Simms Manufacturing Is Considering Two Alternative Investment Proposals with the Following

question 9

Multiple Choice

Simms Manufacturing is considering two alternative investment proposals with the following data: What is the net present value of Proposal X, taking into consideration the initial outlay and the subsequent
Cash inflows?

• A)$23,070 positive
• B)$99,550 positive
• C)$13,070 negative
• D)$4,130 negative

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Definitions:

Quantity Variance

The difference between the expected and actual quantities of inputs used in the production process, affecting the cost of goods sold.

Price Variance

The difference between the actual cost of a good or service and its expected or budgeted cost.

Total Cost Variance

The difference between the actual cost incurred and the standard cost, reflecting how well costs are controlled during a production process.

Factory Overhead Cost

All of the costs of producing a product except for direct materials and direct labor.