Question 6.6. Budgeted overhead for Mangini Company at normal capacity of 30,000 direct labor hours is $6 per hour variable and $4 per hour fixed. In April, $310,000 of overhead was incurred in working 31,500 hours when 32,000 standard hours were allowed. What is the overhead controllable variance? (Points : 2)

$2,000 favorable $5,000 favorable $10,000 favorable $10,000 unfavorable

Question 7.7. In what terms is a total materials variance analyzed? (Points : 2)

price and quantity variances buy and sell variances quantity and quality variances tight and loose variances

Question 8.8. Bish Company had an investment which cost $270,000 and had a salvage value at the end of its useful life of zero. If Bish's expected annual net income is $16,200, what is the annual rate of return? (Points : 2)

6% 8.3% 12% 16.7%

Question 9.9. Spencer Company is contemplating the replacement of an old machine with a new one. The following information has been gathered: Old Machine New Machine Price $390,000 $530,000 Accumulated Depreciation 170,000 -0- Remaining useful life 6 years -0- Useful life -0- 10 years Annual operating costs $167,000 151,500 If the old machine is replaced, it can be sold for $120,000. Which of the following amounts is a sunk cost? (Points : 2)

$151,500 $167,000 $170,000 $ 220,000

Question 10.10. If a company must expand capacity to accept a special order, what would you presume would happen? (Points : 2)

There would be an increase in unit variable costs. There would be no increase in fixed costs. There would be an increase in variable and fixed costs per unit. There would be an increase in fixed costs.