1. Which is not a reason direct labor variances may occur?

a.	Managers do not correctly anticipate changes in wage rates.
b.	Poor materials are used in production.
c.	Prices rise with direct materials.
d.	All of the above.

2. Which of the following is the correct calculation for Division return on investment?

a.	Divide division profit margin by division investment.
b.	Divide profit margin by division investment.
c.	Divide profit margin by division revenue.
d.	Divide division revenue by division investment.

3. In calculating return on investment (ROI), the use of book values of assetsparticularly fixed assetsin the ROI denominator

a.	is the preferable method.
b.	may cause a manager of a division with fully depreciated assets to be reluctant to replace the assets with more costly assets.
c.	is required by generally accepted accounting principles.
d.	may cause a manager of a division with fully depreciated assets to replace the assets with newer, more efficient, but more costly assets.