Question 1

Eddie's Embroidery makes a jacket that should take 1.5 direct labor hours at $16.00 per hour. In April, 2,000 jackets were made that required 3,150 direct labor hours. Eddie's actual payroll during April was $49,140. What is the labor quantity variance?

Group of answer choices

$2,400 F

$1,260 F

$2,400 U

$1,140 U

Question 2

Kerr Kompany is considering investing in a project that costs $50,000 and is expected to generate cash inflows of $20,450 at the end of each year for three years.

The company requires a 11% rate of return on all new investments.

Present Value of an Annuity of 1

Periods 9% 10% 11% 12%

3 2.531 2.489 2.444 2.402

4 3.239 3.170 3.102 3.037

The profitability index for this project is:

Group of answer choices

1.00.

1.24.

0.80.

1.27.

Question 3

Vulcan Chemical is considering two capital investment proposals for plant-wide battery systems. Estimates regarding each project are provided below:

Lithium Ion Nickle Cadmium

Initial investment $200,000 $300,000

Annual net income 30,000 46,000

Net annual cash inflow 110,000 146,000

Estimated useful life 5 years 6 years

Salvage value -0- -0-

The company requires a 10% rate of return on all new investments.

Present Value of an Annuity of 1

Periods 9% 10% 11% 12%

5 3.890 3.791 3.696 3.605

6 4.486 4.355 4.231 4.111

The cash payback period for Nickle Cadmium is:

Group of answer choices

6.65 years.

2.05 years.

3.35 years.

2.5 years.

Question 4

Vulcan Chemical is considering two capital investment proposals for plant-wide battery systems. Estimates regarding each project are provided below:

Lithium Ion Nickle Cadmium

Initial investment $200,000 $300,000

Annual net income 30,000 46,000

Net annual cash inflow 110,000 146,000

Estimated useful life 5 years 6 years

Salvage value -0- -0-

The company requires a 10% rate of return on all new investments.

Present Value of an Annuity of 1

Periods 9% 10% 11% 12%

5 3.890 3.791 3.696 3.605

6 4.486 4.355 4.231 4.111

The net present value for Lithium Ion is:

Group of answer choices

$417,010

$635,830.

$335,830.

$217,010

Question 5

Vulcan Chemical is considering two capital investment proposals for plant-wide battery systems. Estimates regarding each project are provided below:

Lithium Ion Nickle Cadmium

Initial investment $200,000 $300,000

Annual net income 30,000 46,000

Net annual cash inflow 110,000 146,000

Estimated useful life 5 years 6 years

Salvage value -0- -0-

The company requires a 10% rate of return on all new investments.

Present Value of an Annuity of 1

Periods 9% 10% 11% 12%

5 3.890 3.791 3.696 3.605

6 4.486 4.355 4.231 4.111

The annual rate of return for Lithium Ion is:

Group of answer choices

55%.

27.5%.

15.0%.

30.0%.