Question

In: Accounting

10)Oxford Co. has a materials standard of 2.1 pounds per unit of output. Each pound has a standard price of $14 per pound.

 

10)Oxford Co. has a materials standard of 2.1 pounds per unit of output. Each pound has a standard price of $14 per pound. During February, Oxford Co. paid $57,300 for 4,810 pounds, which were used to produce 2,400 units. What is the direct materials quantity variance?

A) $3,220 favorable

B)$8,780 favorable

C)$9,540 unfavorable

D)$1,080 unfavorable

23) Avocado Company has an operating income of $123,900 on revenues of $1,066,000. Average invested assets are $590,000, and Avocado Company has an 13% cost of capital. What is the return on investment?

A)21%

B)8%

C)13%

D)12%

24) Avocado Company has an operating income of $154,980 on revenues of $1,014,000. Average invested assets are $574,000, and Avocado Company has an 9% cost of capital. What is the profit margin? (Round your answer to the nearest whole percent.)

A)18%

B)9%

C)15%

D)27%

31)Evergreen Corp. has two divisions, Fern and Bark. Fern produces a widget that Bark could use in the production of units that cost $223 in variable costs, plus the cost of the widget, to manufacture. Fern's variable costs are $92 per widget, and fixed manufacturing costs are applied at a rate of $53 per widget. Widgets sell on the open market for $137 each. Evergreen's policy is that internal transfers will be made at full cost. If Bark purchases the widgets from Fern, what will be the transfer price?

A)$92

B)$145

C)$137

D)$223

Solutions

Expert Solution

 

ANSWER TO THE QUESTION (10)                    
      DIRECT MATERIAL VARIANCE IS A. $ 3220 FAVOURABLE        
                           
                           
                           
DIRECT MATERIAL VARIANCE                      
      = (STANDARD POUNDS FOR ACTUAL OUTPUT - ACTUAL POUND USED ) * STANDARD RATE PER POUNDS
                           
      = (2400*2.10 POUNDS - 4810 POUNDS ) X $ 14/POUND        
                           
      = (5040-4810)*14                
                           
      = $3220 FAVOURABLE                
                           
                           
ANSWER TO THE QUESTION (23)                    
      RETURN ON INVESTMENT IS A. 21%            
                           
                           
RETURN ON INVESTMENT                      
      = OPERATING INCOME            
        AVERAGE INVESTED ASSETS            
                           
      = $123,900            
        $590,000            
                           
      = 21%            
                           
                           
ANSWER TO THE QUESTION(24)                    
      PROFIT MARGIN   IS C. 15%            
                           
                           
PROFIT MARGIN                        
      = OPERATING INCOME            
        REVENUE            
                           
      = $154,980            
   

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