MA EXAM2

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MA-EXAM2 Covers Chapter 7, 9, & 10

[The following information applies to the questions displayed below.] The following data relate to product no. 33 of La Quinta Corporation: Direct labor standard: 4 hours at $15 per hour Direct labor used in production: 41,000 hours at a cost of $623,200 Manufacturing activity: 8,600 units completed rev: 10_29_2012

The direct-labor rate variance is:

	$8,200U.
	None of these.
	$6,880F.
	$8,200F.
	$6,880U.

The direct-labor efficiency variance is:

	None of these.
	$99,000F.
	$99,000U.
	$9,120F.
	$9,120U.

A recent income statement of Suni Corporation reported the following data:

Sales revenue	$10,318,000
Variable costs	5,918,000
Fixed costs	2,880,000

If these data are based on the sale of 22,000 units, the break-even point would be:

	14,400 units.
	9,400 units.
	13,528 units.
	35,233 units.
	an amount other than those above.

Courtney purchased and consumed 91,000 gallons of direct material that was used in the production of 19,000 finished units of product. According to engineering specifications, each finished unit had a manufacturing standard of five gallons. If a review of Courtney's accounting records at the end of the period disclosed a material price variance of $9,100U and a material quantity variance of $2,400F, determine the actual price paid for a gallon of direct material. (Do not round intermediate calculations.)

rev: 05_21_2014_QC_49649

	Not enough information to judge.
	$0.70.
	None of these.
	$0.60.
	$0.40.

[The following information applies to the questions displayed below.] Narchie sells a single product for $40. Variable costs are 80% of the selling price, and the company has fixed costs that amount to $176,000. Current sales total 18,000 units. rev: 10_29_2012

Narchie:

	will break-even by selling 1,002,000 units.
	will break-even by selling 22,000 units.
	will break-even by selling 15,333 units.
	will break-even by selling 10,000 units.
	cannot break-even because it loses money on every unit sold.

Northcutt's production data for a new deluxe product were taken from the most recent quarterly production budget:

	July	August	September
Planned production in units	1,450	1,550	1,430

In addition, Northcutt produces 5,900 units a month of its standard product. It takes 2 direct labor hours to produce each standard unit and 2.50 direct labor hours to produce each deluxe unit. Northwest's cost per labor hour is $13. Direct labor cost for August would be budgeted at:

	$203,775.
	$229,450.
	Some other amount.
	$200,525.
	$232,050.

Yellow Dot, Inc. sells a single product for $10. Variable costs are $5 per unit and fixed costs total $80,000 at a volume level of 7,200 units. What dollar sales level would Yellow Dot have to achieve to earn a target profit of $145,000?

	$350,000.
	$72,000.
	$450,000.
	$250,000.
	$550,000.

Bison Sporting Goods sells bicycles throughout the northeastern United States. The following data were taken from the most recent quarterly sales forecast:

	Expected Sales	End-of-Month Target Inventory
July	2,000 units	410 units
August	2,150 units	500 units
September	2,080 units	470 units

On the basis of the information presented, how many bicycles should the company purchase in August?

	Some other amount.
	2,240.
	2,150.
	2,650.
	2,050.

[The following information applies to the questions displayed below.] The Gingham Company's budgeted income statement reflects the following amounts:

	Sales	Purchases	Expenses
January	$ 130,000	$ 88,000	$ 25,000
February	120,000	76,000	25,200
March	135,000	91,250	28,000
April	140,000	94,500	29,600

Sales are collected 50% in the month of sale, 25% in the month following sale, and 24% in the second month following sale. 1 percent of sales is uncollectible and expensed at the end of the year. Gingham pays for all purchases in the month following purchase and takes advantage of a 2% discount. The following balances are as of January 1:

Cash	$ 98,000
Accounts receivable *	68,000
Accounts payable	82,000

*Of this balance, $34,000 will be collected in January and the remaining amount will be collected in February. The monthly expense figures include $6,000 of depreciation. The expenses are paid in the month incurred. rev: 10_29_2012

Gingham's expected cash balance at the end of January is:

	$95,000.
	$101,000.
	$116,640.
	$91,640.
	$97,640.

10.

At a volume of 20,000 units, Dries reported sales revenues of $1,080,000, variable costs of $380,000, and fixed costs of $264,000. The company's contribution margin per unit is: rev: 06_19_2013_QC_31979, 06_28_2013_QC_31979

	$35.
	$32.
	$22.
	$37.
	a different amount.

11.

A recent income statement of Black Corporation reported the following data:

Sales revenue	$ 8,671,000
Variable costs	5,934,000
Fixed costs	3,000,000

If these data are based on the sale of 23,000 units, the contribution margin per unit would be:

	an amount other than those above.
	$9.
	$259.
	$119.
	$329.

12.

Ribco Co. makes and sells only one product. The unit contribution margin is $9 and the break-even point in unit sales is 20,000. The company's fixed costs are:

	$50,400.
	$76,000.
	$180,000.
	$40,000.
	an amount other than those above.

13.

Wolverine, Inc. began operations on January 1 of the current year with a $11,200 cash balance. 40% of sales are collected in the month of sale; 60% are collected in the month following sale. Similarly, 10% of purchases are paid in the month of purchase, and 90% are paid in the month following purchase. The following data apply to January and February:

	January	February
Sales	$ 27,000	$ 47,000
Purchases	26,000	32,000
Operating expenses	6,200	8,200

If operating expenses are paid in the month incurred and include monthly depreciation charges of $1,700, determine the change in Wolverine's cash balance during February.

	$9,100 increase.
	$1,900 increase.
	Some other amount.
	$7,400 increase.
	$200 increase.

14.

Quattro began operations in April of this year. It makes all sales on account, subject to the following collection pattern: 30% are collected in the month of sale; 60% are collected in the first month after sale; and 10% are collected in the second month after sale. If sales for April, May, and June were $52,000, $72,000, and $62,000, respectively, what were the firm's budgeted collections for April?

	$36,400.
	$18,600.
	$15,600.
	Some other amount.
	$52,800.

15.

A recent income statement of Dragonwood Corporation reported the following data:

Units sold	7,500

Sales revenue	$ 9,000,000
Variable costs	5,625,000
Fixed costs	2,680,000

If the company desired to earn a target profit of $920,000, it would have to sell:

	9,560 units.
	5,178 units.
	8,000 units.
	an amount other than those above.
	11,308 units.

16.

Dana, Inc. recently completed 48,000 units of a product that was expected to consume 5 pounds of direct material per finished unit. The standard price of the direct material was $7.50 per pound. If the firm purchased and consumed 245,000 pounds in manufacturing (cost = $1,768,900), the direct-material quantity variance would be:

	None of these.
	$37,500F.
	$68,600F.
	$37,500U.
	$68,600U.

17.

Coleman, Inc. anticipates sales of 50,000 units, 48,000 units, and 51,000 units in July, August, and September, respectively. Company policy is to maintain an ending finished-goods inventory equal to 40% of the following month's sales. On the basis of this information, how many units would the company plan to produce in July? rev: 11_02_2011

	49,200.
	48,800.
	50,800.
	Some other amount.
	48,000.

18.

Strayer has a break-even point of 85,000 units. If the firm's sole product sells for $35 and fixed costs total $425,000, the variable cost per unit must be:

	E. an amount other than those in choices A, B, and C, but one that can be derived based on the information presented.
	D. an amount that cannot be derived based on the information presented.
	C. $38.
	A. $10.
	B. $30.

19.

The following selected data pertain to Phineus Corporation:

Cash operating expenses, July 1-31	$ 172,000
Depreciation	52,000
Merchandise purchases in July	552,000
Estimated payments in July for purchases in June	212,000
Estimated payments in July for purchases prior to June	42,000
Estimated payments in July for purchases in July	35 %

July's cash disbursements are expected to be:

	$671,200.
	$417,200.
	$365,200.
	Some other amount.
	$619,200.

20.

Soloman Corporation recently purchased 38,000 gallons of direct material at $6.20 per gallon. Usage by the end of the period amounted to 36,000 gallons. If the standard cost is $6.90 per gallon and the company believes in computing variances at the earliest point possible, the direct-material price variance would be:

	$25,200F.
	$25,200U.
	$1,400F.
	$26,600F.
	$26,600U.

21.

Digregory makes all purchases on account, subject to the following payment pattern: Paid in the month of purchase: 25% Paid in the first month following purchase: 55% Paid in the second month following purchase: 20% If purchases for January, February, and March were $210,000, $190,000, and $240,000, respectively, what were the firm's budgeted payments in March?

	$164,500.
	$60,000.
	Some other amount.
	$132,000.
	$206,500.

22.

Sanderson sells a single product for $60 that has a variable cost of $35. Fixed costs amount to $15 per unit when anticipated sales targets are met. If the company sells one unit in excess of its break-even volume, profit will be:

	B. $25.
	E. an amount other than those in choices A, B, and C, but one that can be derived based on the information presented.
	A. $10.
	C. $60.
	D. an amount that cannot be derived based on the information presented

23.

Newbill Enterprises recently used 26,000 labor hours to produce 9,700 completed units. According to manufacturing specifications, each unit is anticipated to take 2.65 hours to complete. The company's actual payroll cost amounted to $504,400. If the standard labor cost per hour is $19.60, Newbill's labor rate variance is: rev: 12_09_2011

	$5,200F.
	$5,200U.
	$582U.
	$5,000F.
	None of these.
	$582F.

24.

Sammons Corporation had a favorable direct-labor efficiency variance of $8,100 for the period just ended. The actual wage rate was $1.20 more than the standard rate of $15.00. If the company's standard hours allowed for actual production totaled 9,200, how many hours did the firm actually work?

	8,700.
	8,660.
	9,740.
	None of these.
	9,700.

25.

A company has fixed costs of $800 and a per-unit contribution margin of $6. Which of the following statement(s) is (are) true?

	B. The situation described is not possible and there must be an error.
	C. Once the break-even point is reached, the company will increase income at the rate of $6 per unit.
	D. The firm will definitely lose money in this situation.
	A. Each unit "contributes" $6 toward covering the fixed costs of $800.
	E. Statements A and C are true.

26.

Brooklyn sells a single product to wholesalers. The company's budget for the upcoming year revealed anticipated unit sales of 40,500, a selling price of $20, variable cost per unit of $12, and total fixed costs of $453,000. If Brooklyn's unit sales are 150 units less than anticipated, its breakeven point will:

rev: 10_30_2013_QC_38449

	decrease by $12 per unit sold.
	increase by $12 per unit sold.
	not change.
	decrease by $8 per unit sold.
	increase by $8 per unit sold.