BUS 202 Test 3 Sample - BUS 202 Test 3 Sample Student: _ 1....

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
BUS 202 Test 3 Sample Student: ___________________________________________________________________________ 1. The budget for May called for production of 9,000 units. Actual output for the month was 8,500 units with total direct materials cost of $127,500 and total direct labor cost of $77,775. The direct labor standards call for 45 minutes of direct labor per unit at a cost of $12 per direct labor-hour. The direct materials standards call for one pound of direct materials per unit at a cost of $15 per pound. The actual direct labor-hours were 6,375. Variance analysis of the performance for the month of May would indicate: A. $7,500 favorable materials quantity variance. B. $1,275 favorable direct labor efficiency variance. C. $1,275 unfavorable direct labor efficiency variance. D. $1,275 unfavorable direct labor rate variance. 2. Elliott Company makes and sells a single product. Last period the company's labor rate variance was $14,400 U. During the period, the company worked 36,000 actual direct labor-hours at an actual cost of $338,400. The standard labor rate for the product in dollars per hour is: A. $9.40 B. $9.00 C. $8.50 D. $8.10 3. A preference decision: A. is concerned with whether a project clears the minimum required rate of return hurdle. B. comes before the screening decision. C. is concerned with determining which of several acceptable alternatives is best. D. responses A, B, and C are all correct. 4. In calculating the "investment required" for the project profitability index, the amount invested should be reduced by any salvage recovered from the sale of old equipment. True False 1
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
5. (Ignore income taxes in this problem.) Virginia Company invested in a four-year project. Virginia's discount rate is 10%. The cash inflows from this project are: Assuming a positive net present value of $1,000, the amount of the original investment was closest to: A. $2,552 B. $4,552 C. $13,427 D. $17,400 6. Residual income is: A. Net operating income plus the minimum required return on average operating assets. B. Net operating income less the minimum required return on average operating assets. C. Contribution margin plus the minimum required return on average operating assets. D. Contribution margin less the minimum required return on average operating assets. 7. Amster Corporation has not yet decided on the required rate of return to use in its capital budgeting. This lack of information will prevent Amster from calculating a project's: A. Item A B. Item B C. Item C D. Item D 2
Background image of page 2
8. The following information relates to next year's projected operating results of the Children's Division of Grunge Clothing Corporation: If Children's Division is dropped, half of the fixed costs above can be eliminated. What will be the effect on Grunge's profit next year if Children's Division is dropped instead of being kept? A. $50,000 increase
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

This document was uploaded on 12/09/2010.

Page1 / 37

BUS 202 Test 3 Sample - BUS 202 Test 3 Sample Student: _ 1....

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online