work-in-process inventory account of a manufacturing company shows a balance of
$3,000 at the end of an accounting period. The job-cost sheets of the two
incomplete jobs show charges of $500 and $300 for direct materials, and charges
of $400 and $600 for direct labor. From
this information, it appears that the company is using a predetermined overhead
rate as a percentage of direct labor
costs. What percentage is the rate?
break-even point in dollar sales for Rice Company is $480,000 and the companyâ€™s contribution
margin ratio is 40 percent. If Rice Company desires a profit of $84,000, how much would sales have to total?
Companyâ€™s direct labor cost is 25 percent of its conversion cost. If the
manufacturing overhead for the last period was $45,000 and the direct material
cost was $25,000, how much is the direct labor cost?
Grading Companyâ€™s cash and cash equivalents consist of cash and marketable securities. Last year the
companyâ€™s cash account decreased by
$16,000 and its marketable securities account increased by $22,000. Cash
provided by operating activities was $24,000. Net cash used for financing
activities was $20,000. Based on this information, was the net cash flow from
investing activities on the statement of cash flows a net increase or
decrease? By how much?
Gladstone Footwear Corporationâ€™s flexible budget cost formula for supplies, a variable cost, is
$2.82 per unit of output. The companyâ€™s flexible budget performance report for
last month showed an $8,140 unfavorable spending variance for supplies. During that month,
21,250 units were produced. Budgeted activity for the month had been 20,900 units.
What is the actual cost per unit for indirect materials?
Lyons Company consists of two divisions, A and B. Lyons Company reported a
contribution margin of $60,000 for Division A, and had a contribution margin
ratio of 30 percent in Division B, when sales in Division B were $240,000. Net
operating income for the company was $22,000 and traceable fixed expenses were
$45,000. How much were Lyons Companyâ€™s common fixed expenses?
Atlantic Company produces a single product. For the most recent year, the companyâ€™s net operating
income computed by the absorption costing method was $7,800, and its net
operating income computed by the variable costing method was $10,500. The
companyâ€™s unit product cost was $15 under variable costing and $24 under
absorption costing. If the ending
inventory consisted of 1,460 units, how many units must have been in the
Black Company uses the weighted-average method in its process costing system.
The companyâ€™s ending work-inprocess inventory consists of 6,000 units, 75
percent complete with respect to materials and 50 percent complete with respect
to labor and overhead. If the total
dollar value of the inventory is $80,000 and the cost per equivalent
unit for labor and overhead is $6.00, what is the cost per equivalent unit for
At Overland Company, maintenance cost is exclusively a variable cost that
varies directly with machine-hours. The performance report for July showed that
actual maintenance costs totaled $11,315 and that the associated rate variance
was $146 unfavorable. If 7,300 machine-hours were actually worked during July,
what is the budgeted maintenance cost per machine-hour?
The cost of goods sold in a retail store totaled $650,000. Fixed selling and
administrative expenses totaled $115,000 and variable selling and
administrative expenses were $420,000. If the storeâ€™s contribution margin totaled $590,000, how much were the sales?
Denny Corporation is considering replacing a technologically obsolete machine with a new
state-of-the-art numerically controlled
machine. The new machine would cost $600,000 and would have a 10-year useful
life. Unfortunately, the new machine would have no salvage value. The new
machine would cost $20,000 per year to
operate and maintain, but would save $125,000 per year in labor and
other costs. The old machine can be sold now for scrap for $50,000. What
percentage is the simple rate of return on the new machine rounded to the
nearest tenth of a percent? (Ignore income taxes in this problem.)
Lounsberry Inc. regularly uses material O55P and currently has in stock 375
liters of the material, for which it paid $2,700 several weeks ago. If this
were to be sold as is on the open market as surplus material, it would fetch
$6.35 per liter. New stocks of the material can be purchased on the open market
for $7.20 per liter, but it must be purchased in lots of 1,000 liters. Youâ€™ve
been asked to determine the relevant cost of 900 liters of the material to be
used in a job for a customer. What is the relevant cost of the 900 liters of
Harwichport Company has a current ratio of 3.0 and an acid-test ratio of 2.8.
Current assets equal $210,000, of which $5,000 consists of prepaid expenses.
The remainder of current assets consists of cash, accounts receivable,
marketable securities, and inventory. What is the amount of Harwichport
Tolla Company is estimating the following sales for the first six months of
at Tolla are normally collected as 70 percent in the month of sale, 25 percent
in the month following the sale, and the remaining 5 percent being
uncollectible. Also, customers paying in the month of sale are given a 2
percent discount. Based on this information, how much cash should Tolla expect
to collect during the month of April?
Trauscht Corporation has provided the following data from its activity-based
Cost Pool Total Cost Total
orders $91,428 1,900
company makes 360 units of product P23F a year, requiring a total of 725
machine-hours, 85 orders, and 45 inspection-hours per year. The productâ€™s
direct materials cost is $42.30 per unit and its direct labor cost is $14.55
per unit. The product sells for $132.10 per unit. According to the
activity-based costing system, what is the product margin for product P23F?
Williams Companyâ€™s direct labor cost is 30 percent of its conversion cost. If
the manufacturing overhead for the last period was $59,500 and the direct
materials cost was $37,000, what is the direct labor cost?
In a recent period, 13,000 units were produced, and there was a favorable labor
efficiency variance of $23,000. If 40,000 labor-hours were worked and the
standard wage rate was $13 per labor-hour, what would be the standard hours
allowed per unit of output?
The balance in White Companyâ€™s work-in-process inventory account was $15,000 on
August 1 and $18,000 on August 31. The company incurred $30,000 in direct labor
cost during August and requisitioned $25,000 in raw materials (all direct
material). If the sum of the debits to the manufacturing overhead account total
$28,000 for the month, and if the sum of the credits totaled $30,000, then was
Finished Goods debited or credited? By how much?
Cost Pool Total Cost Total
orders $91,428 1,900
A company has provided the following data:
price $80 per unit
cost $50 per unit
the dollar contribution margin per unit is increased by 10 percent, total fixed
cost is decreased by 15 percent, and all other factors remain the same, will
net operating income increase or decrease? By how much?
For the current year, Paxman Company incurred $175,000 in actual manufacturing
overhead cost. The manufacturing overhead account showed that overhead was
overapplied in the amount of $9,000 for the year. If the predetermined overhead
rate was $8.00 per direct labor-hour, how many hours were worked during the