The XYZ Company produces 9-volt batteries and AAA batteries. The company uses a plant-wide rate to apply overhead based on direct labor hours. The following data are given:

Actual overhead	$325,000
Estimated Overhead	$350,000
Estimated activity:
9-volt battery	100,000 direct labor hours
AAA battery	400,000 direct labor hours
Actual activity:
9-volt battery	125,000 direct labor hours
AAA battery	400,000 direct labor hours
Units produced:
9-volt battery	500,000
AAA battery	250,000

If XYZ uses the pro-ration approach to dispose of over-/under-allocated overhead and the accounts below had the following balances, how will cost of goods sold be adjusted?

Raw materials inventory	$200,000
Work in process inventory	$100,000
Finished goods inventory	$200,000
Cost of goods sold	$500,000

A) credit $42,500

B) credit $26,562.50

C) debit $21,250

D) debit $12,500

E) credit $12,500

XYZ Company projected the following information for next year:

Selling price per unit	$75.00
Contribution margin per unit	$30.00
Total fixed costs	$120,000
Tax rate	40%

How many units must be sold to obtain an after tax profit of $67,500?

A) 5,625 units

B) 7,750 units

C) 3,750 units

D) 5,167 units

XYZ Company applies manufacturing overhead. At the end of the year, the following data were available:

Actual manufacturing overhead	$115,000
Estimated manufacturing overhead	$120,000
Applied manufacturing overhead	$118,000

What is the journal entry to dispose of the under-/over-allocated overhead if the difference in actual and applied overhead is considered relatively small?

A) DR Manufacturing Overhead $7,000

CR Cost of Goods Sold $7,000

B) DR Cost of Goods Sold $2,000

CR Manufacturing Overhead $2,000

C) DR Manufacturing Overhead $3,000

CR Cost of Goods Sold $3,000

D) DR Manufacturing Overhead $5,000

CR Cost of Goods Sold $5,000

C) DR Cost of Goods Sold $3,000

CR Manufacturing Overhead $3,000

Under the circumstances of a production constraint, the company should first produce the product with:

A) The highest contribution margin per unit

B) The highest contribution margin ratio

C) The highest contribution margin per unit of the constrained resource

D) The highest revenue per unit

When a company sells more units than the break-even point,

A) none of the above is correct

B) profits are positive.

C) there are no new variable costs incurred.

D) profits are negative.

E) it moves above the relevant range.

XYZ Produce had the following projected information for 2023:

Selling price per unit	$150
Variable cost per unit	$90
Total fixed costs	$300,000

What is the profit when one unit more than the break-even point is sold?

A) It cannot be determined

B) $1,500,150

C) $60

D) $150

E) $600,060

The contribution margin at the break-even point:

A) plus total fixed costs equals total revenues.

B) is greater than variable costs.

C) is zero.

D) equals total fixed costs.

John, owner of XYZ Fabricators, Inc., is interested in using the reciprocal allocation method. The following data from operations were collected for analysis:

Budgeted manufacturing overhead costs:
Plant Maintenance	PM (Support Dept)	$350,000
Data Processing	DP (Support Dept)	$75,000
Machining	M (Operating Dept)	$225,000
Capping	C (Operating Dept)	$125,000

Services furnished:
By Plant Maintenance (budgeted labor-hours):
	to Data Processing	3,500
	to Machining	5,000
	to Capping	8,200
By Data Processing (budgeted computer time):
	to Plant Maintenance	600
	to Machining	3,500
	to Capping	600

Which of the following linear equations represents the complete reciprocated cost of the Data Processing Department?

A) DP = $350,000 + (600 16,700) DP

B) DP = $75,000 + (600 4,700) PM

C) DP = $75,000 + (3,500 16,700) PM

D) DP = $75,000 (600 4,700) + $350,000 (3,340 16,700)

Cost of goods sold equals cost of goods manufactured:

A) when raw materials inventory account balance remains unchanged from the beginning to the end of the period.

B) when the work-in-process inventory account balance remains unchanged from the beginning to the end of the period.

C) plus beginning work-in-process inventory minus ending work-in-process inventory.

D) when no inventory is sold during the period.

E) when the finished goods inventory account balance remains unchanged from the beginning to the end of the period.