31. A company's income statement showed the following: net income, $133,000 and depreciation expense, $32,700. An examination of the company's current assets and current liabilities showed the following changes as a result of operating activities: accounts receivable decreased $10,300; merchandise inventory increased $19,800; and accounts payable increased $4,300. Calculate the net cash provided or used by operating activities.

Multiple Choice

A. $131,300.

B. $191,500.

C. $160,500.

D. $127,000.

E. $170,900.

32. A company reported that its bonds with a par value of $50,000 and a carrying value of $62,000 are retired for $66,000 cash, resulting in a loss of $4,000. The amount to be reported under cash flows from financing activities is:

Multiple Choice

A. $(4,000).

B. $(66,000).

C. $12,000.

D. $(12,000).

E. $(62,000).

33. Marks Corporation has two operating departments, Drilling and Grinding, and an office. The three categories of office expenses are allocated to the two departments using different allocation bases. The following information is available for the current period:

Office Expenses	Total				Allocation Basis
Salaries	$	44,000				Number of employees
Depreciation		21,000				Cost of goods sold
Advertising		44,000				Net sales

Item	Drilling				Grinding				Total
Number of employees		900				2,100				3,000
Net sales	$	350,000			$	525,000			$	875,000
Cost of goods sold	$	91,200			$	148,800			$	240,000

The amount of salaries that should be allocated to Grinding for the current period is:

Multiple Choice

A. $23,000.

B. $30,800.

C. $17,800.

D. $44,000.

E. $13,020.

34. Use the following data to find the direct labor rate variance if the company produced 3,500 units during the period.

Direct labor standard (4 hrs. @ $7.00/hr.)	$	28.00	per unit
Actual hours worked		12,750
Actual rate per hour	$	7.50

Multiple Choice

A. $6,375 favorable.

B. $8,750 favorable.

C. $6,375 unfavorable.

D. $7,000 unfavorable.

E. $7,000 favorable.

35. Epsilon Co. can produce a unit of product for the following costs:

Direct material	$	8.30
Direct labor		24.30
Overhead		41.50
Total costs per unit	$	74.10

An outside supplier offers to provide Epsilon with all the units it needs at $61.50 per unit. If Epsilon buys from the supplier, the company will still incur 40% of its overhead. Epsilon should choose to:

Multiple Choice

A. Buy since the relevant cost to make it is $74.10.

B. Make since the relevant cost to make it is $57.50.

C. Make since the relevant cost to make it is $49.20.

D. Buy since the relevant cost to make it is $57.50.

E. Buy since the relevant cost to make it is $49.20.