Question
18.) In a differential analysis, the primary objective is normally to Select one: A.Maximize income B.Increase costs C.Break even D.None of the above 19.) Which
18.) In a differential analysis, the primary objective is normally to
Select one:
A.Maximize income
B.Increase costs
C.Break even
D.None of the above
19.) Which of the following is NOT a type of differential analysis used by management?
Select one:
A.Replacing fixed assets
B.Selling a product or processing it further
C.Accepting additional business at a special price
D.All of the above are types of differential analysis used by management
20.) Total present value of net cash flow: $607,000
Amount invested: $620,000
What is the present value index?
Select one:
A.1.25
B.0.85
C.1.50
D.None of the above
21.) Which of the following statement is correct about an annuity?
Select one:
A.An annuity is a series of cash flow to be received at fixed intervals
B.Bond interest payment is an example of annuity
C.None of the above
D.All of the above
22.) A new machine costs $200,000 and is expected to generate cash revenue of $50,000 per year. If cash expenses are$10,000, the cash payback period is:
Select one:
A.5 years
B.4 years
C.6 years
D.4.8 years
23.) In setting up the normal selling price for a product, the markup percentage is needed and it is calculated as follows:
Select one:
A.Totalproduct costs / Desired profit.
B.Desired profit + totalselling and administrative expense /Units produced
C.Desired profit + totalselling and administrative expense / Total product costs.
D.None of the above
24.) Which of the following capital investment analysis methods does not use Present Values?
Select one:
A.Average rate of return
B.Cash back
C.All of the above use present values
D.None of the aboveuse present values
25.) A production department hasa standard of3,500 units of direct materials at a standard cost of $12/unit for a productbut actually purchased 4,000 units at $10/unit. The totaldirect material variance is:
Select one:
A.$2,100 Favorable
B.$2,000 Unfavorable
C.$2,000 Favorable
D.$2,600 Unfavorable
26.) An investment with an initial cost of $400,000 is expecting to generate $50,000 annually, the average rate of return is:
Select one:
A.25%
B.15%
C.18%
D.5%
27.) The cost of producing 1000 handbags is follows:
Direct materials: $ 18,500
Direct labor: $10,500
Factory overhead: $6,500
Selling and administrative: $18,000
Management desires a profit of 20% of invested capital of $260,000
3. What is the total period cost?
Select one:
A.$18,000
B.$15,000
C.$14,500
D.$17,500
28.) Which of the following statement is NOT true about the Present Value Index?
Select one:
A.The Present Value Index is the present value of the net cash flow divided by the amount to be invested.
B.When the net present value is positive, the present value index is greater than 1.
C.The present value index is irrelevant when comparing a proposal with different investments.
D.When the net present value is negative, the present value index is less than 1
29.) Consider the followings:
Actual labor hours: 6,000
Actual rate: $5/hr
Standard labor hours: 5,500
Standard rate: $5.50/hr
Determine the direct labor rate variance
Select one:
A.$3,000 favorable
B.$3,000 unfavorable
C.$3,200 unfavorable
D.$2,500 favorable
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