24. Soap Company manufactures Soap X and Soap Y and can sell all it can make of either. Based on the following data, which statement is true? Sales Price Variable Cost Hours needed to process a X is more profitable than Y b. Y is more profitable than X 6. Neither X nor y have a positive contribution margin d X and Y are equally profitable. Niva Co. manufactures three products: Bales; Tales, and Wales. The selling prices are: 55: 78; and 32, respectively. The variable costs for each product are: 20: 50; and 15, respectively. Each product must go through the same processing in a machine that is limited to 2,000 hours per month. Bales take 7 hours to process, Tales take 4 hours, and Wales take 1 hour. 2. Which product has the highest contribution margin per machine hour? Bales 1. Tales c Wales d. Bales and Tales have the same 6. What is the contribution margin per machine hour for Bales? $7 SS $35 d $28 27. What is the contribution margin per machine hour for Tales? b. $5 $28 d. $35 What is the contribution per machine hour for Wales? $35 h $28 e $17 d $8.50 29. Assuming that Niva Co. can sell all of the products they can make, what is the maximum contribution margin they can cam per month? $64,000 b. $70,000 c. $56,000 d $34.000 30. Assuming that Niva produced enough product with the highest contribution margin per unit to use 1.000 hours of machine time. Product demand does not warrant any more production of that product. What is the maximum additional contribution margin that can be realized by utilizing the remaining 1,000 hours on the product with the second highest contribution margin per hour? $5,000 b. $7,000 $4,000 d $28,000 31. The expected average rate of return for a proposed investment of $600,000 in a fixed asset, with a useful life of four years, straight-line depreciation, no residual value, and an expected total net income of $216,000 for the 4 years, is: a. 18% b. 15% c. 27% 9% 32. An anticipated purchase of equipment for $400,000, with a useful life of 8 years and no residual value, is expected to yield the following annual net incomes and net cash flows: Year Net Income $60,000 50,000 50,000 40.000 40.000 40.000 40.000 40.000 Net Cash Flow $110,000 100,000 100,000 90,000 90,000 90,000 90,000 90,000 What is the cash payback period? a. 5 years b. 4 years c. 6 years d. 3 years 33. The rate of earnings is 6% and the cash to be received in one year is $10,000. Determine the present value amount, using the following partial table of present value of $1 at compound interest: Year 12% .943 .890 10% .909 .826 .893 .797 .712 840 .792 .751 .683 .636 a $9,090 b. $9,000 c. $9,430 d. $8,930 34. The expected average rate of return for a proposed investment of $4,800,000 in a fixed asset, using straight line depreciation, with a useful life of 20 years, no residual value, and an expected total net income of $12,000,000 is: a 25% b. 18% c. 40% d. 12.5%
