11, Machine Builders Inc. adopted a standard cost system several years ago that it uses in conjunction with its process cost system. The per-unit standard costs for direct materials and direct labor for its single product are as follows:

Materials:	(4 kilograms $10.00 per kilogram)	$40.00
Labor:	(4 hours $18.00 per hour)	72.00

All materials are issued at the beginning of processing. The operating data shown below were taken from the records for July:

In-process beginning inventory	none
In-process ending inventory90% complete as to labor	1,000 units
Units completed during the month	7,200 units
Budgeted output	8,000 units
Purchases of materials, in kilograms (AQ)	30,000
Total actual labor costs incurred	$525,000
Direct labor hours worked (AQ)	28,000 hours
Materials purchase-price variance	$3,000 unfavorable
Increase in materials inventory in July	1,500 kilograms
Beginning inventory of materials	0 kg.

The direct labor rate variance for July is:

Select one:

a. $6,600 favorable

b. $16,600 favorable

c. $21,000 unfavorable

d. $57,600 unfavorable

e. $58,200 unfavorable

12.Which of the following types of compensation does not provide a deduction to the firm for tax purposes?

Select one:

a. Perks

b. Qualified stock options

c. Retirement plans

d. Current bonus

e. Performance shares

13.Parkside Inc. has three divisions (Entertainment, Plastics, and Video Card), each of which is considered an investment center for performance-evaluation purposes. The Entertainment Division manufactures video arcade equipment using products produced by the other two divisions, as follows: 1. The Entertainment Division purchases plastic components from the Plastics Division that are considered unique (i.e., they are made exclusively for the Entertainment Division). In addition, the Plastics Division makes less-complex plastic components that it sells externally, to other producers. 2. The Entertainment Division purchases, for each unit it produces, a video card from Parkside's Video Card Division, which also sells this video card externally (to other producers). The per-unit manufacturing costs associated with each of the above two items, as incurred by the Plastic Components Division and the Video Card Division, respectively, are:

	Plastic Components	Video Cards
Direct material	$1.25	$2.40
Direct labor	2.35	3.00
Variable overhead	1.00	1.50
Fixed overhead	0.40	2.25
Total cost	$5.00	$9.15

Assume that the Plastics Division has excess capacity and it has negotiated a transfer price of $5.60 per plastic component with the Entertainment Division. This price will likely:

Select one:

a. Cause the Plastics Division to reduce the number of commercial plastic components it manufactures

b. Motivate both divisions because estimated profits will be shared

c. Encourage the Entertainment Division to seek an outside source for plastic components

d. Demotivate the Plastics Division, causing mediocre performance

e. Motivate the Plastics Division to increase the portion of its manufacturing devoted to the Entertainment Division

14, Michael Porter's five competitive forces include which one of the following?

Select one:

a. Global competition.

b. Intensity of demand by customers.

c. Bargaining power of competitors.

d. Intensity of rivalry among competitors.

15Information pertaining to Yekstop Corp.'s sales revenue is presented below:

	November	December	January
Cash sales	$96,000	$125,000	$78,000
Credit sales	288,000	450,000	234,000
Total sales	$384,000	$575,000	$312,000

Management estimates that 4% of credit sales are eventually uncollectible. Of the collectible credit sales, 65% are likely to be collected in the month of sale and the remainder in the month following the month of sale. The company desires to begin each month with an inventory equal to 75% of the sales projected for the month. All purchases of inventory are on open account; 30% will be paid in the month of purchase, and the remainder paid in the month following the month of purchase. Purchase costs are approximately 60% of the selling prices. Total budgeted inventory purchases in November by Yekstop Corp. are:

Select one:

a. $258,750

b. $316,350

c. $384,000

d. $489,150

e. $527,250

15, The basic objective of the residual income (RI) approach to divisional performance measurement and evaluation is to have a division maximize its:

Select one:

a. Return on investment (ROI) rate

b. Imputed interest rate charge

c. Cash flows, after taxes

d. Cash flows in excess of a desired minimum amount

e. Operating income in excess of an imputed charge for capital invested in the division

16. In a Cost-of-Quality (COQ) reporting framework, the "cost of nonconformance" includes:

Select one:

a. Prevention costs and appraisal costs

b. Internal failure costs and external failure costs

c. Prevention costs and internal failure costs

d. Appraisal costs, internal failure costs, and external failure costs

e. Prevention costs and external failure costs

17. The capital budgeting decision technique that reflects the time value of money and is calculated as the present value of the future after-tax cash inflows by the initial cash outlay for the investment is called the:

Select one:

a. Net present value (NPV) method.

b. Capital rationing method.

c. Average accounting rate of return (ARR) method.

d. Profitability index (PI) method.

e. Present value payback method