Exam142.09 - . .: : : 25/02/2009 : : : Answer the following...

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Unformatted text preview: . .: : : 25/02/2009 : : : Answer the following Questions: Question One: (14 Mark) Each Multiple choice question has four suggested answers, letter (A), (B), (C), or (D). You should read each question and then decide which choice is best. 1) Beginning raw material inventory was $32,000. During the month, $276,000 of raw material was purchased. Account at the end of the month revealed that $28,000 of raw material was still present. What is the cost of direct material used? A. 5 $276,000 B. 5 $272,000 C. 5 $280,000 D. 5 $ 2,000 2) Questions (2-6). Refer to the following: The average selling price of a cup of coffee is $1.49 and the average variable expense per cup is $0.36. The average fixed expense per month is $1,300. 2,100 cups are sold each month on average. What are the break-even sales in units? A. 5 872 cups B. 5 3,611 cups C. 5 1,200 cups D. 5 1,150 cups 3) How many cups of coffee would have to be sold to attain target profits of $2,500 per month? A. 5 3,363 cups B. 5 2,212 cups C. 5 1,150 cups D. 5 4,200 cups 4) What is the margin of safety? A. 5 3,250 cups B. 5 950 cups C. 5 1,150 cups D. 5 2,100 cups 5) What is the operating leverage? A. 5 2.21 B. 5 0.45 C. 5 0.34 D. 5 2.92 6) If sales increase by 20%, by how much should net operating income increase? A. 5 30.0% B. 5 20.0% C. 5 22.1% D. 5 44.2% 7) Questions (7-10). Refer to the following: Palestine Enterprises' actual production for the period required 2,100 standard direct labor hours. Actual variable overhead for the period was $10,950. Actual direct labor hours worked were 2,050. The predetermined variable overhead rate is $5 per direct labor hour. What was the spending variance? A. 5 $ 450 U B. 5 $ 450 F C. 5 $ 700 F D. 5 $ 700 U 8) What was the efficiency variance? A. 5 $ 450 U B. 5 $ 450 F C. 5 $ 250 F D. 5 $ 250 U 9) Palestine Enterprises actual production for the period required 2,100 standard direct labor hours. Actual fixed overhead for the period was $14,800. The budgeted fixed overhead was $14,450. The predetermined fixed overhead rate was $7 per direct labor hour. What was the budget...
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Exam142.09 - . .: : : 25/02/2009 : : : Answer the following...

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