1. The common stock of Textile Mills pays an annual dividend of $1.65 a share. The company has promised to maintain a constant dividend even though economic times are tough. How much are you willing to pay for one share of this stock if you want to earn a 12 percent annual return?

A) $13.75 B) $14.01 C) $14.56 D) $14.79 E) $15.23

2. A company is considering producing a product for a new market. The fixed costs required for manufacturing and delivering the product is $50,000. Labor and material costs are estimated to be approximately $25.00 per product. If the product is sold for $35.00 each, the firm's break-even volume would be:

A) 50,000 units B) 5,000 units C) 2,500 units D) 500 units

3. A company had sales of $920,000 and fixed costs were $160,000. What was the income from operations if the contribution margin ratio was 30 percent?

A) $116,000 B) $276,000 C) $484,000 D) $644,000

4. A manufacturer estimates its factory overhead costs to be $30,000 and machine hours to be 4,000 for the year. If the actual hours worked on production total 3,800 and the actual factory overhead costs are $28,000, what is the amount of the over- or underapplied factory overhead?

A) $500 overapplied

B) $500 underapplied

C) $2,000 overapplied

D) $2,000 underapplied