16.The predetermined overhead rate for Zane Company is $5,comprised of a variable overhead rate of $3 and a fixed rate of $2.The amount of budgeted overhead costs at normal capacity of$150,000 was divided by normal capacity of 30,000 direct labor hours,to arrive at the predetermined overhead rate of $5.Actual overhead for June was 9,500 variable and 6,050 fixed,and standard hours allowed for the product porduced in June was3,000 hours.The total overhead variance isa.3,050 Fb.550 Fc.550 Ud.3,050 U17.The predetermined overhead rate for Zane Company is $5,comprised of a variable overhead rate of $3 and a fixed rate of $2.The amount of budgeted overhead costs at normal capacity of$150,000 was divided by normal capacity of 30,000 direct labor hours,to arrive at the predetermined overhead rate of $5.Actual overhead for June was$8,900 variable and 5,400fixed,and 1,500 units were produced.The direct labor standard is 2hours per unit produced.The total overhead variance isa.1,800 Fb.700 Fc.700 Ud.1,800 U18.Which of the following is true?a.The form,content,and frequency of variance reports vary considerably among companiesb.The form,content,and frequency of variance reports do not vary among companiesc.The form and content of variance reports vary considerably among companies,but the frequency is always weeklyd.The form and content of variance reports are consistent among companies,but the frequency varies19.Denmark Corporation’s variance report for the purchasing department reports1,000 units of material A purchased and 2,400 units of material B purchased.It also reports standard prices of$2 for material A and $3 for Material B.Actual prices reported are$2.10 for Material A and $2.80 for Material B.Denmark should report a total price variance ofa.380 Fb.340 Fc.340 Ud.380 U20.When is a variance considered to be’material’?a.when it is large compared to the actual costb.when it is infrequentc.when it is unfavorabled.when it could have been controlled more effectively21.Variance reports area.external financial reportsb.SEC financial reportsc.internal reports for managementd.all of these22.The following information was taken from the annual manufacturing overhead cost budget of Fergie ManufacturingVariable manufacturing overhead costs$92,400Fixed manufacturing overhead costs55,440Normal production level in labor hours30,800Normal production level in units5,775Standard labor hours per unit 4During the year,5,600 units were produced,18,340 hours were worked, and the actual manufacturing overhead was $151,200.Actual fixed manufacturing overhead costs equaled budgeted fixed manufacturing overhead costs.Overhead is applied on the basis of direct labor hours.22-1.Fergie’s total overhead variance is 7840U22-2.Fergie’s controllable overhead variance is 6160U22-3.Fergie’s volume overhead variance isa.1,680 Ub.6,160 Uc.7,840d.22,40023.Use the following table,Present Value of and Annuity of 1Period 8% 9% 10%1 .926 .917 .9092 1.783 1.759 1.7363 2.577 2.531 2.487A company has a minimum required rate of return of 9%.It is considering investing in a project which costs#350,000 and is expected to generate cash inflows of $140,000 at the end of each year for three years.The net present value of this project isa.354,340b.70,000c.35,436d.4,34024.The discount rate is referred to by all of the following alternative names except thea.accounting rate of returnb.cutoff ratec.hurdle rated.required rate of return25.The rate that a company must pay to obtain funds from creditors and stockholders is known as thea.hurdle rateb.cost of capitalc.cutoff rated.all of these26.The higher the risk element in a project,thea.more attractive the investmentb.higher the net present valuec.higher the cost of capitald.higher the discount rate27.If a company’s required rate of return is 10%and, in using the net present value method,a project’s net present value is zero,this indicates that thea.project”s rate of return exceeds10%b.project’s rate of return is less than the minimum rate requiredc.porject earns a rate of return of 10%d.project earns a rate of return of 0%28.If a preoject has a profitability index of1.20,then the project’s internal rate of return isa.equal to the discount rateb.less than the discount ratec.greater than the discount rated.equal to 20%31.which one of the following affects cash during a period?a.Recording depreciation expenseb.Declaration of a cash dividendc.write-off of an uncollectible account receivabled.Payment of an accounts payable32.In calculating cash flows from operating activities using the indirect method,a gain on the sale of equipment isa.added to net incomeb.deducted from net incomec.ignored because it does not affect cashd.not reported on a statement of cash flows
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