Question

1) Albertville has a direct labor standard of two hours per unit of output. All employee has a standard wage rate of $22.50 per hour. Throughout July Albertville paid $189,500 to employees for 8,890 hours worked. 4,700 units were produced throughout July. What is the direct labor rate alteration?

Answer

$22,000 favorable

$11,475 favorable

$10,525 favorable

$10,525 unfavorable

2) Parkway Corporation has $200,000 of 6% preferred stock outstanding which transmits a cumulative dividend preference. Parkway likewise has 10,000 shares of $1 par value common stock outstanding. In the company's first year of processes no dividends were paid. During the second year, Parkway paid cash dividends of $18000. The dividend must be distributed as follows-

Answer

$12,000 preferred; $6,000 common

$8,000 preferred; $10,000 common

$0 preferred; $18,000 common

$18,000 preferred; $0 common

3) Hiawatha Corp is seeing the purchase of a new piece of equipment. The cost savings from the equipment would consequence in an annual increase in cash flow of $200,000. The equipment will have an preliminary cost of $900,000 and have a 6 year life. There is no save value for the equipment. If the hurdle rate is 10% then what is the net present value? Ignore income taxes

Answer

negative $28,947

positive $28,947

zero

positive $300,000