1. Department A had 4,000 units in work in process that were 60% completed as to labor and overhead at the beginning of the period, 29,000 units of direct materials were added during the period, 31,000 units were completed during the period, and 2,000 units were 80% completed as to labor and overhead at the end of the period. All materials are added at the beginning of the process. The first-in, first-out method is used to cost inventories.

Assuming that all direct materials are placed in process at the beginning of production and that the first-in, first-out method of inventory costing is used, what is the material and conversion cost per unit (to the nearest penny), respectively.

a.	$5.94 and $5.86
b.	$5.94 and $6.38
c.	$8.00 and $8.68
d.	$9.84 and $9.5

2. A business operated at 100% of capacity during its first month and incurred the following costs:

Production costs (10,000 units):
Direct materials	$140,000
Direct labor	40,000
Variable factory overhead	20,000
Fixed factory overhead	4,000	$204,000
Operating expenses:
Variable operating expenses	$ 34,000
Fixed operating expenses	2,000	36,000

If 2,000 units remain unsold at the end of the month and sales total $300,000 for the month, what is the amount of the manufacturing margin that would be reported on the variable costing income statement?

a.	$104,000
b.	$106,000
c.	$140,000
d.	$114,800

3. A business operated at 100% of capacity during its first month, with the following results:

Sales (90 units)		$90,000
Production costs (100 units):
Direct materials	$40,000
Direct labor	20,000
Variable factory overhead	2,000
Fixed factory overhead	7,000	69,000
Operating expenses:
Variable operating expenses	$ 8,000
Fixed operating expenses	1,000	9,000

What is the amount of the contribution margin that would be reported on the variable costing income statement?

a.	$34,200
b.	$20,200
c.	$29,700
d.	$26,200

4. Production and sales estimates for June are as follows:

Estimated inventory (units), June 1	8,000
Desired inventory (units), June 30	9,000
Expected sales volume (units):
Area X	4,000
Area Y	10,000
Area Z	6,000
Unit sales price	$20

The budgeted total sales for June is:

a.	$200,000
b.	$400,000
c.	$380,000
d.	$250,000

5. Production estimates for August are as follows:

Estimated inventory (units), August 1	12,000
Desired inventory (units), August 31	9,000
Expected sales volume (units), August	75,000

For each unit produced, the direct materials requirements are as follows:

Direct material A ($5 per lb.)	3 lbs.
Direct material B ($18 per lb.)	1/2 lb.

The number of pounds of materials A and B required for August production is:

a.	216,000 lbs. of A; 72,000 lbs. of B
b.	216,000 lbs. of A; 36,000 lbs. of B
c.	225,000 lbs. of A; 37,500 lbs. of B
d.	234,000 lbs. of A; 39,000 lbs. of B

6.

The charter of a corporation provides for the issuance of 100,000 shares of common stock. Assume that 40,000 shares were originally issued and 10,000 were subsequently reacquired. What is the number of shares outstanding?

a.	10,000
b.	40,000
c.	30,000
d.	50,000

7.

The net income reported on the income statement for the current year was $250,000. Depreciation recorded on fixed assets and amortization of patents for the year were $40,000 and $9,000, respectively. Balances of current asset and current liability accounts at the end and at the beginning of the year are as follows:

	End	Beginning
Cash	$ 50,000	$ 60,000
Accounts receivable	112,000	108,000
Inventories	105,000	93,000
Prepaid expenses	4,500	6,500
Accounts payable (merchandise creditors)	75,000	89,000

What is the amount of cash flows from operating activities reported on the statement of cash flows prepared by the indirect method?

a.	$271,000
b.	$279,000
c.	$327,000
d.	$256,000