1. A company is considering the purchase of a new piece of equipment for $132,000. Predicted annual cash inflows from this investment are $52,800 (year 1); $44,000 (year 2); $26,400 (year 3); $20,400 (year 4); and $10,200 (year 5). The payback period is:

4.43 years.

2.43 years.

3.43 years

3.00 years.

3.04 years.

2. Data pertaining to a company's joint manufacturing process for the current period follows:

	Product A	Product B
Quantities produced	300 lbs.	200 lbs.
Processing cost after products are separated	$3,100	$2,300
Market value at point of separation	$7/lb.	$14/lb.

What cost amount should be allocated to Product A for this period's $2,940 of joint costs on the basis of market value at the point of separation?

$1,252

$930

$1,260

$1,688

$1,764

3. The following company information is available for January:

Direct materials used	3,700 feet @ $56 per foot
Standard costs for direct materials for January production	3,910 feet @ $54 per foot

The direct material quantity variance is:

$7,400 favorable.

$7,400 unfavorable.

$11,340 favorable.

$11,340 unfavorable.

$3,940 favorable.

4. The following company information is available:

Direct materials used for production	38,500 gallons
Standard quantity for units produced	37,000 gallons
Standard cost per gallon of direct material	$6.50
Actual cost per gallon of direct material	$7.10

The direct materials price variance is:

$23,100 unfavorable.

$32,850 unfavorable.

$32,850 favorable.

$9,750 unfavorable.

$2,500 unfavorable.

5.

The following company information is available:

Direct materials used for production	726 pounds
Standard quantity for units produced	778 pounds
Standard cost per pound of direct material	$48.70
Actual cost per pound of direct material	$51.40

The direct materials quantity variance is:

$1,960.40 favorable.

$2,532.40 unfavorable.

$572.20 favorable.

$1,960.40 unfavorable.

$2,532.40 favorable.