Question 35 6 pts The actual information pertains to the month of September. As a part of the budgeting process, Twilith Fencing Company developed the following master budget for September. Twilith is in the process of preparing the flexible budget and understanding the results. Actual Flexible Master Results Budget Budget Sales volume (in units) 12.000 15,000 Sales revenues $600,000 $ $750,000 Variable costs 307.200 $ 360,000 Contribution margin 292,800 $ 390,000 Fixed costs 274,800 $ 270.000 $ $ 18,000 $ 120,000 Operating profit The spending variance for operating income is: Fle Master Budget Results Budget Sales volume (ib units) 12.000 15.000 Sales revenues $600,000 $ $750,000 Variable costs 307.200 $ 360.000 Contribution margin 292,800 $ 390,000 Fixed costs 274.800 $ 270.000 Operating profit $ 18.000 $ $ 120.000 The spending variance for operating income is: O $102,000 unfavorable O $24,000 unfavorable O $42,000 unfavorable $19,200 unfavorable Question 20 6 pts Karpets Industries is investing in a new high-speed loom for weaving its rugs and carpets. The new loom will have a useful life of 7 years and cost $80,000. The loom's residual value is $5,000. Assume that Karpets requires a return of 10% and that the loom will create annual cash savings of $16,250. What is the net present value (NPV) of the new loom? at 10% at 10% PV of an annuity of # of year PV of $1 $1 1 0.9091 0.9091 2 0.8264 1.7355 3 0.7513 2.4869 4. 0.683 3.1699 5 0.6209 3.7908 6 0.5645 4.3553 7 0.5132 4.8684 8 0.4665 5.3349 9 5.759 0.4241 0.3855 10 6.1446 at 10% # of years PV of $1 1 0.9091 0.8264 2 at 10% PV of an annuity of $1 0.9091 1.7355 2.4869 3.1699 3.7208 4.3553 3 0.7513 4 0.6830 5 0.6209 0.5645 6 7 0.5132 0.4665 8 4.8684 5.3349 5.7590 6.1446 9 0.4241 0.3855 10 O $(164.220): no $100,000: no O $164.220: yes $(100,000): yes Question 35 6 pts The actual information pertains to the month of September. As a part of the budgeting process, Twilith Fencing Company developed the following master budget for September. Twilith is in the process of preparing the flexible budget and understanding the results. Actual Flexible Master Results Budget Budget Sales volume (in units) 12.000 15,000 Sales revenues $600,000 $ $750,000 Variable costs 307.200 $ 360,000 Contribution margin 292,800 $ 390,000 Fixed costs 274,800 $ 270.000 $ $ 18,000 $ 120,000 Operating profit The spending variance for operating income is: Fle Master Budget Results Budget Sales volume (ib units) 12.000 15.000 Sales revenues $600,000 $ $750,000 Variable costs 307.200 $ 360.000 Contribution margin 292,800 $ 390,000 Fixed costs 274.800 $ 270.000 Operating profit $ 18.000 $ $ 120.000 The spending variance for operating income is: O $102,000 unfavorable O $24,000 unfavorable O $42,000 unfavorable $19,200 unfavorable Question 20 6 pts Karpets Industries is investing in a new high-speed loom for weaving its rugs and carpets. The new loom will have a useful life of 7 years and cost $80,000. The loom's residual value is $5,000. Assume that Karpets requires a return of 10% and that the loom will create annual cash savings of $16,250. What is the net present value (NPV) of the new loom? at 10% at 10% PV of an annuity of # of year PV of $1 $1 1 0.9091 0.9091 2 0.8264 1.7355 3 0.7513 2.4869 4. 0.683 3.1699 5 0.6209 3.7908 6 0.5645 4.3553 7 0.5132 4.8684 8 0.4665 5.3349 9 5.759 0.4241 0.3855 10 6.1446 at 10% # of years PV of $1 1 0.9091 0.8264 2 at 10% PV of an annuity of $1 0.9091 1.7355 2.4869 3.1699 3.7208 4.3553 3 0.7513 4 0.6830 5 0.6209 0.5645 6 7 0.5132 0.4665 8 4.8684 5.3349 5.7590 6.1446 9 0.4241 0.3855 10 O $(164.220): no $100,000: no O $164.220: yes $(100,000): yes
