Question

1) Frogue Corporation uses a standard cost system. The following information was provided for the period that just ended:

Actual price per kilogram	$3.00
Actual kilograms of material used	31,000
Actual hourly labor rate	$18.20
Actual hours of production	4,900 labor hours
Standard price per kilogram	$2.80
Standard kilograms per completed unit	6 kilograms
Standard hourly labor rate	$18.00
Standard time per completed unit	1 hr.
Actual total factory overhead	$34,900
Actual fixed factory overhead	$18,000
Standard fixed factory overhead rate	$1.20 per labor hour
Standard variable factory overhead rate	$3.80 per labor hour
Maximum plant capacity	15,000 hours
Units completed during the period	5,000

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The direct labor cost variance is:

2) The condensed income statement for a business for the past year is as follows:

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	Product
	A	B
Sales	$800,000	$550,000
Less variable costs	720,000	430,000
Contribution margin	$ 80,000	$120,000
Less fixed costs	125,000	45,000
Income (loss) from operations	$(45,000)	$ 75,000

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Management is considering the discontinuance of the manufacture and sale of Product A at the beginning of the current year. The discontinuance would have no effect on the total fixed costs and expenses or on the sales of Product B. What is the amount of change in net income for the current year that will result from the discontinuance of Product A?

3) Rico Inc. issues a 90-day, 4%, $3,000 note on account. This transaction:

Select one:

a. increases net assets and earnings per share of the company.

b. decreases net assets and increases earnings per share of the company.

c. has no effect on net assets and earnings per share of the company.

d. decreases net assets and earnings per share of the company.

4) Which of the following is the effect of impaired goodwill on liquidity and profitability metrics?

Select one:

a. Both profitability and liquidity will remain unaffected

b. Both profitability and liquidity will decrease

c. Profitability will increase, whereas liquidity will remain unaffected

d. Liquidity will decrease, whereas profitability will increase

Answer 1