ABC company is preparing the master budget for 2020. When preparing the direct labor budget, ________.

Select one:

a. direct labor hours needed for production are multiplied by the direct labor cost per hour

b. budgeted units to be produced are multiplied by direct labor cost per hour to determine budgeted direct labor cost

c. the production manager projects the average direct labor costs

d. the actual direct labor cost per hour must be known

-------------------------------

Moheet Manufacturing company is preparing operating budget for the next year. Indicate which of the following statements regarding the manufacturing overhead budget is incorrect?

Select one:

a. The manufacturing overhead budget calculates the budgeted overhead costs for the year and also the predetermined overhead allocation rate for the year.

b. Depreciation on manufacturing equipment is not included because the production manager has no control over that cost allocation.

c. The cost accountant and the production manager work together to project variable and fixed manufacturing costs.

d. Both fixed and variable manufacturing overhead costs are budgeted.

-------------------------

MARIA manufacturing company is considering establishment of a new branch and wants to use capital budgeting. Assume that this capital investment has a net present value of $1,000.00 at a required rate of return of 10%. At a 12% required rate of return, the net present value of the investment is $100.00. At a 14% required rate of return, the net present value of the investment is $0. The capital investment should be rejected if ________.

Select one:

a. the required rate of return is less than 12%

b. the required rate of return is less than 14%

c. the required rate of return exceeds 14%

d. the required rate of return exceeds 12%