1. Deca Electronics Company produces two products, Resistors and Transistors in a small manufacturing plant which had total manufacturing overhead of $21,000 in June. The factory has two departments, Design, which incurred $10,000 of manufacturing overhead, and Production which incurred $11,000 of manufacturing overhead. Design used 200 hours of direct labor and Production used 80 machine hours. During June, 150 direct labor hours were used in making 100 units of Resistors, and 150 direct labor hours were used in making 100 units of Transistors. If Deca Electronics Company uses a department rate based on direct labor hours for the Design Department and machine hours for the Production Department, the department overhead rates for the Design and Production Departments in June were:

Select one:

A. $15,500

B. $ 8,000

C. $11,250

D. $21,000

2. Which of the following variances is sometimes referred to as the capacity variance?

Select one:

A. Total fixed overhead flexible budget variance

B. Fixed overhead budget variance

C. Fixed overhead volume variance

D. Total variable overhead flexible budget variance

3. The total fixed overhead flexible budget variance is equal to the:

Select one:

A. Sum of the budget and volume variances for fixed overhead

B. Budget variance for fixed overhead

4. Explorer Company is considering the following investment proposal:

Initial investment:

	Depreciable assets (straight-line)	$36,000
	Working capital	4,000

Operations (per year for 4 years):

	Cash receipts	$25,000
	Cash expenditures	11,000

Disinvestment:

	Salvage value of equipment	$ 3,000
	Recovery of working capital	4,000

Discount rate:

10 percent

Additional information for interest rate of 10 percent and four time periods:

Present value of $1	0.68301
Present value of an annuity of $1	3.16987

What is the net present value for the investment?

Select one:

A. $ 9,159

B. $ 4,781

C. $18,322

D. $44,378

C. Sum of the spending and quantity variances for fixed overhead

D. Difference between actual fixed overhead and the amount applied to production

5. Cass Publishing is considering the purchase of a used printing press costing $75,200. The printing press would generate a net cash inflow of $31,310 a year for 3 years. At the end of 3 years, the press would have no salvage value. The company's cost of capital is 10 percent. The company uses straight-line depreciation. The present value factors of an annuity of $1.00 for different rates of return are as follows:

Cost of Capital

Period	8%	10%	12%	14%	16%
2	1.78326	1.73554	1.69005	1.64666	1.60523
3	2.57710	2.48685	2.40183	2.32163	2.24589
4	3.31213	3.16987	3.03735	2.91371	2.79818

The investments internal rate of return (rounded to the nearest percent) is

Select one:

A. 12 percent.

B. 14 percent.

C. 16 percent.

D. 10 percent.