ACCT 202 MIDTERM

Manufacturing overhead includes:

all manufacturing costs except direct labor and direct materials

Garrott Corporation's total assets were $1,505,000 at the end of Year 2 and $1,520,000 at the end of Year 1. Its total stockholders' equity was $1,197,000 at the end of Year 2 and $1,180,000 at the end of Year 1. The company's return on equity for Year 2 is closest to:

2.11%

Lasch Corporation has provided the following financial data from its balance sheet and income statement: The company's times interest earned ratio for Year 2 is closest to:

2.43

Erkkila Inc. reports that at an activity level of 2,100 machine-hours in a month, its total variable inspection cost is $69,846 and its total fixed inspection cost is $9,072. What would be the average fixed inspection cost per unit at an activity level of 2,400 machine-hours in a month? Assume that this level of activity is within the relevant range.

3.78

In the Schedule of Cost of Goods Manufactured and Cost of Goods Sold, the cost of goods manufactured is computed according to which of the following equations?

Cost of goods manufactured = Total manufacturing costs + Beginning work in process inventory - Ending work in process inventory

Jameson estimates that 20,000 direct labor-hours will be worked during the year. The predetermined overhead rate per hour will be:

$2.50 per direct labor-hour

Freiman Corporation's most recent balance sheet and income statement appear below: The working capital at the end of Year 2 is:

$260 thousand

The most recent balance sheet and income statement of Penaloza Corporation appear below: The company paid a cash dividend of $18. It did not dispose of any property, plant, and equipment. The company did not retire any bonds payable or repurchase any of its own common stock. The following questions pertain to the company's statement of cash flows. The net cash provided by (used in) investing activities for the year was:

-104

Megan Corporation's net income last year was $98,000. Changes in the company's balance sheet accounts for the year appear below: The company paid a cash dividend of $36,000 and it did not dispose of any long-term investments or property, plant, and equipment. The company did not issue any bonds payable or repurchase any of its own common stock. The following questions pertain to the company's statement of cash flows. The net cash provided by (used in) investing activities last year was:

-135,000

Buckley Corporation's most recent comparative balance sheet appears below: The company's net income for the year was $91 and it paid a cash dividend of $22. It did not dispose of any property, plant, and equipment during the year. The company did not retire any bonds payable or repurchase any of its own common stock. The net cash provided by (used in) investing activities for the year was:

-136

Krech Corporation's comparative balance sheet appears below: The company's net income (loss) for the year was ($3,000) and its cash dividends were $3,000. It did not sell or retire any property, plant, and equipment during the year. The company uses the indirect method to determine the net cash provided by operating activities. The company's net cash provided by (used in) investing activities is:

-20,000

The company's net income for the year was $152 and it did not issue any bonds or repurchase any of its common stock during the year. Cash dividends were $40. The net cash provided by (used in) financing activities for the year was:

-49

Majorn Auto Parts Store had net income of $81,000 for the year just ended. Majorn collected the following additional information to prepare its statement of cash flows for the year: Majorn uses the indirect method to prepare its statement of cash flows. What is Majorn's net cash provided by (used in) operating activities?

-53,000

Delfavero Corporation has provided the following data: The company's earnings per share for Year 2 is closest to:

0.34 per share

Laverde Corporation has provided the following data: The company's total asset turnover for Year 2 is closest to:

0.82

Excerpts from Sydner Corporation's most recent balance sheet appear below: Sales on account in Year 2 amounted to $1,390 and the cost of goods sold was $900. The acid-test (quick) ratio at the end of Year 2 is closest to:

0.97

Furis Corporation's cash and cash equivalents consist of cash and marketable securities. Last year the company's cash account decreased by $12,000 and its marketable securities account increased by $19,000. Net cash provided by (used in) operating activities was $18,000. Net cash provided by (used in) financing activities was $(12,000). Based on this information, the net cash provided by (used in) investing activities on the statement of cash flows was:

1,000

Dukes Corporation used a predetermined overhead rate this year of $2 per direct labor-hour, based on an estimate of 20,000 direct labor-hours to be worked during the year. Actual costs and activity during the year were: The overapplied or underapplied manufacturing for the year was:

1,000 underapplied

The unit product cost of Product F3 under activity-based costing is closest to:

1,501.23

Crich Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year, the estimated direct labor-hours were 21,800 hours and the total estimated manufacturing overhead was $497,040. At the end of the year, actual direct labor-hours for the year were 21,500 hours and the actual manufacturing overhead for the year was $492,040. Overhead at the end of the year was:

1,840 underapplied

Bolka Corporation, a merchandising company, reported the following results for October: The gross margin for October is:

1,901,900

Gnas Corporation's total current assets are $210,000, its noncurrent assets are $590,000, its total current liabilities are $160,000, its long-term liabilities are $490,000, and its stockholders' equity is $150,000. The current ratio is closest to:

1.31

Fayer Corporation has provided the following financial data: Dividends on common stock during Year 2 totaled $4,500. The market price of common stock at the end of Year 2 was $10.88 per share. The company's equity multiplier at the end of Year 2 is closest to:

1.45

Wessner Corporation has provided the following information: The incremental manufacturing cost that the company will incur if it increases production from 4,000 to 4,001 units is closest to:

10.45

Frankin Corporation's net cash provided by operating activities was $192; its capital expenditures were $154; and its cash dividends were $27. The company's free cash flow was:

11

Varela Corporation's relevant range of activity is 2,000 units to 6,000 units. When it produces and sells 4,000 units, its average costs per unit are as follows: For financial reporting purposes, the total amount of period costs incurred to sell 4,000 units is closest to:

11,600

Recher Corporation's common stock has a par value of $3 per share and has been stable at a total value of $270,000 on the company's balance sheet for several years. The total stockholders' equity at the end of this year was $1,023,000 and at the beginning of the year was $1,010,000. Net income for the year was $17,500. Dividends on common stock during the year totaled $4,500. The market price of common stock at the end of the year was $3.76 per share. The company's book value per share at the end of the year is closest to:

11.37 per share

Excerpts from Colter Corporation's most recent balance sheet appear below: Sales on account in Year 2 amounted to $1,210 and the cost of goods sold was $720. The accounts receivable turnover for Year 2 is closest to:

11.52

Fatzinger Corporation has two production departments, Milling and Assembly. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Milling Department's predetermined overhead rate is based on machine-hours and the Assembly Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: The predetermined overhead rate for the Assembly Department is closest to:

11.60

Rhome Corporation's relevant range of activity is 2,000 units to 6,000 units. When it produces and sells 4,000 units, its average costs per unit are as follows: If 5,000 units are sold, the variable cost per unit sold is closest to:

12.05

Purves Corporation is using a predetermined overhead rate that was based on estimated total fixed manufacturing overhead of $121,000 and 10,000 direct labor-hours for the period. The company incurred actual total fixed manufacturing overhead of $113,000 and 10,900 total direct labor-hours during the period. The predetermined overhead rate is closest to:

12.10

Pedregon Corporation has provided the following information: If 4,000 units are sold, the variable cost per unit sold is closest to:

12.65

Delongis Corporation, a merchandising company, reported the following results for June: Cost of goods sold is a variable cost in this company. The contribution margin for June is:

124,800

The University Store, Inc. is the major bookseller for four nearby colleges. An income statement for the first quarter of the year is presented below: On average, a book sells for $40.00. Variable selling expenses are $3.00 per book; the remaining selling expenses are fixed. The variable administrative expenses are 5% of sales; the remainder of the administrative expenses are fixed. The contribution margin for the University Store for the first quarter is:

140,000

Walmouth Corporation's comparative balance sheet and income statement for last year appear below: The company declared and paid a cash dividend of $54,000 during the year. It did not purchase or dispose of any property, plant, and equipment. It did not issue any bonds or repurchase any of its own common stock. The following questions pertain to the company's statement of cash flows. The net cash provided by (used in) operating activities last year was:

152,000

Thach Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $665,000, variable manufacturing overhead of $3.00 per machine-hour, and 70,000 machine-hours. Recently, Job T321 was completed with the following characteristics: The unit product cost for Job T321 is closest to:

154.50

Ribaudo Corporation has provided the following financial data from its balance sheet and income statement: The company's operating cycle for Year 2 is closest to

162 days

Durphey Corporation has provided the following data concerning last month's operations. How much is the total manufacturing cost for the month on the Schedule of Cost of Goods Manufactured?

172,000

Haver Corporation has provided the following data concerning last month's operations. How much is the cost of goods available for sale on the Schedule of Cost of Goods Sold?

180,000

Tenneson Corporation's cost of goods manufactured for the just completed month was $151,000 and its inventories were as follows: How much was the cost of goods available for sale on the Schedule of Cost of Goods Sold?

185,000

Foisy, Inc., manufactures and sells two products: Product N0 and Product U8. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below: The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: The total overhead applied to Product U8 under activity-based costing is closest to:

194,680

Appleby, Inc., manufactures and sells two products: Product Q9 and Product V8. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below: The overhead applied to each unit of Product V8 under activity-based costing is closest to:

202.35

Financial statements for Maraby Corporation appear below: Maraby Corporation's working capital (in thousands of dollars) at the end of Year 2 was closest to:

260

Housholder Corporation uses a predetermined overhead rate base on machine-hours that it recalculates at the beginning of each year. The company has provided the following data for the most recent year. The amount of manufacturing overhead that would have been applied to all jobs during the period is closest to:

283,650

Macmillan Corporation has provided the following financial data Dividends on common stock during Year 2 totaled $7,200. The market price of common stock at the end of Year 2 was $3.69 per share. The company's working capital at the end of Year 2 is:

289,000

A partial listing of costs incurred at Archut Corporation during September appears below: The total of the product costs listed above for September is:

292,000

Settles Corporation has provided the following financial data: Dividends on common stock during Year 2 totaled $5,400. The market price of common stock at the end of Year 2 was $5.89 per share. The company's return on equity for Year 2 is closest to:

3.31%

Swinger Corporation's comparative balance sheet appears below: The company did not dispose of any property, plant, and equipment during the year. Its net income for the year was $10,000. The net cash provided by (used in) operating activities is:

32,000

Manufacturing overhead for the month was overapplied by $7,000. The Corporation allocates any underapplied or overapplied manufacturing overhead among work in process, finished goods, and cost of goods sold at the end of the month on the basis of the manufacturing overhead applied during the month in those accounts. The finished goods inventory at the end of October after allocation of any underapplied or overapplied manufacturing overhead for the month is closest to:

33,410

The Warrel Corporation reported the following data for last year: Based solely on this information, the net cash provided by (used in) financing activities on the statement of cash flows would be:

34,000

At a volume of 5,000 units, Pwerson Company incurred $32,000 in factory overhead costs, including $14,000 in fixed costs. If volume increases to 6,000 units and both 5,000 units and 6,000 units are within the relevant range, then the company would expect to incur total factory overhead costs of:

35,600

Roca, Inc., manufactures and sells two products: Product M6 and Product X7. The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity: The total overhead applied to Product X7 under activity-based costing is closest to:

369,879

Gilchrist Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. At the beginning of the most recently completed year, the Corporation estimated the machine-hours for the upcoming year at 79,000 machine-hours. The estimated variable manufacturing overhead was $7.38 per machine-hour and the estimated total fixed manufacturing overhead was $2,347,090. The predetermined overhead rate for the recently completed year was closest to:

37.09

Neef Corporation has provided the following financial data from its balance sheet and income statement: The company's gross margin percentage for Year 2 is closest to:

37.3%

Calin Corporation has total current assets of $615,000, total current liabilities of $230,000, total stockholders' equity of $1,183,000, total net plant and equipment of $958,000, total assets of $1,573,000, and total liabilities of $390,000. The company's working capital is:

385,000

Excerpts from Colter Corporation's most recent balance sheet appear below: Sales on account in Year 2 amounted to $1,210 and the cost of goods sold was $720. The inventory turnover for Year 2 is closest to:

4.36

Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. Further assume that the company uses a markup of 50% on manufacturing cost to establish selling prices. The calculated selling price for Job L is closest to:

40,320

Bottum Corporation, a manufacturing Corporation, has provided data concerning its operations for May. The beginning balance in the raw materials account was $20,000 and, the ending balance was $36,000. Raw materials purchases during the month totaled $63,000. Manufacturing overhead cost incurred during the month was $111,000, of which $2,000 consisted of raw materials classified as indirect materials. The direct materials cost for May was:

45,000

Ribaudo Corporation has provided the following financial data from its balance sheet and income statement: The company's accounts receivable turnover for Year 2 is closest to:

5.21

Data from Dunshee Corporation's most recent balance sheet appear below: Sales on account in Year 2 amounted to $1,170 and the cost of goods sold was $730. The average sale period for Year 2 is closest to:

50 days

Dehner Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on the following data: Recently, Job P951 was completed with the following characteristics: The amount of overhead applied to Job P951 is closest to:

540

Pascarelli Corporation's inventory at the end of Year 2 was $122,000 and its inventory at the end of Year 1 was $150,000. Cost of goods sold amounted to $870,000 in Year 2. The company's average sale period for Year 2 is closest to:

57 days

Laflame Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: The estimated total manufacturing overhead is closest to:

630,000

The overhead applied to each unit of Product Z2 under activity-based costing is closest to:

651.92

Tarrant Corporation has two manufacturing departments--Casting and Finishing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both departments. The departmental predetermined overhead rate in the Casting Department is closest to:

7.00

Pedregon Corporation has provided the following information: If the selling price is $20.60 per unit, the contribution margin per unit sold is closest to:

7.95

At the beginning of December, Altro Corporation had $26,000 of raw materials on hand. During the month, the Corporation purchased an additional $76,000 of raw materials. During December, $72,000 of raw materials were requisitioned from the storeroom for use in production. The credits entered in the Raw Materials account during the month of December total:

72,000

Krier Corporation uses a predetermined overhead rate that was based on estimated total fixed manufacturing overhead of $738,000 and 30,000 direct labor-hours for the period. The company incurred actual total fixed manufacturing overhead of $792,000 and 31,500 total direct labor-hours during the period. The amount of manufacturing overhead that would have been applied to all jobs during the period is closest to:

774,900

Mccaskell Corporation's relevant range of activity is 7,000 units to 11,000 units. When it produces and sells 9,000 units, its average costs per unit are as follows: If 8,000 units are produced, the total amount of direct manufacturing cost incurred is closest to:

79,600

What are the equivalent units for materials for the month in the first processing department?

8,475

Salsedo Corporation's balance sheet and income statement appear below: Cash dividends were $9. The company sold equipment for $15 that was originally purchased for $10 and that had accumulated depreciation of $5. It did not issue any bonds payable or repurchase any of its own common stock. The net cash provided by (used in) operating activities for the year was:

85

Megan Corporation's net income last year was $98,000. Changes in the company's balance sheet accounts for the year appear below: The company paid a cash dividend of $36,000 and it did not dispose of any long-term investments or property, plant, and equipment. The company did not issue any bonds payable or repurchase any of its own common stock. The following questions pertain to the company's statement of cash flows. The free cash flow for the year was:

87,000

Boesenhofer, Inc., manufactures and sells two products: Product N6 and Product N7. The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity: The activity rate for the Machine Setups activity cost pool is closest to:

91.81

Which one of the following statements about book value per share is most correct?

Book value per common share is based on past transactions whereas the market price of a share of stock mainly reflects what investors expect to happen in the future.

In a job-order costing system that is based on machine-hours, which of the following formulas is correct?

Predetermined overhead rate = Estimated manufacturing overhead ÷ Estimated machine-hours

Sand Company has an acid-test ratio of 0.8. Which of the following actions would improve the acid-test ratio?

Sell some equipment for cash.

Excerpts from Aultman 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?

The change in Inventory is subtracted from net income; The change in Accounts Payable is subtracted from net income

Under the weighted-average method, the cost of units transferred out of a department is computed as follows for a cost category:

Units transferred to the next department × Cost per equivalent unit

Which of the following would be added to net income in the operating activities section of a statement of cash flows prepared using the indirect method?

a decreased in accrued liabilities

An increase in the Inventory account from $10,000 at the beginning of the year to $15,000 at the end of the year would be shown on the statement of cash flows prepared under the indirect method as:

a deduction from net income of $5,000 in order to arrive at net cash provided by operating activities.

The salary paid to the president of a company would be classified on the income statement as a(n):

administrative expense

An increase in accrued liabilities of $1,000 during a year would be shown on the company's statement of cash flows prepared under the indirect method as:

an addition to net income of $1,000 in order to arrive at net cash provided by operating activities.

In activity-based costing, unit product costs computed for external financial reports include:

direct materials, direct labor, and manufacturing overhead.

Direct costs:

can be easily traced to a particular cost object.

The cost of direct materials is classified as a:

conversion cost: no prime cost: yes

The costs of direct materials are classified as:

conversion cost: no manufacturing cost: yes prime cost: yes

Wages paid to the supervisor of the warehouse where raw materials and parts are temporarily stored before being used in production is considered an example of:

direct labor: no period cost: no

All of the following are examples of product costs except:

depreciation on the company's retail outlets.

In a statement of cash flows, issuing bonds payable affects the:

financing activities

When the level of activity decreases within the relevant range, the fixed cost per unit will:

increase

Tomlin Corporation prepares its statement of cash flows using the indirect method. Which of the following would be subtracted from net income in the operating activities section of the statement?

increase in accounts receivable: yes decreased in accrued liabilities: yes

Materials used in a factory that are not an integral part of the final product, such as cleaning supplies, should be classified as:

manufacturing overhead

Illies Corporation's comparative balance sheet appears below: The company did not dispose of any property, plant, and equipment during the year. Its net income for the year was $5,000 and its cash dividends were $4,000. The company did not issue any bonds payable or purchase any of its own common stock during the year. Its net cash provided by (used in) operating activities and net cash provided by (used in) financing activities are:

net cash provided by operating activities, $33,000; net cash used in financing activities, $(7,000)

In a statement of cash flows, a change in an income taxes payable account would be recorded in the:

operating activities

In a statement of cash flows, which of the following would be classified as an investing activity?

sale of equipment

A cost incurred in the past that is not relevant to any current decision is classified as a(n):

sunk cost

Malcolm Company uses a weighted-average process costing system. All materials at Malcolm are added at the beginning of the production process. The equivalent units for materials at Malcolm would be the sum of:

units in beginning work in process and the units started.

For an automobile manufacturer, the cost of a driver's side air bag purchased from a supplier and installed in every automobile would best be described as a:

variable cost

Within the relevant range, variable costs can be expected to:

vary in total in direct proportion to changes in the activity level.