71. Starling Co. is considering disposing of a machine with a book value of $12,500 and estimated remaining life of five years. The old machine can be sold for $1,500. A new high-speed machine can be purchased at a cost of $25,000. It will have a useful life of five years and no residual value. It is estimated that the annual variable manufacturing costs […]

    31.Which of the following statements is false?    A. Both direct and indirect costs can be assigned to a cost object.   B. Cost drivers are often selected based on the availability of information.   C. Volume measures are good drivers for fixed overhead costs.   D. Fixed costs that do not have a definitive cost driver are allocated using an allocation base that distributes a rational share […]

11) Net income appears on the worksheet: A) only in the balance sheet credit column. B) only in the income statement credit column C) in the income statement debit column and balance sheet debit column D) in the income statement debit column and balance sheet credit column   12) Net loss appears on the worksheet: A) in the income statement credit column and balance sheet […]

Multiple Choice Questions  1.Martin Company currently produces and sells 40,000 units of product at a selling price of $12. The product has variable costs of $6 per unit and fixed costs of $150,000. The company currently earns a total contribution margin of:    A. $280,000   B. $200,000   C. $240,000   D. $90,000     2.Jarvis Company produces a product that has a selling price of $20.00 and a […]

    61. A business received an offer from an exporter for 20,000 units of product at $15 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data are available:  Domestic unit sales price$21 Unit manufacturing costs: Variable12 Fixed5 What is the differential revenue from the acceptance of the offer? A. $300,000B. $420,000C. $120,000D. $240,000   62. A business received an offer from […]

  74. Harbinger Enterprises, Inc.The balance sheet taken from the 2012 10-K of Harbinger Enterprises is provided below.    December 31 Assets: 2012 2011 Current Assets:       Cash $   122,200 $108,000   Accounts receivable 45,000 35,000   Inventory 17,000 14,000   Other current assets 13,000 11,000   Total current assets 197,200 168,000 Long-term Assets:       Property, plant & equipment, net 1,489,800 50,000 […]

  Objective 3.7   Answer the following questions using the information below:   The following information is for Barnett Corporation:   Product X: Revenue$10.00 Variable Cost$2.50   Product Y: Revenue$15.00 Variable Cost$5.00   Total fixed costs$50,000   1) What is the breakeven point assuming the sales mix consists of two units of Product X and one unit of Product Y? A) 1,000 units of Y […]

21) Refer to Table 6-1. Assume a perpetual inventory system and all sales occurred prior to October 30th. Under the FIFO method, cost of goods sold on the income statement would be: A) $375. B) $537. C) $162. D) $420.   22) Which of the following inventory costing methods requires a company to keep track of the actual physical movement of individual inventory items? A) […]

  156. Yakking Co. manufactures mobile cellular equipment and develops a price for the product by using a variable cost concept. Yakking incurs variable costs of $1,900,000 in the production of 100,000 units. Fixed costs total $50,000. The company employs $4,725,000 of assets and wishes to earn a profit equal to a 10% rate of return on assets.  (a) Compute a markup percentage based on variable […]

  Objective 16.3   1) All of the following methods may be used to allocate joint costs EXCEPT the: A) constant gross-margin percentage method B) estimated net realizable value method C) present value allocation method D) sales value at splitoff method   2) An example of a market-based approach to allocating joint costs is (are) allocating joint costs based on: A) sales value at splitoff […]