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Oliver Enterprises has collected the following data for one of its products: Direct materials standard (8 pounds per unit @ $0.5ОЛЬ.) Direct materials flexible budget variance-unfavorable Actual Direct Materials Used (AQU) Actual finished goods produced $4.00 per finished good $14,000 31,000 pounds 20,000 units How much is the direct materials quantity variance? O A. $80,000 favorable O B. $80,000 unfavorable O C. $15,500 unfavorable O D. $64,500 favorable
Redwood Corporation is considering two alternative investment proposals with the following data: Proposal X Proposal Y 9 years $90,000 Straight-line $860,000$475,00 Investment Useful life Estimated annual net cash inflows for 9 years Residual value Depreciation method Required rate of return 9 years $135,000 $38,000 Straight- line 12% 11% What is the accounting rate of return for Proposal X? (Round any intermediary calculations to the nearest dollar, and round your final ar of a percent, X.XX%.) OA. 15.70% B. 7.84% C. 4.59% OD, 5.08%
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Answer #1
Answer to part 1
Material Quantity Variance
SR*(SQ-AQ)
(Standard Rate*Standard quantity for actual output)- (Standard Rate*Actual Quantity)
(0.50*8*20000) - (0.50*31000)
64500 Favorable
Therefore, the right answer is option (d) 64500 Favorable
Answer to part 2
Accounting rate of return
Estimated annual net cash flows 135000
Less: Depreciation [(860000-38000)/9] 91333
Investment 860000
Accounting rate of return [((135000 - 91333)/860000)*100] 5.08%
The right answer is option (d) 5.08%
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