1)

During the month of September, direct labor cost totaled $18,000 and direct labor cost was 40% of prime cost. If total manufacturing costs during September were $94,000, the manufacturing overhead was:rev: 11_12_2013_QC_40369

$27,000

$45,000

$49,000

$76,000

2.   

Iadanza 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 $220.70 per unit.   

Sales volume (units) 23,000   24,000  Cost of goods sold $ 478,200   $ 557,900  Selling and administrative costs $ 648,200   $ 661,200    

The best estimate of the total contribution margin when 8,000 units are sold is (Do not round your intermediate calculations. Round your final answer to nearest whole dollar.):

$1,024,000

$184,000

$1,128,000

$86,400

3.   

Supply costs at Lattea Corporation's chain of gyms are listed below:  

  Client - Visits Supply Cost  March 12,147 $ 29,961  April 11,993 $ 30,227  May 12,775 $ 30,781  June 13,500 $ 31,092  July 12,707 $ 30,222

  August 11,893 $ 29,270  September 12,877 $ 30,220  October 12,228 $ 29,278  November 12,376 $ 29,803  

Management believes that supply cost is a mixed cost that depends on client-visits. Using the high-low method to estimate the variable and fixed components of this cost, those estimates would be closest to (Round your intermediate calculations to 2 decimal places.):

$1.31 per client-visit; $14,046 per month

$0.83 per client-visit; $5,137 per month

$1.13 per client-visit; $15,837 per month

$2.38 per client-visit; $30,222 per month

4.   

A partial listing of costs incurred during December at Gagnier Corporation appears below:    

  Factory supplies $ 10,500     Administrative wages and salaries $ 147,000     Direct materials $ 210,000     Sales staff salaries $ 105,000     Factory depreciation $ 84,000     Corporate headquarters building rent $ 42,000     Indirect labor $ 42,000     Marketing $ 147,000     Direct labor $ 113,400     

The total of the period costs listed above for December is:

$136,500

$554,500

$441,000

$459,900

 

0

  5.   Nikkel Corporation, a merchandising company, reported the following results for July:

  Sales $ 438,800     Cost of goods sold (all variable) $ 175,520     Total variable selling expense $ 18,600     Total fixed selling expense $ 15,360     Total variable administrative expense $ 8,340     Total fixed administrative expense $ 32,470   

The gross margin for July is:

$390,970

$236,340

$263,280

$188,510

6.   Salvadore Inc., a local retailer, has provided the following data for the month of September:

  Merchandise inventory, beginning balance $ 63,180     Merchandise inventory, ending balance $ 62,400     Sales $ 390,000     Purchase of merchandise inventory $ 195,000     Selling expense $ 23,400     Administrative expense $ 78,000   

The cost of goods sold for September was:

$194,220

$195,780

$195,000

$296,400

7. 

  

Management of Modugno Corporation is considering whether to purchase a new model 370 machine costing $442,000 or a new model 240 machine costing $388,000 to replace a machine that was purchased 7 years ago for $430,000. The old machine was used to make product M25A until it broke down last week. Unfortunately, the old machine cannot be repaired.

Management has decided to buy the new model 240 machine. It has less capacity than the new model 370 machine, but its capacity is sufficient to continue making product M25A.

Management also considered, but rejected, the alternative of simply dropping product M25A. If that were done, instead of investing $388,000 in the new machine, the money could be invested in a project that would return a total of $431,000.

In making the decision to buy the model 240 machine rather than the model 370 machine, the sunk cost was:

$431,000

$430,000

$388,000

$442,000

8) The following costs were incurred in September:

  Direct materials $ 46,000    Direct labor $ 33,000    Manufacturing overhead $ 23,000    Selling expenses $ 21,000    Administrative expenses $ 35,000  

Prime costs during the month totaled:

$102,000

$158,000

$79,000

$56,000

9. 

  

The following data have been recorded for recently completed Job 674 on its job cost sheet. Direct materials cost was $1,339. A total of 25 direct labor-hours and 168 machine-hours were worked on the job. The direct labor wage rate is $13 per labor-hour. The company applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $14 per machine-hour. The total cost for the job on its job cost sheet would be:

$2,014

$1,664

$4,016

$1,366

10.   

Pinnini Co. uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. Last year, Pinnini Company incurred $190,000 in actual manufacturing overhead cost. The Manufacturing Overhead account showed that overhead was overapplied $12,960 for the year. If the predetermined overhead rate was $4.30 per direct labor-hour, how many hours did the company work during the year?

41,172 hours

43,186 hours

47,200 hours

44,186 hours

11.   

Desrevisseau Inc., a manufacturing company, has provided the following data for the month of August. The balance in the Work in Process inventory account was $13,500 at the beginning of the month and $25,500 at the end of the month. During the month, the company incurred direct materials cost of $70,000 and direct labor cost of $46,000. The actual manufacturing overhead cost incurred was $47,000. The manufacturing overhead cost applied to Work in Process was $50,000. The cost of goods manufactured for August was:

$151,000

$154,000

$166,000

$163,000

 12.   

Under Lamprey Company's job-order costing system, manufacturing overhead is applied to Work in Process inventory using a predetermined overhead rate. During January, Lamprey's transactions included the following: 

  Direct materials issued to production $  89,000    Indirect Materials issued to production   $ 7,800    Manufacturing overhead cost incurred $ 123,000    Manufacturing  overhead cost applied $ 111,000    Direct labor cost  incurred $ 106,000    

Lamprey Company had no beginning or ending inventories. What was the cost of goods manufactured for January?

$298,200

$325,800

$306,000

$318,000

 13.   

Bakker Corporation applies manufacturing overhead on the basis of direct labor-hours. At the beginning of the most recent year, the company based its predetermined overhead rate on total estimated overhead of $108,120 and 3,400 estimated direct labor-hours. Actual manufacturing overhead for the year amounted to $109,870 and actual direct labor-hours were 3,300.

The applied manufacturing overhead for the year was closest to:

$109,870

$104,940

$108,230

$106,639

14.  

 

Acitelli Corporation, which applies manufacturing overhead on the basis of machine-hours, has provided the following data for its most recent year of operations.  

Estimated manufacturing overhead $ 387,660Estimated machine-hours   9,100Actual manufacturing overhead $ 388,660Actual machine-hours   9,160  

The estimates of the manufacturing overhead and of machine-hours were made at the beginning of the year for the purpose of computing the company's predetermined overhead rate for the year.  The applied manufacturing overhead for the year is closest to:

$390,216

$392,964

$388,659

$391,224

15.   

Lund Company applies manufacturing overhead to jobs using a predetermined overhead rate of 75% of direct labor cost. Any underapplied or overapplied manufacturing overhead cost is closed out to Cost of Goods Sold at the end of the month. During March, the following transactions were recorded by the company:    

  Raw materials (all direct materials):          Purchased during the month $ 28,500         Used in production $ 29,500      Labor:         Direct labor hours worked during the month   2,400         Direct labor cost incurred $ 19,200         Indirect labour cost incurred $ 6,100      Manufacturing overhead costs incurred (total) $ 17,300      Inventories:         Raw materials (all direct), March 31 $ 7,800         Work in process, March 1 $ 10,800         Work in process, March 31 $ 14,600*         *contains $5,300 in direct labor cost.    

The balance on March 1 in the Raw Materials inventory account was:

$6,800

$9,800

$7,800

$8,800

16.   

Daane Company had only one job in process on May 1. The job had been charged with $1,200 of direct materials, $1,872 of direct labor, and $3,152 of manufacturing overhead cost. The company assigns overhead cost to jobs using the predetermined overhead rate of $19.70 per direct labor-hour.   During May, the following activity was recorded: 

  Raw materials (all direct materials):          Beginning balance $ 7,500         Purchased during the month $ 17,500         Used in production $ 23,600      Labor:         Direct labor-hours worked during the month   1,000         Direct labor cost incurred $ 11,700      Actual manufacturing overhead costs incurred $ 18,450      Inventories:         Raw materials, May 30 $ ?         Work in process, May 30 $ 12,362      

Work in process inventory on May 30 contains $3,276 of direct labor cost. Raw materials consist solely of items that are classified as direct materials.

The cost of goods manufactured for May was:

$70,310

$45,914  

$55,000  

$48,862

17.   

Leija Manufacturing Company uses a job-order costing system and started the month of March with one job in process (Job #359). This job had $470 of cost assigned to it at this time. During March, Leija assigned production costs as follows to the jobs worked on during the month:

  Job # 359 Job # 360 Job # 361  Total cost assigned to jobs during March $5,700 $7,800 $2,100

During March, Leija completed and sold Job #359. Job #360 was also completed but was not sold by month end. Job #361 was not completed by the end of March. What is Leija's work in process inventory balance at the end of March?

rev: 07_10_2012

12,400

4,400

3,000

2,100

 18.   Drewniak Corporation has provided the following data from its activity-based costing system:

ActivitiesEstimated

Overhead Cost Expected Activity  Assembly $972,180          66,000       machine-hours  Processing orders $91,530          1,800       orders  Inspection $133,406          1,820       inspection-hours  

The company makes 430 units of product O37W a year, requiring a total of 690 machine-hours, 40 orders, and 10 inspection-hours per year. The product's direct materials cost is $36.35 per unit and its direct labor cost is $30.09 per unit.According to the activity-based costing system, the unit product cost of product O37W is closest to:

$96.51 per unit

$88.03 per unit

$66.44 per unit

$94.89 per unit

19.   

Addy Company has two products: A and B. The annual production and sales of Product A is 2,450 units and of Product B is 1,850 units. The company has traditionally used direct labor-hours as the basis for applying all manufacturing overhead to products. Product A requires 0.3 direct labor-hours per unit and Product B requires 0.6 direct labor-hours per unit. The total estimated overhead for next period is $107,100. The company is considering switching to an activity-based costing system for the purpose of computing unit product costs for external reports. The new activity-based costing system would have three overhead activity cost pools--Activity 1, Activity 2, and General Factory--with estimated overhead costs and expected activity as follows:

Activities

EstimatedOverhead

Costs

Expected Activity

Product A Product B Total  Activity 1 $33,094       1,750     1,350          3,100      Activity 2 18,850       2,450     950          3,400      General Factory 55,156       1,335     1,560          2,895      Total $107,100            

(Note: The General Factory activity cost pool's costs are allocated on the basis of direct labor-hours.)

The predetermined overhead rate (i.e., activity rate) for Activity 2 under the activity-based costing system is closest to:

$5.54

$31.50

$38.10

$7.69

20.   

Accola Company uses activity-based costing. The company has two products: A and B. The annual production and sales of Product A is 2,900 units and of Product B is 1,600 units. There are three activity cost pools, with estimated costs and expected activity as follows:

  Activities Estimated Overhead CostExpected Activity

Product A Product B Total  Activity 1 $103,447               2,400          2,300           4,700        

  Activity 2 $128,645               3,400          2,100           5,500          Activity 3 $138,690               1,160          1,140           2,300        

The activity rate for Activity 3 is closest to:

$161.21

$61.26

$40.82

$60.30

21.   

Mannarelli Corporation uses the FIFO method in its process costing system. Operating data for the Casting Department for the month of September appear below:

  Units

Percent Completewith Respect to

Conversion Beginning work in process inventory 27,000          20%           Transferred in from the prior department during September 115,000            Ending work in process inventory 37,000          90%          

According to the company's records, the conversion cost in beginning work in process inventory was $16,960 at the beginning of September. Additional conversion costs of $539,574 were incurred in the department during the month. The cost per equivalent unit for conversion costs for September is closest to (Round off to three decimal places.):

$4.692

$4.060

$3.877

$3.919

22.   

Cargin Company uses the FIFO method in its process costing system. The Assembly Department started the month

with 31,000 units in its beginning work in process inventory that were 50% complete with respect to conversion costs. An additional 103,000 units were transferred in from the prior department during the month to begin processing in the Assembly Department. There were 25,000 units in the ending work in process inventory of the Assembly Department that were 30% complete with respect to conversion costs.

What were the equivalent units for conversion costs in the Assembly Department for the month?

116,500

109,000

97,000

101,000

23.   

Severn Company uses the FIFO method in its process costing system. The following data were taken from the accounting records of the company for last month:  

  Beginning Work in Process inventory      ($52,000; materials 100% complete; labor and overhead 50% complete) 25,000 units    Units started during the period 90,000 units    Units completed during the period 100,000 units    Ending work in process inventory      (materials 100% complete; labor and overhead 60% complete) ? units    Cost per equivalent unit:      Materials $ 4.00      Labor and overhead $ 2.25    

The cost of the units in the ending Work in Process inventory is:

$30,000

$80,250

$40,500

$20,100

24.   

Wilson Company has a process costing system. The Assembly Department had the following costs for May:    

  Materials Labor & Overhead  Work in process inventory, May 1 $ 50,000   $ 33,000    Costs added during May $ 165,000   $ 231,000    

Assume that Wilson uses the weighted-average method and that for May the company computed 22,000 equivalent units for labor and overhead. The cost per equivalent unit for labor and overhead for the month would have been:

$1.50

$12.00

$10.50

$18.00

25) The activity in Nolan Company's Blending Department for the month of April is given below:  

 Number of

unitsLabor and overhead

percent complete  Work in process inventory, April 1 22,000   50%    Started into process during the month 78,000      Work in process inventory, April 30 24,000   60%    

All materials are added at the beginning of processing in the Blending Department. The equivalent units for material for the month, using the FIFO method, are:

78,000 units

100,000 units

89,000 units

102,000 units

26.   

Dimitrov Corporation, a company that produces and sells a single product, has provided its contribution format income statement for July.   

  Sales (7,400 units) $ 355,200   

  Variable expenses 196,100     Contribution margin 159,100     Fixed expenses 109,500     Net operating income $ 49,600      

If the company sells 7,200 units, its net operating income should be closest to: 

$49,600

$48,259

$45,300

$40,000

27.   

Rothe Company manufactures and sells a single product that it sells for $90 per unit and has a contribution margin ratio of 35%. The company's fixed expenses are $62,100. If Rothe desires a monthly target net operating income equal to 15% of sales, the amount of sales in units will have to be (rounded): 

1,971 units

4,600 units

1,380 units

3,450 units

28.   

Pool Company's variable expenses are 36% of sales. Pool is contemplating an advertising campaign that will cost $33,500. If sales increase by $116,000, the company's net operating income should increase by (Round your intermediate calculations to two decimal places.):

$41,760

$95,680

$40,740

$8,260

29.  

 

Smith Company sells a single product at a selling price of $30 per unit. Variable expenses are $12 per unit and fixed expenses are $78,660. Smith's break-even point is:

2,622 units

4,370 units

6,555 units

13,110 units

30.   

Sperberg Corporation's operating leverage is 5.2. If the company's sales increase by 14.50%, its net operating income should increase by about:

66.10%

14.50%

5.20%

75.40%

31.   

A cement manufacturer has supplied the following data:    

  Tons of cement produced and sold 260,000     Sales revenue $ 1,175,200     Variable manufacturing expense $ 466,310     Fixed manufacturing expense $ 289,100     Variable selling and administrative expense $ 82,290     Fixed selling and administrative expense $ 228,800     Net operating income $ 108,700        

What is the company's unit contribution margin? (Do not round your intermediate calculations.)

rev: 03_11_2013_QC_28054

$2.41

$2.11

$4.52

$.32

32.   

Wright Corporation's contribution format income statement for last month appears below.   

  Sales $ 93,000    Variable expenses 36,600    Contribution margin 56,400    Fixed expenses 16,800    Net operating income $ 39,600    

There were no beginning or ending inventories. The company produced and sold 3,000 units during the month.  

The company has an opportunity to secure a special order of 880 units if it is willing to drop the selling price on these units to $29. Costs of securing the special order would be $1,160. The special order would not affect the company's regular sales. If the special order is accepted, the company's overall net operating income will: (Do not round intermediate calculations.)

increase by $14,784

increase by $13,624

increase by $3,880

remain the same

33.   Prestwich Company has budgeted production for next year as follows:

  Quarter  First Second Third Fourth  Production in units 84,000        104,000        114,000        94,000            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 quarter equal to 25% of the next quarter's production needs for material A. A total of 42,000 pounds of material A are on hand to start the year. Budgeted purchases of material A for the second quarter would be:

265,000 pounds

213,000 pounds

260,000 pounds

203,000 pounds

34.   Shuck Inc. bases its manufacturing overhead budget on budgeted direct labor-hours. The direct labor budget indicates that 9,600 direct labor-hours will be required in May. The variable overhead rate is $4.50 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $128,600 per month, which includes depreciation of $12,450. All other fixed manufacturing overhead costs represent current cash flows. The May cash disbursements for manufacturing overhead on the manufacturing overhead budget should be:

$159,350

$43,200

$171,800

$116,150

35.   Lunderville Inc. bases its selling and administrative expense budget on budgeted unit sales. The sales budget shows 4,600 units are planned to be sold in December. The variable selling and administrative expense is $5.40 per unit. The budgeted fixed selling and administrative expense is $76,200 per month, which includes depreciation of $7,560 per month. The remainder of the fixed selling and administrative expense represents current cash flows. The cash disbursements for selling and administrative expenses on the December selling and administrative expense budget should be:

$24,840

$93,480

$68,640

$101,040

36.   

Avril Company makes collections on sales according to the following schedule:   

24% in the month of sale60% in the month following sale13% in the second month following sale The following sales are expected:    

  Expected Sales  January $170,000        February $180,000        March $215,000          

Cash collections in March should be budgeted to be:

$181,700

$192,500

$208,550

$215,000

37.   Deschambault Inc. is working on its cash budget for December. The budgeted beginning cash balance is $21,000. Budgeted cash receipts total $163,000 and budgeted cash disbursements total $160,000. The desired ending cash balance is $40,000. To attain its desired ending cash balance for December, the company needs to borrow:

$16,000

$0

$64,000

$40,000

38.   Sartain Corporation is in the process of preparing its annual budget. The following beginning and ending inventory levels are planned for the year.

  Beginning Inventory Ending Inventory  Finished goods (units) 28,000      78,000       Raw material (grams) 58,000      48,000       Each unit of finished goods requires 4 grams of raw material.

If the company plans to sell 710,000 units during the year, how much of the raw material should the company purchase during the year?

3,088,000 grams

3,050,000 grams

3,040,000 grams

3,030,000 grams

39.   Young Enterprises has budgeted sales in units for the next five months as follows:    

  June 5,000 units    July 7,600 units    August 5,800 units    September 7,200 units    October 4,200 units       Past experience has shown that the ending inventory for each month should be equal to 15% of the next month's sales in units. The inventory on May 31 fell short of this goal since it contained only 700 units. The company needs to prepare a Production Budget for the next five months.

The total number of units to be produced in July is:

8,470 units

7,600 units

7,330 units

7,870 units

40.   The Yost Company makes and sells a single product, Product A. Each unit of Product A requires 1.4 hours of labor at a labor rate of $6.20 per hour. Yost Company needs to prepare a Direct Labor Budget for the second quarter.

If the budgeted direct labor cost for May is $147,560, then the budgeted production of Product A for May is: (Do not round intermediate calculations.)

20,400 units

17,000 units

23,800 units

33,320 units

41.   Oscarson Midwifery's cost formula for its wages and salaries is $1,640 per month plus $360 per birth. For the month of September, the company planned for activity of 160 births, but the actual level of activity was 147 births. The actual wages and salaries for the month was $54,060. The wages and salaries in the planning budget for September would be closest to:

$59,240

$54,560

$56,900

$54,060

42.   Fussner Medical Clinic measures its activity in terms of patient-visits. Last month, the budgeted level of activity was 1,740 patient-visits and the actual level of activity was 1,840 patient-visits. The cost formula for administrative expenses is $3.30 per patient-visit plus $19,200 per month. The actual administrative expense was $25,725. Last month, the spending variance for administrative expenses was:

$330 U

$453 U

$618 U

$783 U

43.   

The following materials standards have been established for a particular product:  

  Standard quantity per unit of output 7.5    Pounds  Standard price $14.30    per pound  

The following data pertain to operations concerning the product for the last month:  

  Actual materials purchased 6,680    Pounds  Actual cost of materials purchased   $92,300      Actual materials used in production 5,980    Pounds  Actual output 1,100    Units  

What is the materials quantity variance for the month?  

$25,675 F

$22,451 U

$5,250 U

$32,461 F

44.   

Kibodeaux Corporation makes a product with the following standard costs:    

 Standard Quantityor Hours

Standard Price or Rate Standard Cost Per Unit

  Inputs             Direct materials 9.4 liters      $7.00 per liter      $65.80       Direct labor 0.5 hours      $18.00 per hour      $9.00       Variable overhead 0.5 hours      $3.00 per hour      $1.50         The company budgeted for production of 2,800 units in June, but actual production was 2,900 units. The company used 26,970 liters of direct material and 1,370 direct labor-hours to produce this output. The company purchased 28,970 liters of the direct material at $6.90 per liter. The actual direct labor rate was $18.70 per hour and the actual variable overhead rate was $2.70 per hour.

The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.

The materials quantity variance for June is:

$2,030 F

$940 U

$940 F

$2,030 U

45.   

Kibodeaux Corporation makes a product with the following standard costs:    

  Standard Quality or Hours Standard Price or Rate Standard Cost

Per Unit  Inputs             Direct materials 9.8 liters      $13.50 per liter      $132.30       Direct labor 0.1 hours      $30.50 per hour      $3.05       Variable overhead 0.1 hours      $11.50 per hour      $1.15        The company budgeted for production of 3,300 units in June, but actual production was 4,250 units. The company used 41,225 liters of direct material and 404 direct labor-hours to produce this output. The company purchased 35,640 liters of the direct material at $4.90 per liter. The actual direct labor rate was $31.20 per hour and the actual variable overhead rate was $11.20 per hour.     The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.

The labor rate variance for June is: 

$283 U

$283 F

$298 U

$298 F