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1. Thank you! I'll be sure to leave a thumbs up! The standard costs and actual costs for factory overhead for the manufacture of 2,500

1. Thank you! I'll be sure to leave a thumbs up!

The standard costs and actual costs for factory overhead for the manufacture of 2,500 units of actual production are as follows:

Standard Costs
Fixed overhead (based on 10,000 hours) 3 hours per unit @ $0.78 per hour
Variable overhead 3 hours per unit @ $1.93 per hour
Actual Costs
Total variable cost, $18,200
Total fixed cost, $7,800

The total factory overhead cost variance is

a.$5,675 unfavorable

b.$3,725 unfavorable

c.$5,675 favorable

d.$7,625 favorable

2.

Mason Corporation had $1,195,000 in invested assets, sales of $1,205,000, income from operations amounting to $247,000, and a desired minimum return of 15%.

The residual income for Mason Corporation is

a.$67,750

b.$94,850

c.($5,500)

d.$0

3.

The following financial information was summarized from the accounting records of Train Corporation for the current year ended December 31:

Rails Division Locomotive Division Corporate Total
Cost of goods sold $ 47,200 $30,720
Direct operating expenses 27,200 20,040
Sales 108,000 78,000
Interest expense $ 2,040
General overhead 18,160
Income tax 4,700

The income from operations for the Rails Division is

a.$33,600

b.$8,700

c.$21,150

d.$60,800

4.

The following financial information was summarized from the accounting records of Train Corporation for the current year ended December 31:

Rails Division Locomotive Division Corporate Total
Cost of goods sold $47,900 $31,300
Direct operating expenses 27,300 22,000
Sales 95,900 69,100
Interest expense $2,800
General overhead 18,900
Income tax 4,100

The income from operations for the Rails Division is

a.$20,700

b.$68,600

c.$48,000

d.$95,900

5.

Stryker Industries received an offer from an exporter for 27,000 units of product at $19 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data are available:

Domestic unit sales price $23
Unit manufacturing costs:
Variable 12
Fixed 6

What is the differential cost from the acceptance of the offer?

a.$513,000

b.$162,000

c.$324,000

d.$621,000

6.

The production department is proposing the purchase of an automatic insertion machine. It has identified three machines and has asked the accountant to analyze them to determine the best cash payback. Which machine has the best payback period?

Machine A Machine B Machine C
Annual cash flow $ 40,000 $ 50,000 $ 75,000
Initial cost 300,000 250,000 500,000

a.Machine A

b.Machine C

c.Machine B

d.They all three have the same cash payback period.

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