Accounting 3

1.   Morganti Corporation sells a product for \$140 per unit. The product’s current sales are 40,700 units and its break-even sales are 31,339 units. What is the margin of safety in dollars?

 A. \$3,798,667 B. \$4,387,460 C. \$1,310,540 D. \$5,698,000
2.   A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations:

What is the variable costing unit product cost for the month?

 A. \$94 per unit B. \$111 per unit C. \$115 per unit D. \$90 per unit
3.   The break-even in units sold will decrease if there is an increase in

 A. unit variable expenses. B. selling price. C. total fixed expenses. D. unit sales.
4.   Bartelt Inc., which produces a single product, has provided the following data for its most recent month of operations:

There were no beginning or ending inventories. What was the absorption costing unit product cost?

 A. \$246 per unit B. \$183 per unit C. \$117 per unit D. \$125 per unit
5.   When using data from a segmented income statement, what are the dollar sales for the company to break-even overall equal to?

 A. (Traceable fixed expenses + Common fixed expenses) ÷ Overall CM ratio B. (Non-traceable fixed expenses + Common fixed expenses) ÷ Overall CM ratio C. (Traceable fixed expenses) ÷ Overall CM ratio D. (Allocated fixed expenses + Traceable fixed expenses) ÷ Overall CM ratio
6.   The selling and administrative expense budget of Ruffing Corporation is based on budgeted unit sales, which are 4,800 units for February. The variable selling and administrative expense is \$8.10 per unit. The budgeted fixed selling and administrative expense is \$71,520 per month, which includes depreciation of \$16,800 per month. The remainder of the fixed selling and administrative expense represents current cash flows. What should the cash disbursements for selling and administrative expenses on the February selling and administrative expense budget be?

 A. \$110,400 B. \$93,600 C. \$54,720 D. \$38,880
7.   What is the margin of safety?

A. The excess of budgeted or actual sales over the break-even volume of sales
B. The excess of budgeted or actual sales over budgeted or actual variable expenses
C. The excess of budgeted net operating income over actual net operating income
D. The excess of budgeted or actual sales over budgeted or actual fixed expenses

8.   Data concerning Wythe Corporation’s single product appear below:

Fixed expenses are \$106,000 per month. The company is currently selling 2,000 units per month. The marketing manager would like to cut the selling price by \$15 and increase the advertising budget by \$5,000 per month. The marketing manager predicts that these two changes would increase monthly sales by 800 units. What should be the overall effect of this change on the company’s monthly net operating income?

 A. increase of \$1,000 B. increase of \$103,000 C. increase of \$31,000 D. decrease of \$31,000
9.   The contribution margin ratio of Baginski Corporation’s only product is 53%. The company’s monthly fixed expense is \$617,980 and the company’s monthly target profit is \$23,000. What are the dollar sales to attain that target profit closest to?

A. \$1,166,000
B. \$1,209,396
C. \$327,529
D. \$339,719
10.   Data concerning Cutshall Enterprises Corporation’s single product appear below:

What are the unit sales to attain the company’s monthly target profit of \$16,000 closest to?

 A. 2,320 B. 4,834 C. 3,872 D. 4,462
11.   Which of the following represents the normal sequence in which the below budgets are prepared?

A. Budgeted Balance Sheet, Sales Budget, Budgeted Income Statement
B. Sales Budget, Budgeted Balance Sheet, Budgeted Income Statement
C. Sales Budget, Budgeted Income Statement, Budgeted Balance Sheet
D. Budgeted Income Statement, Sales Budget, Budgeted Balance Sheet
12.   Which of the following benefits could an organization reasonably expect from an effective budget program?

 A. Option A B. Option B C. Option C D. Option D
13.   Assume a company sells a single product. If Q equals the level of output, P is the selling price per unit, V is the variable expense per unit, and F is the fixed expense, then what is the break-even point in sales dollars?

 A. F/[(P-V)/P] B. F/[Q(P-V)] C. F/[Q(P-V)/P] D. F/(P-V)
14.   Under super-variable costing, which of the following is treated as a period cost?

 A. Option A B. Option C C. Option D D. Option B
15.   The manufacturing overhead budget at Amrein Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 4,900 direct labor-hours will be required in August. The variable overhead rate is \$9.40 per direct labor-hour. The company’s budgeted fixed manufacturing overhead is \$96,040 per month, which includes depreciation of \$7,350. All other fixed manufacturing overhead costs represent current cash flows. What should the August cash disbursements for manufacturing overhead on the manufacturing overhead budget be?

A. \$46,060
B. \$88,690
C. \$134,750
D. \$142,100
16.   Bera Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products:

Data for one of the company’s products follow:

How much overhead cost would be assigned to Product Q79P using the activity-based costing system?

A. \$43,659.54
B. \$125.82
C. \$7,119.92
D. \$4,770.99
17.   Mutskic Corporation produces and sells Product BetaC. To guard against stockouts, the company requires that 30% of the next month’s sales be on hand at the end of each month. Budgeted sales of Product BetaC over the next four months are:

What would budgeted production for August be?

 A. 77,000 units B. 83,000 units C. 107,000 units D. 80,000 units
18.   Closser Corporation produces and sells two products. In the most recent month, Product M50S had sales of \$39,000 and variable expenses of \$12,870. Product H50G had sales of \$12,000 and variable expenses of \$4,980. The fixed expenses of the entire company were \$33,050. What is the break-even point for the entire company closest to?

A. \$50,900
B. \$17,950
C. \$50,846
D. \$33,050
19.   The manufacturing overhead budget at Pendley Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 8,900 direct labor-hours will be required in August. The variable overhead rate is \$5.50 per direct labor-hour. The company’s budgeted fixed manufacturing overhead is \$133,500 per month, which includes depreciation of \$30,260. All other fixed manufacturing overhead costs represent current cash flows. The company recomputes its predetermined overhead rate every month. What should the predetermined overhead rate for August be?

 A. \$15.00 B. \$17.10 C. \$5.50 D. \$20.50
20.   Under variable costing, fixed manufacturing overhead is

 A. carried in an asset account. B. ignored. C. carried in a liability account. D. expensed as a period cost
1.   Gwinnett Barbecue Sauce Corporation manufactures a specialty ba