Multiple Choice Question 62
Manor Company had the following department data:
Physical Units
Work in process, July 1
Completed and transferred out Work in process, July 31

30,000
135,000
35,000

Materials are added at the beginning of the process. What is the total number of equivalent units for materials in July?
135,000.
140,000.
200,000.
170,000.

Multiple Choice Question 63
Corsica Company had the following department data:
Physical Units
Work in process, beginning
Completed and transferred out
Work in process, ending

-060,000
7,000

Materials are added at the beginning of the process. What is the total number of equivalent units for materials during the period?
67,000.
7,000.
60,000.
53,000.

Multiple Choice Question 64
Gardaner Company had the following department information about physical units and percentage of completion:
Physical Units
Work in process, May 1 (60%)
60,000
Completed and transferred out Work in process, May 31 (40%)
150,000
40,000

If materials are added at the beginning of the production process, what is the total number of equivalent units for materials during May?
190,000.
202,000.
166,000.
210,000.

Multiple Choice Question 66
In the month of June, a department had 20,000 units in beginning work in process that were 70% complete. During June, 70,000 units were transferred into production from another department. At the end of June there were 10,000 units in ending work in process that were 40% complete. Materials are added at the beginning of the process, while conversion costs are incurred uniformly throughout the process. How many units were transferred out of the process in June?
70,000 units.
80,000 units.
90,000 units.
100,000 units.

Multiple Choice Question 67
In the month of June, a department had 30,000 units in beginning work in process that were 70% complete. During June, 80,000 units were transferred into production from another department. At the end of June there were 10,000 units in ending work in process that were 40% complete. Materials are added at the beginning of the process, while conversion costs are incurred uniformly throughout the process. The equivalent units of production for materials for June were
100,000 equivalent units.
114,000 equivalent units.
110,000 equivalent units.
80,000 equivalent units.

Multiple Choice Question 68
In the month of June, a department had 30,000 units in beginning work in process that were 70% complete. During June, 80,000 units were transferred into production from another department. At the end of June there were 10,000 units in ending work in process that were 40% complete. Materials are added at the beginning of the process, while conversion costs are incurred uniformly throughout the process. The equivalent units of production for conversion costs for June were
110,000 equivalent units.
80,000 equivalent units.
90,000 equivalent units.
104,000 equivalent units.

Multiple Choice Question 69
A process with no beginning work in process, completed and transferred out 28,000 units during a period and had 12,000 units in the ending work in process that were 50% complete. How much is equivalent units of production for the period for conversion costs?
22,000 equivalent units.
34,000 equivalent units.
46,000 equivalent units.
40,000 equivalent units.

Multiple Choice Question 70
A process with 1,600 units of beginning work in process, completed and transferred out 20,000 units during a period. There were 10,000 units in the ending work in process that were 50% complete as to conversion costs. Materials are added 80% at the beginning of the process and 20% when the units are 90% complete. How much is equivalent units of production for the period for material costs?
24,000 equivalent units.
22,000 equivalent units.
30,000 equivalent units.
28,000 equivalent units.

Multiple Choice Question 71
Haley Company had the following department data on physical units:
Work in process, beginning
3,000
Completed and transferred out
6,600
Work in process, ending
2,400

Materials are added at the beginning of the process. What is the total number of equivalent units for materials during the period?
9,000.
3,600.
2,400.
7,200.

Multiple Choice Question 72
Meca-Tech Industries had the following department information about physical units and percentage of completion:
Physical Units
Work in process, June 1 (75%)
8,000
Completed and transferred out
15,000
Work in process, June 30 (50%)
12,000
If materials are added at the beginning of the production process, what is the total number of equivalent units for materials during June?
27,000.
15,000.
21,000.
11,000.

Multiple Choice Question 79
Taylon’s Seafood used high-low data from June and July to determine its variable cost of $18 per unit. Additional information follows:
Month
Units produced
Total costs
June
2,000
$48,000
July
1,000
30,000
If Tommy’s produces 2,200 units in August, how much is its total cost expected to be?
$57,600
$51,600
$39,600
$52,800

Multiple Choice Question 85
To which function of management is CVP analysis most applicable?
Directing
Motivating
Controlling
Planning

Multiple Choice Question 86
Kelly Company produces flash drives for computers, which it sells for $20 each. Each flash drive costs $15 of variable costs to make. During April, 1,000 drives were sold. Fixed costs for March were $2 per unit for a total of $1,000 for the month. How much is the contribution margin ratio?
20%
75%
80%
25%

Multiple Choice Question 88
If a company had a contribution margin of $750,000 and a contribution margin ratio of 40%, total variable costs must have been
$1,875,000.
$300,000.
$450,000.
$1,125,000.

Multiple Choice Question 90
A company has contribution margin per unit of $60 and a contribution margin ratio of 40%. What is the unit selling price?
Cannot be determined
$150.00
$24.00
$100.00

Multiple Choice Question 91
Sales are $500,000 and variable costs are $200,000. What is the contribution margin ratio?
40%
60%
Cannot be determined because amounts are not expressed per unit
50%

Multiple Choice Question 92
Hansen’s variable costs are 30% of sales. The company is contemplating an advertising campaign that will cost $33,000. If sales are expected to increase $70,000, by how much will the company’s net income increase?
$37,000
$16,000
$49,000
$12,000

Multiple Choice Question 93
Fowlen, Inc. has a product with a selling price per unit of $200, the unit variable cost is $90, and the total monthly fixed costs are $300,000. How much is Fessler’s contribution margin ratio?
45%
55%
150%
222%

Multiple Choice Question 94
Grave Company has a contribution margin of $500,000 and a contribution margin ratio of 40%.How much are total variable costs?
$1,250,000
$300,000
$200,000
$750,000

Multiple Choice Question 95
ISSAC Company has a contribution margin per unit of $21 and a contribution margin ratio of 60%. How much is the selling price of each unit?
$12.60
$52.50
Cannot be determined without more information
$35.00

Multiple Choice Question 96
A division sold 100,000 calculators during 2014:
Sales
$2,000,000

Variable costs:
Materials
$380,000

Order processing
110,000
Billing labor
150,000
Selling expenses
Total variable costs
Fixed costs

60,000
700,000
1,000,000

How much is the contribution margin per unit?
$2
$7
$17
$13

Multiple Choice Question 97
At the break-even point of 2,000 units, variable costs are $120,000, and fixed costs are $64,000. How much is the selling price per unit?
$92
$32
$28
Not enough information

Multiple Choice Question 72
The following information is taken from the production budget for the first quarter:
Beginning inventory in units
Sales budgeted for the quarter
Capacity in units of production facility
1,800
678,000
708,000
How many finished goods units should be produced during the quarter if the company desires 4,800 units available to start the next quarter?
682,800
675,000
681,000
711,000

Multiple Choice Question 73
An overly optimistic sales budget may result in
insufficient inventories.
increased sales during the year.
excessive inventories.
increases in selling prices late in the year.

Multiple Choice Question 74
In a production budget, total required units are the budgeted sales units plus
desired ending finished goods units plus beginning finished goods units.
desired ending finished goods units minus beginning finished goods units.
beginning finished goods units.
desired ending finished goods units.

Multiple Choice Question 75
The direct materials budget details
1. the quantity of direct materials to be purchased.
2. the cost of direct materials to be purchased.
neither 1 nor 2
1
2
both 1 and 2

Multiple Choice Question 76
The production budget shows expected unit sales of 65,000. Beginning finished goods units are 11,200. Required production units are 67,200. What are the desired ending finished goods units?
12,800
13,400
9,000
11,200

Multiple Choice Question 77
The production budget shows expected unit sales are 100,000. The required production units are 104,000. What are the beginning and desired ending finished goods units, respectively?
Beginning Units
Ending Units
10,000
6,000
6,000
10,000
4,000
10,000
10,000
4,000

Multiple Choice Question 78
The production budget shows that expected unit sales are 80,000. The total required units are 90,000. What are the required production units?
10,000
Cannot be determined from the data provided
15,000
30,000

Multiple Choice Question 79
The direct materials budget shows:
Units to be produced
Total pounds needed for production
Total materials required

6,000
30,000
26,400
What are the direct materials per unit?
.44 pounds
4.4 pounds
Cannot be determined from the data provided
5.0 pounds

Multiple Choice Question 80
The direct materials budget shows:
Desired ending direct materials
Total materials required
Direct materials purchases

74,000 pounds
108,000 pounds
94,800 pounds

The total direct materials needed for production is

34,000 pounds.
13,200 pounds.
20,800 pounds.
202,800 pounds.

Multiple Choice Question 81
If the required direct materials purchases are 36,000 pounds, the direct materials required for production is three times the direct materials purchases, and the beginning direct materials are three and a half times the direct materials purchases, what are the desired ending direct materials in pounds?
36,000
90,000
18,000
54,000

Multiple Choice Question 81
In the Palm Company, indirect labor is budgeted for $108,000 and factory supervision is budgeted for $36,000 at normal capacity of 160,000 direct labor hours. If 180,000 direct labor hours are worked, flexible budget total for these costs is
$148,500.
$144,000.
$157,500.
$162,000.

Multiple Choice Question 82
Kettler Company uses flexible budgets. At normal capacity of 16,000 units, budgeted manufacturing overhead is: $64,000 variable and $180,000 fixed. If Kettler had actual overhead costs of $246,000 for 18,000 units produced, what is the difference between actual and budgeted costs?
$4,000 favorable.
$6,000 unfavorable.
$6,000 favorable.
$4,000 unfavorable.

Multiple Choice Question 83
A company’s planned activity level for next year is expected to be 200,000 machine hours. At this level of activity, the company budgeted the following manufacturing overhead costs:
Variable
Indirect materials
Indirect labor
Factory supplies
Fixed
$240,000
320,000
40,000
Depreciation $100,000
Taxes 20,000
Supervision 80,000

A flexible budget prepared at the 190,000 machine hours level of activity would show total manufacturing overhead costs of
$760,000.
$570,000.
$600,000.
$770,000.

Multiple Choice Question 84
Casey Industries produced 256,000 units in 120,000 direct labor hours. Production for the period was estimated at 264,000 units and 132,000 direct labor hours. A flexible budget would compare budgeted costs and actual costs, respectively, at
132,000 hours and 120,000 hours.
128,000 hours and 120,000 hours.
120,000 hours and 120,000 hours.
128,000 hours and 132,000 hours.

Multiple Choice Question 85
A company’s planned activity level for next year is expected to be 200,000 machine hours. At this level of activity, the company budgeted the following manufacturing overhead costs:
Variable
Indirect materials
Indirect labor
Factory supplies
Fixed
$180,000
240,000
30,000
Depreciation $75,000
Taxes 15,000
Supervision 70,000

A flexible budget prepared at the 180,000 machine hours level of activity would show total manufacturing overhead costs of
$565,000.
$450,000.
$405,000.
$550,000.

Multiple Choice Question 86
Lampim Industries produced 320,000 units in 160,000 direct labor hours. Production for the period was estimated at 330,000 units and 165,000 direct labor hours. A flexible budget would compare budgeted costs and actual costs, respectively, at
160,000 hours and 160,000 hours.
165,000 hours and 165,000 hours.
165,000 hours and 150,000 hours.
165,000 hours and 160,000 hours.

Multiple Choice Question 87
At zero direct labor hours in a flexible budget graph, the total budgeted cost line intersects the vertical axis at $40,000. At 20,000 direct labor hours, a horizontal line drawn from the total budgeted cost line intersects the vertical axis at $120,000. Fixed and variable costs may be expressed as:
$80,000 fixed plus $4 per direct labor hour variable.
$80,000 fixed plus $2 per direct labor hour variable.
$40,000 fixed plus $4 per direct labor hour variable.
$40,000 fixed plus $6 per direct labor hour variable.

Multiple Choice Question 88
At 18,000 direct labor hours, the flexible budget for indirect materials is $36,000. If $37,600 are incurred at 18,400 direct labor hours, the flexible budget report should show the following difference for indirect materials:
$800 favorable.
$1,600 favorable.
$800 unfavorable.
$1,600 unfavorable.