1. The 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 material, and charges of $400 and $600 for direct labor. From this
information, it appears that the company is using a predetermined overhead rate
of direct labor. What percentage is the rate?

2. The break-even point in dollar sales for Rice Company is $480,000 and the
company contribution margin ratio is 40 percent. If Rice Company desires a
profit of $84,000, how much would sales have to total?

3. Williams Company’s direct labor cost is 25 percent of its conversion cost.
If the manufacturing overhead for the last period was $45,000 and direct
material cost was $25,000, how much is the direct labor cost?

4. Grading Company’s cash and cash equivalents consist of cash and marketable
securities. Last year the company’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?

5. Gladstone Corporation’s flexible budget cost formula for supplies, a
variable cost is $2.28 per unit of output. The company’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 material?

6. Lyons Company consist 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 on division B were $240,000. Net
operating income for the company was $22,000 and traceable fixed expenses
$45,000. How much were Lyons Company’s common fixed expenses?

7. Atlantic Company produces a single product. For the most recent year, the
company’s net operating income computing by absorption costing method was
$7,800, and its net operating income computed by the variable costing method
was $10,500. The company’s unit product 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 beginning inventory?

8. Black Company uses the weighted-average method in its process costing
system. The company’s ending work-in-process inventory consist 6,000 units, 75
percent complete with respect to materials and 50 percent 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 materials?
9. At Overland Company, maintenance cost is exclusively at variable cost that
varies directly with machine-hours. The Performance report for July showed that
actual maintenance cost 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?

10. The cost of goods sold in a retail stored totaled $650,000. Fixed selling
and administrative expenses totaled $115,000 and variable selling and
administrative expenses were $420,000. If the store’s contribution margin
totaled $590,000, how much were the sales?

11. 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 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 cost. The old machine can be sold now for a 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 the income taxes in this problem)

12. 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 stock 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. You 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
material O55P?

13. Harwichport Company has a current ratio of 3.0 and a acid test ratio of
2.8. Current assets equal $210,000 of which $5,000 consists of prepaid
expenses. The remainder of current assets consisst of cash, account receivable,
marketable securities, and inventory. What is the