1. Manufacturing overhead was estimated to be $750,000 for the year along with 15,000 direct labor hours. Actual manufacturing overhead was $500,000, and actual direct labor hours were 19,000. What is the predetermined overhead rate per direct labor hour?

2. Plywood, Inc. produces two different products (Product A and Product X) using two different activities: Machining, which uses machine hours as an activity driver, and Inspection, which uses number of batches as an activity driver. The activity rate for Machining is $125 per machine hour, and the activity rate for Inspection is $500 per batch. The activity drivers are used as follows: Product A Product X Total Machine hours 2,000 3,000 5,000 Number of batches 45 15 60 What is the proportion of Machining activity used by Product X?

3. Jeans, Inc. uses the high-low method of estimating costs. Jeans, Inc. had total costs of $250,000 at its lowest level of activity, when 5,000 units were sold. When, at its highest level of activity, sales equaled 10,000 units, total costs were $440,000. What would Jeans, Inc. estimate variable cost per unit as?

4. Sky Corp has a selling price of $35, variable costs of $10 per unit, and fixed costs of $15,000. How many units must be sold to break-even?

5. Calculate the unit contribution margin and contribution margin ratio if Data, Inc. has sales per unit of $125/unit and variable costs of $60/unit.

6. Data, Inc. has fixed costs of $700,000 and a contribution margin ratio of 40%. How much sales revenue must be earned for a profit of $100,000?

7. Parts Co. currently manufactures microchips. Parts Co. received a special order for 2,000 units of its product at a special price of $275. Parts Co. currently produces 20,000 microchips at the following manufacturing costs: Assume that Parts Co. has sufficient capacity to fill the order without harming normal production and sales. If Parts Co. accepts the order, calculate the effect the order have on the company's short- term profit, i.e., dollar amount and whether increase/decrease.

8. Le Bain currently manufactures a subcomponent that is used in its main product. A supplier has offered to supply all the subcomponents needed at a price of $300. Le Bain currently produces 50,000 subcomponents at the following manufacturing costs: If Le Bain has no alternative uses for the manufacturing capacity, what would be the maximum price per unit they would be willing to pay the supplier?

9. Pretend Corp. expects to sell 1000 sun visors in May and 800 in June. Each visor sells for $18. Pretend Corps beginning and ending finished goods inventories for May are 75 and 50 units, respectively. Ending finished goods inventory for June will be 60 units. a. Calculate Pretend Corp's budgeted production in units for May and June. b. Suppose that each visor takes 1.50 direct labor hours to produce and Pretend Corp. pays its workers $10 per hour. Calculate Pretend Corp's budgeted direct labor cost for May and June.

10. Jackson Manufacturing prepared a master budget that included $68,990 for direct materials, $123,700 for direct labor, $22,000 for variable overhead, and $56,800 for fixed overhead. Jackson

Manufacturing planned to sell 11,000 units during the period, but actually sold 8,700 units. How much would fixed overhead cost be on a flexible budget for the period based on actual sales?

11. Pirate Co. uses a standard cost system to account for the costs of its production of speedboats. Standards are 5.4 meters of materials at $75 per meter. During September, Pirate Co. produced 3,400 boats. Pirate Co. purchased and used a total of 6,760 meters of materials at a total cost of $422,380. Calculate the direct materials price variance (also indicate favorable/unfavorable).

12. Florence Co. has a direct labor standard of 5 hours per unit of output. Each employee has a standard wage rate of $12 per hour. During April, Florence Co. paid $105,500 to employees for 7,350 hours worked. 5,000 units were produced during April. What is the direct labor rate variance (also indicate favorable/unfavorable)?

13. Florence Co. has a direct labor standard of 2 hours per unit of output. Each employee has a standard wage rate of $15 per hour. During February, Florence Co. paid $100,000 to employees for 25,150 hours worked. 10,400 units were produced during February. What is the direct labor efficiency variance (also indicate favorable/unfavorable)?

14. Plants Company has an operating income of $180,000 on revenues of $2,000,000. Average invested assets are $750,000, and Plants Company has an 8% cost of capital. What is the return on investment?

15. Denver Corp. has an operating income of $580,000, average invested assets of $1,600,000, and a cost of capital of 7%. What is the residual income?

16. Teddy Bear Inc. sold 7,000 units in July for $25/unit. Variable costs were $12/unit and non- manufacturing costs were $25,000. What was total profit in dollars and the profit margin percentage for Teddy Bear, Inc. in July?

17. What is the accounting rate of return for a project that is estimated to yield total income of $510,000 over four years and costs $850,000?

18. A project has estimated annual net cash flow of $200,000 and is estimated to cost $2,100,000. What is the payback period?

19. Day Corp is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in net income after tax of $250,000. The equipment

will have an initial cost of $500,000 and have a 5 year life. If the salvage value of the equipment is estimated to be $155,000, what is the annual net cash flow? 20. Smith Jr., a manager at Halo Corp. is considering several potential capital investment projects. Data on these projects follow: Project X Project Y Project Z Initial Investment $40,000 $20,000 $50,000 Annual cash inflows $25,000 $10,000 $25,400 PV of cash inflows $45,000 $33,000 $70,000 a. Compute the payback period for each project. b. Compute the profitability index of each project and rank order them based on this criterion. c. If Smith Jr. had limited funds to invest, which of the above criterion should he use to prioritize the projects?