Suppose You Purchase One Share of the Stock of Volatile

question 33

Multiple Choice

Suppose you purchase one share of the stock of Volatile Engineering Corporation at the beginning of year 1 for $36.At the end of year 1,you receive a $2 dividend,and buy one more share for $30.At the end of year 2,you receive total dividends of $4 (i.e.,$2 for each share) ,and sell the shares for $36.45 each.The time-weighted return on your investment is ________.

• A)-1.75%
• B)4.08%
• C)8.53%
• D)11.46%
• E)12.35%

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Definitions:

Direct Material Standards

The predetermined cost and quantity of materials required for the manufacturing of a product.

Purchases Variance

A financial metric used to measure the difference between the actual cost of purchased materials and the planned or standard cost.

Materials Price Variance

The difference between the actual amount paid for materials and the expected (or standard) cost of those materials, multiplied by the quantity of materials purchased.

Direct Material Standards

Standard costs set for the quantity and price of materials required for a manufacturing process.