Sample Quiz #3 Questions – based on Chapters 7 and...

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Sample Quiz #3 Questions – based on Chapters 7 and 9
1. A company has fixed manufacturing cost of $1,200 and
produced 150 units of its product in the year 2009. Both fixed
cost and production quantity have been constant every year since
inception of the company. Income for the year was $7,860 based
on full costing and $8,500 based on variable costing. How many
units were sold during the year?
2. Given these data for a company, what is absorption costing
income? Production quantity and cost parameters are stable
from period to period.
A.
B.
C.
D.
70
150
230
300
A.
B.
C.
D.
$2,100
$1,100
$1,600
$2,500
3. The production budget shows the quantity of product for
each quarter of the next year as 600, 775, 1,025, and 1,000.
Production is expected to remain stable in following quarters.
Two units of material are needed for each unit of product. The
cost per unit of materials is $3.50. Ending inventory of
materials is desired to be 100 units if next period usage is in the
range 0 – 1300, 150 for 1301 -1900, and 200 for 1900+. What
is the budgeted cost of purchases of materials in the second
quarter of next year?
A.
B.
C.
D.
$2,712.50
$4,725
$5,425
$5,600
4. A company budgets the quantity sold of its product at 500
units for the first period of operation and expects growth in
sales quantity of 250 units for each of the next two periods with
stable sales thereafter. It wishes to have finished units at the
end of the first period equal to 100 with growth in ending
inventory of 25 for each of the next two periods and stable
thereafter. What is the production required for the third period
of operation?
A.
B.
C.
D.
1,025
500
1,000
775
Variable costing income
Quantity Produced
Quantity Sold
Fixed product cost
$1,600
800
900
$4,000
5. A company’s product requires 12 minutes of direct labor time
per unit. The labor rate is $18 per hour. Production is planned to
be 80 units for the next period of operations. What is the direct
labor cost budgeted for the period?
6. Which of these sets of quantities for a company’s product for
beginning [BQ], capacity [CQ], demand [DQ], production [PQ]
and sales [SQ] is feasible?
BQ
0
20
20
20
5/29/2016
CQ
100
100
100
100
DQ
80
100
80
80
PQ
80
50
120
100
A.
B.
C.
D.
A.
B.
C.
D.
$216
$288
$17,280
$960
first
second
third
fourth
SQ
55
90
80
90
page 1 of 2
Sample Quiz #3 Questions – based on Chapters 7 and 9
7. Last period a company required 48 pounds of direct material
to make 120 units of its product. The company has 11 units of its
product in finished goods inventory at the start of this period. It
plans to sell 35 units during this period and desires an inventory
of 8 units of product at the end of this period. What is the amount
of material, in pounds, which is budgeted to be used in
production for this period? Work in process inventories are zero
at both the start and end of the period.
A.
B.
C.
D.
43
12.8
32
17.2
A company has the following simplified cash budget [all amounts are $], without any financing needed,
for four quarters and the year as a whole:
Q1
begin
add
total
subtract
end
Q2
8
10
18
12
6
Q3
Q4
8
19
15
10
2
Year
2
10
12
8
41
.
Q#
Answer
5/29/2016
8. In the “end” row what is the first missing
number?
A.
B.
C.
D.
8
6
4
5
9. In the “Year” column, what is the first
missing number?
A.
B.
C.
D.
8
2
20
10
1.
C
2.
B
3.
D
4.
A
5.
B
6.
A
7.
B
8.
C
9.
A
page 2 of 2
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