Question :
PART I — MULTIPLE CHOICE (60 points)
Instructions: Designate the best : 1311571
PART I — MULTIPLE CHOICE (60 points)
Instructions: Designate the best answer for each of the following questions.
1. Which of the following is a responsibility center that incurs expenses, generates revenues, and is responsible for generating a return on assets?
a. Cost center
b. Revenue center
c. Profit center
d. Investment center
2. Which one of the following is the most useful measure for evaluating a manager’s performance in controlling revenues and costs in a profit center?
a. Contribution margin
b. Contribution net income
c. Contribution gross profit
d. Controllable margin
3. Hanover Corporation desires to earn target net income of $42,000. The selling price per unit is $18, unit variable cost is $5.60, and total fixed costs are $123,912. How many units must the company sell to earn its target net income?
a. 13,380
b. 9,993
c. 3,387
d. 9,217
4. Remark Enterprises uses a process cost accounting system.
Beginning Work in Process3,000 units (50% complete)
Ending Work in Process2,000 units (30% complete)
Started into Production56,000 units
How many units were completed and transferred out during the current period?
a. 56,000
b. 58,000
c. 59,000
d. 57,000
5. Ralston Gifts applies overhead on the basis of machine hours. The following data were provided by Ralston:
Estimated annual overhead cost$516,600
Actual annual overhead cost$537,500
Estimated machine hours126,000
Actual machine hours125,000
How much overhead was applied?
a. $512,500
b. $520,380
c. $516,600
d. $541,800
6. The following data has been collected for use in analyzing Marshall’s behavior of maintenance costs:
MonthMaintenance CostsMachine Hours
January$20,0001,600
February25,0002,100
March27,2002,600
April19,6001,700
May21,4002,400
June28,4002,500
July23,6002,300
Using the high-low method to separate the maintenance costs into their variable and fixed cost components, these components are
a. $7.20 per hour plus $7,200
b. $11.00 per hour plus $8,800
c. $7.20 per hour plus $8,480
d. $11.00 per hour plus $900
7. Given the following information for Janaro Products, compute the company’s ROI: Sales — $800,000; Controllable Margin — $120,000; Average Operating Assets — $400,000.
a. 30%
b. 50%
c. 15%
d. Some other answer.
8. Given the following data for Harvard Publishing, determine the amount of cost of goods manufactured.
Direct materials used$65,000Beginning work in process$12,000
Direct labor41,000Ending work in process8,000
Manufacturing overhead63,000Beginning finished goods14,000
Operating expenses88,000Ending finished goods12,000
a. $169,000
b. $173,000
c. $175,000
d. $165,000
9. Select the correct order of the following components of the production cost report
(1) costs accounted for
(2) unit costs
(3) costs charged to a department
a. (1), (2), (3)
b. (1), (3), (2)
c. (2), (1), (3)
d. (2), (3), (1)
10. Which is the starting point of a master budget?
a. Cash budget
b. Sales budget
c. Production budget
d. Budgeted balance sheet
