Multiple choice ten questions managerial accounting

able costs should be higher than expected. If activrty is 1. If activit ' is higher than expected, total vari ) be lower than expected. lower than expected, total variable costs should a) True b) False 2. A material price variance is favorable if the actual price exceeds the standard price. a) True b) False 3. Which department should usually be held responsible for an unfavorable materials price variance? a) Production. b) Materials Handling. c) Engineering. d) Purchasing. 4. If the labor efficiency variance is unfavorable, then a) actual hours exceeded'standard hours allowed for the actual output. b) standard hours allowed for the actual output exceeded actual hours. c) the standard rate exceeded the actual rate. d) the actual rate exceeded the standard rate. 5. Variable manufacturing overhead is applied to products on the basis of standard direct labor-hours. If the direct labor efficiency variance is unfavorable, the variable overhead efficiency variance will be: a) favorable. b) unfavorable. 0) either favorable or unfavorable. d) zero. . An investment project for which the net present value is $300 Whim of the fulluw'ing conclusions? ' a) The net present value is toe small, pmiecit should he ba The rate ofcemmofthe I c) memmmmmwamsmmarmmmmmwmmamw. d) lis'lgk'ifimiii Be am fine} (peasants calm is m 19min 4 :(Ignore income taxes in this problem.) Shields Company has gath investment project: Investment required in equipment ................ $400,000 Annual cash inflows ................................. $80,000 Salvage value .................. ' .............................. $O Life of the investment ................................ 10 years Discount rate ..................... L ........................ 10% Use this data to answer questions 7 to 10. 7. The payback period for the investment is closest to: a) 0.1 years b) 0.2 years. c) 5.0 years. d) 10.0 years. 8. The simple rate of return on the investment is Closest to: a) 5%. b) 10%. c) 15%. d) 20%. 9. The internal rate of return on the investment is closest to: a) 5%. ' b) lO%. 0) 15%. d) 20%. 10. The net present value on this investment is closest to. a) $400,000. b) $80,000. c) $76,950 d) $91,600. ered the following data on a proposed