7. Dybala Corporation's produces and sells a single product. Data concerning that product appear below:

	Per Unit	Percent of Sales
Selling price	$180	100%
Variable expenses	90	50%
Contribution margin	$ 90	50%

The company is currently selling 5,300 units per month. Fixed expenses are $420,100 per month. The marketing manager believes that a $6,300 increase in the monthly advertising budget would result in a 160 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change?

-Increase of $8,100

-Decrease of $8,100

-Decrease of $6,300

-Increase of $14,400

Bottom of Form

19. The following standards for variable overhead have been established for a company that makes only one product:

Standard hours per unit of output	6.5	hours
Standard variable overhead rate	$13.00	per hour

The following data pertain to operations for the last month:

Actual hours	9,800	hours
Actual total variable overhead cost	$125,200
Actual output	1,500	units

Required:
a.	What is the variable overhead rate variance for the month? (Input the amount as a positive value. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.)

b.

What is the variable overhead efficiency variance for the month? (Input the amount as a positive value. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.)

Top of Form

25. Chee Corporation has gathered the following data on a proposed investment project: (Ignore income taxes in this problem.)

Investment required in equipment	$450,000
Annual cash inflows	$90,000
Salvage value	$0
Life of the investment	10 years
Required rate of return	7%

The company uses straight-line depreciation. Assume cash flows occur uniformly throughout a year except for the initial investment.

The payback period for the investment is closest to:

-0.2 years

-1.0 years

-3.0 years

-5.0 years