The following information pertains to questions 81 and 82. Petro Ltd.

refines raw oil into several different

products and in one month produces 50,000 units of Product A and 40,000 units of Product B. Each unit
of A can be sold for $14 and each unit of B can be sold for $20. The monthly joint costs are $600,000. All
units produced are sold, and there is no beginning inventory. 81. Using the sales value at split-off
method, what are the joint allocation costs for Product B (rounded to the nearest thousand)? a)
$280,000 b) $353,000 c) $320,000 d) $267,000 82. Using the physical measure method, what are the
joint allocation costs for Product A (rounded to the nearest thousand)? a) $333,000 b) $267,000 c)
$280,000 d) $353,000 2013 Sample Entrance Examination CMA Canada Page 31 83. A company has the
following unit production data for June: Work-in-process inventory, June 1 118,000 Started in production
254,500 Completed production 251,500 Work-in-process inventory, June 30 111,950 The company
expects normal spoilage of 2% of completed goods. What is the abnormal spoilage for June? a) 5,030 b)
3,000 c) 4,020 d) 9,050 84. (-) For a manufacturing company, which of the following statements is true?
a) Wages paid to manufacturing labour are period costs. b) Salaries paid to the sales manager are
product costs. c) Wages paid to the receptionist in the human resources office are period costs. d)
Stationery and supplies used by the bookkeeping clerk in the accounting office are product costs. 85. A
company has the following quarterly sales information: Q1 (Actual) Q2 (Budgeted) Cash sales $150,000
$175,000 Credit sales $325,000 $330,000 60% of credit sales are collected in the quarter of the sale, and
remaining credit sales are collected in the quarter after that. The company expects 3% of credit sales to
be uncollectable. What is the budgeted cash received in Q2? a) $318,160 b) $503,000 c) $367,060 d)
$493,160 2013 Sample Entrance Examination CMA Canada Page 32 The following information pertains to
questions 86 and 87. Liza’s Flowers had the following unit sales results for February: Budgeted Sales
Budgeted Contribution Margin Actual Sales Actual Contribution Margin Roses 5,500 $1.25 6,500 $1.15
Tulips 6,500 $0.75 6,000 $0.80 86. What is the favourable sales-volume variance for roses? a) $1,250 b)
$1,150 c) $550 d) $650 87. What is the favourable sales-mix variance (rounded to the nearest dollar)? a)
$123 b) $250 c) $385 d) $500 ------------------------------------ 88. Glory Ltd. sells tires. In March it sold 5,000
tires and had an inventory of 3,500 tires on March 1. For April, budgeted sales are 5,250 tires and
budgeted ending inventory is 3,000 tires. If there were 3,300 tires in inventory on March 31, how many
tires should Glory purchase in April? a) 4,950 b) 8,250 c) 4,450 d) 1,750 89. If total sales volume variance
is $2,100 unfavourable, total sales mix variance is $900 favourable, and market share variance is $500
favourable, then the market size variance is a) $2,500 unfavourable. b) $1,700 unfavourable. c) $700
unfavourable. d) $3,500 unfavourable. 2013 Sample Entrance Examination CMA Canada Page 33 90. XY
Manufacturing Ltd. had the following inventory data for July, Year 14: July 1 July 31 Direct materials
$140,000 $135,000 Work-in-process $40,000 $42,000 Finished goods $65,000 $70,000 Actual costs
incurred in July include direct materials purchases of $100,000, direct labour of $250,000 and
manufacturing overhead of $125,000. What is the cost of goods manufactured for July using absorption
costing? a) $478,000 b) $480,000 c) $473,000 d) $355,000 91. DHC Ltd. produces X, Y and Z through a
joint production process. It can further refine all of Product X into X-Plus. The following information is
available: i) Selling price per unit of X-Plus ii) Cost of the additional refining to produce X-Plus iii) Joint
costs to produce X iv) Selling price of X Which of the above information is relevant to the decision to
further refine Product X? a) i) only b) i) and ii) only c) iii) and iv) only d) i), ii) and iv) only 92. A company is
considering the following projects: J M V Annual after-tax cash inflows $950,000 $1,000,000 $1,100,000
Initial project cost $5,000,000 $5,000,000 $5,000,000 Cost of capital 7% 10% 12% Project life 7 years 8
years 7 years Based only on profitability index, which project(s) should the company invest in? a) Only J
b) Only M c) Only V d) All three projects