81. If the operating asset turnover increased by 50 percent and the margin increased by 50 percent, the ROI would increase by
a 25%
b.125%
c. 50%
d. 100%
1.50 x 1.50 2.25 or 125% increase
ROI Margin x Turnover
82. When machine hours are used as cost allocation base, the item most likely to contribute to an unfavorable variable overhead efficiency variance is:
a. Workers wastefully using variable overhead items
b. Using more machine hours than budgeted
c. Unused capacity
d. More units being produced than planned
83. The costs of goods acquired from suppliers including incoming freight or transportation costs are
a. Ordering costs
b. Carrying costs
c. Stockout costs
d. Purchasing costs.
84. The S Import is a distributor of blank DVDs. M Record purchases blank DVDs from S import at $5.00 per DVD. DVDs are shipped in packages containing 25. S Import pays all incoming freight. M Record has an annual demand of 104.000 blank DVDs. Sales are constant at a rate of 2.000 blank DVDS per week. M Record earns 15% on its cash, investment. The purchase order lead time is one week. Relevant ordering costs per purchase order is $94.50 and carrying costs per package per year is $3.50. What are the relevant total costs?
a. $4,182.56
b. $6,150.50
c. $1,951.70
d. $2,560.2023
85. The P Ltd manufactures timber bookcases in two production processes: cutting and assembly. The company has adopted an activity-based costing system and has identified the following activities: (1) moving timber to production: $10.000 (2) storing timber: $15.000 (3) disposing of planks that are too short: $20,000: (4) setting up circular saw: $12.000; (5) painting bookcase: $34,000. Total costs of non-value added activities is:
a. $37.000
b. $91.000
c. $57.000
d. $45.000 (1+2+3)
86. The S Import is a distributor of blank DVDs. M Record purchases blank DVDs from S Import at $5.00 per DVD. DVDs are shipped in packages containing 25. S Import pays all incoming freight. M Record has an annual demand of 104,000 blank DVDs. Sales are constant at agate of 2.000 blank DVDs per week. M Record earns 15% on its cash investment. The purchase order lead time is one week. Relevant ordering costs per purchase order is $94.50 and carrying costs per package per year is $3.50. What is the economic order quantity?
a. 200 packages
b. 652 packages
c. 188 packages
d. 874 packages
EOQ = (2(104,000/25)94.50)/((5.0015%25) + 3.50)
EOQ = 188 packages
87. During October, 10.000 direct labor hours were worked at a standard cost of $10 per hour. If the direct labor rate variance for October was $4,000 unfavorable, the actual cost per direct labor hour must be
a. $9.60
b. $9.20
c. $10.40.
d. $10.00
10,000 x $10 = $100,000
$100,000 + $4,000 - $104,000
$104,000/10,000 = $10.40
88. The A company's costs for January were budgeted at $16,300. For February they were budgeted at $14.100. Budgeted output for January was 4,800 units and for February 4,200 units. Any output level over 4,500 units requires an extra $200 spending on maintenance of the equipment. Budgeted output for March was 4.600 units whilst actual output was 4.700 units. Which of the following is the nearest to the flexed budget cost for March?
a. $16,000
b. $15.700
c. $15.800
d. $17.400
Variable cost = (16,300 - 14,100) / (4,800 - 4,200) = 11/3 = 3.6667
Fixed cost = 16,300 - 4,800 x 3.67 = -1,316
Cost = 3,6667 * 4,700 - 1,316 = 15.917
89. Division A sells its products internally to Division B, which in turn, produces B's products that sell for $10 per unit. Division A incurs costs of $1.25 per unit while Division B incurs additional costs of $5.00 per unit. Assuming the transfer price of As production to Division B is set at $2.00 per unit, what amount correctly reflects the company's operating income per unit?
a $2.50
b. $0.75
c. $1.25
d. $3.75
$10.00 - ($1.25 + $5.00) = $3.75
90. DJ Company has two product lines. D and J. Line D has sales of $200.000 during March, a segment margin ratio of 28%, and traceable fixed expenses of $24,000. The company as a whole had a contribution margin ratio of 46% and $230,000 in total contribution margin. Based on this information, total variable expenses for product J must have been:
a. $120,000
b. $150.000.
c. All are incorrect
d. $80,000
a 25%
b.125%
c. 50%
d. 100%
1.50 x 1.50 2.25 or 125% increase
ROI Margin x Turnover
82. When machine hours are used as cost allocation base, the item most likely to contribute to an unfavorable variable overhead efficiency variance is:
a. Workers wastefully using variable overhead items
b. Using more machine hours than budgeted
c. Unused capacity
d. More units being produced than planned
83. The costs of goods acquired from suppliers including incoming freight or transportation costs are
a. Ordering costs
b. Carrying costs
c. Stockout costs
d. Purchasing costs.
84. The S Import is a distributor of blank DVDs. M Record purchases blank DVDs from S import at $5.00 per DVD. DVDs are shipped in packages containing 25. S Import pays all incoming freight. M Record has an annual demand of 104.000 blank DVDs. Sales are constant at a rate of 2.000 blank DVDS per week. M Record earns 15% on its cash, investment. The purchase order lead time is one week. Relevant ordering costs per purchase order is $94.50 and carrying costs per package per year is $3.50. What are the relevant total costs?
a. $4,182.56
b. $6,150.50
c. $1,951.70
d. $2,560.2023
85. The P Ltd manufactures timber bookcases in two production processes: cutting and assembly. The company has adopted an activity-based costing system and has identified the following activities: (1) moving timber to production: $10.000 (2) storing timber: $15.000 (3) disposing of planks that are too short: $20,000: (4) setting up circular saw: $12.000; (5) painting bookcase: $34,000. Total costs of non-value added activities is:
a. $37.000
b. $91.000
c. $57.000
d. $45.000 (1+2+3)
86. The S Import is a distributor of blank DVDs. M Record purchases blank DVDs from S Import at $5.00 per DVD. DVDs are shipped in packages containing 25. S Import pays all incoming freight. M Record has an annual demand of 104,000 blank DVDs. Sales are constant at agate of 2.000 blank DVDs per week. M Record earns 15% on its cash investment. The purchase order lead time is one week. Relevant ordering costs per purchase order is $94.50 and carrying costs per package per year is $3.50. What is the economic order quantity?
a. 200 packages
b. 652 packages
c. 188 packages
d. 874 packages
EOQ = (2(104,000/25)94.50)/((5.0015%25) + 3.50)
EOQ = 188 packages
87. During October, 10.000 direct labor hours were worked at a standard cost of $10 per hour. If the direct labor rate variance for October was $4,000 unfavorable, the actual cost per direct labor hour must be
a. $9.60
b. $9.20
c. $10.40.
d. $10.00
10,000 x $10 = $100,000
$100,000 + $4,000 - $104,000
$104,000/10,000 = $10.40
88. The A company's costs for January were budgeted at $16,300. For February they were budgeted at $14.100. Budgeted output for January was 4,800 units and for February 4,200 units. Any output level over 4,500 units requires an extra $200 spending on maintenance of the equipment. Budgeted output for March was 4.600 units whilst actual output was 4.700 units. Which of the following is the nearest to the flexed budget cost for March?
a. $16,000
b. $15.700
c. $15.800
d. $17.400
Variable cost = (16,300 - 14,100) / (4,800 - 4,200) = 11/3 = 3.6667
Fixed cost = 16,300 - 4,800 x 3.67 = -1,316
Cost = 3,6667 * 4,700 - 1,316 = 15.917
89. Division A sells its products internally to Division B, which in turn, produces B's products that sell for $10 per unit. Division A incurs costs of $1.25 per unit while Division B incurs additional costs of $5.00 per unit. Assuming the transfer price of As production to Division B is set at $2.00 per unit, what amount correctly reflects the company's operating income per unit?
a $2.50
b. $0.75
c. $1.25
d. $3.75
$10.00 - ($1.25 + $5.00) = $3.75
90. DJ Company has two product lines. D and J. Line D has sales of $200.000 during March, a segment margin ratio of 28%, and traceable fixed expenses of $24,000. The company as a whole had a contribution margin ratio of 46% and $230,000 in total contribution margin. Based on this information, total variable expenses for product J must have been:
a. $120,000
b. $150.000.
c. All are incorrect
d. $80,000
| DJ company | Line D | Line J | |
| Sales revenue | 500.000 | 200.000 | 300.000 |
| - Total variable costs | 270.000 | 120.000 | 150.000 |
| = Contribution margin | 230.000 | 80.000 | |
| Less: Segment fixed costs | 24.000 | ||
| = Segment margin | 56.000 |
