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Grading Company’s cash and cash equivalents consist

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Managerial Accounting Final Part 1

1. The work-in-process inventory account of a manufacturing company shows a balance of $3,000 at the end of an accounting period. The job-cost sheets of the two incomplete jobs show charges of $500 and $300 for direct materials, and charges of $400 and $600 for direct labor. From this information, it appears that the company is using a predetermined overhead rate as a percentage of direct labor costs. What percentage is the rate?

2. The break-even point in dollar sales for Rice Company is $480,000 and the company’s contribution margin ratio is 40 percent. If Rice Company desires a profit of $84,000, how much would sales have to total?

3. Williams Company’s direct labor cost is 25 percent of its conversion cost. If the manufacturing overhead for the last period was $45,000 and the direct material cost was $25,000, how much is the direct labor cost?

4. Grading Company’s cash and cash equivalents consist of cash and marketable securities. Last year the company’s cash account decreased by $16,000 and its marketable securities account increased by $22,000. Cash provided by operating activities was $24,000. Net cash used for financing activities was $20,000. Based on this information, was the net cash flow from investing activities on the statement of cash flows a net increase or decrease? By how much?

5. Gladstone Footwear Corporation’s flexible budget cost formula for supplies, a variable cost, is $2.82 per unit of output. The company’s flexible budget performance report for last month showed an $8,140 unfavorable spending variance for supplies. During that month, 21,250 units were produced. Budgeted activity for the month had been 20,900 units. What is the actual cost per unit for indirect materials?

6. Lyons Company consists of two divisions, A and B. Lyons Company reported a contribution margin of $60,000 for Division A, and had a contribution margin ratio of 30 percent in Division B, when sales in Division B were $240,000. Net operating income for the company was $22,000 and traceable fixed expenses were $45,000. How much were Lyons Company’s common fixed expenses?

7. Atlantic Company produces a single product. For the most recent year, the company’s net operating income computed by the absorption costing method was $7,800, and its net operating income computed by the variable costing method was $10,500. The company’s unit product cost was $15 under variable costing and $24 under absorption costing. If the ending inventory consisted of 1,460 units, how many units must have been in the beginning inventory?

8. Black Company uses the weighted-average method in its process costing system. The company’s ending work-inprocess inventory consists of 6,000 units, 75 percent complete with respect to materials and 50 percent complete with respect to labor and overhead. If the total dollar value of the inventory is $80,000 and the cost per equivalent unit for labor and overhead is $6.00, what is the cost per equivalent unit for materials?

9. At Overland Company, maintenance cost is exclusively a variable cost that varies directly with machine-hours. The performance report for July showed that actual maintenance costs totaled $11,315 and that the associated rate variance was $146 unfavorable. If 7,300 machine-hours were actually worked during July, what is the budgeted maintenance cost per machine-hour?

10. The cost of goods sold in a retail store totaled $650,000. Fixed selling and administrative expenses totaled $115,000 and variable selling and administrative expenses were $420,000. If the store’s contribution margin totaled $590,000, how much were the sales?

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