Answer and Explanation:
a. In the case when the BTA does not have the tax liability previous year so it would use the present year liability to measure out the minimum predicted tax payment quarter wise
So the current year tax liability is $240,000
So the estimated tax payment is
= $240,000 × 25%
= $60,000 per quarter
b. In this given case also the predicted quarterly tax payment is $60,000 because the BTA cannot applied the previous year tax exception for any type of quarter
The price of Benzethonium, an active ingredient in hand soap, decreases. How does this decrease in input cost affect the supply of hand soap
Answer:
d. It shifts the supply curve to the left.
Explanation:
When there is any change in the price of the good or service keeping other things constant so it would lead in the movement along with the supply curve. If there is any change in the input cost so it affect the production cost that would shift the supply and on the other hand when the cost is reduced so the shift should be in outward direction and vice versa
Jiffy Park Corp. has annual sales of $50,736,000, an average inventory level of S15,010,000, and average accounts receivable of $10,010,000. The firm's cost of goods sold is 85% of sales. The company makes all purchases on credit and has always paid on the 30th day. However, it now plans to take full advantage of trade credit and to pay its suppliers on the 40th day. The CFO also believes that sales can be maintained at the existing level but inventory can be lowered by $1,950,000 and accounts receivable by $1,950,000. 7 points)
a. What is Jiffy Park's cash conversion cycle (CCC) prior to the changes proposed'?
b. What is Jiffy Park's CCC after implementing the suggested changes?
c. What is the net change in Jiffy Park's CCC given what you just calculated above?
d. Why is this significant?
Answer:
Jiffy Park Corp.
Cash Conversion Cycle:
a. Prior to proposed changes:
CCC = 169 days
b. After implementing changes:
CCC = 129 days
c. The change in CCC is 40 days
d. It is significant. It is about 24% reduction in the CCC. It is equal to the days that payable are outstanding under the proposed plan.
Explanation:
a) Data and Calculations:
Current annual sales = $50,736,000
Average inventory level = $15,010,000
Average accounts receivable = $10,010,000
Cost of goods sold = 85% of sale s= $43,125,600
Normal Days Payable Outstanding = 30 days
New Plan:
Planned Days Payable Outstanding = 40 days
Annual sales = $50,736,000
Average inventory level = $13,060,000 ($15,010,000 - $1,950,000)
Average accounts receivable = $8,060,000 ($10,010,000 - $1,950,000)
Cash Conversion Cycle:
a. Prior to proposed changes:
Days Inventory Outstanding = $15,010,000/$43,125,600 * 365 = 127 days
Days Receivable OUtstanding = $10,010,000/$50,736,000 * 365 = 72 days
Days Payable Outstanding = 30 days
CCC = 169 (127 + 72 - 30) days
b. After implementing changes:
Days Inventory Outstanding = $13,060,000/$43,125,600 * 365 = 111 days
Days Receivable OUtstanding = $8,060,000/$50,736,000 * 365 = 58 days
Days Payable Outstanding = 30 days
CCC = 129 (111 + 58 - 40) days
c. The change in CCC is 40 days (169 - 129)
d. It is significant. It is about 24% reduction in the CCC. It is equal to the days that payable are outstanding under the proposed plan.
On January 2, Dog Mart prepaid $19,920 rent for the year and recorded the prepayment in an asset account. Prepare the January 31 adjusting entry for rent expense. If an amount box does not require an entry, leave it blank. Jan. 31 fill in the blank 2 fill in the blank 3 fill in the blank 5 fill in the blank 6
Answer:
Debit : Rent Expense $1,660
Credit : Prepaid Rent $1,660
Explanation:
The January 31 adjusting entry for rent expense would include a Debit to Rent Expense and Credit to Prepaid Rent - Asset Account at an amount of $1,660.
Calculation :
Rent Expense = 1/12 x $19,920 = $1,660
The Boat Company has a capital structure of 30 percent riskless debt and 70 percent equity. The assumed tax rate is 23 percent. If the asset beta is .9, what is the equity beta?
Answer: 0.68
Explanation:
Using the measures given, the equity beta can be calculated as:
Equity beta = Asset beta * (1 + (1 - Tax rate) * (Debt/Equity)
= 0.9 * ( 1 + ( 1 - 23%) * (30% / 70%)
= 1.593 * 0.3/0.7
= 0.68
Labeau Products, Ltd., of Perth, Australia, has $19,000 to invest. The company is trying to decide between two alternative uses for the funds as follows: Invest in Project X Invest in Project Y Investment required $ 19,000 $ 19,000 Annual cash inflows $ 6,000 Single cash inflow at the end of 6 years $ 40,000 Life of the project 6 years 6 years The company’s discount rate is 14%. Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables. Required: 1. Compute the net present value of Project X. 2. Compute the net present value of Project Y. 3. Which project would you recommend the company accept?
Answer:
x = $4,332.01
y = -776.54
project x because its NPV is positive
Explanation:
Net present value is the present value of after-tax cash flows from an investment less the amount invested.
NPV can be calculated using a financial calculator
Only projects with a positive NPV should be accepted. A project with a negative NPV should not be chosen because it isn't profitable.
Project X
Cash flow in year 0 = -19000
Cash flow in year 1 to 6 = 19,000
I = 14%
NPV = $4,332.01
Project Y
Cash flow in year 0 = -19000
Cash flow in year 1 to 5 = 0
Cash flow in year 6 = $ 40,000
I = 14%
NPV = -776.54
To find the NPV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
On Dec. 15, 2020, Julie’s Tax Prep, a cash-method taxpayer, prepaid $5,000 worth of deductible interest on a business loan. The interest won’t accrue until January 2021. Julie’s Tax Prep will be displaying for the first time at a trade show in July 2021. On Dec. 16, 2020, Julie’s prepaid the $7,000 trade show booth rental expense. The payment isn’t due until May 2021, and use of the booth will occur in July 2021. In addition, on Dec. 28, 2020, Ed’s Equipment repaired some equipment in Julie’s office and billed Julie’s $2,000. Julie’s received the invoice on Dec. 28, 2020 and paid the $2,000 invoice on Jan. 29, 2021. How much of the $14,000 in deductible business expenses may Julie’s Tax Prep deduct in 2020?
Answer:
Julie’s Tax Prep
Of the $14,000 in deductible business expenses, Julie’s Tax Prep may deduct in 2020 is:
= $12,000.
Explanation:
a) Data and Calculations:
Expenses paid in 2020:
Deductible interest on a business loan = $5,000
Trade show booth rental expense = $7,000
Total deductible = $12,000
The payment for the repair of office equipment will not a deductible expense for 2020 since Julie Tax Prep is a cash-method taxpayer.
On January 1, Year 2, Grande Company had a $16,000 balance in the Accounts Receivable account and a zero balance in the Allowance for Doubtful Accounts account. During Year 2, Grande provided $104,000 of service on account. The company collected $97,000 cash from accounts receivable. Uncollectible accounts are estimated to be 2% of sales on account. Based on this information, the amount of cash flow from operating activities that would appear on the Year 2 statement of cash flows is:
Answer:
Based on this information, the amount of cash flow from operating activities that would appear on the Year 2 statement of cash flows is:
= $97,000.
Explanation:
a) Data and Calculations:
Accounts Receivable balance on January 1, Year 2 = $16,000
Allowance for Doubtful Accounts balance on January 1, Year 2 = $0
Service Revenue on credit during Year 2 = $104,000
Cash collected from Accounts Receivable = $97,000
Accounts Receivable balance on December 31, Year 2 = $23,000
Allowance for Doubtful Accounts balance on December 31, Year 2 = $2,080 ($104,000 * 2%)
Net Accounts Receivable balance on December 31, Year 2 = $20,920 ($23,000 - $2,080)
b) The $97,000 is the actual cash inflow received from customers during Year 2. It increases the cash inflows and forms part of the operating activities section of the Statement of Cash Flows for Year 2 under the direct method.
Green is self-employed as a human resources consultant and reports on the cash basis for income tax purposes. Select the appropriate tax treatment on Form 1040 (U.S. Individual Income Tax Return) for personal life insurance premiums paid by Green.
a. Fully deductible on Form 1040 to arrive at adjusted gross income
b. Reported in Schedule A, Itemized Deductions (deductibility subject to threshold of 7.5% of adjusted gross income)
c. Reported in Schedule A, Itemized Deductions (deductibility subject to threshold of 2% of adjusted gross income)
d. Not deductible
Answer:
Green (Self-Employed Human Resources Consultant)
The appropriate tax treatment on Form 1040 (U.S. Individual Income Tax Return) for personal life insurance premiums paid by Green is:
d. Not deductible
Explanation:
Green can claim business insurance premiums (regarded as business expenses by the IRS) and healthcare insurance premiums (regarded as medical expenses by the IRS) as deductions, but his personal life insurance premiums are considered as personal expenses. They are not tax-deductible. The IRS regards the payments for life insurance premiums as it regards the purchase of any other product or service for personal consumption.
innetonka Company leases an asset. Information regarding the lease: • Fair value of the asset: $400,000. • Useful life of the asset: 6 years with no salvage value. • Lease term is 5 years. • Annual lease payments are $60,000 • Implicit interest rate: 11%.
Answer:
This is a finance lease.
Explanation:
Note: This question is not complete. The complete question is therefore provided before answering the question as follows:
Minnetonka Company leases an asset. Information regarding the lease:
Fair value of the asset: $400,000.
Useful life of the asset: 6 years with no salvage value.
Lease term is 5 years.
Annual lease payments are $60,000
Implicit interest rate: 11%.
Minnetonka can purchase the asset at the end of the lease period for $50,000.
What type of lease is this?
The explanation of the answer is now provided as follows:
Finance lease can be described a lease in which the finance company legally owns the asset throughout the lease term, but the lessor transfers all risk and reward connected with the asset to the lessee, and the lessee also acquires the ownership of the asset at the end of the lease term.
Since Minnetonka can purchase the asset at the end of the lease period for $50,000, this implies that Minnetonka can acquires the ownership of the asset at the end of the lease term. This therefore implies that this is a finance lease.
A hotel is deciding how many reservations to accept for major one-night event in Indianapolis. The hotel has 180 rooms available. Managers believe that 92 percent of those with a reservation will actually show up. An empty room costs the hotel $175 per room. However, if the hotel oversells the rooms, and more than 180 customers show up, the hotel will need to make other arrangements for these guests. The cost of placing these extra guests in other accomodations is $375 per room needed. How many rooms should the hotel sell for this particular night to minimize their costs? +xls
Answer:
Hotel A, Indianapolis
The number of rooms that the hotel should sell for this particular night to minimize their costs is:
= 196 rooms.
Explanation:
a) Data and Calculations:
Hotel rooms available = 180
Expected percentage of reservations that will actually show up = 92%
Cost per empty room = $175
Cost per room for overbooking and placing extra guests in other accommodations = $375
The number of rooms to sell this particular night to minimize costs = 180/92% = 196 rooms
Booking 196 rooms will ensure that the maximum rooms are fully taken by the reservationists and the hotel can only incur a probable cost of $375 per overbooked guest.
An individual is at a restaurant with two other people and they are trying to determine the tip for their check total which came to $57.38. They want to pay a 18% gratuity. Which is the correct tip amount based on a 18% tip (rounded up to the nearest dollar)
Answer: $10.00
Explanation:
The individual and the other two are trying to pay an 18% tip so the amount they should tip can be calculated by:
= Check total * 18%
= 57.38 * 18%
= $10.3284
= $10.00 to the nearest dollar
What are the consequences of bank failures?
Answer:
When a bank fails, it may try to borrow money from other solvent banks in order to pay its depositors. If the failing bank cannot pay its depositors, a bank panic might ensue in which depositors run on the bank in an attempt to get their money back.
Explanation:
You're trying to save to buy a new $180,000 Ferrari. You have $32,000 today that can be invested at your bank. The bank pays 5.0 percent annual interest on its accounts. How long will it be before you have enough to buy the car
Answer:
Given an annual interest rate of 5%, it will take 35.4 years to accumulate $180,000.
Explanation:
Giving the following information:
Future Value (FV)= $180,000
Present value (PV)= $32,000
Interest rate (i)= 5%
To calculate the number of years (n) to reach the objective, we need to use the following formula:
n= ln(FV/PV) / ln(1+i)
n= ln(180,000/32,000) / ln(1.05)
n= 35.4
Given an annual interest rate of 5%, it will take 35.4 years to accumulate $180,000.
ou are attempting to value a call option with an exercise price of $109 and one year to expiration. The underlying stock pays no dividends, its current price is $109, and you believe it has a 50% chance of increasing to $142 and a 50% chance of decreasing to $76. The risk-free rate of interest is 12%. Calculate the call option's value using the two-state stock price model
Answer:
$14.73
Explanation:
Given that, there is a 50 - 50 chance that a call option will either increase or decrease ;
Exercise price = $109
Increase price = $142
Decrease price = $76
Using the two state stock price model :
Increase price - exercise price ; 142 - 109 = $33
Decrease price - exercise price ; 76 - 109 - $33
We calculate the mean, expected value of winning after one year,
E(X) = Σx*p(x)
Since call won't be exercised if price decrease, then - 33 = 0
x : ___ 33 _____ 0
p(x) : _ 0.5 ____ 0.5
E(X) = (33*0.5) + (0*0.5)
E(X) = 16.5
The present value, PV = Expected winning / (1 + r)
PV = 16.5 / (1 + 0.12) = 16.5 / 1.12 = 14.73
The Rent It Company declared a dividend of $.60 a share on October 20th to holders of record on Monday, November 1st. The dividend is payable on December 1st. You purchased 100 shares of this stock on Wednesday, October 27th. How much dividend income will you receive on December 1st as a result of this declaration
Answer:
the dividend income that should be received is $60
Explanation:
The computation of the dividend income is shown below:
= Dividend per share × number of shares of the stock purchased
= $0.60 × 100 shares
= $60
hence, the dividend income that should be received is $60
Basically we applied the above formula so that the correct value could come
Explain what should be your attitude after taking the test.
The position in a craft union in which the holder is the chief administrator of the union hiring hall is the
Answer:
e. international union representative
Explanation:
Union representatives played a vital role with respect to supporting the employees for reporting to the union leaders when they are on the place of their peers. It acted as the main liason between the employers & employees as in this they support the employees and guidem them via the challenges that took place during the work
So at the time when the craft union position where the holder be the chief administrator of the union hiring hall so it should be the international union representative
Interest rate in US (Rh): 3.5%
Interest rate in Euro zone (Rh): 7.5%
Line of credit in US: USD 10,000,000
Line of credit in in Euro zone: EUR 8,000,000
The spot rate of EUR, now (SR0): $1.25
Suppose your forecast tells you that the spot rate of EUR one year later (SR1) will be $1.20. What is your uncovered rate of return from US (Ruh) and Euro zone (Ruf)?
Answer:
(US): 3.20%
EURo zone :7.81%
Explanation:
As per Uncovered Interest rate parity theory,
Expected Spot Rate / Spot Rate = (1 + time adjusted interest rate of $) / (1 + time adjusted interest rate of Euro)
To find Uncovered rate of return from US (Ruh), we put expected spot rate, spot rate and time adjusted interest rate of Euro in above equation :
$ 1.20 / 1.25 = (1 + 1* interest rate of $) / (1 + 1*0.075)
Hence, Interest Rate of $ = 3.2%
Hence, Uncovered rate of return from US (Ruh) is 3.20%.
Similarly, to find Uncovered rate of return from Euro zone (Ruf), we put expected spot rate, spot rate and time adjusted interest rate of US in above equation :
$ 1.20 / 1.25 = (1 + 1*0.035) / (1 + 1* interest rate of euro)
Hence, interest rate of Euro = 7.81%.
Hence, Uncovered rate of return from Euro zone (Ruf) is 7.81%.
The sales price of a product is $100 per unit; the variable cost is $20 per unit; and fixed costs total $800. How many units must be sold to break even?
Answer:
10
Explanation:
Breakeven quantity are the number of units produced and sold at which net income is zero
Breakeven quantity = fixed cost / price – variable cost per unit
$800 / ($100 - $20)
= $800 / $80
= 10
Theo quan điểm hiện đại khi tiếp cận chi phí chất lượng, chi phí chất lượng thấp nhất là khi
Answer:
Translate in English please!!!!!!!!!!!!!
A firm is considering an investment in a new advertising project. The project will produce a cash flow of $1,000 in one year and it will produce a cash flow of $15,000 two years from now. The firm has a required return of 11%. You are the manager of the advertising department and you estimate that the cost of this project is $13,000 today. Do you recommend that the firm accept this project
Answer:
The fact the investment opportunity has a positive cash flow means that the project should be accepted since it is value-adding
Explanation:
We can evaluate the acceptability of the project using the net present value approach. The net present value is the present value of future cash flows discounted at the 11% required rate of return.
Present value=future cash flow/(1+required rate of return)^n
n is the year in which the cash flows are expected, it is 1 for year 1 cash flow and 2 for year 2 cash flow
NPV=$1,000/(1+11%)^1+$15,000/(1+11%)^2-$13,000
NPV=$75.24
On January 2, 20Y4, Whitworth Company acquired 40% of the
outstanding stock of Aloof Company for $340,000. For the year
ended December 31, 2024, Aloof Company earned income of
$180,000 and paid dividends of $10,000. On January 31 2045,
Whitworth Company sold all of its investment in Aloof Company
stock for $405,000.
Answer:
Journal entries needed for:
a. Purchase of stock
b. Share of Aloof income
c. Dividend
d. Sale of Aloof company stock
a. Purchase of stock
Date Account Title Debit Credit
Jan 2, 20Y4 Investment in Aloof company $340,000
stock
Cash $340,000
b. Share of Aloof income
Date Account Title Debit Credit
Dec 31, 2024 Investment in Aloof company $72,000
stock
Income of Aloof Company $72,000
Working:
= 40% * 180,000 income
= $72,000
c. Dividend
Date Account Title Debit Credit
Dec 31, 2024 Cash $4,000
Investment in Aloof company $4,000
stock
Working:
= 40% * 10,000 dividend
= $4,000
d. Sale of stock
Date Account Title Debit Credit
Dec 31, 2024 Cash $405,000
Loss on sales of Aloof $3,000
company stock
Investment in Aloof company $408,000
stock
Working:
Value of stock = Purchase price + share of Aloof income - Share of dividend
= 340,000 + 72,000 - 4,000
= $408,000
Quick Cleaners, Inc. (QCI), has been in business for several years. It specializes in cleaning houses but has some small business clients as well.
a. Issued $21,000 of QCI stock for cash.
b. Incurred $840 of utilities costs this month and will pay them next month.
c. Paid wages for the current month, totaling $2,600.
d. Performed cleaning services on account worth $3,800.
e. Some of Quick Cleaners’ equipment was repaired at a total cost of $300. The company paid the full amount at the time the repair work was done.
Required:
Prepare journal entries for the above transactions, which occurred during a recent month.
Answer:
Quick Cleaners, Inc. (QCI)
Journal Entries
a. Debit Cash $21,000
Credit Common Stock $21,000
To record the issuance of QCI stock for cash.
b. Debit Utilities Expense $840
Credit Utilities Payable $840
To accrue utilities expense for the month.
c. Debit Wages Expense $2,600
Credit Cash $2,600
To record the payment of wages for the month.
d. Debit Accounts Receivable $3,800
Credit Service Revenue $3,800
To record the performance of cleaning services on account.
e. Debit Equipment Repairs $300
Credit Cash $300
To record the payment for equipment repairs.
Explanation:
a) Data and Analysis:
a. Cash $21,000 Common Stock $21,000
b. Utilities Expense $840 Utilities Payable $840
c. Wages Expense $2,600 Cash $2,800
d. Accounts Receivable $3,800 Service Revenue $3,800
e. Equipment Repairs $300 Cash $300
Journalize the below entries.
Dec. 2 Purchased merchandise inventory on credit from Troy, $4,000. Terms were 1/10 n/30.
Dec. 3 Paid monthly rent, debiting Rent Expense for $2,600.
Dec. 5 Purchased office supplies on credit terms of 1/10 n/30 from Rigby Supply, $450.
Dec. 8 Received and paid electricity utility bill, $590.
Dec. 9 Purchased equipment on account from Alright Equipment, $6,500. Payment terms were n/30.
Dec. 10 Returned the equipment to Alright Equipment. It was damaged.
Dec. 11 Paid Troy the amount owed on the purchase of December 2.
Answer:
Dec. 2.
Dr. Inventory $4,000
Cr. Troy $4,000
Dec. 3.
Dr. Rent Expense $2,600
Cr. Cash $2,600
Dec. 5.
Dr. Office Supplies $450
Cr. Rigby Supply $450
Dec. 8.
Dr. Utility Expense $590
Cr. Cash $590
Dec. 9.
Dr. Equipment $6,500
Cr. Alright Equipment $6,500
Dec. 10.
Dr. Alright Equipment $6,500
Cr. Equipment $6,500
Dec. 11.
Dr. Troy $4,000
Cr. Discount received $40
Cr. Cash $3,960
Explanation:
Dec. 11
The terms 1/10 n/30 mean there is a discount of 1% available on the payment to be made in 10 days of the purchase. The net credit period is 30 days. As the payment is made within the discount period, hence the payment will be made net of discount.
Discount on Purchase = $4,000 x 1% = $40
Payment = Total amount due - Discount = $4,000 -$40 = $3,960
this is essay .......
Explanation:
that's an essay???! holy
On June 30, 2024, L. N. Bean issued $16 million of its 8% bonds for $14 million. The bonds were priced to yield 10%. Interest is payable semiannually on December 31 and July 1. If the effective interest method is used, how much bond interest expense should the company report for the 6 months ended December 31, 2024
Answer:
$700,000
Explanation:
Calculation to determine how much bond interest expense should the company report for the 6 months ended December 31, 2024
Using this formula
Interest expense for the 6 months ended December 31, 2024 = Carrying value * Effective interest rate/2
Let plug in the formula
Interest expense for the 6 months ended December 31, 2024= $14,000,000 * 10% / 2
Interest expense for the 6 months ended December 31, 2024=$14,000,000*5%/2
Interest expense for the 6 months ended December 31, 2024= $700,000
Therefore the amount of bond interest expense that the company should report for the 6 months ended December 31, 2024 is $700,000
Zoe Corporation has the following information for the month of March: Cost of direct materials used in production $15,424 Direct labor 27,640 Factory overhead 37,280 Work in process inventory, March 1 23,362 Work in process inventory, March 31 20,247 Finished goods inventory, March 1 22,674 Finished goods inventory, March 31 28,844 a. Determine the cost of goods manufactured.
Answer:
Particulars Amount
Raw material used $15,424
Add: Direct Labour $27,640
Add: Factory overhead $37,280
Total manufacturing cost $80,344
Add:Beginning work in progress inventory $23,362
Less: Ending work in progress inventory $20,247
Cost of goods manufactured $83,459
Add: Beginning finished goods inventory $22,674
Less: Ending finished goods inventory $28,844
Cost of goods sold $77,289
According to Ghemawat's earlier observations of CAGE phenomena related to countries and relative distances measured with the framework, countries who share a common currency have a greater probablity of trading with each other than countries who share a common border.
a. True
b. False
Answer:
According to Ghemawat's CAGE framework, "countries who share a common currency have a greater probability of trading with each other than countries who share a common border."
a. True
Explanation:
The CAGE framework was developed by an international strategy guru, Pankaj Ghemawat. CAGE is a cultural, administrative, geographic, and economic framework. The framework offers businesses a means to evaluate the non-physical distances that exist between countries. With this more-inclusive view of distance, the CAGE framework provides another way for business to consider the location, opportunities, and risks involved in global trade or arbitrage.
Using the information below, calculate net income for the period:
Sales revenues for the period $1,323,000
Operating expenses for the period 258,000
Finished Goods Inventory, January 1 55,000
Finished Goods Inventory, December 31 60,000
Cost of goods manufactured
for the period 559,000
A. $774,000.B. $769,000.C. $530,000.D. $535,000.E. $448,000.
Answer:
See explanation
Explanation:
The correct choice is not available : Net Income is $511,000
We determined this as follows :
Income Statement for the ended December 31
Sales $1,323,000
Less Cost of Sales
Opening Finished Goods Inventory $55,000
Add Cost of goods manufactured $559,000
Less Ending Finished Goods Inventory ($60,000) ($554,000)
Gross Profit $769,000
Less Expenses
Operating expenses ($258,000)
Net Income $511,000
A contractor team of three consultants is bidding on a project. The senior consultant charges $175.00/hour and the other two consultants charge $130.00/hour. The senior consultant estimates that she will spend 120 hours on the project, and the other consultants estimate that they will split 350 hours between them. The team adds 85% to their estimated labor costs to cover overhead and achieve their target profit margin. What is the total cost that the team bids for the project
Answer:
Total cost of project $123,025
Explanation:
The total cost of the project would be the sum of the labour cost of the three consultants and the overhead charged to the project.
So, we can compute the total cost of project as follows:
Labour cost $
Senior consultant (175× 120) = 21,000
Other consultants (130× 350) = 45,500
Total labour cost 66,500
Overhead (85%× 66,500) 56,525
Total cost of project 123,025
