1) Vaughn Company is considering purchasing new equipment for $475,700. It is expected that the equipment will produce net annual cash flows of $67,000 over its 10-year useful life. Annual depreciation will be $47,570. Compute the cash payback period. (Round answer to 1 decimal place, e.g. 10.5.)

Cash payback period years

2) Blue Company's standard labor cost of producing one unit of Product DD is 3.40 hours at the rate of $10.60 per hour. During August, 43,300 hours of labor are incurred at a cost of $10.80 per hour to produce 12,500 units of Product DD.

(a)

Compute the total labor variance.

Total labor variance $

(b)

Compute the labor price and quantity variances.

Labor price variance $

Labor quantity variance $

(c)

Compute the labor price and quantity variances, assuming the standard is 3.70 hours of direct labor at $11.00 per hour.

Labor price variance $

Labor quantity variance $