Salmone company reported the following purchases and sales

1.

TB MC Qu. 03-52 Dybala Corporation produces and sells...

Dybala Corporation produces and sells a single product. Data concerning that product appear below:

Per Unit

Percent of Sales

Selling price

$

130

100

%

Variable expenses

91

70

%

Contribution margin

39

30

%

The company is currently selling 6,200 units per month. Fixed expenses are $220,000 per month. The marketing manager believes that a $6,700 increase in the monthly advertising budget would result in a 240 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change?

rev: 08_18_2016_QC_CS-57562

decrease of $6,700

decrease of $2,660

increase of $9,360

increase of $2,660

2.

TB MC Qu. 04-88 Acton Corporation, which applies manufacturing...

Acton 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

$176,700

Estimated machine-hours

1,900

Actual manufacturing overhead

$168,100

Actual machine-hours

1,820

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 overhead for the year was:

Noreen 4e Recheck 2017-16-03

$7,440 underapplied

$7,440 overapplied

$1,160 overapplied

$1,160 underapplied

3.

TB MC Qu. 09-58 Prester Corporation has budgeted production...

Prester Corporation has budgeted production for next year as follows:

Quarter

First

Second

Third

Fourth

Production in units

76,800

89,100

93,000

112,800

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 38,200 pounds of material A are on hand to start the year. Budgeted purchases of material A for the second quarter would be:

224,700 pounds

178,200 pounds

180,150 pounds

176,250 pounds

4.

TB MC Qu. 11-47 Degregorio Corporation makes a product...

Degregorio Corporation makes a product that uses a material with the following direct material standards:

Standard quantity

2.4

kilos per unit

Standard price

$6

per kilo

The company produced 6,600 units in November using 16,180 kilos of the material. During the month, the company purchased 18,220 kilos of the direct material at a total cost of $105,676. The direct materials purchases variance is computed when the materials are purchased. The materials quantity variance for November is:

$2,040 F

$1,946 U

$1,946 F

$2,040 U

5.

TB MC Qu. 08-128 (Ignore income taxes in this problem.) Lajeunesse...

(Ignore income taxes in this problem.) Lajeunesse Corporation uses a discount rate of 10% in its capital budgeting. Partial analysis of an investment in automated equipment with a useful life of 9 years has thus far yielded a net present value of $(192,250). This analysis did not include any estimates of the intangible benefits of automating this process nor did it include any estimate of the salvage value of the equipment.

Click here to view Exhibit 8B-1 and Exhibit 8B-2 to determine the appropriate discount factor(s) using tables. Ignoring any salvage value, to the nearest whole dollar how large would the additional cash flow per year from the intangible benefits have to be to make the investment in the automated equipment financially attractive?

rev: 12_19_2017_QC_CS-112654

$25,331

$33,383

$192,250

$17,012

6.

TB MC Qu. 12-65 Last year the Uptown Division of Gorcen Enterprise...

Last year the Uptown Division of Gorcen Enterprises had sales of $693,000 and a net operating income of $46,530. The average operating assets at Uptown last year amounted to $198,000. Last year at Uptown the return on investment was: (Do not round intermediate calculations.)

24%

29%

12%

16%

7.

TB MC Qu. 06-39 Hochberg Corporation uses an activity-based...

Hochberg Corporation uses an activity-based costing system with the following three activity cost pools:

Activity Cost Pool

Total Activity

Fabrication

30,000

machine-hours

Order processing

375

orders

Other

Not applicable

The Other activity cost pool is used to accumulate costs of idle capacity and organization-sustaining costs. The company has provided the following data concerning its costs:

Wages and salaries

$

513,000

Depreciation

123,000

Occupancy

155,000

Total

$

791,000

The distribution of resource consumption across activity cost pools is given below:

Activity Cost Pools

Fabricating

Order Processing

Other

Total

Wages and salaries

25%

60%

15%

100%

Depreciation

15%

25%

60%

100%

Occupancy

30%

50%

20%

100%

The activity rate for the Fabrication activity cost pool is closest to:

Noreen 4e Rechecks 2017-24-03

$6.44 per machine-hour

$1.60 per machine-hour

$6.59 per machine-hour

$3.20 per machine-hour

8.

TB MC Qu. 05-57 A manufacturing company that produces...

A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations:

Selling price

$

145

Units in beginning inventory

0

Units produced

2,440

Units sold

2,280

Units in ending inventory

160

Variable cost per unit:

Direct materials

$

49

Direct labor

$

17

Variable manufacturing overhead

$

17

Variable selling and administrative

$

10

Fixed costs:

Fixed manufacturing overhead

$

85,400

Fixed selling and administrative expenses

$

22,800

The total gross margin for the month under absorption costing is:

$61,560

$107,760

$118,560

$15,960

9.

TB MC Qu. 08-101 (Ignore income taxes in this problem.) Overland Corporation...

(Ignore income taxes in this problem.) Overland Corporation has gathered the following data on a proposed investment project:

Click here to view Exhibit 8B-1 and Exhibit 8B-2 to determine the appropriate discount factor(s) using tables.

Investment required in equipment

$

440,000

Annual cash inflows

$

77,000

Salvage value of equipment

$

0

Life of the investment

20

years

Discount rate

13

%

The company uses straight-line depreciation on all equipment. Assume cash flows occur uniformly throughout a year except for the initial investment.

The internal rate of return on the investment is closest to:

15%

19%

13%

17%

10.

TB MC Qu. 04-67 Zander Inc. uses...

Zander Inc. uses a job-order costing system in which any underapplied or overapplied overhead is closed to cost of goods sold at the end of the month. In July the company completed job F21X that consisted of 16,500 units of one of the company's standard products. No other jobs were in process during the month. The job cost sheet for job F21X shows the following costs:

Beginning balance

$61,050

Direct materials

$551,100

Direct labor cost

$224,400

Manufacturing overhead cost applied

$316,800

During the month, the actual manufacturing overhead cost incurred was $313,500 and 11,000 completed units from job F21X were sold. No other products were sold during the month. The unadjusted cost of goods sold (in other words, the cost of goods sold BEFORE adjustment for any underapplied or overapplied overhead) for July is closest to:

$768,900

$766,100

$1,092,300

$1,153,350

11.

TB MC Qu. 04-87 Acton Corporation, which applies manufacturing...

Acton 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

$84,100

Estimated machine-hours

1,000

Actual manufacturing overhead

$81,000

Actual machine-hours

970

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:

$80,859

$80,216

$79,498

$81,577

12.

TB MC Qu. A-31 Minden Corporation estimates that the following...

Minden Corporation estimates that the following costs and activity would be associated with the manufacture and sale of product A:

Number of units sold annually

100,000

Required investment

$

528,000

Unit product cost

$

30

Selling and administrative expenses

$

394,000

If the company uses the absorption costing approach to cost-plus pricing described in the text and desires a 24.5% rate of return on investment (ROI), the required markup on absorption cost for Product A would be closest to:

Noreen rechecks 2017-04-04

17%

24%

12%

15%

13.

TB MC Qu. 05-150 Kilihea Corporation produces a...

Kilihea Corporation produces a single product. The company's absorption costing income statement for July follows:

Kilihea Corporation Income Statement For the month ended July 31

Sales (9,700 units)

$523,800

Cost of goods sold

295,850

Gross margin

227,950

Selling and administrative expenses:

Fixed

116,400

Variable

58,200

174,600

Net operating income

$53,350

During July, the company's variable production costs were $23.50 per unit and its fixed manufacturing overhead totaled $73,400.

Net operating income under the variable costing method for July would be:

Noreen 4e Rechecks 2017-24-03

$53,350

$58,850

$47,850

$44,650

14.

TB MC Qu. 10-125 Shelby Boat Wash's cost formula for...

Shelby Boat Wash's cost formula for its cleaning equipment and supplies is $2,940 per month plus $35 per boat. For the month of September, the company planned for activity of 73 boats, but the actual level of activity was 29 boats. The actual cleaning equipment and supplies for the month was $4,010. The activity variance for cleaning equipment and supplies in September would be closest to:

$1,540 F

$1,485 U

$1,540 U

$1,485 F

15.

TB MC Qu. 07-108 The Talbot Corporation makes wheels that it…

The Talbot Corporation makes wheels that it uses in the production of bicycles. Talbot's costs to produce 270,000 wheels annually are:

Direct materials

$54,000

Direct labor

$81,000

Variable manufacturing overhead

$40,500

Fixed manufacturing overhead

$77,000

An outside supplier has offered to sell Talbot similar wheels for $0.80 per wheel. If the wheels are purchased from the outside supplier, $32,000 of annual fixed overhead could be avoided and the facilities now being used could be rented to another company for $94,900 per year. Direct labor is a variable cost.

If Talbot chooses to buy the wheel from the outside supplier, then annual net operating income would:

Noreen 4e Recheck 2017-16-03

increase by $72,100

increase by $54,000

increase by $86,400

decrease by $8,500

16.

TB MC Qu. 03-76 Puchalla Corporation sells a product for...

Puchalla Corporation sells a product for $110 per unit. The product's current sales are 12,200 units and its break-even sales are 10,614 units. The margin of safety as a percentage of sales is closest to:

rev: 07_14_2016_QC_CS-55471

13%

87%

85%

15%

17.

TB MC Qu. 11-85 Ortman Corporation makes a product...

Ortman Corporation makes a product with the following standard costs:

Standard Quantity or Hours

Standard Price or Rate

Direct materials

6.6

liters

$11.00

per liter

Direct labor

1.0

hours

$16.00

per hour

Variable overhead

1.0

hours

$1.00

per hour

The company reported the following results concerning this product in May:

Actual output

1,600

units

Raw materials used in production

10,400

liters

Actual direct labor-hours

1,535

hours

Purchases of raw materials

11,830

liters

Actual price of raw materials purchased

$ 6.80

per liter

Actual direct labor rate

$15.50

per hour

Actual variable overhead rate

$0.80

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 variable overhead rate variance for May is:

Noreen 4e Rechecks 2017-24-03

$310 F

$307 U

$310 U

$307 F

18.

TB MC Qu. 10-42 Lynne Catering uses two measures of activity, jobs...

Lynne Catering uses two measures of activity, jobs and meals, in the cost formulas in its budgets and performance reports. The cost formula for catering supplies is $480 per month plus $91 per job plus $14 per meal. A typical job involves serving a number of meals to guests at a corporate function or at a host's home. The company expected its activity in June to be 10 jobs and 79 meals, but the actual activity was 14 jobs and 77 meals. The actual cost for catering supplies in June was $2970. The catering supplies in the flexible budget for June would be closest to:

$2,913

$2,832

$79

$1754

19.

TB MC Qu. 02-105 Abare Corporation reported the...

Abare Corporation reported the following data for the month of December:

Direct materials

$

85,000

Direct labor cost

$

52,000

Manufacturing overhead

$

83,000

Selling expense

$

38,000

Administrative expense

$

56,000

The conversion cost for December was:

$135,000

$198,000

$139,000

$220,000

20.

TB MC Qu. 07-91 Tawstir Corporation has...

Tawstir Corporation has 720 obsolete personal computers that are carried in inventory at a total cost of $1,058,400. If these computers are upgraded at a total cost of $45,360, they can be sold for a total of $842,400. As an alternative, the computers can be sold in their present condition for $770,040.

The sunk cost in this situation is:

$1,058,400

$45,360

$842,400

$770,040

21.

TB MC Qu. 12-76 Cabal Products is a division of a major corporation.

Cabal Products is a division of a major corporation. Last year the division had total sales of $13,143,500, net operating income of $661,540, and average operating assets of $4,850,000. The company's minimum required rate of return is 13%. The division's turnover is closest to:

17.44

2.39

2.71

.35

22.

TB MC Qu. 07-92 Tawstir Corporation has...

Tawstir Corporation has 500 obsolete personal computers that are carried in inventory at a total cost of $720,000. If these computers are upgraded at a total cost of $180,000, they can be sold for a total of $240,000. As an alternative, the computers can be sold in their present condition for $50,000.

What is the net advantage or disadvantage to the company from upgrading the computers rather than selling them in their present condition?

$190,000 advantage

$740,000 disadvantage

$10,000 advantage

$60,000 advantage

23.

TB MC Qu. 09-36 The WRT Corporation makes collections...

The WRT Corporation makes collections on sales according to the following schedule: 25% in month of sale

65% in month following sale

5% in second month following sale

5% uncollectible

The following sales have been budgeted:

Sales

April

$

151,000

May

$

109,000

June

$

111,000

Budgeted cash collections in June would be:

$123,150

$106,150

$78,400

$27,750

24.

TB MC Qu. 10-245 Bobe Air uses two measures of...

Bobe Air uses two measures of activity, flights and passengers, in the cost formulas in its budgets and performance reports. The cost formula for plane operating costs is $47,000 per month plus $2,730 per flight plus $9 per passenger. The company expected its activity in May to be 65 flights and 243 passengers, but the actual activity was 68 flights and 242 passengers. The actual cost for plane operating costs in May was $233,928. The plane operating costs in the planning budget for May would be closest to:

$223,899

$233,928

$234,818

$226,637

25.

TB MC Qu. 02-70 The following costs were incurred...

The following costs were incurred in April:

Direct materials

$50,000

Direct labor

$41,000

Manufacturing overhead

$33,000

Selling expenses

$29,000

Administrative expenses

$44,000

Conversion costs during the month totaled:

$197,000

$103,000

$83,000

$74,000

26.

TB MC Qu. 06-54 Ort Corporation...

Ort Corporation has provided the following data from its activity-based costing accounting system:

Indirect factory wages

$

569,000

Factory equipment depreciation

270,000

Distribution of Resource Consumption across Activity Cost Pools:

Activity Cost Pools

Customer Orders

Product Processing

Other

Total

Indirect factory wages

60%

25%

15%

100%

Factory equipment depreciation

30%

45%

25%

100%

The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs that are not assigned to products.

How much indirect factory wages and factory equipment depreciation cost would be assigned to the Customer Orders activity cost pool?

$389,900

$565,400

$839,000

$422,400

27.

TB MC Qu. 09-47 On November 1, Barnes Corporation has...

On November 1, Barnes Corporation has 9,750 units of Product A on hand. During the month, the company plans to sell 46,200 units of Product A, and plans to have 8,200 units on hand at end of the month. How many units of Product A must be produced during the month?

44,650

46,200

54,400

47,750

28.

TB MC Qu. 05-70 Quinnett Corporation has two divisions: the Export...

Quinnett Corporation has two divisions: the Export Products Division and the Business Products Division. The Export Products Division's divisional segment margin is $40,000 and the Business Products Division's divisional segment margin is $97,600. The total amount of common fixed expenses not traceable to the individual divisions is $123,600. What is the company's net operating income?

Noreen 4e Rechecks 2017-24-03

($137,600)

$261,200

$14,000

$137,600

29.

TB MC Qu. B-19 Hamelinck Corporation would like to determine the...

Hamelinck Corporation would like to determine the relative profitability of a number of jobs. For example, the revenue from Job W06Z is $116,000 and its avoidable costs amount to $88,160, resulting in an incremental profit of $27,840. Furthermore, the job requires 290 hours of the constrained resource. What is the profitability index for job W06Z?

$96 per hour

$960 per hour

0.24

$864 per hour

30.

TB MC Qu. 11-61 Jackson Industries uses a standard cost system...

Jackson Industries uses a standard cost system in which direct materials inventory is carried at standard cost. Jackson has established the following standards for one unit of product:

Standard Quantity or Hours

Standard Price or Rate

Standard Cost Per Unit

Direct materials

5

pounds

$4.90

per pound

$24.50

Direct labor

2.70

hours

$8.00

per hour

$21.60

During May, Jackson purchased 139,500 pounds of direct material at a total cost of $711,450. The total factory wages for May were $522,300, 90 percent of which were for direct labor. Jackson manufactured 24,000 units of product during May using 116,500 pounds of direct material and 65,300 direct labor-hours. The price variance for the direct material acquired by Jackson Industries during May is:

$24,500 Favorable

$30,900 Favorable