c
ccc

 
› p The balanced scorecard perspective that addresses concerns about organizational growth is
the:
a learning and growth perspective c customer value perspective
b internal business perspective d financial perspective

2 p
n February direct labor was 60% percent of conversion cost
f the manufacturing overhead
cost for the month was $78,000 and the direct materials cost was $22,000, the direct labor
cost was:
a $52,000
b $›,667
c $››7,000
d $33,000

3 p aag
nc is a merchandising company Last month the company's cost of goods sold was
$86,000 The company's beginning merchandise inventory was $20,000 and its ending
merchandise inventory was $2›,000 What was the total amount of the company's
merchandise purchases for the month?
a $86,000
b $›27,000
c $87,000
d $85,000

 p ribb orporation uses direct labor-hours in its predetermined overhead rate At the
beginning of the year, the estimated direct labor-hours were ›7,900 hours and the total
estimated manufacturing overhead was $3›,890 At the end of the year, actual direct labor-
hours for the year were ›6,700 hours and the actual manufacturing overhead for the year was
$336,890 Overhead at the end of the year was:
a $22,920 underapplied
b $›7,920 overapplied
c $›7,920 underapplied
 d $22,920 overapplied

5 p The direct labor rate in Brent ompany is $9 00 per hour, and manufacturing overhead is
applied to products using a predetermined overhead rate of $6 00 per direct labor hour
During May, the company purchased $60,000 in raw materials (all direct materials) and
worked 3,200 direct labor hours The Raw Materials inventory (all direct materials)
decreased by $3,000 between the beginning and end of May The Work in Process inventory
on May › consisted of one job which had been charged with $,000 in direct materials and on
which 300 hours of direct labor time had been worked There was no Work in Process
inventory on May 3› The balance in the Work in Process inventory account on May › was:
a $0
b $6,700
c $,500
d $8,500

6 p Jinker ompany uses the weighted-average method in its process costing system Operating
data for the Painting Department for the month of April appear below:
Units Percentage complete
Beginning work in process inventory 6,700 50%
Transferred in from the prior department during April 57,800
Ending work in process inventory 7,600 60%
What were the equivalent units for conversion costs in the Painting Department for April?
a 56,900
b 6›,60
c 62,360
d 58,700

7 p ardiv orporation has provided the following production and average cost data for two
levels of monthly production volume The company produces a single product
Production volume ,000 units 5,000 units
Direct materials $85 80 per unit $85 80 per unit
 Direct labor $56 ›0 per unit $56 ›0 per unit
Manufacturing overhead $73 60 per unit $62 ›0 per unit
The best estimate of the total cost to manufacture ,300 units is closest to:
a $877,200
b $909,00
c $90›,925
d $926,650

8 p Donner ompany would like to estimate the variable and fixed components of its
maintenance costs and has compiled the following data for the last five months of operations
Labor ours Maintenance ost
January ›60 $6›7
February ›30 $553
March ›80 $596
April ›90 $623
May ››0 $532

Using the high-low method of analysis, the estimated variable cost per labor hour for
maintenance is closest to:
a $0 83
b $› 8
c $› 30
d $› ›

9 p The ³Dog ut´ hot dog stand expects the following operating results for next year:
Sales $280,000
Net operating income $2›,000
ontribution margin ratio 70%
What is Dog ut's break-even point next year in sales dollars?
a $›20,000
b $›8›,300
 c $›96,000
d $250,000

›0 pA tile manufacturer has supplied the following data:

Boxes of tiles produced and sold 580,000
Sales revenue $2,82,000
Variable manufacturing expense ›,653,000
Fixed manufacturing expense 78,000
Variable selling and administrative expense ›5,000
Fixed selling and administrative expense ›28,000
Net operating income $›32,000
What is the company's unit contribution margin?
a $0 23
b $ 90
c $3 ›0
d $› 80

›› p Under variable costing:

a net operating income will tend to move up and down in response to changes in levels of
production
b inventory costs will be lower than under absorption costing
c net operating income will tend to vary inversely with production changes
d net operating income will always be higher than under absorption costing

›2 p A company produces a single product Variable production costs are $›2 per unit and
variable selling and administrative expenses are $3 per unit Fixed manufacturing overhead
totals $36,000 and fixed selling and administration expenses total $0,000 Assuming a
beginning inventory of zero, production of ,000 units and sales of 3,600 units, the dollar
value of the ending inventory under variable costing would be:
a $,800
b $8,00
 c $6,000
d $3,600

›3 p King ompany produces a single product During March, the company had net operating
income under absorption costing that was $3,500 lower than under variable costing The
company sold 7,000 units in March, and its variable costs were $7 per unit, of which $3 was
variable selling expense
f fixed manufacturing overhead was $2 per unit under absorption
costing, then how many units did the company produce during March?
a 5,250 units
b 8,750 units
c 6,500 units
d 6,›25 units

› pRadakovich orporation has provided the following data from its activity-based costing
system:
Activity ost Pool Total ost Total Activity
Assembly $36,20 28,000 machine-hours
Processing orders $60,896 ›,600 orders

nspection $82,767 ›,›0 inspection-hours
The company makes 230 units of product F60N a year, requiring a total of 80 machine-
hours, 50 orders, and 30 inspection-hours per year The product's direct materials cost is
$›2 70 per unit and its direct labor cost is $5 93 per unit The product sells for $›26 60 per
unit According to the activity-based costing system, the product margin for product F60N is:
a $6,25› 70 per unit
b $,90 70 per unit
c $6,393 70 per unit
d $›5,633 ›0 per unit

›5 pAll the following are considered to be benefits of participative budgeting, except for:
a
ndividuals at all organizational levels are recognized as being part of a team; this results
in greater support for the organization
 b The budget estimates are prepared by those in directly involved in activities
c When managers set their own targets for the budget, top management need not be
concerned with the overall profitability of operations
d Managers are held responsible for reaching their goals and cannot easily shift
responsibility by blaming unrealistic goals set by others

›6 p Douglas ompany plans to sell 2,000 units of Product A during July and 30,000 units
during August Sales of Product A during June were 25,000 units Past experience has shown
that end-of-month inventory should equal 3,000 units plus 30% of the next month's sales On
June 30 this requirement was met Based on these data, how many units of Product A must
be produced during the month of July?
a 28,800
b 22,200
c 2,000
d 25,800

›7 pWhen the actual direct labor-hours exceed the standard direct labor-hours allowed for the
actual output of the period, the journal entry would include:
a redit to Wages Payable; redit to Labor Efficiency Variance
b redit to Work-
n-Process; redit to Labor Efficiency Variance
c redit to Wages Payable; Debit to Labor Efficiency Variance
d redit to Work-
n-Process; Debit to Labor Efficiency Variance

›8 p The following materials standards have been established for a particular raw material used in
the company's sole product:
Standard quantity per unit of output › 0 pound
Standard price $›6 60 per pound
The following data pertain to operations concerning the product for the last month:
Actual materials purchased 2,200 pounds
Actual cost of materials purchased $3,650
Actual materials used in production ›,900 pounds
 Actual output 2,›00 units
What is the materials quantity variance for the month?
a $3,320 F
b $3,›50 F
c $,980 U
d $,725 U

›9 p Variable overhead is applied on the basis of standard direct labor-hours
f the direct labor
efficiency variance is unfavorable, the variable overhead efficiency variance will be:
a favorable
b unfavorable
c zero
d indeterminable since it is not related to the labor efficiency variance

20 p
nsider ompany has two divisions, J and K During March, the contribution margin in J was
$30,000 The contribution margin ratio in K was 0%, its sales were $›25,000, and its
segment margin was $32,000 The common fixed expenses in the company were $0,000,
and the company's net operating income was $›8,000 The segment margin for Division J
was:
a $26,000
b $32,000
c $8,000
d $58,000

2› pNarciso orporation is preparing a bid for a special order that would require 880 liters of
material R›9S The company already has 280 liters of this raw material in stock that
originally cost $6 20 per liter Material R›9S is used in the company's main product and is
replenished on a periodic basis The resale value of the existing stock of the material is $5 5
per liter New stocks of the material can be readily purchased for $6 20 per liter What is the
relevant cost of the 880 liters of the raw material when deciding how much to bid on the
special order?
 a $5,006
b $5,56
c $,796
d $5,56

22 p
f the project profitability index of an investment project is zero, 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 rate
c the project's internal rate of return is equal to the discount rate
d the relationship of the rate of return and the discount rate is impossible to determine from
the data given

23 p(
gnore income taxes in this problem ) arrison ompany is studying a project that would
have an eight-year life and would require a $300,000 investment in equipment which has no
salvage value The project would provide net operating income each year as follows for the
life of the project:
Sales $500,000
Less cash variable expenses 200,000
ontribution margin 300,000
Less fixed expenses:
Fixed cash expenses $›50,000
Depreciation expenses 37,500 ›87,500
Net operating income $››2,500
The company's required rate of return is ›0% What is the payback period for this project?
a 3 years
b 2 years
c 2 5 years
d 2 67 years

2 p
n an internal transfer, the buying division records the transaction by

 a debiting accounts receivable
b crediting accounts payable
c debiting intracompany S
d crediting inventory

25 p Paulson ompany has only 25,000 hours of machine time each month to manufacture its
twoproducts Product X has a contribution margin of $50, and Product Y has a contribution
margin of $6 Product X requires 5 hours of machine time, and Product Y requires 8 hours
of machine time
f Paulson ompany wants to dedicate 80 percent of its machine time to
the product that will provide the most income, the company will have a total contribution
margin of
a $250,000
b $20,000
c $2›0,000
d $200,000