CHAP 25 - If you're not able to answer each question, please skip entirely.

1) In October, Pine Company reports 18,700 actual direct labor hours, and it incurs $161,600 of manufacturing overhead costs. Standard hours allowed for the work done is 20,200 hours. The predetermined overhead rate is $8.15 per direct labor hour. In addition, the flexible manufacturing overhead budget shows that budgeted costs are $6.25 variable per direct labor hour and $46,800 fixed. Compute the overhead controllable variance. (Round answer to 0 decimal places, e.g. 125.)

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2) Wayne Company is considering a long-term investment project called ZIP. ZIP will require an investment of $141,328. It will have a useful life of 4 years and no salvage value. Annual cash inflows would increase by $88,600, and annual cash outflows would increase by $40,200. The companys required rate of return is 12%. Click here to view PV table. Calculate the internal rate of return on this project. (Round answers to 0 decimal places, e.g. 15%.)

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APPENDIX G

3) Jozy Altidore invested $6,400 at 10% annual interest, and left the money invested without withdrawing any of the interest for 12 years. At the end of the 12 years, Jozy withdrew the accumulated amount of money.

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4) For each of the following cases, indicate (a) what interest rate columns and (b) what number of periods you would refer to in looking up the future value factor.

Overhead Controllable Variances Neither favorable nor unfavorable Unfavorable Favorable 16 Internal rate of return on this project is between % and olo (a) What amount did Jozy withdraw, assuming the investment earns simple interest? Accumulated amount 7,680 (b) What amount did Jozy withdraw, assuming the investment earns interest compounded annually? (Round answer to 2 decimal places, e.g. 25.25.) Accumulated amount (2) In Table 2 (future value of an annuity of 1): Number of Annual Rate Years Invested Compounded 5 % Annually 12% Semiannually Case A Case B (a) (b) Case AT 1 % 7 periods Case B 6 % C 4.5 periods