1. The following report compares budgeted and actual costs and production for the milling department of the Stuart Company for the month of July 2016:
Planned Actual
Units of production.............. 200,000 196,000
Materials............................ $300,000 $296,400
Direct Labor........................ 100,000 100,600
Supplies............................... 40,000 40,200
Maintenance........................ 20,000 22,000
Taxes.................................... 1,000 1,100
Materials, direct labor, and supplies are considered completely variable costs. Maintenance was originally budgeted at $6,000 plus $0.07 per unit of output.
Using the data given above to evaluate the performance of the milling department in the month of July, which of the following statements is TRUE?
A. There is actually an unfavorable variance for materials of $2,400.
B. There is actually an unfavorable variance for direct labor of $2,600.
C. There is actually an unfavorable variance in maintenance costs incurred of $2,280.
D. All of the other answers are true.
2. The current sales for Richard Corporation are $350,000 and break-even units are 10,000 at a price of $25 per unit. What is the margin of safety?
A. $ 25,000
B. $ 50,000
C. $100,000
D. $250,000
3. The Redwood Company is considering the purchase of a new machine. The machine costs $200,000 and has an estimated useful life of five years with no salvage value. It is expected to save $56,000 cash per year for five years.
The approximate Internal Rate of Return is:
A. 4%.
B. 12.4%.
C. 13.0%.
D. 13.5%.
4. If you were to receive $2,000 per year for the next 40 years and you invested that in an investment that earned 13% per year, how much would you have at the end of the 40 years?
A. $15,268.75
B. $265,563.10
C. $82,061.80
D. $2,027,408.49
5. The following Balance Sheet is given for Webster, Inc:
|
Webster, Inc.
Balance Sheets
December 31, 2017 and 2016
|
|
|
2017
|
2016
|
| Assets |
|
|
|
Current assets:
|
|
|
|
Cash
|
$114,000
|
$96,000
|
|
Accounts receivable
|
190,000
|
178,000
|
|
Inventory
|
146,000
|
164,000
|
|
Prepaid expenses
|
188,000
|
176,000
|
|
Total current assets
|
$638,000
|
$614,000
|
|
Property, plant, and equipment
|
124,000
|
110,000
|
|
Intangible assets
|
64,000
|
54,000
|
|
Total assets
|
$826,000
|
$778,000
|
| Liabilities and Stockholders' Equity |
|
|
|
Liabilities:
|
|
|
|
Current liabilities
|
$140,000
|
$136,000
|
|
Long-term liabilities-8% bonds
|
60,000
|
60,000
|
|
Total liabilities
|
$200,000
|
$196,000
|
|
Stockholders' equity:
|
|
|
|
6% preferred stock, $50 par; 800
|
|
|
|
shares authorized and outstanding
|
$80,000
|
$80,000
|
|
Common stock, $25 par
|
100,000
|
100,000
|
|
Paid-in capital in excess of par
|
44,000
|
44,000
|
|
Retained earnings
|
402,000
|
358,000
|
|
Total stockholders' equity
|
$626,000
|
$582,000
|
|
Total liabilities and stockholders'
|
|
|
|
equity
|
$826,000
|
$778,000
|
The current ratio for 2017 is:
A. 4.47:1
B. 4.56:1
C. 4.51:1
D. .219:1