– the company uses a fifo inventory flow assumption.
– variable selling and administrative expenses are $2 per unit sold. fixed selling and
administrative expenses total $100,000.
– production and sales information for the three years is as follows:
required:
a. compute net operating income for each year under the variable costing approach.
b. referring to the absorption costing income statements above, explain why net
operating income was higher in year 2 than in year 1 under absorption costing, in light
of the fact that fewer units were sold in year 2 than in year 1.
c. referring again to the absorption costing income statements, explain why the
company suffered a loss in year 3 but reported a profit in year 1, although the same
number of units was sold in each year.
d. if the company had used lean production during year 2 and year 3 and produced only
what could be sold, what would the company’s net operating income (loss) have been
each year under absorption costing?
9) financial statements for marcalo company appear below:
marcalo company’s current ratio at the end of year 2 was closest to:
a.0.42
b.0.40
c.1.24
d.1.61
10) the opportunity cost of using one unit of the constrained resource in a volume
trade-off decision is equal to:
a.the profitability index for the company’s best selling product
b.the profitability index for the product whose production would be cut back if
necessary
c.the profitability index of the product with the fastest growing sales
d.the profitability index of the company’s most profitable product
11) enriques corporation manufactures and sells a single product. the company uses
units as the measure of activity in its budgets and performance reports. during february,
the company budgeted for 5,000 units, but its actual level of activity was 4,990 units.
the company has provided the following data concerning the formulas used in its
budgeting and its actual results for february:
the activity variance for net operating income in february would be closest to:
a.$2,716 f
b.$2,716 u
c.$176 u
d.$176 f
12) larsen corporation has designed a new product, j57, whose variable cost is $61.80
per unit and that requires 3.30 minutes of the constrained resource. the opportunity cost
is $31.00 per minute used of the constrained resource. what is the minimum acceptable
selling price for the new product?
a.$92.80
b.$61.80
c.$102.30
d.$164.10