Post ACC211
Unit 1 Chapter 1 Quiz

1.

The following costs were incurred in April:

Direct materials

$41,400

Direct labor

$29,800

Manufacturing overhead

$24,300

Selling expenses

$19,700

Administrative
expenses

$34,500

Conversion costs during the month totaled:

$71,200

$65,700

$54,100

$149,700

2.

The following costs were incurred in April:

Direct materials

$39,700

Direct labor

$23,200

Manufacturing overhead

$24,000

Selling expenses

$20,300

Administrative
expenses

$33,900

Prime costs during the month totaled:

$47,200

$86,900

$62,900

$141,100

3.

Haab Inc. is a merchandising company. Last month the
company’s cost of goods sold was $67,500. The company’s beginning merchandise
inventory was $11,000 and its ending merchandise inventory was $26,200. What
was the total amount of the company’s merchandise purchases for the month?

$104,700

$52,300

$82,700

$67,500

4.

At a sales volume of 35,500 units, Carne Company’s sales
commissions (a cost that is variable with respect to sales volume) total
$727,750.

To the
nearest whole dollar, what should be the total sales commissions at a sales
volume of 34,200 units? (Assume that this sales volume is within the relevant
range.) (Do not round intermediate
calculations.)

$712,620

$755,413

$701,100

$727,750

5.

Calip Corporation, a merchandising
company, reported the following results for October:

Sales

$419,000

Cost of goods sold
(all variable)

$175,500

Total variable selling
expense

$23,600

Total fixed selling
expense

$17,200

Total variable
administrative expense

$15,400

Total fixed
administrative expense

$31,400

The contribution margin for
October is:

$204,500

$155,900

$370,400

$243,500

6.

Nieman Inc., a local retailer, has
provided the following data for the month of March:

Merchandise inventory,
beginning balance

$49,300

Merchandise inventory,
ending balance

$44,200

Sales

$260,700

Purchases of
merchandise inventory

$142,400

Selling expense

$20,100

Administrative expense

$60,100

The cost of goods sold for March
was:

$222,600

$137,300

$147,500

$142,400

7.

Nieman Inc., a local retailer, has
provided the following data for the month of March:

Merchandise inventory,
beginning balance

$
44,500

Merchandise inventory,
ending balance

$
43,200

Sales

$263,100

Purchases of
merchandise inventory

$137,600

Selling expense

$
17,000

Administrative expense

$
60,900

The net operating income for March
was:

$125,500

$126,500

$46,900

$46,300

8.

In April direct labor was 70% of conversion cost. If the
manufacturing overhead for the month was $42,000 and the direct materials cost
was $28,000, the direct labor cost was:

$98,000

$65,333

$18,000

$12,000

9.

The following cost data pertain to the operations of Rademaker
Department Stores, Inc., for the month of March.

Corporate headquarters building
lease

$80,000

Cosmetics Department sales
commissions-Northridge Store

$7,000

Corporate legal office salaries

$75,000

Store manager’s salary-Northridge
Store

$11,000

Heating-Northridge Store

$11,000

Cosmetics Department cost of
sales-Northridge Store

$83,000

Central warehouse lease cost

$17,000

Store security-Northridge Store

$11,000

Cosmetics Department manager’s
salary-Northridge Store

$4,000

The Northridge Store is just one of many stores owned and operated by the
company. The Cosmetics Department is one of many departments at the Northridge
Store. The central warehouse serves all of the company’s stores.

What is the total amount of the costs listed above that are direct costs of the
Cosmetics Department?

$83,000

$94,000

$90,000

$127,000

10.Corcetti Company manufactures and sells prewashed denim jeans.
Large rolls of denim cloth are purchased and are first washed in a giant
washing machine. After the cloth is dried, it is cut up into jean pattern
shapes and then sewn together. The completed jeans are sold to various retail
chains.

Which of the following terms could be used to correctly describe the cost of
the soap used to wash the denim cloth?

Direct Cost

Product Cost

A)

Yes

Yes

B)

Yes

No

C)

No

Yes

D)

No

No

Option
A

Option
B

Option
C

Option
D

11.Ence Sales, Inc., a merchandising company, reported sales of
6,400 units in April at a selling price of $684 per unit. Cost of goods sold,
which is a variable cost, was $455 per unit. Variable selling expenses were $30
per unit and variable administrative expenses were $40 per unit. The total
fixed selling expenses were $156,800 and the total administrative expenses were
$260,400.

The gross margin for April was:

$1,465,600

$3,960,400

$1,017,600

$600,400

Post ACC211
Unit 3 Chapter 5 Quiz

1.

Florek Inc. produces and sells a single product. The
company has provided its contribution format income statement for March.

Sales (6,800 units)

$

408,000

Variable expenses

299,200



Contribution margin

108,800

Fixed expenses

87,900



Net operating income

$

20,900





If the company sells 7,000 units, its net operating income should be closest
to:

$24,100

$20,900

$32,900

$21,515

2.

Spartan Systems reported total sales of $340,000, at a
price of $20 and per unit variable expenses of $11, for the sales of their
single product.

Total

Per
Unit

Sales

$340,000

$20

Variable expenses

187,000

11



Contribution margin

153,000

$9





Fixed expenses

104,000


Net operating income

$49,000



What is the amount of contribution
margin if sales volume increases by 20%? (Round
your intermediate calculations to 2 decimal places and your final answer to
the nearest whole number.)

rev: 03_17_2016_QC_CS-44872, 03_18_2016_QC_CS-44872

$176,000

$86,400

$183,600

$57,600

3.

Bolding Inc.’s contribution margin ratio is 61% and its fixed
monthly expenses are $45,500. Assuming that the fixed monthly expenses do not
change, what is the best estimate of the company’s net operating income in a
month when sales are $133,000?

$81,130

$6,370

$35,630

$87,500

4.

The Clyde Corporation’s variable expenses are 40% of
sales. Clyde Corporation is contemplating an advertising campaign that will
cost $29,000. If sales increase by $79,000, the company’s net operating
income will increase by:

$31,600

$18,400

$2,600

$64,800

5.

Darwin Inc. sells a particular textbook for $29. Variable
expenses are $21 per book. At the current volume of 44,000 books sold per
year the company is just breaking even. Given these data, the annual fixed
expenses associated with the textbook total:

$352,000

$1,276,000

$1,628,000

$924,000

6.

Wyly Inc. produces and sells a single product. The selling
price of the product is $195.00 per unit and its variable cost is $78.00 per
unit. The fixed expense is $348,660 per month.

The break-even in monthly dollar
sales is closest to: (Round your intermediate
calculations to 2 decimal places.)

$871,650

$522,990

$581,100

$348,660

7.

Morganti Corporation sells a product for $145 per unit.
The product’s current sales are 41,300 units and its break-even sales are
32,625 units. What is the margin of safety in dollars?

$3,736,965

$5,988,500

$4,730,625

$1,257,875

8.

Lasseter Corporation has provided its contribution format
income statement for August. The company produces and sells a single product.

Sales (5,200 units)

$

176,800

Variable expenses

78,000



Contribution margin

98,800

Fixed expenses

46,400



Net operating income

$

52,400





If the company sells 5,300 units, its total contribution margin
should be closest to:

$53,408

$98,800

$100,700

$102,200

9.

Carlton Corporation sells a single product at a selling price of
$40 per unit. Variable expenses are $22 per unit and fixed expenses are
$82,800. Carlton’s break-even point is:

4,600
units

3,764
units

5,000
units

2,070
units

Post ACC211
Unit 4 Chapter 6 Quiz

1.

A company produces a single product. Variable production
costs are $13.7 per unit and variable selling and administrative expenses are
$4.7 per unit. Fixed manufacturing overhead totals $53,000 and fixed selling
and administration expenses total $57,000. Assuming a beginning inventory of
zero, production of 5,700 units and sales of 4,450 units, the dollar value of
the ending inventory under variable costing would be:

$17,125

$28,375

$23,000

$11,250

2.

A manufacturing company that produces a single product has
provided the following data concerning its most recent month of operations:

Selling price

$144

Units in beginning
inventory

0

Units produced

3,020

Units sold

2,730

Units in ending
inventory

290

Variable costs per
unit:

Direct materials

$47

Direct labor

$21

Variable manufacturing
overhead

$16

Variable selling and
administrative

$9

Fixed costs:

Fixed manufacturing
overhead

$90,600

Fixed selling and
administrative expenses

$35,490

The total gross margin for the month under absorption
costing is:

$81,900

$21,840

$128,430

$139,230

3.

Hatfield Corporation, which has only one product, has
provided the following data concerning its most recent month of operations:

Selling price

$170

Units in beginning
inventory

100

Units produced

2,130

Units sold

870

Units in ending
inventory

1,360

Variable costs per
unit:

Direct materials

$75

Direct labor

$30

Variable manufacturing
overhead

$10

Variable selling and
administrative

$13

Fixed costs:

Fixed manufacturing
overhead

$27,690

Fixed selling and
administrative

$17,400

What is the total period cost for
the month under the variable costing?

$45,090

$28,710

$27,690

$56,400

4.

Farron Corporation, which has only one product, has
provided the following data concerning its most recent month of operations:

Selling price

$172

Units in beginning inventory

0

Units produced

9,700

Units sold

9,300

Units in ending
inventory

400

Variable costs per
unit:

Direct
materials

$33

Direct
labor

$75

Variable
manufacturing overhead

$21

Variable
selling and administrative

$25

Fixed costs:

Fixed
manufacturing overhead

$145,500

Fixed
selling and administrative

$10,300

What is the net operating income for the month under variable
costing?

$11,600

$(40,000)

$17,600

$6,000

5.

Farron Corporation, which has only one product, has
provided the following data concerning its most recent month of operations:

Selling price

$120

Units in beginning
inventory

0

Units produced

9,050

Units sold

8,650

Units in ending
inventory

400

Variable costs per
unit:

Direct
materials

$20

Direct
labor

$62

Variable
manufacturing overhead

$8

Variable
selling and administrative

$12

Fixed costs:

Fixed
manufacturing overhead

$135,750

Fixed
selling and administrative

$9,000

What is the net operating income for the month under absorption
costing?

$25,050

$10,950

$16,950

$6,000

6.

Aaker Corporation, which has only one product, has
provided the following data concerning its most recent month of operations:

Selling price

$135

Units in beginning
inventory

0

Units produced

6,750

Units sold

6,450

Units in ending
inventory

300

Variable costs per
unit:

Direct
materials

$21

Direct
labor

$51

Variable
manufacturing overhead

$15

Variable
selling and administrative

$15

Fixed costs:

Fixed
manufacturing overhead

$182,250

Fixed
selling and administrative

$26,700

What is the unit product cost for the month under variable
costing?

$102 per units

$129 per units

$114 per units

$87 per units

7.

Khanam Corporation, which has only one product, has
provided the following data concerning its most recent month of operations:

Selling price

$115

Units in beginning
inventory

0

Units produced

6,500

Units sold

6,200

Units in ending
inventory

300

Variable costs per
unit:

Direct
materials

$16

Direct
labor

$46

Variable
manufacturing overhead

$10

Variable
selling and administrative

$10

Fixed costs:

Fixed
manufacturing overhead

$175,500

Fixed
selling and administrative

$25,200

The company produces the same number of units every month,
although the sales in units vary from month to month. The company’s variable
costs per unit and total fixed costs have been constant from month to month.

What is the unit product cost for the month under absorption
costing?

$99
per unit

$72
per unit

$82
per unit

$109
per unit

8.

Harris Corporation produces a single product. Last year,
Harris manufactured 32,150 units and sold 26,900 units. Production costs for
the year were as follows:

Fixed manufacturing
overhead

$482,250

Variable manufacturing
overhead

$279,705

Direct labor

$154,320

Direct materials

$234,695

Sales were $1,277,750, for the year, variable selling and
administrative expenses were $158,710, and fixed selling and administrative
expenses were $212,190. There was no beginning inventory. Assume that direct
labor is a variable cost.

The contribution margin per unit would be: (Do not round intermediate calculations.)

$26.70 per unit

$16.30 per unit

$20.80 per unit

$21.90 per unit

9.

A manufacturing company that produces a single product has
provided the following data concerning its most recent month of operations:

Selling price

$89

Units in beginning inventory

0

Units produced

4,300

Units sold

4,000

Units in ending inventory

300

Variable costs per unit:

Direct
materials

$13

Direct
labor

$35

Variable
manufacturing overhead

$1

Variable selling
and administrative

$10

Fixed costs:

Fixed
manufacturing overhead

$77,400

Fixed selling
and administrative

$24,000

The total contribution margin for the month under variable costing is:

$160,000

$88,000

$42,600

$120,000

Post ACC211
Unit 5 Chapter 7 Quiz

1.

The WRT Corporation makes
collections on sales according to the following schedule:

40% in month of sale

55% in month following sale

5% in second month following
sale

The following sales have been are expected:

Expected
Sales

April

$110,000

May

$120,000

June

$110,000

Budgeted cash collections in June
should be budgeted to be:


$110,550

$110,000

$115,500

$110,000

2.

Paradise Corporation budgets on an annual basis for its
fiscal year. The following beginning and ending inventory levels (in units)
are planned for next year.

Beginning
Inventory

Ending
Inventory

Raw material*

52,000

62,000

Finished goods

92,000

62,000

*Three pounds of raw material are needed to produce each
unit of finished product.

If Paradise Corporation plans to sell 540,000 units during
next year, the number of units it would have to manufacture during the year
would be:

488,000
units

540,000
units

570,000
units

510,000
units

3.

Morie
Corporation is working on its direct labor budget for the next two months.
Each unit of output requires 0.77 direct labor-hours. The direct labor rate
is $11.10 per direct labor-hour. The production budget calls for producing
7,000 units in March and 6,800 units in April. The company guarantees its
direct labor workers a 40-hour paid work week. With the number of workers
currently employed, that means that the company is committed to paying its
direct labor work force for at least 5,480 hours in total each month even if
there is not enough work to keep them busy. What would be the total combined
direct labor cost for the two months?

$121,656.00

$117,948.60

$133,599.60

$118,947.60

4.

The
manufacturing overhead budget at Amrein Corporation is based on budgeted
direct labor-hours. The direct labor budget indicates that 2,400 direct
labor-hours will be required in August. The variable overhead rate is $5 per
direct labor-hour. The company’s budgeted fixed manufacturing overhead is
$43,080 per month, which includes depreciation of $3,680. All other fixed
manufacturing overhead costs represent current cash flows. The August cash
disbursements for manufacturing overhead on the manufacturing overhead budget
should be:

$55,080

$39,400

$51,400

$12,000

5.

The
manufacturing overhead budget at Pendley Corporation is based on budgeted
direct labor-hours. The direct labor budget indicates that 6,000 direct
labor-hours will be required in August. The variable overhead rate is $8.40 per
direct labor-hour. The company’s budgeted fixed manufacturing overhead is
$109,800 per month, which includes depreciation of $24,970. All other fixed
manufacturing overhead costs represent current cash flows. The company
recomputes its predetermined overhead rate every month. The predetermined
overhead rate for August should be:

$23.20

$18.30

$8.40

$26.70

6.

Vandel Inc. bases its selling and administrative expense
budget on budgeted unit sales. The sales budget shows 2,700 units are planned
to be sold in April. The variable selling and administrative expense is $3.20
per unit. The budgeted fixed selling and administrative expense is $35,770
per month, which includes depreciation of $4,200 per month. The remainder of
the fixed selling and administrative expense represents current cash flows.
The cash disbursements for selling and administrative expenses on the April
selling and administrative expense budget should be:

44,410

40,210

31,570

8,640

7.

Laurey Inc. is working on its cash budget for May. The
budgeted beginning cash balance is $47,000. Budgeted cash receipts total
$131,000 and budgeted cash disbursements total $126,000. The desired ending
cash balance is $64,000. To attain its desired ending cash balance for May,
the company needs to borrow:

$116,000

$0

$64,000

$12,000

8.

Sarter
Corporation is in the process of preparing its annual budget. The following
beginning and ending inventory levels are planned for the year.

Beginning
Inventory

Ending
Inventory

Finished goods (units)

26,000

76,000

Raw material (grams)

56,000

46,000

Each unit of finished goods
requires 2 grams of raw material.

The company
plans to sell 610,000 units during the year, how much of the raw material
should the company purchase during the year?


1,336,000
grams

1,310,000
grams

1,366,000
grams

1,320,000
grams

9.

The Adams Corporation, a merchandising firm, has budgeted
its activity for November according to the following information:

• Sales at $540,000, all for cash.

• Merchandise inventory on October
31 was $245,000.

• The cash balance November 1 was
$27,000.

• Selling and administrative
expenses are budgeted at $87,000 for November and are paid for in cash.

• Budgeted depreciation for
November is $43,000.

• The planned merchandise
inventory on November 30 is $275,000.

• The cost of goods sold is 70% of
the selling price.

• All purchases are paid for in
cash.

• There is no interest expense or
income tax expense.

The budgeted cash receipts for
November are:

$405,000

$540,000

$135,000

$583,000

10.

LFM
Corporation makes and sells a product called Product WZ. Each unit of Product
WZ requires 3.0 hours of direct labor at the rate of $26.00 per direct
labor-hour. Management would like you to prepare a Direct Labor Budget for
June.

The budgeted direct labor cost per unit of Product WZ would be:

$7.00 per unit

$46.00 per unit

$26.00 per unit

$78.00 per unit

11.

LFM
Corporation makes and sells a product called Product WZ. Each unit of Product
WZ requires 2.2 hours of direct labor at the rate of $18.00 per direct
labor-hour. Management would like you to prepare a Direct Labor Budget for
June.

The company plans to sell 41,000 units of Product WZ in June. The finished
goods inventories on June 1 and June 30 are budgeted to be 630 and 130 units,
respectively. Budgeted direct labor costs for June would be: (Do not round intermediate calculations.)


$1,603,800

$1,641,300

$730,500

$1,622,550

Post ACC211
Unit 6 Chapter 8 Quiz

1.

Hettinger Hospital bases its budgets on patient-visits.
The hospital’s static budget for March appears below:

Budgeted number of
patient-visits

8,900

Budgeted variable
costs:

Supplies (@ $10.00 per
patient-visit)

$ 89,000

Laundry (@ $9.70 per
patient-visit)

86,330

Total variable cost

175,330

Budgeted fixed costs:

Wages and salaries

99,840

Occupancy costs

107,840

Total fixed cost

207,680

Total cost

$383,010

The total variable cost at the activity level of 9,000 patient-visits per month
should be:

$175,330

$207,680

$177,300

$210,010

2.

Epley Corporation makes a product
with the following standard costs:

Standard
Quantity or Hours

Standard
Price or Rate

Direct materials

2.0
pounds

$7.00
per pound

Direct labor

1.3
hours

$11.00
per hour

Variable overhead

1.3
hours

$3.00
per hour

In July the
company produced 5,000 units using 10,310 pounds of the direct material and
2,290 direct labor-hours. During the month, the company purchased 10,880
pounds of the direct material at a cost of $76,760. The actual direct labor
cost was $38,241 and the actual variable overhead cost was $11,942.

The company
applies variable overhead on the basis of direct labor-hours. The direct
materials purchases variance is computed when the materials are purchased.

The materials quantity variance
for July is:


$460 U

$600
F

$2,170 U

$460
F

3.

Epley Corporation makes a product
with the following standard costs:

Standard
Quantity or Hours

Standard
Price or Rate

Direct materials

9.0
pounds

$8.5
per pound

Direct labor

0.8
hours

$30.00
per hour

Variable overhead

0.8
hours

$14.00
per hour

In July the
company produced 3,410 units using 13,640 pounds of the direct material and
2,848 direct labor-hours. During the month, the company purchased 14,400
pounds of the direct material at a cost of $35,100. The actual direct labor cost
was $85,030 and the actual variable overhead cost was $38,220.

The company
applies variable overhead on the basis of direct labor-hours. The direct
materials purchases variance is computed when the materials are purchased.

The labor rate variance for July
is:

$410
F

$410
U

$3,190
U

$3,190
F

4.

Pardoe, Inc.,
manufactures a single product in which variable manufacturing overhead is
assigned on the basis of standard direct labor-hours. The company uses a
standard cost system and has established the following standards for one unit
of product:

Standard
Quantity

Standard
Price or Rate

Standard
Cost

Direct materials

2.0
pounds

$5.50
per pound

$11.00

Direct labor

0.6
hours

$16
per hour

$9.6

Variable manufacturing
overhead

0.6
hours

$3.75
per hour

$2.25

During March, the following
activity was recorded by the company:

• The company produced 5,000 units
during the month.

• A total of 13,500 pounds of
material were purchased at a cost of $37,800.

• There was
no beginning inventory of materials on hand to start the month; at the end of
the month,

2,700
pounds of material remained in the warehouse.

• During March, 3,200 direct
labor-hours were worked at a rate of $16.50 per hour.

• Variable manufacturing overhead
costs during March totaled $7,400.

The direct materials purchases
variance is computed when the materials are purchased.

The materials price variance for
March is:

$36,450 U

$20,800
F

$20,800 U

$36,450 F

5.

Oddo Corporation makes a product
with the following standard costs:

Standard
Quantity or Hours

Standard
Price or Rate

Standard
Cost Per Unit

Direct materials

3.0
ounces

$8.10 per ounce

$24.30

Direct labor

0.8
hours

$20.00 per hour

$16.00

Variable overhead

0.8
hours

$8.00 per hour

$6.40

The company reported the following
results concerning this product in December.

Originally budgeted output

4,510

units

Actual output

4,310

units

Raw materials used in
production

13,200

ounces

Actual direct
labor-hours

3,718

hours

Purchases of raw
materials

14,990

ounces

Actual price of raw
materials

$7.90

per ounce

Actual direct labor
rate

$19.40

per hour

Actual variable
overhead rate

$8.20

per hour

The company
applies variable overhead on the basis of direct labor-hours. The direct
materials purchases variance is computed when the materials are purchased.

The materials quantity variance
for December is:


$2,187 U

$2,133 F

$2,187 F

$2,133 U

6.

Oddo Corporation makes a product
with the following standard costs:

Standard
Quantity or Hours

Standard
Price or Rate

Standard
Cost Per Unit

Direct materials

3.0
ounces

$13.50
per ounce

$40.50

Direct labor

0.6
hours

$19.50
per hour

$11.70

Variable overhead

0.6
hours

$12.00
per hour

$7.20

The company reported the following
results concerning this product in December.

Originally budgeted
output

12,400

units

Actual output

12,200

units

Raw materials used in production

35,960

ounces

Actual direct
labor-hours

7,520

hours

Purchases of raw
materials

37,560

ounces

Actual price of raw
materials

13.25

per ounce

Actual direct labor
rate

15.70

per hour

Actual variable
overhead rate

8.70

per hour

The company
applies variable overhead on the basis of direct labor-hours. The direct
materials purchases variance is computed when the materials are purchased.

The materials price variance for
December is:

$17,630 U

$17,630 F

$9,390
F

$9,390 U

7.

Oddo Corporation makes a product
with the following standard costs:

Standard
Quantity or Hours

Standard
Price or Rate

Standard
Cost Per Unit

Direct materials

4.0
ounces

$7.90 per ounce

$31.60

Direct labor

0.7
hours

$30.00 per hour

$21.00

Variable overhead

0.7
hours

$8.00 per hour

$5.60

The company reported the following
results concerning this product in December.

Originally budgeted output

4,490

units

Actual output

4,290

units

Raw materials used in
production

17,450

ounces

Actual direct
labor-hours

3,293

hours

Purchases of raw
materials

19,220

ounces

Actual price of raw
materials

$7.70

per ounce

Actual direct labor
rate

$19.20

per hour

Actual variable
overhead rate

$8.10

per hour

The company
applies variable overhead on the basis of direct labor-hours. The direct
materials purchases variance is computed when the materials are purchased.

The variable overhead efficiency
variance for December is:


$2,349 U

$2,320 F

$2,320 U

$2,349 F

8.

Midgley
Corporation makes a product whose direct labor standards are 0.9 hours per
unit and $21 per hour. In April the company produced 7,000 units using 5,800
direct labor-hours. The actual direct labor cost was $121,800.

The labor efficiency variance for
April is:

$10,500
U

$10,500
F

$11,500
F

$11,500
U

Post ACC211
Unit 7 Chapter 9 Quiz

1.

Given the following data:

Average operating
assets

$504,000

Total liabilities

$23,520

Sales

$168,000

Contribution margin

$85,680

Net operating income

$45,360

Return on investment (ROI) would
be:

27.0%

9.0%

51.0%

17.0%

2.

Given the following data:

Return on investment

36%

Turnover

2.7

Margin

10%

Sales

$270,000

Average operating
assets

$75,000

Minimum required rate
of return

19%

The residual income would be:

$12,750

$0

$19,500

$24,300

3.

Cabal
Products is a division of a major corporation. Last year the division had
total sales of $28,540,000, net operating income of $2,597,140, and average
operating assets of $5,708,000. The company’s minimum required rate of return
is 10%.

The division’s margin is closest
to:(Round
your answer to 1 decimal place.)

9.1%

45.5%

91.0%

20.0%

4.

The West
Division of Frede Corporation had average operating assets of $667,000 and
net operating income of $146,000 in December. The minimum required rate of
return for performance evaluation purposes is 23%.

What was the West Division’s
minimum required return in December?

$146,000

$153,410

$33,580

$186,990

5.

Last year the Uptown Division of Gorcen Enterprises had sales of
$300,000 and a net operating income of $24,000. The average operating assets at
Uptown last year amounted to $120,000.

Last year at Uptown the return on investment was:

8%

12%

20%

40%

6.

The West Division of Frede Corporation had average operating
assets of $700,000 and net operating income of $120,800 in December. The
minimum required rate of return for performance evaluation purposes is 16%.

What was the West Division’s minimum required return in December?

$112,000

$120,800

$131,328

$19,328

7.

The West Division of Frede Corporation had average operating
assets of $700,000 and net operating income of $120,800 in December. The
minimum required rate of return for performance evaluation purposes is 16%.

What was the West Division’s residual income in December?

$8,800

($19,328)

($8,800)

$19,328

Post ACC211
Unit 8 Chapter 11 Quiz

1.

Frick Road Paving Corporation is considering an investment
in a curb-forming machine. The machine will cost $180,000, will last 10 years,
and will have a $30,000 salvage value at the end of 10 years. The machine is
expected to generate net cash inflows of $40,000 per year in each of the 10
years. Frick’s discount rate is 10%. The net present value of the proposed
investment is closest to:

Click here to view Exhibit 11B-1 and Exhibit 11B-2, to
determine the appropriate discount factor(s) using tables.

$250,000

$65,800

$245,800

$77,380

2.

The management of Mashiah Corporation is considering the
purchase of a machine that would cost $290,000, would last for 6 years, and
would have no salvage value. The machine would reduce labor and other costs by
$102,000 per year. The company requires a minimum pretax return of 13% on all
investment projects.

Click here to view Exhibit 11B-2 to determine the
appropriate discount factor(s) using tables.

The present value of the annual cost savings of $102,000 is
closest to:

$849,012

$612,000

$195,872

$407,796

3.

Clairmont Corporation
is considering the purchase of a machine that would cost $160,000 and would
last for 5 years. At the end of 5 years, the machine would have a salvage value
of $19,000. By reducing labor and other operating costs, the machine would
provide annual cost savings of $36,000. The company requires a minimum pretax
return of 8% on all investment projects. (Ignore income taxes in this problem.)

Click here to view
Exhibit 11B-1 and Exhibit 11B-2, to determine the appropriate discount
factor(s) using tables.

The net present value
of the proposed project is closest to: (Round discount factor(s) to 3 decimal
places, intermediate and final answers to the nearest dollar amount.)

$(3,313)

$12,233

$20,000

$(18,660)