1. A manufacturing company that has only one product has established the following standards for its variable manufacturing overhead. Variable manufacturing overhead standards are based on machine-hours. Standard hours per unit of output 4.20 machine-hours Standard variable overhead rate $11.55 per machine-hour The following data pertain to operations for the last month: Actual hours 8,600 machine-hours Actual total variable manufacturing overhead cost $95,890 Actual output 1,900 units What is the variable overhead efficiency variance for the month?

$3,192 U

$6,913 F

$7,161 U

$6,913 U

2. The following materials standards have been established for a particular product: Standard quantity per unit of output 3.2 grams Standard price $13.00 per grams The following data pertain to operations concerning the product for the last month: Actual materials purchased 2,000 grams Actual cost of materials purchased $ 23,300 Actual materials used in production 1,300 grams Actual output 370 units The direct materials purchases variance is computed when the materials are purchased. Required:

a. What is the materials price variance for the month? (Input the amount as a positive value. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.)

b. What is the materials quantity variance for the month? (Input the amount a as positive value. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.)

3. The following standards for variable overhead have been established for a company that makes only one product: Standard hours per unit of output 5.3 hours Standard variable overhead rate $15.00 per hour The following data pertain to operations for the last month: Actual hours 9,000 hours Actual total variable overhead cost $125,080 Actual output 1,680 units Required:

a. What is the variable overhead rate variance for the month? (Input the amount as a positive value. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.)

b. What is the variable overhead efficiency variance for the month? (Input the amount as a positive value. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.)

4.. Fabio Corporation is considering eliminating a department that has a contribution margin of $25,000 and $75,000 in fixed costs. Of the fixed costs, $19,500 cannot be avoided. The effect of eliminating this department on Fabio's overall net operating income would be:

a decrease of $50,000.

an increase of $50,000.

a decrease of $30,500.

an increase of $30,500.

5. The management of Fannin Corporation is considering dropping product H58S. Data from the company's accounting system appear below: Sales $920,000 Variable expenses $388,000 Fixed manufacturing expenses $370,000 Fixed selling and administrative expenses $250,000 In the company's accounting system all fixed expenses of the company are fully allocated to products. Further investigation has revealed that $233,000 of the fixed manufacturing expenses and $194,000 of the fixed selling and administrative expenses are avoidable if product H58S is discontinued. What would be the effect on the company's overall net operating income if product H58S were dropped?

Overall net operating income would decrease by $88,000.

Overall net operating income would increase by $88,000.

Overall net operating income would increase by $105,000.

Overall net operating income would decrease by $105,000.

6. Chee Corporation has gathered the following data on a proposed investment project: (Ignore income taxes in this problem.) Investment required in equipment $410,000 Annual cash inflows $60,000 Salvage value $0 Life of the investment 16 years Required rate of return 9% The company uses straight-line depreciation. Assume cash flows occur uniformly throughout a year except for the initial investment. The payback period for the investment is closest to:

0.1 years

1.0 years

4.8 years

6.8 years