Please see the attached file for questions

1) Pickleball Company is considering the following investment proposal: Initial investment: Depreciable assets (straight-line) Working capital Operations (per year for 4 years): Cash receipts Cash expenditures Disinvestment: Salvage value of equipment Recovery of working capital Discount rate: $72,000 8,000 $50,000 22,000 $6,000 8,000 10 percent Additional information for interest rate of 10 percent and four time periods: Present value of $1 Present value of an annuity of $1 0.683 3.170 What is the net present value for the investment? A) $ 5,256 B) $18,322. C) $57,060 D) $65,256 2) Read Publishing is considering the purchase of a used printing press costing $84,200. The printing press would generate a net cash inflow of $37,422 a year for 3 years. At the end of 3 years, the press would have no salvage value. The company's cost of capital is 10 percent. The company uses straight-line depreciation. The present value factors of an annuity of $1.00 for different rates of return are as follows: Period 2 3 4 8% 1.78 2.58 3.31 10% 1.74 2.49 3.17 Cost of Capital 12% 1.69 2.40 3.04 14% 1.65 2.32 2.91 16% 1.61 2.25 2.80 The investments internal rate of return (rounded to the nearest percent) is: A) 10 percent B) 16 percent. C) 14 percent D) 12 percent 3). A project under consideration has a net present value of $10,000 for a required investment of $60,000. There are no other investment options at this time. However, the assumed discount rate used to calculate the net present value is 20%. On the basis of this information alone, this project should: A) Definitely be rejected because $10,000 is only 17% of $60,000 B) Be rejected on the basis that the project loses $50,000 C) Probably be approved since the net present value is greater than zero. D) Be accepted if the cost of capital is greater than or equal to 20 percent 4). Clarinet Publishing is considering the purchase of a used printing press costing $38,400. The printing press would generate a net cash inflow of $20,000 a year for 5 years. At the end of 5 years, the press would have no salvage value. The company's cost of capital is 10 percent. The company uses straight-line depreciation. The investment's payback period in years (rounded to two decimal points) is: A) 2.56 B) 2.13 C) 1.92. D) 3.00 5). Sammy Corporation is considering an investment in equipment for $150,000 with a four-year life and no salvage value. Sammy uses the straight-line method of depreciation and is subject to a 34 percent tax rate. Over the life of the project, the total tax shield created by depreciation is: A) $ 25,000 B) $ 51,000. C) $ 40,800 D) $150,000 6). Next Step Company is a two-division firm and has the following information available for this year: Common fixed costs Direct fixed costs of Division A Direct fixed costs of Division B Sales revenue of Division A Sales revenue of Division B Variable costs of Division A Variable costs of Division B $ 800,000 200,000 400,000 1,200,000 1,800,000 240,000 360,000 What is Division A's contribution margin? A) $ 840,000 B) $ 960,000. C) $ 560,000 D) $(240,000) 7). The Durango Lumber Company had the following historical accounting data, per 100 board feet, concerning one of its products in the Sawmill Division: Finished shelving: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead $60 32 16 24 The historical data is based on an average volume per period of 20,000 board feet. The shelving is normally transferred internally from the Sawmill Division to the Finishing Division. Durango may also sell the shelving externally for $180 per 100 board feet. The divisions are taxed at identical rates. Which of the following transfer pricing methods would lead to the highest Finishing Division income if 10,000 board feet are produced and transferred in entirety this period from Sawmill to Finishing? A) Market price B) All variable costs plus 50 percent markup. C) Full absorption costing plus 10 percent markup D) None of these methods generates a higher division income than another 8). If the International Division of Latin American Products had an investment turnover of 2.7 and a return on sales of 0.24, the return on investment would be: A) 26.7% B) 52.8% C) 64.8%. D) 384.0% 9) Assume that the standard cost to make one finished unit includes 2 hour of direct labor at $8 per hour. During April, 22,000 direct labor-hours were worked, 10,500 units of product were manufactured, and total direct labor cost was $160,000. What is the labor rate variance for April? A) $ 2,000 (U) B) $ 2,000 (F) C) $16,000 (U) D) $16,000 (F). 10) The management of Mouser Manufacturing is analyzing variable overhead variances for the fiscal period just ended. The flexible budget called for $352,000 in variable overhead but actual variable overhead was $400,000. In computing the overhead variances, Mouser management discovered that it had used 80,000 pounds of direct material, rather than the budgeted amount of 88,000 pounds. (Pounds of direct material is the single overhead driver of variable overhead). The standard variable overhead rate per pound of direct material is $4.00. What is Mouser's variable overhead spending variance? A) $16,000 (F) B) $80,000 (U). C) $36,000 (U) D) $40,000 (U) 11). Leo Production Company has the following information: Standard fixed factory overhead rates per direct labor-hour $3.00 Standard variable factory overhead rates per direct labor-hour Actual number of units produced Actual factory overhead costs (includes $70,000 fixed) Actual direct labor hours $10.00 12,000 units $156,000 12,000 hours Standard factory overhead rates are based on a normal monthly volume of 10,000 units (1 standard direct labor-hour per unit). What is Leo's variable overhead efficiency variance? A) $ 6,000 (U) B) $ 4,000 (F) C) $ -0-. D) $10,000 (F) 12) Jewelry Company has a sales budget for next month of $450,000. Cost of goods sold is expected to be 45 percent of sales. All goods are paid for in the month following purchase. The beginning inventory of merchandise is $20,000, and an ending inventory of $24,000 is desired. Beginning accounts payable is $206,500. The cost of goods sold for next month is expected to be: A) $160,000 B) $202,500. C) $360,000 D) $406,000 13) The Year 1 selling expense budget for Karin Corporation is as follows: Budgeted sales Selling costs: Delivery expenses Commission expenses Advertising expenses Office expenses Miscellaneous expenses Total $2,500,000 $25,000 75,000 20,000 12,000 30,000 $ 162,000 Delivery and commission expenses vary proportionally with budgeted sales in dollars. Advertising and office expenses are fixed. Miscellaneous expenses include $10,000 of fixed costs. The rest varies with budgeted sales in dollars. The Year 2 budgeted sales is $3,400,000. What will be the value for commission expenses in the Year 2 selling expense budget? A) $102,000. B) $ 24,000 C) $ 48,000 D) $122,000 14) Periwinkle Manufacturing Company has the following budgeted costs for 10,000 units: Variable Costs $200,000 100,000 $300,000 Manufacturing Selling & Administrative Total Fixed Costs $ 75,000 25,000 $100,000 What is the markup on fixed costs needed to obtain a target profit of $125,000? A) 300.0 percent B) 400.0 percent C) 150.0 percent D) 425.0 percent. 15) Periwinkle Manufacturing Company has the following budgeted costs for 10,000 units: Variable Costs $200,000 150,000 $350,000 Manufacturing Selling & Administrative Total Fixed Costs $ 75,000 25,000 $100,000 What is the markup on variable costs needed to break even? A) 28.6 percent. B) 150.4 percent C) 33.3 percent D) 300.0 percent 16) Cardinal Company allocates common Building Department costs to producing departments (A and B) based on space occupied, and it allocates common Personnel Department costs based on the number of employees. Space occupancy and employee data are as follows: Building Space occupied Employees Personnel Dept. A Dept. B 200 ft. 1,000 ft. 24,000 ft. 7,000 ft. 3 5 90 25 If Cardinal uses the direct allocation method, the ratio representing the portion of Personnel costs allocated to Department A is: A) 80/105 B) 90/115. C) 80/113 D) None of the above