1)

Handerson Corporation makes a product with the following standard costs:

	Standard Quantity or Hours			Standard Price or Rate
Direct materials		8.5	kilos	$	6.00	per kilo
Direct labor		0.4	hours	$	20.00	per hour
Variable overhead		0.4	hours	$	6.00	per hour

The company reported the following results concerning this product in August.

Actual output		3,200	units
Raw materials used in production		29,030	kilos
Purchases of raw materials		31,600	kilos
Actual direct labor-hours		1,160	hours
Actual cost of raw materials purchases	$	195,920
Actual direct labor cost	$	22,736
Actual variable overhead cost	$	7,540

The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.

The variable overhead rate variance for August is:

Multiple Choice

$640 F

$580 U

$640 U

$580 F

2)

Serie Inc. reported the following results from last years operations:

Sales	$	16,800,000
Variable expenses		10,640,000
Contribution margin		6,160,000
Fixed expenses		5,488,000
Net operating income	$	672,000
Average operating assets	$	7,000,000

At the beginning of this year, the company has a $2,100,000 investment opportunity with the following characteristics:

Sales	$	2,520,000
Contribution margin ratio		50	% of sales
Fixed expenses	$	1,108,800

Last year's margin was closest to:

Multiple Choice

36.7%

67.3%

9.6%

4.0%