Penn Foster EXAMINATION NUMBER: 06140400
Note: You should complete all lesson exams before you take the
Complete the following exam by answering the questions and compiling your answers into a word-processing document. When you’re ready to submit your answers, refer to the instructions at the end of your exam booklet. Be certain to indicate the proper question number before each of your answers. Remember to show your work if an answer requires a mathematical solution.
Answer each of the following 20 questions. Each answer is worth
At an activity level of 8,800 units, Pember Corporation’s total variable cost is $146,520 and its total fixed cost is $219,296. For the activity level of 8,900 units, compute the following values.
A. The total variable cost
B. The total cost
C. The average variable cost per unit
D. The average fixed cost per unit
E. The average total cost per unit
Note: Assume that the activity level is within the relevant range.
Job 397 was recently completed. The following data have been recorded on its job cost sheet
Direct materials …………………………………$59,400
Direct labor-hours………………………………1,254 DLHs
Direct labor wage rate …………………………$11 per DLH
Number of units completed ………………….3,300 units
The company applies manufacturing overhead on the basis of direct labor-hours. The predetermined overhead rate is $37 per direct labor-hour.
What is the unit product cost that would appear on the job cost sheet for this job?
Carver Inc. uses the weighted-average method in its process costing system. The following data concern the operations of the company’s first processing department for a recent month.
Work in process, beginning:
Units in process…………………………………………700
Percent complete with respect to materials …….50%
Percent complete with respect to conversion …..40%
Units started into production
during the month ……………………………………23,000
Work in process, ending:
Units in process…………………………………………200
Percent complete with respect to materials …….80%
Percent complete with respect to conversion …..40%
Using the wieghted-average method, what are the equivalent units of production for materials and for
Hayek Corporation uses the FIFO method in its process costing. The following data concern the company’s Mixing Department for the month of August.
Work in process, August 1 $31,734 $30,320
Cost added to production in the Mixing
Department during August $91,332 $81,864
Equivalent units of production for August 7,740 7,580
What are the cost per equivalent unit for materials and the cost per equivalent for conversion for the Mixing Department for August using the FIFO method?
Maddaloni International, Inc. produces and sells a single product. The product sells for $160.00 per unit and its variable expense is $46.40 per unit. The company’s monthly fixed expense is $219,248.
What is the monthly break-even in total dollar sales?
Mitchel Corporation manufactures a single product. Last year, variable costing net operating income was $55,000.
The fixed manufacturing overhead costs released from inventory under absorption costing amounted to $24,000.
What is the absorption costing net operating income from last year?
Calder Corporation manufactures and sells one product.
The following information pertains to the company’s first year of operations:
Variable costs per unit:
Direct Materials $92
Fixed costs per year:
Direct Labor $720,000
Fixed manufacturing overhead $3,264,000
Fixed selling and administrative $1,935,000
The company does not have any variable manufacturing overhead costs or variable selling and administrative costs. During its first year of operations, the company produced 48,000 units and sold 45,000 units. The company’s only product sells for $258 per unit.
What is the net operating income?
Mouret Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products.
Activity Cost Pools Activity Rate
Setting up batches $92.68 per batch
Processing customer orders $95.08 per customer order
Assembling products $3.41 per assembly hour
Last year, Product N79A required 28 batches,
6 customer orders, and 712 assembly hours.
How much total overhead cost would be assigned to Product N79A using the company’s activity-based costing system?
The manufacturing overhead budget of Paparella Corporation is based on budgeted direct labor-hours. The November direct labor budget indicates that 6,000 direct labor-hours will be required in that month. The variable overhead rate is $2.00 per direct labor-hour. The company’s budgeted fixed manufacturing overhead is $79,200 per month.
Which includes depreciation of $21,000. All other fixed manufacturing overhead costs represent current
A. Determine the cash disbursements for manufacturing overhead for November.
B. Determine the predetermined overhead rate for November.
Sund Corporation bases its budgets on the activity measure “customers served.” During April, the company plans to serve 38,000 customers. The company has provided the following data concerning the formulas it uses in its budgeting:
Prepare the company’s planning budget for April. What is the net operating income?
Fixed element per month
Variable element per month
Revenue — $2.10
Wages and salaries $25,000 $0.50
Supplies $0 $0.30
Insurance $6,200 $0.00
Miscellaneous expense $2,500 $0.40
Shawl Corporation’s variable overhead is applied on the basis of direct labor-hours. The standard cost card for product F02E specifies 5.5 direct labor-hours per unit of F02E. The standard variable overhead rate is $6.80 per direct labor-hour. During the most recent month, 1,560 units of product F02E were made and 8,700 direct labor hours were worked.
The actual variable overhead incurred was $52,635.
A. What was the variable overhead rate variance for the month?
B. What was the variable overhead efficiency variance for the month?
Kingdon Corporation’s manufacturing overhead includes $7.10 per machine-hour for variable manufacturing overhead and $207,000 per period for fixed manufacturing overhead.
What is the predetermined overhead rate for the denominator level of activity of 4,600 machine-hours?
Pinkney Corporation has provided the following data concerning its direct labor costs for November:
Standard wage rate $12.20 per DLH
Standard hours 5.3 DLHs per unit
Actual wage rate $11.20 per DLH
Actual hours 39,720 DLHs
Actual output 7,900 units
Show the journal entry to record the incurrence of direct labor costs
Idom Industries is a division of a major corporation
Iles Industries is a division of a major corporation
Iba Gilde Industries is a division of a major corporation. The following data are for the latest year of operations:
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . $5,820,000
Net operating income . . . . . . . . . . . . . . $436,500
Avergae operating assets . . . . . . . . . . . $2,000,000
The company’s minimum
required rate of return . . . . . . . . . . . . . 18%
What is the division’s residual income?
Tullius Corporation has received a request for a special
order of 8,000 units of product C64 for $50.00 each. The
normal selling price of this product is $53.25 each, but
the units would need to be modified slightly for the customer.
The normal unit product cost of product C64 is computed as follows:
Direct materials $18.10
Direct labor 7.40
Variable manufacturing overhead 5.20
Fixed manufacturing overhead 4.80
Unit product cost $35.50
Direct labor is a variable cost. The special order would have no effect on the company’s total fixed manufacturing overhead costs.
The customer would like some modifications made to product
C64 that would increase the variable costs by $5.00 per unit and that would require a one-time investment of $43,000 in special molds that would have no salvage value. This special order would have no effect on the company’s other sales. The company has ample spare capacity for producing the special order.
How much is the “effect” (incremental net operating income) on the company’s total net operating income through accepting the special order?
(Ignore income taxes in this problem.) Hinck Corporation is investigating automating a process by purchasing a new machine for $520,000 that would have an 8 year useful life and no salvage value. By automating the process, the company would save $134,000 per year in cash operating costs. The company’s current equipment would be sold for scrap now, yielding $22,000. The annual depreciation on the new machine would be $65,000.
What is the simple rate of return on the investment to the nearest tenth of a percent?
(Ignore income taxes in this problem.) Schaad Corporation has entered into an 8 year lease for a piece
of equipment. The annual payment under the lease will be $2,500, with payments being made at the beginning of each year.
If the discount rate is 14%, what is the present value of the lease payments?
Brodigan Corporation has provided the following information concerning a capital budgeting project:
Investment required in equipment $450,000
Net annual operating cash inflow $220,000
Tax rate 30%
After-tax discount rate 12%