Question

1)

A company had net income of $49,000, net sales of $679,760, and average total assets of $232,000. Its profit margin and total asset turnover were, respectively:

Multiple Choice

7.21%; 21.12.

2.93%; 21.12.

2.93%; 7.21.

7.21%; 2.93.

21.12%; 7.21.

2)

MotorCity, Inc. purchased 53,000 shares of Shaw common stock for $258,000. This represents 40% of the outstanding stock. The entry to record the transaction includes a:

Multiple Choice

Debit to Long-Term Investments-HTM for $258,000.

Credit to Long-Term Investments for $3,199,200.

Debit to Short-Term Investment-AFS for $258,000.

Debit to Long-Term Investments for $3,199,200.

Debit to Long-Term Investments for $258,000.

3)

A company paid $39,800 plus a broker's fee of $575 to acquire 9% bonds with a $42,000 maturity value. The company intends to hold the bonds to maturity. The cash proceeds the company will receive when the bonds mature equal:

Multiple Choice

$42,575.

$45,780.

$42,000.

$40,375.

$39,800.

4)

Using the information below for Sundar Company; determine the total manufacturing costs added during the current year:

Direct materials used	$	19,800
Direct labor used		25,300
Factory overhead		51,100
Beginning work in process		11,500
Ending work in process		12,100

Multiple Choice

$45,100.

$96,200.

$44,500.

$95,600.

$75,800.

5)

The standard materials cost to produce 1 unit of Product R is 9 pounds of material at a standard price of $45 per pound. In manufacturing 6,300 units, 53,900 pounds of material were used at a cost of $46 per pound. What is the direct materials price variance?

Multiple Choice

$126,000 favorable.

$53,900 favorable.

$126,000 unfavorable.

$53,900 unfavorable.

$72,100 favorable.

Answer 1

1

Profit margin= Net income/Net sales = 49000/679760= 7.21%

Total asset turnover = Net sales/Average total assets = 679760/232000=2.93

Option 4 is correct

2

The entry to record the transaction includes a Debit to Long-Term Investments for $258,000.

Option 5 is correct

3

Cash proceeds the company will receive when the bonds mature equal 42,000

Option 3 is correct

4

Manufacturing costs added = Direct materials used +Direct labor used +Factory overhead

Manufacturing costs added = 19800+25300+51100= $96200

Option 2 is correct

5

Direct materials price variance = 53900*(46-45) = $53,900 unfavorable.

Option 4 is correct