Reference no: EM13602557

Strauss Corporation is making a $70,000 investment in equipment with a 5-year life. The company uses the straight-line method of depreciation and has a tax rate of 40 percent. The company's required rate of return is 11 percent.

What is the present value of the tax savings related to depreciation of the equipment? (Round the present value factor calculations to 4 decimal places, e.g. 0.2525. Round all other calculations and the final answer to 2 decimal places, e.g. 25.21.)

Present Value $

Calculating Labor and Overhead Variances [LO 3,4]

At the start of 2012, Textile Express Company determined its standard labor cost to be 2.5 hours per unit at $33.90 per hour. The budget for variable overhead was $8 per unit, and budgeted fixed overhead was $15,000 for the year. Expected annual production was 5,000 units. During 2012, the actual cost of labor was $34.30 per hour. Textile Express produced 4,840 units requiring 11,700 direct labor hours. Actual overhead for the year was $50,290.

Calculate labor rate and efficiency variances and the controllable overhead variance and the overhead volume variance. (Round calculations to 2 decimal places, e.g. 25.21 and the final answers to 0 decimal places, e.g. 5,250. For negative numbers use either a negative sign preceding the number, e.g. -45 or parenthesis, e.g. (45).)

Labor Rate Variance = $____ unfavorable
Labor Efficiency Variance = $  favorable
Controllable Overhead Variance = $ __favorable
Overhead Volume Variance = $ _____unfavorable