MCQ Accounting Done

12.
For July, White Corporation has budgeted production of 6,000 units. Each unit requires 0.10 direct
labor-hours at a cost of $8.50 per direct labor-hour. How much will White Corporation budget for labor
in July?
A. $51,000
B. $5,160
C. $600
D. $5,100
Explanation: 6000X0.1X8.5= $5100
13. Triste Corporation manufactures and sells women's skirts. Each skirt (unit) requires 2.6 yards of
cloth. Selected data from Triste's master budget for next quarter are shown below:
July August September
Budgeted sales (in units) 7,000 9,000 10,000
Budgeted production (in units) 8,000 10,500 14,000
Each unit requires 1.6 hours of direct labor, and the average hourly cost of Triste's direct labor is $15.
What is the cost of Triste Corporation's direct labor in September?
A. $336,000
B. $240,000
C. $150,000
D. $210,000
Explanation: Cost of direct labor in September = (Number of hours) * (cost of labor per hour)
= (Total number of units* time for each unit) * (cost of labor per hour)
=(14000*1.6)*15 = $336000
15. May Corporation, a merchandising firm, has budgeted sales as follows for the third quarter of the
year:
July $80,000
August $90,000
September $70,000
Cost of goods sold is equal to 65% of sales. The company wants to maintain a monthly ending inventory
equal to 130% of the Cost of Goods Sold for the following month. The inventory on June 30 is less than
this ideal since it is only $65,000. The company is now preparing a Merchandise Purchases Budget.
The budgeted purchases for July are:
A. $52,000
B. $63,050
C. $47,450
D. $91,050
19. The Covey Corporation is preparing its Manufacturing Overhead Budget for the fourth quarter of
the year. The budgeted variable manufacturing overhead rate is $4.00 per direct labor-hour; the
budgeted fixed manufacturing overhead is $64,000 per month, of which $18,000 is factory depreciation.
If the budgeted direct labor time for October is 8,000 hours, then the total budgeted manufacturing
overhead for October is:
A. $96,000
B. $78,000
C. $64,000
D. $76,000
Explanation: $4 x 8000 = $32000
$64,000 -$18,000 = $46,000
cash = $78,000
20. The Adams Corporation, a merchandising firm, has budgeted its activity for November according to
the following information:
• Sales at $450,000, all for cash.
• Merchandise inventory on October 31 was $200,000.
• The cash balance November 1 was $18,000.
• Selling and administrative expenses are budgeted at $60,000 for November and are paid for in cash.
• Budgeted depreciation for November is $25,000.

• The planned merchandise inventory on November 30 is $230,000.
• 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:
A. $315,000
B. $450,000
C. $135,000
D. $475,000
31. Jason Corporation has invested in a machine that cost $80,000, that has a useful life of eight years,
and that has no salvage value at the end of its useful life. The machine is being depreciated by the
straight-line method, based on its useful life. It will have a payback period of five years. Given these
data, the simple rate of return on the machine is closest to:
A. 6.8%
B. 7.5%
C. 9%
D. 12%
32.
Bullinger Corporation has provided the following data concerning an investment project that it is
considering:
Initial investment $470,000
Annual cash flow $134,000 per year
Salvage value at the end of the project $27,000
Expected life of the project 4 years
Discount rate 14%

The net present value of the project is closest to:
A. $93,000
B. $406,326
C. ($63,674)
D. ($79,658)
34.
Schoultz Corporation has provided the following data concerning an investment project that it is
considering:
The life of the project is 4 years. The company's discount rate is 12%. The net present value of the
project is closest to:
A. $700,000
B. $364,000
C. $108,108
D. $808,108
35.
Valotta Corporation has provided the following data concerning an investment project that it is
considering:

Working capital $70,000
Salvage value at the end of the project $21,000
Expected life of the project 4 years
Discount rate 11%
The working capital would be released for use elsewhere at the end of the project. The net present
value of the project is closest to:
A. $178,118
B. $201,988
C. $463,000
D. $131,988
42. For the past year, Allargando Company recorded sales of $500,000 and average operating assets of
$250,000. What is the margin that Allargando Company needed to earn in order to achieve an ROI of
12%?
A. 6.00%
B. 12.00%
C. 2.00%
D. 8.33%
43. Garde Corporation keeps careful track of the time required to fill orders. Data concerning a
particular order appear below:
Hours
Wait time 28.1
Process time 0.5
Inspection time 0.4
Move time 2.4

Queue time 4.8
The throughput time was:
A. 36.2 hours
B. 8.1 hours
C. 3.3 hours
D. 32.9 hours
47. The Jenkins Division recorded operating data as follows for the past year:
Sales $600,000
Net operating income $30,000
Average operating assets $200,000
Stockholders' equity $50,000
Residual income $14,000
For the past year, the return on investment was:
A. 5%
B. 18%
C. 30%
D. 25%
50. Ebsen Corporation keeps careful track of the time required to fill orders. Data concerning a
particular order appear below:
Hours
Wait time 16.6
Process time 1.3
Inspection time 0.3
Move time 2.9
Queue time 9.4
The manufacturing cycle efficiency (MCE) was closest to:

A. 0.84
B. 0.04
C. 0.17
D. 0.09

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12.

Explanation: 6000X0.1X8.5= $5100

July August September

Budgeted sales (in units) 7,000 9,000 10,000

Budgeted production (in units) 8,000 10,500 14,000

The budgeted purchases for July are:

Explanation: $4 x 8000 = $32000

$64,000 -$18,000 = $46,000

• Sales at $450,000, all for cash.

• Merchandise inventory on October 31 was $200,000.

• The cash balance November 1 was $18,000.

• Budgeted depreciation for November is $25,000.

• 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:

Initial investment $470,000

Annual cash flow $134,000 per year

Salvage value at the end of the project $27,000

Expected life of the project 4 years

Discount rate 14%

Initial investment $700,000

Annual cash flow $266,000 per year

Initial investment $690,000

Annual cash flow $283,000 per year

Salvage value at the end of the project $21,000

Expected life of the project 4 years

Discount rate 11%

Wait time 28.1

Process time 0.5

Inspection time 0.4

Move time 2.4

The throughput time was:

Net operating income $30,000

Average operating assets $200,000

Stockholders' equity $50,000

Residual income $14,000

For the past year, the return on investment was:

Wait time 16.6

Process time 1.3

Inspection time 0.3

Move time 2.9

Queue time 9.4

The manufacturing cycle efficiency (MCE) was closest to:

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