3. A business has recently purchased a tonne of PVC material at a cost of 350. The material could be sold immediately for 320 or it could be used as a substitute for another type of material that costs 310 per tonne. The PVC material is in continuous use within the business and its replacement cost is 360 per tonne.

What is the relevant cost of the material for decision-making?

1. 310
2. 320
3. 350
4. 360

3. Which one of the following may account for an adverse labour efficiency variance?

1. Using a higher grade of worker than was planned
2. Change in labour-market conditions between the setting of the standard and the actual event
3. Using higher grade materials leading to lower wastage rates
4. Poor supervision

1. Which method of investment appraisal does not seek to measure the profitability of an investment project?

1. net present value
2. internal rate of return
3. accounting rate of return
4. payback