A company is planning to purchase a machine that will cost $25,800, have a six-year life, and be depreciated over a three-year period with no salvage value. The company expects to sell the machine's output of 3,000 units evenly throughout each year. A projected income statement for each year of the asset's life appears below. What is the accounting rate of return for this machine?

Sales		$99,000
Costs:
Manufacturing	$52,300
Depreciation on machine	4,300
Selling and administrative expenses	33,000	(89,600)
Income before taxes		$9,400
Income tax (40%)		(3,760)
Net income		$5,640

	21.86%.
	43.72%.
	4.30%.
	33.33%.
	50.00%.

A company provided the following direct materials cost information. Compute the cost variance.

Standard costs assigned:
Direct materials standard cost (424,000 units @ $6 / unit)	$2,544,000
Actual costs
Direct materials cost incurred (422,750 units @ $6.20 / unit)	$2,621,050

	$84,550 Unfavorable.
	$77,050 Favorable.
	$7,500 Favorable.
	$77,050 Unfavorable.
	$84,550 Favorable