1.

The general model for calculating a price variance is:

A. actual quantity of inputs × (actual price - standard price).

B. standard price × (actual quantity of inputs - standard quantity allowed for output).

C. (actual quantity of inputs at actual price) - (standard quantity allowed for output at standard price).

D. actual price × (actual quantity of inputs - standard quantity allowed for output).

2. If the labor efficiency variance is unfavorable, then

A. actual hours exceeded standard hours allowed for the actual output.
B. standard hours allowed for the actual output exceeded actual hours.
C. the standard rate exceeded the actual rate.
D. the actual rate exceeded the standard rate.

3. The Porter Company has a standard cost system. In

July the company purchased and used 22,500
pounds of direct material at an actual cost of
$53,000; the materials quantity variance was $1,875
Unfavorable; and the standard quantity of materials
allowed for July production was 21,750 pounds. The
materials price variance for July was:

A. $2,72
5F
B. $2,725 U
C. $3,250 F
D. $3,250 U

4. The following mate

established for a pa
 The following data
concerning the prod

What is the materia

month?
A.

B.

C.

D.

5. The following labor

been established fo
product:

he following data p
concerning the prod
month:

What is the labor ef

the month?
A.

B.

C.
 D.

6.
The following labor
established for a pa

The following data

concerning the prod

What is the labor ra

A.

B.

C.

D.

7. In computing the margin in a ROI analysis, which of

the following is used?
 A. Sales in the
denominator

B. Net operating income in the denominator

C. Average operating assets in the denominator

D. Residual income in the denominator

8. All other things the same, which of the following

would increase residual income?

A. Increase in average
operating assets.

B. Decrease in average operating assets.

C. Increase in minimum required return.

D. Decrease in net operating income.

9. Last year a company had stockholder's equity of

$160,000, net operating income of $16,000 and
sales of $100,000. The turnover was 0.5. The return
on investment (ROI) was:

A. 10
%

B. 9%

C. 8%

D. 7%

10. Soderquist Corporation uses residual income to

evaluate the performance of its divisions. The
company's minimum required rate of return is 11%.
In April, the Commercial Products Division had
 average operating assets of $100,000 and net
operating income of $9,400. What was the
Commercial Products Division's residual income in
April?

A. -
$1,6
00

B. $1,600

C. $1,034

D. -$1,034

11. Hoster Corporation keeps careful track of the time

required to fill orders. The times recorded for a
particular order appear below:

The throughput time was:

A. 8.9
hours

B. 18 hours

C. 4.5 hours

D. 22.5 hours

12. Botelho Corporation keeps careful track of the time

required to fill orders. Data concerning a particular
order appear below:
 The delivery cycle time was:

A. 33.1
hours

B. 3.7 hours

C. 12.6 hours

D. 30.9 hours

13. Mordue Corporation keeps careful track of the time

required to fill orders. Data concerning a particular
order appear below:

The manufacturing cycle efficiency (MCE) was

closest to:

A. 0.1
5
B. 0.53
C. 0.05
D. 0.16
14. Which of the following costs would be considered a period rather than a product cost in a
manufacturing company?

A. Manufacturing equipment depreciation.

B. Property taxes on corporate headquarters.

C. Direct materials costs.

D. Electrical costs to light the production

facility.

E. Sales commissions.

15. Which of the following costs would be variable with respect to the number of cones sold
at a Baskins & Robbins shop? (There may be more than one correct answer.)

A. The cost of lighting the store.

B. The wages of the store manager.

C. The cost of ice cream.

D. The cost of napkins for customers.

16. Coffee Klatch is an espresso stand in a downtown office building. The average selling
price of a cup of coffee is $1.49 and the average variable expense per cup is $0.36. The
average fixed expense per month is $1,300. An average of 2,100 cups are sold each
month. What is the CM Ratio for Coffee Klatch?

a. 1.319

b. 0.758

c. 0.242

d. 4.139

17. Coffee Klatch is an espresso stand in a downtown office building. The average selling
price of a cup of coffee is $1.49 and the average variable expense per cup is $0.36. The
average fixed expense per month is $1,300. Use the formula method to determine how
many cups of coffee would have to be sold to attain target profits of $2,500 per month.
a. 3,363 cups
b. 2,212 cups
c. 1,150 cups
d. 4,200 cups
18. Coffee Klatch is an espresso stand in a downtown office building. The average selling
price of a cup of coffee is $1.49 and the average variable expense per cup is $0.36. The
average fixed expense per month is $1,300. Use the formula method to determine the
sales dollars that must be generated to attain target profits of $2,500 per month.

a. $2,550

b. $5,013

c. $8,458

d. $10,555

19. The following information relates to Clyde

Corporation which produced and sold 50,000
units last month.

There were no beginning or ending inventories.

Production and sales next month are expected to
be 40,000 units. The company's unit
contribution margin next month should be:

A. $16.
63
B. $3.10
C. $7.98
D. $13.30

20. Sensabaugh Inc., a company that produces and

sells a single product, has provided its
contribution format income statement for
January.
 If the company sells 1,600 units, its total
contribution margin should be closest to:

A. $22,2
00
B. $28,800
C. $4,800
D. $32,400

21. The contribution margin ratio is 30% for the

Honeyville Company and the break-even point
in sales is $150,000. If the company's target net
operating income is $60,000, sales would have
to be:

A. $200,
000
B. $350,000
C. $250,000
D. $210,000

22. Knoke Corporation's contribution margin ratio

is 29% and its fixed monthly expenses are
$17,000. If the company's sales for a month are
$98,000, what is the best estimate of the
company's net operating income? Assume that
the fixed monthly expenses do not change.

A. $81,0
00
B. $11,420
C. $52,580
D. $28,420
23. A product sells for $20 per unit and has a
contribution margin ratio of 40 percent. Fixed
expenses total $240,000 annually. How many
units of the product must be sold to yield a
profit of $60,000?

A. 37,500
units
B. 40,000 units
C. 65,000 units
D. 30,000 units

24. The contribution margin ratio of Lime

Corporation's only product is 75%. The
company's monthly fixed expense is $688,500
and the company's monthly target profit is
$20,000. The dollar sales to attain that target
profit is closest to:

A. $531,
375
B. $944,667
C. $918,000
D. $516,375

25. Smith Company sells a single product at a

selling price of $30 per unit. Variable expenses
are $12 per unit and fixed expenses are $41,400.
Smith's break-even point is:

A. 1,380
units
 B. 2,300 units
C. 3,450 units
D. 6,900 units

26.  Using the following data, determine the unit product cost under absorption costing.

a. $22
b. $24
c. $28
d. $30

27. Using the same data as problem 6, determine the unit product cost under variable
costing.

a. $22
b. $24
c. $28
d. $30

Baken Corporation applies manufacturing overhead on the basis of direct labor-hours. At the
beginning of the most recent year, the company based its predetermined overhead rate on total
estimated overhead of $172,140 and 3,800 estimated direct labor-hours. Actual manufacturing
overhead for the year amounted to $171,000 and actual direct labor-hours were 3,880.

28. The applied manufacturing overhead for the year is?

A. $172,140 C. $173,280
B. $175,764 D. $180,500

29. Was the overhead underapplied or overapplied and by how much?

A. $4,764 overapplied C. $1,140 overapplied
B. $4,764 underapplied D. $1,140 underapplied