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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:

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.

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.)

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)