1) a Materials price variance:(12000-2500)*(225000/12000-20)= Materials quantity variance:20((12000-2500)-3750*2.

5)=

11875F 2500U

b No,I will not recommend him, though the materials price variance is favourable, but the material quantity variance is unfavoura It means that will spend more budget on the materials which will be a waste of money. 2) a Labor rate variable:160*35(12-12.5)= Labor efficiency variance:12.5(160*35-1.4*3750)=

2800F 4375U

b NO,since the Labor rate variable is already favourable, but the Labor efficiency variance is already unfavorable,this company ne workers so that can lower the cost.

ut the material quantity variance is unfavourable.

ance is already unfavorable,this company needs some adjust in

1) ROI: 0.2 new product Net poeration income sales 2000000 variable expensess 1200000 contribution margin 800000 Fixed expenses 640000 Net operating income 160000 Division operating assets 1000000 Margin: Turnover: ROI: 0.08 2.4 0.192

2) I will reject. Since the ROI become lower than the old one, the higher the ROI, the greater the profit earned per dollar invested i segment's assets.But it becomes lower. So I will reject

3) Since the ROI of the three years do not change, the headquarter wants to improve the ROI so that it means the profit earned pe improve. The new product line promisesan ROI of 16%,whereas the company's overall ROI last year was only 15%, Thus addin increase the company's overall ROI. 4) Residual income: 320000 New residual income: 360000

I will reject, it seems that the new product line improved from 320000 to 360000, but the ROI is changed too, the whole ROI dec to 19.2%, which represent that the profit decreased too, so I will be reluctant to accept this new product.

eater the profit earned per dollar invested in the

he ROI so that it means the profit earned per dollar will erall ROI last year was only 15%, Thus adding the new line would

t the ROI is changed too, the whole ROI decreased from 20% ept this new product.