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162) To maximize profits, produce the product with the lowest contribution margin per unit of the constraint. 163) When making product mix decisions, companies are most profitable when they maximize production of the product with the greatest sales demand. 164) When making product mix decisions, companies are most profitable when they maximize production of the product with the greatest sales price. 165) All of the following are product mix considerations except A) What constraint(s) stops us from making (or displaying) all of the units we can sell? B) Which products offer the highest contribution margin per unit of the constraint? […]

91) A rate variance for direct labor measures how well a company keeps unit prices of labor inputs within standards. 92) If the standard quantity allowed for direct labor is less than the actual quantity used, the efficiency variance is favorable. 93) Which variance is directly impacted if the employees who build the product go on strike and temporary workers who are slower and not as skilled are hired? A) Materials price variance B) Materials quantity variance C) Labor efficiency variance D) Labor rate variance 94) How is the direct labor rate variance calculated? A) The difference between the standard […]

118) Golden Corporation has operating income of $336,000, a sales margin of 16%, and capital turnover of 3.0. The return on investment (ROI) for Golden Corporation would be closest to A) 5%. B) 48%. C) 2%. D) 160%. 119) Kleeman Company has a sales margin of 16%, operating income of $336,000, and capital turnover of 3.0. The sales in dollars for Kleeman Company would be closest to A) $ 3,760. B) $ 12,000. C) $1,008,000. D) $2,100,000. 120) Lewis Company has operating income of $336,000. Its return on investment (ROI) is 48%, while its target rate of return is 10%. […]

142) Senseman Company has three potential projects from which to choose. Selected information on each of the three projects follows: Project A Project B Project C Investment required $ 42,500 $ 56,000 $ 53,700 Net present value of project $ 45,700 $ 75,400 $ 70,200 Using the profitability index, rank the projects from most profitable to least profitable. A) A, B, C B) C, B, A C) B, A, C D) B, C, A 143) Silver Creations is evaluating a project that would require an initial investment of $36,000. The present value of the net cash inflows associated with this […]

152) (Present value tables are needed.) The Janus Vending Machine Company is looking to expand its business by adding a new line of vending machines. The management team is considering expanding into either soda machines or snack machines. Following is the relevant financial data relating to the decision: Soda Machines Snack Machines Investment $75,000 $50,000 Useful life (years) 5 10 Estimated annual net cash inflows for useful life $30,000 $18,000 Residual value $30,000 $10,000 Depreciation method straight-line straight-line Required rate of return 8% 12% What is the net present value for the soda machines? A) $(140,220) B) $24,360 C) $65,220 […]