Use the following information to answer 112-113

Nives Corporation reported the following data for the month of January:

Additional information:

112. The total manufacturing cost for January was:

A) $86,000
B) $198,000
C) $121,000
D) $187,000
Level: Medium LO: 3,4 Ans: B

113. The net operating income for January was:

A) $14,000
B) $16,000
C) $91,000
D) $82,000
Level: Medium LO: 3,4 Ans: A

Use the following information to answer 114-117

Management of Shandley Corporation has asked your help as an intern in preparing some key reports for
August. The beginning balance in the raw materials inventory account was $21,000. During the month,
the company made raw materials purchases amounting to $59,000. At the end of the month, the balance in
the raw materials inventory account was $22,000. Direct labor cost was $39,000 and manufacturing
overhead cost was $71,000. The beginning balance in the work in process account was $12,000 and the
ending balance was $18,000. The beginning balance in the finished goods account was $30,000 and the
ending balance was $54,000. Sales totaled $220,000. Selling expense was $11,000 and administrative
expense was $34,000.

30 Brewer, Introduction to Managerial Accounting, 3/e

114. The total manufacturing cost for August was:
A) $168,000
B) $169,000
C) $71,000
D) $110,000
Level: Medium LO: 3,4 Ans: A

115. The cost of goods manufactured for August was:

A) $169,000
B) $168,000
C) $174,000
D) $162,000
Level: Medium LO: 3,4 Ans: D

116. The cost of goods sold for August was:

A) $186,000
B) $196,000
C) $138,000
D) $121,000
Level: Medium LO: 3,4 Ans: C

117. The net operating income for August was:

A) $6,000
B) $65,000
C) $82,000
D) $37,000
Level: Medium LO: 3,4 Ans: D

Use the following information to answer 118-119

The CFO of Carl Corporation has provided the following data for September. The beginning balance in
the raw materials inventory account was $32,000. During the month, the company made raw materials
purchases amounting to $56,000. At the end of the month, the balance in the raw materials inventory
account was $34,000. Direct labor cost was $46,000 and manufacturing overhead cost was $68,000. The
beginning balance in the work in process account was $13,000 and the ending balance was $10,000. The
beginning balance in the finished goods account was $53,000 and the ending balance was $31,000. Sales
totaled $270,000. Selling expense was $15,000 and administrative expense was $50,000.

118. The cost of goods sold for September was:

A) $129,000
B) $193,000
C) $292,000
D) $149,000
Level: Medium LO: 3,4 Ans: B

Brewer, Introduction to Managerial Accounting, 3/e 31

119. The net operating income for September was:
A) $77,000
B) $91,000
C) $12,000
D) $35,000
Level: Medium LO: 3,4 Ans: C

Use the following information to answer 120-121

Berthelot Corporation has provided the following data for June. The beginning balance in the raw
materials inventory account was $34,000. During the month, the company made raw materials purchases
amounting to $50,000. At the end of the month, the balance in the raw materials inventory account was
$28,000. Direct labor cost was $47,000 and manufacturing overhead cost was $81,000. The beginning
balance in the work in process account was $11,000 and the ending balance was $10,000. The beginning
balance in the finished goods account was $25,000 and the ending balance was $59,000. Sales totaled
$270,000. Selling expense was $14,000 and administrative expense was $43,000.

120. The total manufacturing cost for June was:

A) $81,000
B) $178,000
C) $184,000
D) $128,000
Level: Medium LO: 3,4 Ans: C

121. The net operating income for June was:

A) $35,000
B) $62,000
C) $85,000
D) $119,000
Level: Medium LO: 3,4 Ans: B

Use the following information to answer 122-123

Okey Corporation has provided the following data for the month of April. The beginning balance in the
finished goods inventory account was $37,000 and the ending balance was $34,000. Sales totaled
$250,000. Cost of goods manufactured was $123,000, selling expense was $17,000, and administrative
expense was $62,000.

122. The cost of goods sold for April was:

A) $202,000
B) $126,000
C) $123,000
D) $120,000
Level: Easy LO: 3 Ans: B

32 Brewer, Introduction to Managerial Accounting, 3/e

123. The net operating income for April was:
A) $45,000
B) $127,000
C) $48,000
D) $130,000
Level: Easy LO: 3 Ans: A

Use the following information to answer 124-125

Nieman Inc., a local retailer, has provided the following data for the month of March:

124. The cost of goods sold for March was:

A) $146,000
B) $150,000
C) $142,000
D) $237,000
Level: Easy LO: 3 Ans: C

125. The net operating income for March was:

A) $130,000
B) $134,000
C) $43,000
D) $47,000
Level: Easy LO: 3 Ans: D

Brewer, Introduction to Managerial Accounting, 3/e 33

Use the following information to answer 126-127
Varland Corporation reported the following data for the month of June:

Additional information:

126. The total manufacturing cost for June was:

A) $164,000
B) $79,000
C) $107,000
D) $161,000
Level: Medium LO: 4 Ans: D

127. The cost of goods manufactured for June was:

A) $153,000
B) $161,000
C) $164,000
D) $169,000
Level: Medium LO: 4 Ans: A

Use the following information to answer 128-129

Sherr Corporation reported the following data for the month of March:

Additional information:

34 Brewer, Introduction to Managerial Accounting, 3/e

128. The cost of goods manufactured for March was:
A) $185,000
B) $199,000
C) $181,000
D) $190,000
Level: Medium LO: 4 Ans: B

129. The cost of goods sold for March was:

A) $180,000
B) $218,000
C) $241,000
D) $124,000
Level: Medium LO: 4 Ans: A

Use the following information to answer 130-131

Nahass Corporation has provided the following data for September. The beginning balance in the raw
materials inventory account was $28,000. During the month, the company made raw materials purchases
amounting to $70,000. At the end of the month, the balance in the raw materials inventory account was
$34,000. Direct labor cost was $35,000 and manufacturing overhead cost was $53,000. The beginning
balance in the work in process account was $18,000 and the ending balance was $11,000. The beginning
balance in the finished goods account was $57,000 and the ending balance was $31,000.

130. The total manufacturing cost for September was:

A) $152,000
B) $88,000
C) $158,000
D) $53,000
Level: Medium LO: 4 Ans: A

131. The cost of goods manufactured for September was:

A) $152,000
B) $145,000
C) $158,000
D) $159,000
Level: Medium LO: 4 Ans: D

Use the following information to answer 132-133

At a sales volume of 35,000 units, Cly Corporation’s sales commissions (a cost that is variable with
respect to sales volume) total $525,000.

Brewer, Introduction to Managerial Accounting, 3/e 35

132. To the nearest whole dollar, what should be the total sales commissions at a sales volume of 36,100
units? (Assume that this sales volume is within the relevant range.)
A) $525,000
B) $509,003
C) $533,250
D) $541,500
Level: Easy LO: 5 Ans: D

133. To the nearest whole cent, what should be the average sales commission per unit at a sales volume of
33,600 units? (Assume that this sales volume is within the relevant range.)
A) $14.54
B) $15.00
C) $15.63
D) $15.32
Level: Easy LO: 5 Ans: B

Use the following information to answer 134-135

At a sales volume of 37,000 units, Maks Corporation’s property taxes (a cost that is fixed with respect to
sales volume) total $802,900.

134. To the nearest whole dollar, what should be the total property taxes at a sales volume of 39,700
units? (Assume that this sales volume is within the relevant range.)
A) $802,900
B) $748,295
C) $832,195
D) $861,490
Level: Easy LO: 5 Ans: A

135. To the nearest whole cent, what should be the average property tax per unit at a sales volume of
40,300 units? (Assume that this sales volume is within the relevant range.)
A) $21.70
B) $20.22
C) $19.92
D) $20.81
Level: Easy LO: 5 Ans: C

Use the following information to answer 136-137

Kodama Corporation staffs a helpline to answer questions from customers. The costs of operating the
helpline are variable with respect to the number of calls in a month. At a volume of 30,000 calls in a
month, the costs of operating the helpline total $369,000.

36 Brewer, Introduction to Managerial Accounting, 3/e

136. To the nearest whole dollar, what should be the total cost of operating the helpline costs at a volume
of 33,800 calls in a month? (Assume that this call volume is within the relevant range.)
A) $369,000
B) $327,515
C) $392,370
D) $415,740
Level: Easy LO: 5 Ans: D

137. To the nearest whole cent, what should be the average cost of operating the helpline per call at a
volume of 31,300 calls in a month? (Assume that this call volume is within the relevant range.)
A) $12.30
B) $11.79
C) $10.92
D) $12.05
Level: Easy LO: 5 Ans: A

Use the following information to answer 138-139

Emerton Corporation leases its corporate headquarters building. This lease cost is fixed with respect to the
company’s sales volume. In a recent month in which the sales volume was 32,000 units, the lease cost
was $716,800.

138. To the nearest whole dollar, what should be the total lease cost at a sales volume of 30,900 units in a
month? (Assume that this sales volume is within the relevant range.)
A) $742,317
B) $692,160
C) $704,480
D) $716,800
Level: Easy LO: 5 Ans: D

139. To the nearest whole cent, what should be the average lease cost per unit at a sales volume of 34,400
units in a month? (Assume that this sales volume is within the relevant range.)
A) $23.20
B) $21.62
C) $20.84
D) $22.40
Level: Easy LO: 5 Ans: C

Brewer, Introduction to Managerial Accounting, 3/e 37

Use the following information to answer 140-141
The following cost data pertain to the operations of Bouffard Department Stores, Inc., for the month of
May.

The Brentwood Store is just one of many stores owned and operated by the company. The Shoe
Department is one of many departments at the Brentwood Store. The central warehouse serves all of the
company’s stores.

140. What is the total amount of the costs listed above that are direct costs of the Shoe Department?
A) $38,000
B) $29,000
C) $70,000
D) $34,000
Level: Easy LO: 6 Ans: A

141. What is the total amount of the costs listed above that are NOT direct costs of the Brentwood Store?
A) $161,000
B) $86,000
C) $32,000
D) $38,000
Level: Medium LO: 6 Ans: A

38 Brewer, Introduction to Managerial Accounting, 3/e

Use the following information to answer 142-143
The following cost data pertain to the operations of Rademaker Department Stores, Inc., for the month of
March.

The Northridge Store is just one of many stores owned and operated by the company. The Cosmetics
Department is one of many departments at the Northridge Store. The central warehouse serves all of the
company’s stores.

142. What is the total amount of the costs listed above that are direct costs of the Cosmetics Department?
A) $83,000
B) $94,000
C) $90,000
D) $127,000
Level: Easy LO: 6 Ans: B

143. What is the total amount of the costs listed above that are NOT direct costs of the Northridge Store?
A) $172,000
B) $33,000
C) $80,000
D) $94,000
Level: Medium LO: 6 Ans: A

Use the following information to answer 144-146

Dechico Corporation purchased a machine 3 years ago for $456,000 when it launched product G92L.
Unfortunately, this machine has broken down and cannot be repaired. The machine could be replaced by a
new model 330 machine costing $474,000 or by a new model 260 machine costing $418,000.
Management has decided to buy the model 260 machine. It has less capacity than the model 330 machine,
but its capacity is sufficient to continue making product G92L. Management also considered, but rejected,
the alternative of dropping product G92L and not replacing the old machine. If that were done, the
$418,000 invested in the new machine could instead have been invested in a project that would have
returned a total of $496,000.

Brewer, Introduction to Managerial Accounting, 3/e 39

144. In making the decision to buy the model 260 machine rather than the model 330 machine, the
differential cost was:
A) $18,000
B) $56,000
C) $38,000
D) $40,000
Level: Easy LO: 7 Ans: B

145. In making the decision to buy the model 260 machine rather than the model 330 machine, the sunk
cost was:
A) $418,000
B) $456,000
C) $474,000
D) $496,000
Level: Easy LO: 7 Ans: B

146. In making the decision to invest in the model 260 machine, the opportunity cost was:
A) $418,000
B) $456,000
C) $474,000
D) $496,000
Level: Easy LO: 7 Ans: D

Use the following information to answer 147-149

Management of Childers Corporation is considering whether to purchase a new model 380 machine
costing $278,000 or a new model 230 machine costing $207,000 to replace a machine that was purchased
3 years ago for $266,000. The old machine was used to make product R16K until it broke down last
week. Unfortunately, the old machine cannot be repaired.
Management has decided to buy the new model 230 machine. It has less capacity than the new model 380
machine, but its capacity is sufficient to continue making product R16K.
Management also considered, but rejected, the alternative of simply dropping product R16K. If that were
done, instead of investing $207,000 in the new machine, the money could be invested in a project that
would return a total of $305,000.

147. In making the decision to buy the model 230 machine rather than the model 380 machine, the sunk
cost was:
A) $305,000
B) $266,000
C) $278,000
D) $207,000
Level: Easy LO: 7 Ans: B

40 Brewer, Introduction to Managerial Accounting, 3/e