Managerial Accounting

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1. The following data pertains to activity and the cost of cleaning and maintenance for two recent months:    The best estimate of the total month 1 variable cost for cleaning and maintenance is:  A. $300 B. $500 C. $800 D. $100

2. Tatooine Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year, the total estimated manufacturing overhead was $530,000. At the end of the year, actual direct labor-hours for the year were 41,874 hours, manufacturing overhead for the year was underapplied by $15,000., and the actual manufacturing overhead was $520,000.

The predetermined overhead rate for the year must have been closest to:  A. $11.40 per machine-hour B. $12.34 per machine-hour C. $12.06 per machine-hour D. $10.53 per machine-hour

3. The Nichols Company uses the weighted-average method in its process costing system. The company recorded 29,500 equivalent units for conversion costs for November in a particular department. There were 6,000 units in the ending work in process inventory on November 30, 75% complete with respect to conversion costs. The November 1 work in process inventory consisted of 8,000 units, 50% complete with respect to conversion costs. A total of 25,000 units were completed and transferred out of the department during the month. The number of units started during November in the department was:  A. 24,500 units B. 23,000 units C. 27,000 units D. 21,000 units

4. A company's current net operating income is $20,400. and its average operating assets are $75,000. The company's required rate of return is 24%. A new project being considered would require an investment of $12,000 and would generate annual net operating income of $5,000. Calculate the residual income of the new project. 

5. Christiansen Corporation uses an activity-based costing system with the following three activity cost pools:    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:    The distribution of resource consumption across activity cost pools is given below:    The activity rate for the Order Processing activity cost pool is closest to:  A. $676 per order B. $780 per order C. $560 per order D. $312 per order

6. Budgeted sales in Allen Company over the next four months are given below:    Twenty-five percent of the company's sales are for cash and 75% are on account. Collections for sales on account follow a stable pattern as follows: 50% of a month's credit sales are collected in the month of sale, 30% are collected in the month following sale, and 15% are collected in the second month following sale. The remainder are uncollectible. Given these data, cash collections for December should be:  A. $138,000 B. $133,500 C. $120,000 D. $103,500

7. Bolick Midwifery's cost formula for its wages and salaries is $1,800 per month plus $152 per birth. For the month of May, the company planned for activity of 119 births, but the actual level of activity was 114 births. The actual wages and salaries for the month was $19,980. The activity variance for wages and salaries in May would be closest to:  A. $760 U B. $92 U C. $92 F D. $760 F

8. The following materials standards have been established for a particular product:    The following data pertain to operations concerning the product for the last month:    What is the materials quantity variance for the month?  A. $19,460 F B. $9,730 U C. $10,115 U D. $20,230 F

9. Sales and average operating assets for Company R and Company S are given below:

Average

Operating

Sales Assets

Company R: $15,000. $5,000.

Company S: $35,000. $8,000.    Calculate the margin that each company will have to earn in order to generate an ROI* of 30%:

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10. The Wong Company has a standard costing system. The following data are available for March:

Actual quantity of direct materials purchased: 10,000 pounds

Standard price of direct materials: $5. per pound

Material price variance: $1,500. unfavorable    What is the actual price per pound of direct materials purchased in March?

11 & 12: Cartman Corporation's most recent balance sheet and income statement appear below:   

   11: Compute the following for Year 2: a. Working capital.

b. Current ratio.

12: Compute the following for Year 2:

a. Average collection period.

b. Inventory turnover.