6. 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

What is the total period cost?

Select one:

A.

$18,000

B.

$15,000

C.

$14,500

D.

$17,500

7. 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

What is the cost per unit?

Select one:

A.

$40.00

B.

$35.00

C.

$45.25

D.

$35.50

8. The management of ABC company has established 10% as the minimum acceptable rate of return for its invested assets. The following information is available for its two divisions:

	Retail	Entertainment
Income from operations	$ 343,200	$ 320,000
Invested assets	$ 1,320,000	$ 1,600,000

What is the rate of return for the entertainment division?

Select one:

A.

20%

B.

26%

C.

23%

D.

25%

9. The management of ABC company has established 10% as the minimum acceptable rate of return for its invested assets. The following information is available for its two divisions:

	Retail	Entertainment
Income from operations	$ 343,200	$ 320,000
Invested assets	$ 1,320,000	$ 1,600,000

What is the residual income for the retail division?

Select one:

A.

$343,200

B.

$250,000

C.

$211,200

D.

None of the above

10. Which of the following projects have a present value index greater than 1?

Project A costing $200,000 with a total present value of net cash flow of $205,000

ProjectB costing $200,000 with a total present value of net cash flow of $195,000

Select one:

a.

Project A

b.

Project B

c.

Both Projects A and B

d.

None of the above

11. 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