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Test II –
Chapters 5 thru 7

1.
Data concerning Odum Corporation’s single product appear below:

.jpg” alt=”Picture”>

The break-even in monthly unit sales is closest to:
A) 1,413
units
B) 1,110
units
C) 622
units
D) 1,048
units

2.
A cement manufacturer has supplied the following data:

.jpg” alt=”Picture”>

What is the company’s unit contribution margin?
A) $2.00
B) $0.32
C) $4.30
D) $2.30

3.
Tanigawa Inc. has an operating leverage of 8.7. If the company’s
sales increase by 8%, its net operating income should increase by about:
A) 69.6%
B) 8.7%
C) 108.8%
D) 8.0%

4.
A company that makes organic fertilizer has supplied the following
data:

.jpg” alt=”Picture”>

The company’s unit contribution margin is closest to:
A) $5.25
B) $4.05
C) $3.50
D) $2.35

5.
Weinreich Corporation produces and sells a single product. Data
concerning that product appear below:

.jpg” alt=”Picture”>

The company is currently selling 2,000 units per month. Fixed expenses are
$131,000 per month. The marketing manager believes that an $18,000 increase in
the monthly advertising budget would result in a 170 unit increase in monthly
sales. What should be the overall effect on the company’s monthly net operating
income of this change?
A) Increase
of $2,700
B) Increase
of $15,300
C) Decrease
of $18,000
D) Decrease
of $2,700

6.
Guillet Inc. produces and sells a single product. The selling
price of the product is $180.00 per unit and its variable cost is $46.80 per
unit. The fixed expense is $618,048 per month.

The break-even in monthly unit sales is closest to:
A) 3,434
units
B) 4,640
units
C) 7,093
units
D) 13,206
units

7.
Danneman Corporation’s fixed monthly expenses are $13,000 and its
contribution margin ratio is 56%. Assuming that the fixed monthly expenses do
not change, what is the best estimate of the company’s net operating income in
a month when sales are $41,000?
A) $9,960
B) $5,040
C) $22,960
D) $28,000

8.
Green Enterprises produces a single product. The following data
were provided by the company for the most recent period:

.jpg” alt=”Picture”>

For the period above, one would expect the net operating income under absorption
costing to be:
A) higher
than the net operating income under variable costing.
B) lower
than the net operating income under variable costing.
C) the
same as the net operating income under variable costing.
D) The
relation between absorption costing net operating income and variable costing
net operating income cannot be determined.

9.
Vanstee Corporation manufactures a variety of products. Variable
costing net operating income last year was $60,000 and this year was $67,000.
Last year, $37,000 in fixed manufacturing overhead costs were deferred in
inventory under absorption costing. This year, $8,000 in fixed manufacturing
overhead costs were released from inventory under absorption costing.

What was the absorption costing net operating income this year?
A) $38,000
B) $96,000
C) $75,000
D) $59,000

10.
Green Enterprises produces a single product. The following data
were provided by the company for the most recent period:

.jpg” alt=”Picture”>

Under absorption costing, the unit product cost is:
A) $20
B) $18
C) $15
D) $25

11.
Olds Inc., which produces a single product, has provided the
following data for its most recent month of operations:

.jpg” alt=”Picture”>

There were no beginning or ending inventories. The absorption costing unit
product cost was:
A) $97
B) $130
C) $99
D) $207

12.
Tsuchiya Corporation manufactures a variety of products. Last
year, the company’s variable costing net operating income was $57,500. Fixed
manufacturing overhead costs deferred in inventory under absorption costing
amounted to $35,400. What was the absorption costing net operating income last
year?
A) $22,100
B) $35,400
C) $57,500
D) $92,900

13.
Segment margin is sales minus:
A) variable
expenses.
B) traceable
fixed expenses.
C) variable
expenses and common fixed expenses.
D) variable
expenses and traceable fixed expenses.

14.
Favini Company, which has only one product, has provided the
following data concerning its most recent month of operations:

.jpg” alt=”Picture”>

What is the unit product cost for the month under absorption costing?
A) $91
B) $125
C) $118
D) $98

15.
Dykema Corporation uses activity-based costing to compute product
margins. Overhead costs have already been allocated to the company’s three
activity cost pools-Processing, Supervising, and Other. The costs in those
activity cost pools appear below:

.jpg” alt=”Picture”>

Processing costs are assigned to products using machine-hours (MHs) and
Supervising costs are assigned to products using the number of batches. The
costs in the Other activity cost pool are not assigned to products. Activity
data appear below:

.jpg” alt=”Picture”>

Finally, sales and direct cost data are combined with Processing and
Supervising costs to determine product margins.

.jpg” alt=”Picture”>

The activity rate for the Processing activity cost pool under activity-based
costing is closest to:
A) $15.00
per MH
B) $3.60
per MH
C) $0.46
per MH

16.
Drewniak Corporation has provided the following data from its
activity-based costing system:

.jpg” alt=”Picture”>

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 $35.72 per unit and its direct labor cost is $29.46
per unit.
According to the activity-based costing system, the average cost of product
O37W is closest to:
A) $94.11
per unit
B) $89.72
per unit
C) $65.18
per unit
D) $92.49
per unit

17.
Roshannon Corporation uses activity-based costing to compute
product margins. In the first stage, the activity-based costing system
allocates two overhead accounts-equipment expense and indirect labor-to three
activity cost pools-Processing, Supervising, and Other-based on resource
consumption. Data to perform these allocations appear below:

.jpg” alt=”Picture”>

.jpg” alt=”Picture”>

In the second stage, Processing costs are assigned to products using
machine-hours (MHs) and Supervising costs are assigned to products using the
number of batches. The costs in the Other activity cost pool are not assigned
to products. Activity data for the company’s two products follow:

.jpg” alt=”Picture”>

Finally, sales and direct cost data are combined with Processing and
Supervising costs to determine product margins.

.jpg” alt=”Picture”>

The activity rate for the Processing activity cost pool under activity-based
costing is closest to:
A) $5.33
per MH
B) $0.68
per MH
C) $0.52
per MH
D) $3.00
per MH

18.
Ballweg Corporation has an activity-based costing system with
three activity cost pools-Machining, Order Filling, and Other. In the first
stage allocations, costs in the two overhead accounts, equipment depreciation
and supervisory expense, are allocated to the three activity cost pools based
on resource consumption. Data used in the first stage allocations follow:

.jpg” alt=”Picture”>

.jpg” alt=”Picture”>

Machining costs are assigned to products using machine-hours (MHs) and Order
Filling costs are assigned to products using the number of orders. The costs in
the Other activity cost pool are not assigned to products. Activity data for
the company’s two products follow:

.jpg” alt=”Picture”>

Finally, the costs of Machining and Order Filling are combined with the
following sales and direct cost data to determine product margins.

.jpg” alt=”Picture”>

What is the product margin for Product T2 under activity-based costing?
A) $1,821
B) $871
C) $8,700
D) $16,200

19.
Roshannon Corporation uses activity-based costing to compute
product margins. In the first stage, the activity-based costing system
allocates two overhead accounts-equipment expense and indirect labor-to three
activity cost pools-Processing, Supervising, and Other-based on resource
consumption. Data to perform these allocations appear below:

.jpg” alt=”Picture”>

.jpg” alt=”Picture”>

In the second stage, Processing costs are assigned to products using
machine-hours (MHs) and Supervising costs are assigned to products using the
number of batches. The costs in the Other activity cost pool are not assigned
to products. Activity data for the company’s two products follow:

.jpg” alt=”Picture”>

Finally, sales and direct cost data are combined with Processing and
Supervising costs to determine product margins.

.jpg” alt=”Picture”>

What is the overhead cost assigned to Product P3 under activity-based costing?
A) $30,000
B) $5,916
C) $5,640
D) $11,556

20.
Matt Company uses activity-based costing. The company has two
products: A and B. The annual production and sales of Product A is 8,000 units
and of Product B is 6,000 units. There are three activity cost pools, with
total cost and total activity as follows:

.jpg” alt=”Picture”>

The activity-based costing cost per unit of Product A is closest to:
A) $2.40
B) $3.90
C) $10.59
D) $6.60

Test II –
Chapters 5 thru 71.Data concerning Odum Corporation’s single product appear below:

.jpg” alt=”Picture”>

The break-even in monthly unit sales is closest to:A) 1,413
units
B) 1,110
units
C) 622
units
D) 1,048
units

2.A cement manufacturer has supplied the following data:

.jpg” alt=”Picture”>

What is the company’s unit contribution margin?A) $2.00
B) $0.32
C) $4.30
D) $2.30

3.Tanigawa Inc. has an operating leverage of 8.7. If the company’s
sales increase by 8%, its net operating income should increase by about:A) 69.6%
B) 8.7%
C) 108.8%
D) 8.0%4.A company that makes organic fertilizer has supplied the following
data:

.jpg” alt=”Picture”>

The company’s unit contribution margin is closest to:A) $5.25
B) $4.05
C) $3.50
D) $2.355.Weinreich Corporation produces and sells a single product. Data
concerning that product appear below:

.jpg” alt=”Picture”>

The company is currently selling 2,000 units per month. Fixed expenses are
$131,000 per month. The marketing manager believes that an $18,000 increase in
the monthly advertising budget would result in a 170 unit increase in monthly
sales. What should be the overall effect on the company’s monthly net operating
income of this change?A) Increase
of $2,700
B) Increase
of $15,300
C) Decrease
of $18,000
D) Decrease
of $2,700

6.Guillet Inc. produces and sells a single product. The selling
price of the product is $180.00 per unit and its variable cost is $46.80 per
unit. The fixed expense is $618,048 per month.

The break-even in monthly unit sales is closest to:A) 3,434
units
B) 4,640
units
C) 7,093
units
D) 13,206
units

7.Danneman Corporation’s fixed monthly expenses are $13,000 and its
contribution margin ratio is 56%. Assuming that the fixed monthly expenses do
not change, what is the best estimate of the company’s net operating income in
a month when sales are $41,000?A) $9,960
B) $5,040
C) $22,960
D) $28,000

8.Green Enterprises produces a single product. The following data
were provided by the company for the most recent period:

.jpg” alt=”Picture”>

For the period above, one would expect the net operating income under absorption
costing to be:A) higher
than the net operating income under variable costing.
B) lower
than the net operating income under variable costing.
C) the
same as the net operating income under variable costing.
D) The
relation between absorption costing net operating income and variable costing
net operating income cannot be determined.

9.Vanstee Corporation manufactures a variety of products. Variable
costing net operating income last year was $60,000 and this year was $67,000.
Last year, $37,000 in fixed manufacturing overhead costs were deferred in
inventory under absorption costing. This year, $8,000 in fixed manufacturing
overhead costs were released from inventory under absorption costing.

What was the absorption costing net operating income this year?A) $38,000
B) $96,000
C) $75,000
D) $59,000

10.Green Enterprises produces a single product. The following data
were provided by the company for the most recent period:

.jpg” alt=”Picture”>

Under absorption costing, the unit product cost is:A) $20
B) $18
C) $15
D) $25

11.Olds Inc., which produces a single product, has provided the
following data for its most recent month of operations:

.jpg” alt=”Picture”>

There were no beginning or ending inventories. The absorption costing unit
product cost was:A) $97
B) $130
C) $99
D) $20712.Tsuchiya Corporation manufactures a variety of products. Last
year, the company’s variable costing net operating income was $57,500. Fixed
manufacturing overhead costs deferred in inventory under absorption costing
amounted to $35,400. What was the absorption costing net operating income last
year?A) $22,100
B) $35,400
C) $57,500
D) $92,900

13.Segment margin is sales minus:A) variable
expenses.
B) traceable
fixed expenses.
C) variable
expenses and common fixed expenses.
D) variable
expenses and traceable fixed expenses.

14.Favini Company, which has only one product, has provided the
following data concerning its most recent month of operations:

.jpg” alt=”Picture”>

What is the unit product cost for the month under absorption costing?A) $91
B) $125
C) $118
D) $98

15.Dykema Corporation uses activity-based costing to compute product
margins. Overhead costs have already been allocated to the company’s three
activity cost pools-Processing, Supervising, and Other. The costs in those
activity cost pools appear below:

.jpg” alt=”Picture”>

Processing costs are assigned to products using machine-hours (MHs) and
Supervising costs are assigned to products using the number of batches. The
costs in the Other activity cost pool are not assigned to products. Activity
data appear below:

.jpg” alt=”Picture”>

Finally, sales and direct cost data are combined with Processing and
Supervising costs to determine product margins.

.jpg” alt=”Picture”>

The activity rate for the Processing activity cost pool under activity-based
costing is closest to:A) $15.00
per MH
B) $3.60
per MH
C) $0.46
per MH

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

.jpg” alt=”Picture”>

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 $35.72 per unit and its direct labor cost is $29.46
per unit.
According to the activity-based costing system, the average cost of product
O37W is closest to:A) $94.11
per unit
B) $89.72
per unit
C) $65.18
per unit
D) $92.49
per unit17.Roshannon Corporation uses activity-based costing to compute
product margins. In the first stage, the activity-based costing system
allocates two overhead accounts-equipment expense and indirect labor-to three
activity cost pools-Processing, Supervising, and Other-based on resource
consumption. Data to perform these allocations appear below:

.jpg” alt=”Picture”>

.jpg” alt=”Picture”>

In the second stage, Processing costs are assigned to products using
machine-hours (MHs) and Supervising costs are assigned to products using the
number of batches. The costs in the Other activity cost pool are not assigned
to products. Activity data for the company’s two products follow:

.jpg” alt=”Picture”>

Finally, sales and direct cost data are combined with Processing and
Supervising costs to determine product margins.

.jpg” alt=”Picture”>

The activity rate for the Processing activity cost pool under activity-based
costing is closest to:A) $5.33
per MH
B) $0.68
per MH
C) $0.52
per MH
D) $3.00
per MH18.Ballweg Corporation has an activity-based costing system with
three activity cost pools-Machining, Order Filling, and Other. In the first
stage allocations, costs in the two overhead accounts, equipment depreciation
and supervisory expense, are allocated to the three activity cost pools based
on resource consumption. Data used in the first stage allocations follow:

.jpg” alt=”Picture”>

.jpg” alt=”Picture”>

Machining costs are assigned to products using machine-hours (MHs) and Order
Filling costs are assigned to products using the number of orders. The costs in
the Other activity cost pool are not assigned to products. Activity data for
the company’s two products follow:

.jpg” alt=”Picture”>

Finally, the costs of Machining and Order Filling are combined with the
following sales and direct cost data to determine product margins.

.jpg” alt=”Picture”>

What is the product margin for Product T2 under activity-based costing?A) $1,821
B) $871
C) $8,700
D) $16,20019.Roshannon Corporation uses activity-based costing to compute
product margins. In the first stage, the activity-based costing system
allocates two overhead accounts-equipment expense and indirect labor-to three
activity cost pools-Processing, Supervising, and Other-based on resource
consumption. Data to perform these allocations appear below:

.jpg” alt=”Picture”>

.jpg” alt=”Picture”>

In the second stage, Processing costs are assigned to products using
machine-hours (MHs) and Supervising costs are assigned to products using the
number of batches. The costs in the Other activity cost pool are not assigned
to products. Activity data for the company’s two products follow:

.jpg” alt=”Picture”>

Finally, sales and direct cost data are combined with Processing and
Supervising costs to determine product margins.

.jpg” alt=”Picture”>

What is the overhead cost assigned to Product P3 under activity-based costing?A) $30,000
B) $5,916
C) $5,640
D) $11,556

20.Matt Company uses activity-based costing. The company has two
products: A and B. The annual production and sales of Product A is 8,000 units
and of Product B is 6,000 units. There are three activity cost pools, with
total cost and total activity as follows:

.jpg” alt=”Picture”>

The activity-based costing cost per unit of Product A is closest to:A) $2.40
B) $3.90
C) $10.59
D) $6.60

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