1-The following information is from the static budget of AAA plc for 2016 .

Expected production and sales	5,400 units
Expected selling price per unit	$ 850
Total fixed costs	$1,110,000

Standard quantities, standard prices and standard unit costs follow for direct materials and direct manufacturing labor:

	Standard Quantity	Standard Price	Standard Unit Cost
Direct materials	10 pounds	$10 per pound	$100
Direct manufacturing labor	4 hours	$26 per hour	$104

During 2016, actual number of units produced and sold was 5,350, at an average selling price of $800. Actual cost of direct materials used was $ 1,149,400, based on 70,000 pounds purchased at $16.42 per pound. Direct manufacturing labor hours actually were 17,000 at the rate of $ 33.70 per hour. As a result, actual direct manufacturing labor costs were $572,900. Actual fixed costs were $1,200,000. There were no beginning or ending inventories.

The direct material efficiency variance is :

a. $165,000 unfavorable

b. $114,400 unfavorable

c. NONE OF THE GIVEN OPTIONS

d. $114,400 favorable

e. $165,000 favorable

2-Charles Motor Company makes electric cars and has two products, the General and the Extreme. To produce the General, Charles Motor employed assets of $23,500,000 at the beginning of the period and $30,000,000 of assets at the end of the period. Other costs to manufacture the General include the following:

Direct materials $1,450 per unit

Setup $700 per setup-hour

Production $470 per machine-hour

General administration and selling costs total $1,777,000 for the period. In the current period, Charles Motor produced 8000 General cars using 7,000 setup-hours and 176,500 machine-hours. Charles Motor sold these cars for $14,200 each. The gross margin of Charles is $14,145,000.

Assuming that Charles Motors total assets are $30,000,000, current liabilities $2,500,000, tax rate is 40% and weighted average cost of capital (WACC) 9%.

What is Economic Value Added (EVA) for the General?

a. $5,238,300

b. $9,893,000

c. $6,012,000

d. $4,720,800

e. $4,945,800

f. NONE OF THE GIVEN OPTIONS

1-W Inc., manufactures a specialized snowboard made for the advanced snowboarder. W began 2014 with an inventory of 240 snowboards. During the year, it produced 900 boards and sold 995 for $750 each.

Fixed production costs were $280,000, and variable production costs were $325 per unit. Fixed advertising, marketing, and other general and administrative expenses were $112,000, and variable shipping costs were $15 per board. Assume that the cost of each unit in beginning inventory is equal to 2014 inventory cost.

W uses absorption costing. Ws budgeted production was 1,000 units. Production-volume variances are written off to cost of goods sold.

What is total cost of goods sold under absorption costing?

a. $573,975

b. $601,975

c. $741,975

d. $629,975

e. $689,700