The time value of money is explained by which of the following?
A) Invested money earns income over time.
B) Money is more valuable over time.
C) Interest is always compounded over time.
D) A stream of payments is received over time.
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Michael Corporation manufactures railroad cars, which is its only product. The standards for the railroad cars are as follows:
Standard tons of direct material (steel) per car 4
Standard cost per ton of steel $17.00
During the month of March, the company produced 1,650 cars. Related production data for the month follows:
Actual materials purchased and used (tons) 6,650
Actual direct materials total cost $115,000
What is the direct materials price variance for the month?
A) $1,950 unfavorable
B) $850 unfavorable
C) $850 favorable
D) $1,950 favorable
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Management by exception would dictate that the manager investigate which of the following variances?
A) Variances which are greater than a budget and actual dollar amount or percentage
B) Variances which are less than budget and actual dollar amount or percentage
C) All unfavorable variances
D) All favorable and unfavorable variances
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The Porch Cushion Company manufactures foam cushions. The number of cushions to be produced in the upcoming three months follows:
Number of foam cushions to be produced in July 12,000
Number of foam cushions to be produced in August 15,000
Number of foam cushions to be produced in September 10,000
Each cushion requires 2 pounds of the foam used as stuffing. The company has a policy that the ending inventory of foam each month must be equal to 25% of the following month's expected production needs. How many pounds of foam does The Porch Cushion Company need to purchase in August?
A) 22,500
B) 42,500
C) 27,500
D) 20,000
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The subscription sales manager at The New York Times may be in charge of a(n)
A) investment center.
B) revenue center.
C) profit center.
D) cost center.
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The human resources department for Kohl's Department Stores may be classified as a(n)
A) cost center.
B) investment center.
C) revenue center.
D) profit center.
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(Present value tables are needed.) Cleveland Cove Enterprises is evaluating the purchase of an elaborate hydraulic lift system for all of its locations to use for the boats brought in for repair. The company has narrowed their choices down to two: the B14 Model and the F54 Model. Financial data about the two choices follows.
B14 Model F54 Model
Investment $320,000 $240,000
Useful life (years) 8 8
Estimated annual net cash inflows for useful life $70,000 $35,000
Residual value $30,000 $10,000
Depreciation method Straight-line Straight-line
Required rate of return 14% 10%
What is the net present value of the F54 Model?
A) $15,260 positive
B) $156,395 positive
C) $191,395 positive
D) $48,605 negative
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How is the direct labor efficiency variance calculated?
A) The difference between the standard labor rate and the actual labor rate
B) The difference between the standard labor hours and the actual labor hours used
C) The difference between the standard labor hours allowed and the actual labor hours used multiplied by the actual labor rate
D) The difference between the standard labor hours allowed and the actual labor hours used multiplied by the standard labor rate
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