A Company Has the Following Information Available About One of Its

question 98

Multiple Choice

A company has the following information available about one of its products:
$\begin{array}{ll}\text { Standard price per pound of input } & ? \\\text { Actual price per pound of input } & \$ 27 \\\text { Standard inputs per unit of output } & 3 \text { pounds } \\\text { Actual units of output } & 3,000 \\\text { Direct Materials Price Variance } & \$ 18,000 \mathrm{~F} \\\text { Actual pounds of input used } & 9,000\end{array}$
What is the standard price per pound of input?

• A) $25
• B) $27
• C) $29
• D) $33

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Definitions:

Payback Period

The length of time it takes for an investment to generate an amount of cash flow equal to the initial amount invested.

NPV

Net Present Value, a financial metric used to evaluate the profitability of an investment or project, calculated by discounting the expected future cash flows to present day values and subtracting the initial investment cost.

Discounted Payback Period

The time required to recoup the cost of an investment while accounting for the time value of money, typically used in capital budgeting to assess profitability.

After-Tax Cash Inflows

The net cash that a business generates after accounting for all taxes.