Answer the Following Question(s)using the Information Below

question 62

Multiple Choice

Answer the following question(s) using the information below:
Carriage Ltd.manufactures baby carriages.The company has two divisions, Wheels and Assembly.Because of different accounting methods and inflation rates, the company is considering multiple evaluation measures.The following information is provided for the year just ended:
The company is currently using a 12% required rate of return.
-What are Wheels's and Assembly's residual incomes based on current values, respectively?

• A)$70,000; $28,500
• B)$94,000; $28,500
• C)$94,000; $70,000
• D)$28,500; $94,000
• E)$61,800; $70,000

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Definitions:

Lower Quality

Lower quality typically refers to products or assets that do not meet certain standards or expectations in terms of performance, durability, or reliability.

Materials Quantity Variance

The difference between the actual quantity of materials used in production and the expected quantity, multiplied by the standard cost per unit.

SQ × AP

The standard quantity times actual price formula, used in cost accounting to calculate the variance between the actual cost and the standard cost of raw materials.

Direct Materials Price Variance

The difference between the actual cost and the standard cost of direct materials used in production, indicating how effectively the materials budget is being adhered to.