Multiple Choice Answers

Which of the following conditions would cause the break-even point to increase?

a. Total fixed costs decrease
b. Unit selling price increases
c. Unit variable cost decreases
d. Unit variable cost increases

Managers of what type of decentralized units have authority and responsibility for revenues, costs, and assets invested in the unit?

a. Profit center
b. Investment center
c. Production center
d. Cost center

The following data relate to direct labor costs for February:
Actual costs 3,200 hours at $14.40
Standard Costs 3,000 hours at $14.00
What is the direct labor rate variance?

a. $1,200 unfavorable
b. $1,280 favorable
c. $1,200 favorable
d. $1,280 unfavorable

Which of the following are present value methods of analyzing capital investment proposals?

a. Internal rate of return and average rate of return
b. Average rate of return and net present value
c. Net present value and internal rate of return
d. Net present value and payback

The standard factory overhead rate is $10 per direct labor hour ($8 for variable factory overhead and $2 for fixed factory overhead) based on 100% capacity of 30,000 direct labor hours. The standard cost and the actual cost of factory overhead for the production of 5,000 units during May were as follows:
Standard: 25,000 hours at $10 $250,000
Actual: Variable factory overhead 202,500
Fixed factory overhead 60,000
What is the amount of the variable factory overhead controllable variance?

a. $10,000 favorable
b. $2,500 unfavorable
c. $10,000 unfavorable
d. $2,500 favorable