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Final-Managerial

# Final-Managerial - 1 Calculate labor rate variance Actual...

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1) Calculate labor rate variance Actual Hours (Actual Rate-Standard Rate) Also know if favorable or unfavorable. Hint: this relates to actual being compared to standard. When 2) What are opportunity costs and what are sunk costs. 3) Calculate ROI ROI= Net Operating Income/Net Operating Assets 4) Turnover is (Sales/Average Assets) 5) Residual income (Average Operating Assets X Minimum Required Rate of Return) su 6) Division's Margin = NET OPERATING/TOTAL SALES 7) How much would you have to invest today in the bank at an interest rate of 9% to have an annuity of \$8,900 per year for 8 years, with nothing left in the bank at the end of the 8 years? (USE tables) 8) The management of Furrow Corporation is considering dropping product L07E. Data from the company's accounting system appear below: Sales \$750,000 Variable expenses \$285,000 750000 Fixed manufacturing expenses \$246,000 285000 Fixed selling and administrative expenses \$155,000 465000 In the company's accounting system all fixed expenses of the company are fully allocated to products. Further investigation has revealed that \$182,000 of the fixed 246000 manufacturing expenses and \$98,000 of the fixed selling and administrative expenses 155000 are avoidable if product L07E is discontinued. What would be the effect on the 401000 company's overall net operating income if product L07E were dropped? A) Overall net operating income would decrease by \$401,000. 64000 B) Overall net operating income would increase by \$182,000. C) Overall net operating income would increase by \$195,000. D) Overall net operating income would decrease by \$185,000.

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