Question :
PART I — MULTIPLE CHOICE (30 points)
Instructions: Designate the best : 1311545
PART I — MULTIPLE CHOICE (30 points)
Instructions: Designate the best answer for each of the following questions.
1. Wilson Company determined that its standard number of hours that should have been worked for the output attained is 6,000 direct labor hours and the actual number of direct labor hours worked was 5,800. The direct labor price variance was $1,160 unfavorable, and the standard rate of pay was $14 per direct labor hour, what was the actual rate of pay for direct labor?
a. $14.20 per direct labor hour
b. $13.80 per direct labor hour
c. $14.39 per direct labor hour
d. $14.68 per direct labor hour
2. Which one of the capital budgeting methods does not use cash flow amounts?
a. Cash payback technique
b. Annual rate of return method
c. Internal rate of return method
d. Net present value method
3. Which method does not consider time value of money?
a. Profitability index
b. Net present value method
c. Internal rate of return method
d. Annual rate of return
4. A company uses 2,400 pounds of materials and exceeds the standard by 80 pounds. The quantity variance is $40 unfavorable. What is the standard price?
a. $2.00
b. $62.00
c. $5.00
d. $0.50
5. Which of the following is considered to be a rigorous but attainable standard?
a. All material standards
b. Normal standards
c. Ideal standards
d. Balanced standards
6. A company uses 30,000 pounds of materials for which the price paid was $3.80 a pound. The materials price variance was $3,000 favorable. What is the standard price per pound?
a. $10.00
b. $3.90
c. $3.70
d. $13.80
7. An unfavorable materials quantity variance would occur if
a. more materials are purchased than are used.
b. actual pounds of materials used were less than the standard labor hours.
c. actual labor hours were greater than the standard labor hours allowed.
d. actual pounds of materials used were greater than the standard pounds allowed.
8. The annual rate of return method of capital budgeting
a. incorporates the time value of money.
b. considers the timing of the cash flows.
c. ignores length of time over which the cash flows will be received.
d. all of the above.
9. Which statement is true?
a. A project with an internal rate of return that is zero or positive is acceptable.
b. A project with a net present value that is zero is acceptable.
c. Potential salvage value is ignored as a noncash flow item.
d. The internal rate of return method cannot be calculated when unequal annual cash inflows exist.
10. Which statement is true concerning how the internal rate of return is expressed?
a. As a yes-no decision
b. As a dollar amount
c. In years
d. In the same expression as the annual rate of return
11. Which statement is true as it relates to a standard cost?
a. It is the actual cost of a unit of product.
b. It represents the selling price of a product to produce the most profit.
c. It is a total budgeted amount in the accounting records.
d. It is often journalized in the accounting system.
*12. From what does the overhead volume variance result?
a. Variable overhead costs
b. Fixed overhead costs
c. Both variable and fixed overhead costs
d. All manufacturing costs
