43. The following materials standards have been established for a particular pro

Question

43. The following materials standards have been established for a particular product 4.6 Standard quantity per unit of output Standard price grams S 15.05 per gram The following data pertain to operations concerning the product for the last month: 3,100 S 44,020 2,400 300 grams Actual materials purchased Actual cost of materials purchased Actual materials used in production Actual output grams units What is the materials quantity variance for the month? A) $9,940 U B) $15,351 U C) $14,484 U D) $10,535 U 44. Tennill Inc. has a $1,400,000 investment opportunity with the following characteristics: s 4,480,000 Sales Contribution margin ratio Fixed expenses 40% of sales s 1,657,600 The ROI for this year's investment opportunity considered alone is closest to: A)8.1% B) 128.0% C)3.096 D) 9.6% 45 BR Company has a contribution margin of 40%. Sales are S312,500, net operating income is $25,000, and average operating assets are $200,000. What is the company's return on investment (ROD? A) 12.5% B) 62.5% C) 80% D) 64.0% 46. If net operating income is $70,000, average operating assets are $250,000, and the minimum required rate ofretum is 16%, what is the residual income? A) $11,200 B) $40,000 C) S110,000 D) S30,000

Explanation / Answer

Material qty. variance = (Standard qty for actual output - Actual qty. used)*standard price per unit

calculation of standard qty for actual output = 4.6*300 = 1380

actual qty used = 2400(Given)

Standard price per unit = 15.05

SO material quantity variance = (1380 -12400)*15.05

= 15351 U

so (B) option is correct.

44. ROI - Net profit / Investment

Calculation of Net profit -

Investment = 1400000

ROI = 134400/1400000

= 9.60%

(D) option would be the correct option.

45. Return on investment = return / investment

return would be = 25000(Given)

Investment = 200000

ROI = 25000/200000

= 12.5%

(A) option would be correct.

46. Residual income =net operating income -( Average operating assets* Min. required return on assets)

= 70000 - (250000*16%)

= 70000 - 40000

= 30000

so (D) option is correct option

Please comment in case of any query/calrification requiredd.

Sales 4480000 Contribution margin ratio 1792000 Fixed cost 1657600 Net profit 134400

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