Minden Co. had $500,000 of equity share capital, on which the return was 16%, and $1,500,000 of debt, on which the interest rate was 10%. The tax rate was 40%. The weighted average cost of capital was Southron Inc. makes electrical appliances such as toasters, irons and dustbusters. The flexible (variable) cost per unit is $15. Fixed cost is $250,000 per month. The appliances are sold to retailers for $25 each, on average. Fixed costs are allocated to products on the basis of direct labour hours, and the budget for January is that 10,000 direct labour hours will be worked. The budgeted overhead recovery rate for January is * O $ a) $10.00 per direct labour hour b) $25.00 per direct labour hour c) $2.50 per direct labour hour d) $10,00 per unit produced O e) none of the above Jemima's Outfits has a store in Dixie Outlet Mall. It specializes in high-class ladies fashions and sells complete outfits for a uniform price of $75 each. The sales budget for 2007 was to sell 6,000 outfits. If the actual sales for 2007 are 6,750 units, there would be * a) a favourable sales variance O b) an unfavourable sales variance b c) a favourable cost variance d) an unfavourable cost variance O e) none of the above