1.A company is considering purchasing a machine for $21,000. The machine will generate an after-tax net income of $2,000 per year. Annual depreciation expense would be $1,500. What is the approximate Accounting Rate of Return?
A.19%.
B.33%.
C.17%.
D.10%.
E.25%.
2.Product X requires 10 machine hours per unit to be produced, Product Y requires only 6 machine hours per unit, and the company's productive capacity is limited to 240,000 machine hours. Product A sells for $32 per unit and has variable costs of $12 per unit. Product B sells for $24 per unit and has variable costs of $7 per unit. Assuming the company can sell as many units of either product as it produces, the company should:
A.Produce only Product X.
B.Produce only Product Y.
C.Produce equal amounts of X and Y.
D.Produce X and Y in the ratio of 62.5% X to 37.5% Y.
E.Produce X and Y in the ratio of 40% X and 60% Y.
3. An estimate of an asset's value to the company, calculated by discounting the future cash flows from the investment at an appropriate rate and then subtracting the initial cost of the investment, is known as:
A.Annual net cash flows.
B.Rate of return on investment.
C.Net present value.
D.Payback period.
E.Unamortized carrying value.
4.Bartels Corp. produces woodcarvings. It takes 2 hours of direct labor to produce a carving. Bartels' standard labor cost is $12 per hour. During August, Bartels produced 10,000 carvings and used 21,040 hours of direct labor at a total cost of $250,376. What is Bartels' labor rate variance for August?
A.$10,376 unfavorable.
B.$2,104 unfavorable.
C.$2,104 favorable.
D.$12,480 unfavorable.
E.$12,480 favorable.
5.Bartels Corp. produces woodcarvings. It takes 2 hours of direct labor to produce a carving. Bartels' standard labor cost is $12 per hour. During August, Bartels produced 10,000 carvings and used 21,040 hours of direct labor at a total cost of $250,376. What is Bartels' labor efficiency variance for August?
A.$10,376 unfavorable.
B.$2,104 unfavorable.
C.$2,104 favorable.
D.$12,480 unfavorable.
E.$12,480 favorable.
6.Using the high-low method and the Willco data above, what is the approximate fixed cost component of the monthly maintenance costs?
A.$33,860
B.$24,500
C.$32,755
D.$32,715
E.$30,686
7.Using the high-low method and the Willco data above, what is the approximate fixed cost component of the monthly maintenance costs?
A.$33,860
B.$24,500
C.$32,755
D.$32,715
E.$30,686