2. Joe Malay received the following report on the Division's operation for the month of August: Direct labor rate variance = $25,000 unfavorable; Direct labor efficiency variance = $70,000 (?). The standard calls for 3 direct labor hours per unit of output at $28 per labor hour (SP). The standard direct labor hours for the units manufactured (SQ) is 20 percent more than the total direct labor hours actually worked (AQ) in August. What was the average direct labor hourly rate (AP) the Division paid in August?

Select one:

a. $24.00

b. $26.00

c. $28.00

d. $30.00

e. $31.25

3James Webb is the general manager of the Industrial Product Division, and his performance is measured using the residual income (RI) method. Webb is reviewing the followed forecasted information for his division for the coming year:

Category	Amount (thousands)
Current assets (e.g., inventory)	$1,800
Revenue	30,000
Plant and equipment (net book value)	17,200

If the imputed interest charge (i.e., divisional cost of capital) is 15% and Webb wants to achieve an RI target of $2 million, what will costs have to be in order to achieve the target?

Select one:

a. $9,000,000

b. $10,800,000

c. $23,620,000

d. $25,150,000

e. $25,690,000