Section 4 – Essay – Choose ONLY ONE of the essay questions below. (15 points)  

Section 3 – Short Discussion – each should be answered in 4 to 7 sentences. (5 points each)  

Which statement best differentiates COPD from asthma?

A 26-year-old woman with asthma reports using her albuterol inhaler four times per week. She awakens with coughing twice each month. Spirometry demonstrates an FEV1 of 88% predicted. Which therapeutic adjustment is most appropriate?

A favorable direct-labor efficiency variance is created when:

The Tattersall Company’s budgeted income statement reflects the following amounts:  Sales Purchases SG&A Expenses January $120,000 $78,000 $24,000 February $110,000 $66,000 $24,200 March $125,000 $81,250 $27,000   Tattersall pays for all purchases in the month following the purchase.  Tattersall has $72,000 of Accounts Payable on January 1.      SG&A Expenses include $5,000 of depreciation and are paid for in the month incurred.    Tattersall’s budgeted cash disbursements in February are: 

The purpose of the Data Processing Department of Martinez Corp. is to assist the various departments of the corporation with their information needs free of charge.  For responsibility accounting, the Data Processing Department would best be evaluated as a:

Ibarra Corp. has a standard variable overhead rate of $4 per machine hour, which each completed unit expected to take 3 machine hours to produce.  A review of the company’s accounting records found the following:    Actual variable overhead: $210,000  Variable overhead efficiency variance: $18,300U  Variable overhead spending variance: $30,300F How many units did Ibarra actually produce during the period?

The Tattersall Company’s budgeted income statement reflects the following amounts:  Sales Purchases SG&A Expenses January $120,000 $78,000 $24,000 February $110,000 $66,000 $24,200 March $125,000 $81,250 $27,000 All sales are on account, with 50% collected in the month of sale, 30% in the month following sale, and 19% in the second month following sale. One percent of sales is uncollectible and immediately recorded as such.      Tattersall has $58,000 of Net Accounts Receivable on January 1.  $35,000 of Accounts Receivable will be collected in January and the remaining amount will be collected in February.     Tattersall’s budgeted cash receipts in February are: 

Samsung is considering whether to make or buy a component that is used in the production of cell phones.  The annual cost of producing the 100,000 units needed by the company is as follows:  Variable manufacturing costs      $300,000  Fixed manufacturing costs           $100,000  Allocated corporate overhead       $50,000    If Samsung were to discontinue production of the component, fixed manufacturing costs would be reduced by 80%. Corporate overhead is allocated based on factory square footage.  Of the above costs, the amount NOT relevant to the company’s make-or-buy decision is: