Author: Anonymous

Rainmaker Enterprises the following information for October:               Job                   Beginning of Month Status        End of Month Status                 Total Allocated Costs             Job A                    In Process                                            Completed, Sold                           $153,000             Job B                    In Process                                            Completed, Not Sold                 $241,000             Job C                    Not Started                                        Completed, Sold                           $190,000             Job D                    In Process                                           In Process                                         $78,000   Overhead is applied at a rate of 125% of direct labor costs.  Actual Manufacturing Overhead was $120,000 for the month of October; $145,000 of overhead was applied to the four jobs (the total allocated costs above include the applied overhead).    Any under or overapplied overhead is adjusted directly to Cost of Goods Sold. Rainmaker Enterprises marks up product costs by 50% to determine sales prices of completed jobs.  For the month of October, Rainmaker Enterprises reports Gross Profit of:

Actual sales for Beauty Beavis Corporation in May were $200,000 (5,000 units sold).  If Beauty Beavis projects an increase in units sold of 10% per month and it will raise the price per unit by $2, what is the amount of budgeted sales revenue for the month of June?

 Which is included in the budgeted income statement but would never appear in the cash budget?

Trump Corporation manufactures great, terrific products that are made in the USA.  Two of his mid-level managers, Clinton and Sanders, have proposed different production setups for a new product, to be sold for $500/unit.  Clinton’s consists of fixed costs of $300,000 and a variable cost of $200/unit.  Sanders’ consists of fixed costs of $400,000 and a variable cost of $160/unit.  The indifference point in units sold – at which the two setups would produce the exact same result – is:

Perfect Reb Corporation manufactures four products; information regarding those products is as follows:                                                                                          A                      B                      C                      D                      Sales Price per Unit                               $300                 $250             $350             $500             Variable Cost per Unit                          $170                 $130            $ 210              $330             Machine Hours per Unit                        5                        3                         4                     6             Periodic Demand in Units                    300                  500                  800                 250 Answer the following: (A) If Perfect Reb Corporation has a monthly capacity of 5,431 machine hours per period, how many units of each product should Perfect Reb produce in order to maximize operations efficiency? (B) Suppose Perfect Reb Corporation paid $9,000 for equipment to increase machine hour capacity to 6,500 per period and is subject to a tax rate of 25%.  What is the change in net income when compared to part “A” of this problem? Label your answers.  SHOW YOUR WORK FOR POTENTIAL OF EARNING PARTIAL CREDIT IN THE CASE OF AN INCORRECT ANSWER.  

The margin of safety (in dollars or units) is:

In which of the following environments would job order cost accounting be best utilized?

Trombatore Corporation provided the following budget information:                                                                                                 August                         September                   October                        November        Unit Sales                  12,000                          16,000                             21,000                          20,000   The budgeted sales price for each unit is $20. The company budgets production so that ending Finished Goods Inventory equals 20 percent of next month’s budgeted sales. The total cost (including direct materials, direct labor, and overhead) to produce each unit is $7. Selling and administrative expenses are budgeted at $30,000 per month PLUS 25 percent of total sales revenue. Budgeted operating income for the month of October equals:

Which of the following is NOT true regarding the master budget?

 Love Haters Corporation reports the following cost information:     Total Costs Machine Hours January $2,100,000 3,100 February $1,900,000 2,700 March $1,200,000 1,100 Using the high-low method, estimated variable costs per hour are: