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39. Evaluation of capital investments based on economic profit motivates managers to invest in projects that A) earn a return in excess of the project's return on investment B) earn a return in excess of the segment's return on investment C) earn a return in excess of the cost of capital D) earn a return in excess of the segment's net income Answer: because those investments increase the division's economic profit. 40. The accounting convention of most pessimistic immediate results A) cost benefit B) objectivity C) materiality D) conservatism Answer: means selecting the method of measurement that provides the Under the traditional approach to cost allocation, the costs in each cost pool are allocated to a produc in proportion to the product's usage of the A) available capacity B) budgeted capacity C) cost-allocation base D) cost pool Answer 42. USC Company has the following information available: Budgeted factory overhead costs Actual factory overhead costs Budgeted direct labor hours Actual direct labor hours $90,000 $80,000 20,000 21,000 Assume direct labor hours are the cost driver of factory overhead costs. The budgeted factory overhea rate is A) $3.57 per direct labor hour B) $3.81 per direct labor hour C) $4.00 per direct labor hour D) S4.50 per direct labor hour

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