Answer: b
Explanation:
Exercise 24-5 Payback period computation; even cash flows LO P1 Compute the payback period for each of these two separate investments: A new operating system for an existing machine is expected to cost $520,000 and have a useful life of six years. The system yields an incremental after-tax income of $150,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $10,000. A machine costs $380,000, has a $20,000 salvage value, is expected to last eight years, and will generate an after-tax income of $60,000 per year after straight-line depreciation.
Answer and Explanation:
The computation of the payback period is shown below:
1. Payback period = Initial investment ÷ Net cash flow
where,
Initial investment is $520,000
Net cash flow is = incremental after-tax income + depreciation expense
= $150,000 + $85,000
= $235,000
The depreciation expense is
= ($520,000 - $10,000) ÷ (6 years)
= $85,000
Now the payback period is
= $520,000 ÷ $235,000
= 2.21 years
2. Payback period = Initial investment ÷ Net cash flow
where,
Initial investment is $380,000
Net cash flow is = incremental after-tax income + depreciation expense
= $60,000 + $45,000
= $105,000
The depreciation expense is
= ($380,000 - $20,000) ÷ (8 years)
= $45,000
Now the payback period is
= $380,000 ÷ $105,000
= 3.62 years
Never Forget Bakery purchased a lot in Oil City six years ago at a cost of $278,000. Today, that lot has a market value of $320,000. At the time of the purchase, the company spent $6,000 to level the lot and another $8,000 to install storm drains. The company now wants to build a new facility on that site. The building cost is estimated at $1.03 million. What amount should be used as the initial cash flow for this project?
Answer:
The amount that should be used as the initial cash flow for this project is $1,350,000
Explanation:
The amount to be used as the initial cash flow for the project comprises of estimated building cost of $1.03 million and the market worth of the lot now.
The cost six years ago of $278,000,the cost of leveling as well as the cost of installing the storm drains were long ago time and are not relevant now.
In a nutshell the cost of the new project is $1,350,000($1,030,000+$320,0000)
ASAP HELP ME PLEASE , GIVING BRAINLIEST TO CORRECT AWNSER
Answer:
A
Explanation:
Answer:
because people would have to have good contraptions in order to be able to make free choices
Explanation:
Teel Printing uses two measures of activity, press runs, and book set-ups, in the cost formulas in its budgets and performance reports. The cost formula for wages and salaries is $7,850 per month plus $402 per press run plus $952 per book set-up. The company expected its activity in July to be 206 press runs and 113 book set-ups, but the actual activity was 203 press runs and 112 book set-ups. The actual cost for wages and salaries in July was $196,180.
The spending variance for wages and salaries in July would be closest to
Answer:
Spending variance $100 unfavorable
Explanation:
The spending variance is the difference between the standard cost allowed for the actual activity and the actual cost of the activity
$
Standard cost allowed for the actual activity
=7,850 + (402×203) + (952×112)= 196,080
Actual cost 196,180
Spending variance 100 unfavorable
Suppose Mr. Lane just bought a share of BlueWind Co., a renewable energy startup. BlueWind promises to pay Mr. Lane $18 in dividends for one year and then the firm will shut down. Suppose that the liquidation value of the share is $3, and the rate of time preference is 5%. Then, according to the single-period dividend discount model, the present value of the cash payment received by Mr. Lane in one year would be
Answer:
The present value of the cash payment is $20
Explanation:
The present value of cash payment receivable by Mr Lane in one year's time is the today's equivalent amount of the dividend of $18 as well as the liquidation value of $3.
The present value is the total cash inflows multiplied by the discount factor
discount factor=1/(1+r)^n
where is the rate of time preference of 5%'
n is 1 i.e in one year's time
total cash inflows=$18+$3=$21
discount factor =1/(1+5%)^1=0.95238
present value of cash payment=0.95238*$21=$20
A domestic manufacturer of watches purchases quartz crystals from a Swiss firm. The crystals are shipped in lots of . The acceptance sampling procedure uses randomly selected crystals. a. Construct operating characteristic curves for acceptance criteria of , , and (to 4 decimals). b. If is and , what are the producer's and consumer's risks for each sampling plan in part (a) (to 4 decimals)? c At Producer's Risk At Consumer's Risk
Answer:
The curve and calculation are attached below
Indicate the effect—Understate, Overstate, No Effect—that each of the following errors has on 2020 net income and 2021 net income. 2020 2021 (a) Equipment (with a useful life of 5 years) was purchased and expensed in 2018. Select an option Select an option (b) Wages payable were not recorded at 12/31/20. Select an option Select an option (c) Equipment purchased in 2020 was expensed. Select an option Select an option (d) 2020 ending inventory was overstated. Select an option Select an option (e) Patent amortization was not recorded in 2021. Select an option Select an option
Answer: The answer is provided below
Explanation:
The net income is excess of revenues over expenses after the adjustment for depreciation expense and the income tax expense. Net income is also called the net profit.
(a) Equipment (with a useful life of 5 years) was purchased and expensed in 2018.
2020 : It will be overstated in the net income.
2021: It will be overstated in the net income.
b. Wages payable were not recorded at 12/31/20.
2020: It will be overstated in the net income.
2021: It will be understated in the net income.
c. Equipment purchased in 2020 was expensed.
2020: It will be understated in the net income.
2021: It will be overstated in the net income
d. 2020 ending inventory was overstated.
2020: It will be overstated in the net income.
2021: It will be understated in the net income.
e. Patent amortization was not recorded in 2021.
2020: It will be no effect in the net income.
2021: It will be overstated in the net income
niversal Studios sold the Mamma Mia! DVD around the world. Universal charged $21.40 in Canada and $32 in Japanlong dashmore than the $20 it charged in the United States. Assume Universal's marginal cost of production (m) is $1.20. Determine what the elasticities of demand must be in Canada and in Japan if Universal is profit maximizingLOADING.... The elasticity of demand in Canada must be epsilon Subscript Upper Cequals nothing. (Enter a numeric response using a real
Answer:
Explanation:
Lerner Index = -1 / Elasticity of demand = (P - MC) / P
(1) Canada:
- 1 / Ec = (21.4 - 1.20) / 21.4
- 1 / Ec = 20.2 / 21.4
- 1 / Ec = 0.9344
Ec = -1 / 0.9344
Ec = - 1.059
(2) Japan:
Lerner Index = -1 / Elasticity of demand = (P - MC) / P
- 1 / Ej = (32 - 1.2) / 32
- 1 / Ej = 30.8 / 32
- 1 / Ej = 0.9625
Ej = -1 / 0.9625
Ej = - 1.039
Ellie (a single taxpayer) is the owner of ABC, LLC. The LLC (a sole proprietorship) reports QBI of $900,000 and is not a specified services business. ABC paid total W-2 wages of $300,000, and the total unadjusted basis of property held by ABC is $30,000. Ellie's taxable income before the QBI deduction is $740,000 (this is also her modified taxable income). What is Ellie's QBI deduction for 2019
Answer:
QBI deduction for 2019 is $148,000
Explanation:
Description Amount
Taxable income before QBI deduction
exceed $207,500 threshold.
Capital investment limit is considered
QBI deduction is lesser of:
1) 20% of qualified business income $180,000
($900,00 × 20%)
or Greater of
2) 50% 0f W-2 wages $150,000
($300,000 × 50%)
or
25% 0f W-2 wages + 2.5% of unadjustment
basis pf qualified property
($300,000 × 25%) + ($300,000 × 2.5%) $75,750
3)Not more than 20% of modified taxable income
($740,000 × 20%) $148,000
Therefore, QBI deduction for 2019 is $148,000
n the Month of March, Chester Corporation received orders of 180 units at a price of $15.00 for their product Cid. Chester uses the accrual method of accounting and offers 30 day credit terms. Chester delivers 120 units in March and the balance of 60 units in April. They received payment for 60 units in March, 60 units in April, and 60 units in May. How much revenue is recognized on the March income statement from this order? How much in the April Income statement? (Answer in thousands)
Answer:
Explanation:
Under accrual basis, revenue will recognize only after order delivered. so in march they didn't deliver any order. so income statement will report 0. in April they delivered 180 units. they can recognize a revenue of $15*180 = $2,700 in their April income statement.
So, answer will be. 0, $2,700
Beerbo purchased a patent from Mitter Lite Co. for $1,000,000 on January 1, 2018. At that time, the patent's useful life was 10 years, expiring on December 31, 2027. In early 2020, Beerbo determined that the economic benefits of the patent would not last longer than 4 more years (6 years from the date of acquisition). Given the revised useful life, Beerbo expects the useful life of the patent to expire on December 31, [a1]. (Input year; e.g. "2020") At the end of 2019 / beginning of 2020, what was the value / net book value of the patent in Beerbo's books
Answer:
$800,000
Explanation:
As per the data given in the question,
Beerbo expects patent's useful life to expire on Dec-31 2023.
At the beginning of 2020 / end of 2019, the value of the patent in Beerbo's book = $1,000,000 - ($1,000,000 ÷ 10×2))
= $800,000
Amortix patent year = 4
Patent amortization expense at the end of 2020 = $800,000 ÷ 4
=$200,000
Consider a portfolio manager with a $20,500,000 equity portfolio under management. The manager wishes to hedge against a decline in share values using stock index futures. Currently a stock index future is priced at 1250 and has a multiplier of 250. The portfolio beta is 1.25. Calculate the number of contracts required to hedge the risk exposure and indicate whether the manager should be short or long.
Answer:
Assume that a month later the equity portfolio has a market value of $20,000,000 and the stock index future is priced at 1150 with a multiplier of 250. Calculate the profit on the equity position.
Calculate the overall profit.
$1,550,000
Explanation:
Assume that a month later the equity portfolio has a market value of $20,000,000 and the stock index future is priced at 1150 with a multiplier of 250. Calculate the profit on the equity position.
Calculate the overall profit.
The manager should be short on the stock index futures because the position on the equity portfolio is long.
Number of contracts required to hedge
= [$20,500,000/(1250*250)] * 1.25 = 82 contracts
Profit on the equity portfolio
= $20,000,000 - $20,500,000 = -$500,000
Profit on the stock index future
= [(1250)(250) – (1150)(250)] x 82 = $2,050,000
Overall profit
= $2,050,000 - $500,000
= $1,550,000
therefore, the overall profit is $1,550,000
Brownley Company has two service departments and two operating (production) departments. The Payroll Department services all three of the other departments in proportion to the number of employees in each. The Maintenance Department costs are allocated to the two operating departments in proportion to the floor space used by each. Listed below are the operating data for the current period: Service Depts. Production Depts. Payroll Maintenance Cutting Assembly Direct costs $ 20,400 $ 25,500 $ 76,500 $ 105,400 No. of personnel 15 15 45 Sq. ft. of space 10,000 15,000 The total cost of operating the Maintenance Department for the current period is:
Answer:
The total cost of operating the Maintenance Department for the current period is $29,580
Explanation:
In order to calculate The total cost of operating the Maintenance Department for the current period we would have to calculate first the Overhead allocated to Maintenance from Payroll department as follows:
Overhead allocated=Payroll overhead×(Maintenance payroll personnel/Total personnel)
Overhead allocated=$ 20,400×(15/15+15+45)
Overhead allocated=$4,080
Therefore, to calculate the The total cost of operating the Maintenance Department for the current period we would have to use the following formula:
Total cost of operating Maintenance Department=Overhead allocated+Direct overhead incurred
Total cost of operating Maintenance Department=$4,080+$25,500
Total cost of operating Maintenance Department=$29,580
The total cost of operating the Maintenance Department for the current period is $29,580
Company A sells paper coffee cups to all Caribou Coffee locations in the US. Company B sells dinner plates to Applebee’s. Company A charges $1 for a pack of 100 cups and Company B charges $3 for 1 dinner plate. Tell us exactly what information you would need to determine whether Company A or Company B has higher annual revenue and explain how you would calculate these two figures.
Answer:
Company A and Company B
Determination of annual revenue:
a) The information needed to determine which company has higher annual revenue include:
i) The annual quantities of packs of paper coffee cups sold to the Caribou Coffee locations in the US for a number of years.
ii) The annual quantities of dinner plates sold to Applebee's for the same years as above.
b) The annual revenues can be calculated by multiplying the price for a pack of 100 cups by the annual quantity sold.
Explanation:
Revenue is a function of price and quantity sold. The price is unit selling price and the quantity depends on the period for which revenue is being computed.
Revenue is the earnings from the sale of goods and services. The excess of revenue over cost of sales gives the gross profit, from which expenses would be deducted to arrive at net income after adding other incomes from non-operational activities.
According to a summary of the payroll of Mountain Streaming Co., $110,000 was subject to the 6.0% social security tax and the 1.5% Medicare tax. Also, $25,000 was subject to state and federal unemployment taxes. a. Calculate the employer's payroll taxes, using the following rates: state unemployment, 5.4%; federal unemployment, 0.8%. $ b. Journalize the entry to record the accrual of payroll taxes. If an amount box does not require an entry, leave it blank.
Answer:
a. Calculate the employer's payroll taxes, using the following rates: state unemployment, 5.4%; federal unemployment, 0.8%.
$9,800b. Journalize the entry to record the accrual of payroll taxes. If an amount box does not require an entry, leave it blank.
Dr FICA Social Security expense 6,600Dr FICA Medicare expense 1,650Dr Federal unemployment tax expense 200Dr State unemployment tax expense 1,350 Cr FICA Social Security payable 6,600 Cr FICA Medicare payable 1,650 Cr Federal unemployment tax payable 200 Cr State unemployment tax payable 1,350Explanation:
payroll taxes should be:
social security $110,000 x 6% = $6,600
Medicare $110,000 x 1.5% = $1,650
federal unemployment $25,000 x 0.8% = $200
state unemployment $25,000 x 5.4% = $1,350
total = $9,800
Both employees and employers must pay equal amounts of FICA taxes (social security and medicare), but only employees pay unemployment taxes.
Bonnie Jo purchased a used camera (five-year property) for use in her sole proprietorship. The basis of the camera was $3,000. Bonnie Jo used the camera in her business 60 percent of the time and used it for personal purposes the rest of the time during the first year. Calculate Bonnie Jo's depreciation deduction during the first year, assuming the sole proprietorship had a loss during the year. (Bonnie did not place the property in service in the last quarter.)
Answer:
$360
Explanation:
The computation of the depreciation deduction during the first year is shown below:
= Basis of the camera × given percentage × weightage
= $3,000 × 60% × 20%
= $360
Since the 60% is used for business and 40% used for personal
And there is a recovery period of assets of 5 years so half year convention period applies
Final Examination Hide or show questions Calculator Problem 9-23 (b) (LO. 2) Ricardo, who is self-employed, uses his automobile 85% for business and during 2019 drove a total of 32,200 business miles. Information regarding his car expenses is listed below. Business parking $345 Auto insurance 2,800 Auto club dues (includes towing service) 275 Toll road charges (business-related) 205 Oil changes and engine tune-ups 180 Repairs 1,890 Depreciation allowable 3,600 Fines for traffic violations (incurred during business use) 95 Gasoline purchases 4,125 What is Ricardo's deduction in 2019 for the use of his car if he uses:
Answer:
Explanation:
a) actual cost method:-
=deductions × percentage
= 345 + 205 + 85% (2800 + 275 + 180 + 1890 +3600 +4125 )
=550 + 10939.5
=11489.5 = 11490
Note :- fines are not taken.
b) automatic mileage method:-
=total number of business miles × standard rate
=32200×0.58 +345+205
=19226
Stahlmaere Inc. is a start-up company that manufactures simple machines. It is interested in analyzing the profit from a new machine using Monte Carlo simulation. It wants to investigate the profit resulting from a selling price of $150 per unit. The setup and advertising costs are known to total $75,000. They assume that the demand for the product is normally distributed with a mean of 1500 units and a standard deviation of 100 units. The company estimates that the raw material cost per unit is uniformly distributed between $5 and $6. The labor cost per unit is assumed to follow a discrete uniform distribution from $12 to $16. A junior analyst has devised the following Excel spreadsheet that simulates a single scenario using the information given above: Selling price per unit = 150 Set up and advertising cost = 75000 Demand = =NORM.INV(RAND(),1500,100) Raw material cost per unit = =5+(6-5)*RAND() Labor cost per unit = =RANDBETWEEN(12,16) Profit = =(B1*B4)-B2-((B5+B6)*B4) Copy-and-paste the above information into cells A1:B8 of an Excel spreadsheet. Then use a data table to repeat the simulation 1000 times. From the simulation results, estimate Stahlmaere's expected mean profit. Understanding that simulation is random in nature and that your estimate is unlikely to match any of the answer choices exactly, choose the answer choice that is closest to the estimated mean profit.
A. $180,000
B. $50,000
C. $150,000
D. $90,000
E. $120,000
Answer:
$ 120,000
Explanation:
Formulas:
Cell Formula
B4 =NORMINV(RAND(),1500,100)
B5 =5+(6-5)*RAND()
B6 =RANDBETWEEN(12,16)
B8 =(B1*B4)-B2-((B5+B6)*B4)
B12 =AVERAGE(F3:F1002)
Enter formula = B8 in cell E2
and =RANDBETWEEN(12,16) in E3 copy down to E1002 (this represents labor cost)
To create the data table, select range E2:F1002
click Data tab > What-If Analysis in Data Tools group > Data Table > In the resulting dialogue box, enter B6 in the Column Input cell, and B1 in the Row Input cell.
Estimated mean profit = $ 121,445 this is closest to $ 120,000
THE ANSWER IS $ 120,000
Gratuities: A customer has a large sailing yacht on a vessel that your company will be discharging. The customer is present and is watching the off-loading operation. The five stevedores you manage pull off a very tricky maneuver, safely transferring the yacht to the trailer. The customer is elated, and reaches into his pocket, pulling out a big wad of $50 bills. What do you do?
Answer:
The answer is "Shifting".
Explanation:
Some information, that is choices is missing in the question so that the correct option can be identified as follows:
We assume, that the company is doing, as per the given scenario, it set out from the Query, the Market of Packers, and adjusting operation involving shifts to one position of industrial vehicles.
In January 2020, Sunland Company, a newly formed company, issued 10300 shares of its $8 par common stock for $13 per share. On July 1, 2020, Sunland Company reacquired 1030 shares of its outstanding stock for $10 per share. The acquisition of these treasury shares decreased total stockholders' equity. increased total stockholders' equity. did not change total stockholders' equity. decreased the number of issued shares.
Answer:
The correct option is the acquisition of these treasury shares decreased total stockholders' equity.
Explanation:
Initially the total stockholders' equity is $133,900 ($13*10,300) which comprised of $82,400 common stock ($8*10,300) $51,500 paid in capital in capital in excess of par value.
By repurchasing 1,030 treasury stock at $10,the total stockholders' equity decrease by $10,300,which leaves a balance of $123,600 ($133,900-$10,300).
In other words,the first option is the correct choice of answer
Barbara's Bakery purchased three new 7-year assets during the current year. She chose NOT to use Section 179 immediate expensing or take bonus depreciation. The furnishings were purchased for $15,000 in April, the equipment for $6,000 in July, and the appliances for $40,000 in November. What amount of depreciation expense is allowable in the current year
Answer:
Depreciation in Current year is $14,939
Explanation:
Answer:
I think it is 4748. If it asks second year, it will be 16072.
Explanation:
Furnishings...in April, second quarter:
15,000x17.85%=2677.5
Equipment...in July, third quarter:
6,000x10.71%=642.6
Appliances...in November, fourth quarter
40,000x3.57%=1428
Total: 2677.5+642.6+1428=4748
A financier plans to invest up to $500,000 in two projects. Project A yields a return of 9% on the investment of x dollars, whereas Project B yields a return of 17% on the investment of y dollars. Because the investment in Project B is riskier than the investment in Project A, she has decided that the investment in Project B should not exceed 40% of the total investment. How much should the financier invest in each project in order to maximize the return on her investment
Answer:
She should invest $300,000 in Project A, and $200,000 in Project B.
Explanation:
Solution
Since Project B yields a higher return, she should invest as much money as possible in it, which is 40% of the total investment or
or (0.40)($500,000) = $200,000
so
The remaining $500,000 - $200,000 = $300,000 should be invested in Project A.
Therefore, she should invest $300,000 in Project A, and $200,000 in Project B.
Warren Buffet opposes stock splits to lower the share price because he believes:________.
a. lower share price will encourage other companies to try to take over the company from existing shareholders.
b. lower stock price encourages short term investing, whereas he is looking for long-term investors.
c. stock splits encourage long-term investing, which is detrimental to his firm's investment policy.
d. lower share price indicates poor growth prospects..
Answer:. b. lower stock price encourages short term investing, whereas he is looking for long-term investors.
Explanation:
Warren Buffet has stated that he does not want to split Berkshire Hathaway's stock because he believes that it would attract short term investors whereas he is looking for long term investors. He believes that a stock being split makes it susceptible to investors who just want to buy it for the meantime, wait for it to appreciate a bit and then sell. He however prefers Companies with a long term potential so he prefers people investing for the long run.
A company determined that the budgeted cost of producing a product is $30 per unit. On June 1, there were 86000 units on hand, the sales department budgeted sales of 370000 units in June, and the company desires to have 160000 units on hand on June 30. The budgeted cost of goods sold for June would be
Answer:
The budgeted cost of goods sold for June would be $ 13,320,000
Explanation:
Budgeted cost per unit = $30
Sales budget = 370,000 units
Less: Beginning inventory = 86,000 units
Add: Ending inventory = 160,000 units
Therefore budgeted cost of goods sold for June = (370,000 - 86,000 + 160,000) × $30
= 444,000 × $30
= $13,320,000
Vandy Corporation's balance sheet and income statement appear below: Comparative Balance Sheet Ending Balance Beginning Balance Assets: Cash and cash equivalents $ 31 $ 29 Accounts receivable 61 73 Inventory 59 61 Property, plant, and equipment 684 550 Less accumulated depreciation 349 319 Total assets $ 486 $ 394 Liabilities and stockholders' equity: Accounts payable $ 53 $ 54 Accrued liabilities 20 21 Income taxes payable 52 48 Bonds payable 203 190 Common stock 61 60 Retained earnings 97 21 Total liabilities and stockholders' equity $ 486 $ 394 Income Statement Sales $ 807 Cost of goods sold 492 Gross margin 315 Selling and administrative expense 182 Net operating income 133 Gain on sale of equipment 16 Income before taxes 149 Income taxes 45 Net income $ 104 The company sold equipment for $18 that was originally purchased for $14 and that had accumulated depreciation of $12. It paid a cash dividend of $28 during the year and did not retire any bonds payable or repurchase any of its own common stock. Required: Prepare a statement of cash flows for the year using the indirect method.
Answer:
See below the statement of Cash flow from Vandy Corporation.
Explanation:
Vandy Corporation
Statement of Cash Flow
CASH FLOW FROM OPERATING ACTIVITIES:
Net Income $104
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation on Fixed Assets ($349-$319+$12) $42
Gain on Sale of Equipment ($16)
(Increase) Decrease in Current Assets:
Accounts Receivables $12
Inventory $2
Increase (Decrease) in Current Liabilities:
Accounts Payable ($1)
Accrued Liabilities ($1)
Income taxes payable $4
Net Cash provided by Operating Activities $146
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of Equipment $18
Purchase of Property, plant and equipment ($684-$550+$14) ($148)
Net Cash Flow from Investing Activities ($130)
CASH FLOWS FROM FINANCING ACTIVITIES:
Bonds Payable $13
Issuance of Common Stock $1
Payment of Dividends ($28)
Net Cash from Financing Activities ($14)
Net Increase (Decrease) in Cash $2
Opening Cash Balance $29
Ending Cash Balance $31
Early in 2021, the Excalibur Company began developing a new software package to be marketed. The project was completed in December 2021 at a cost of $36 million. Of this amount, $24 million was spent before technological feasibility was established. Excalibur expects a useful life of five years for the new product with total revenues of $60 million. During 2022, revenue of $18 million was recognized. Required: 1. Prepare a journal entry to record the 2021 development costs. 2. Calculate the required amortization for 2022. 3. Determine the amount to report for the computer software costs in the December 31, 2022, balance sheet.
Answer:
Dr research and development expense $24,000,000
Dr computer software costs $12,000,000
Cr Cash $36,000,000
Amortization is $3,600,000
Balance sheet balance in 2022 is $8,400,000
Explanation:
The cash of $36 million spent would be credited to cash account as an outflow of cash while $24 million would be debited to research and development expense account with the balance of $12 debited to computer software costs as asset
amortization for 2022=cost of software*revenue in 2022/total estimated revenue=$12,000,000*$18,000,000/$60,000,000=$3,600,00
Amount of computer software at 31 December 2022=$12,000,000-$3,600,000=$ 8,400,000
Job 397 was recently completed. The following data have been recorded on its job cost sheet. Direct materials $59,400 Direct labor-hours 1,254 DLHs Direct labor wage rate $11 per DLH Number of units completed 3,300 units The company applies manufacturing overhead on the basis of direct labor-hours. The predetermined overhead rate is $37 per direct labor-hour. Required: What's the unit product cost that would appear on the job cost sheet for this job
Answer:
$36.24
Explanation:
The computation of unit product cost is shown below:-
Unit product cost = Direct material + Direct labor + Manufacturing overhead) ÷ Unit completed
= ($59,400 + (1254 × $11) + (1254 × $37)) ÷ 3,300
= ($59,400 + $13,794 + $46,398) ÷ 3,300
= $119,592 ÷ 3,300
= $36.24
Therefore for computing the units product cost we simply applied the above formula.
A well-known financial writer argues that he can earn 148 percent per year buying wine by the case. Specifically, he assumes that he will consume one $12 bottle of fine Bordeaux per week for the next 12 weeks. He can either pay $12 per week or buy a case of 12 bottles today. If he buys the case, he receives a 9 percent discount and, by doing so, earns the 148 percent. Assume he buys the wine and consumes the first bottle today. Calculate the EAR.
Answer:
EAR = 148%
Explanation:
calculating the EAR ( applying the formula for present value of annuity )
cost of case = 12 * 12 * ( 1 - 0.09 ) = 131.04
Pv = 131.04
cost per case = $12
no of weeks = 12 weeks
rate of the wine per ( IRR ) = IRR(57;56;55;;;;1)= 1.76319
rate of the wine per week = 1.76319%
therefore EAR = ( 1 + 0.0176319) ^52 - 1 = 148.15% ≈ 148%
Builder Products, Inc., uses the weighted-average method in its process costing system. It manufactures a caulking compound that goes through three processing stages prior to completion. Information on work in the first department, Cooking, is given below for May: Production data: Pounds in process, May 1; materials 100% complete;conversion 90% complete 76,000Pounds started into production during May 410,000Pounds completed and transferred out ?Pounds in process, May 31; materials 60% complete;conversion 40% complete 36,000Cost data: Work in process inventory, May 1: Materials cost$117,900Conversion cost$53,600Cost added during May: Materials cost$613,080Conversion cost$294,700 Required:1. Compute the equivalent units of production for materials and conversion for May.2. Compute the cost per equivalent unit for materials and conversion for May.3. Compute the cost of ending work in process inventory for materials, conversion, and in total for May.4. Compute the cost of units transferred out to the next department for materials, conversion, and in total for May.5. Prepare a cost reconciliation report for May.
Answer:
1.Total Equivalent Units Materials 471,600 Conversion 464,400
2. Cost Per Equivalent Unit Materials $ 1.33 Conversion $ 0.75
3. Cost of Ending Work In Process $ 39528
4. Cost Of Units Transferred Out = $ 936,000
5. Cost Materials $ 627 228 and Conversion $348,300
Explanation:
Builder Products, Inc.,
Weighted-Average Method
1. Equivalent Units
Particulars Units % of Completion Equivalent Units
Materials Conversion Materials Conversion
Transferred Out 450000 100 100 450,000 450,000
Ending WIP 36000 60 40 21,600 14,400
Total Equivalent Units 471,600 464,400
Transferred Out units are calculated by adding Opening Inventory and production started and subtracting ending inventory units.
Transferred Out units = Opening Inventory+ production started -ending inventory units
Transferred Out units =76,000 + 410,00 - 36000= 450000 units.
2. Cost Per Equivalent Units
Materials Conversion
Cost Of Opening Inventory 117,900 53600
Cost Added 613,080 294,700
Total Costs 624,980 348,300
Equivalent Units 471,600 464,400
Cost per Equivalent Unit 624980/471600 348300/464400
$ 1.33 $ 0.75
3. Cost of Ending Work In Process $ 39528
Materials = 21600 * $ 1.33= $ 28728
Conversion = 14400 * $ 0.75= $10800
We multiply the equivalent number of units with the cost per unit to find the cost.
4. Cost Of Units Transferred Out = $ 936,000
Materials = 450 000 * $ 1.33= $ 598,500
Conversion = 450000 * $ 0.75 = $ 337,500
5. A Cost Reconciliation Report
Materials Conversion
Ending WIP $ 28728 $10800
Transferred Out $ 598,500 $ 337,500
Total 627 228** 348,300
These calculated costs reconcile with the costs given in the above data.
Materials Conversion
Cost Of Opening Inventory 117,900 53600
Cost Added 613,080 294,700
Total Costs 624,980** 348,300
The difference is in the cost of materials which is actually 624,980** and we found it out to be 627 228** . This is because we rounded the Cost per Equivalent Unit of material from $ 1.325 to $1.33
If we multiply 1.325 * 471,600 we get $ 624870 which is almost the same.
Assume that you are a retail customer. Use the information below to answer the following question. Bid Ask Borrowing Lending S0($/€) $1.42 = €1.00 $1.45 = €1.00 i$ 4.25% APR 4% APR F360($/€) $1.48 = €1.00 $1.50 = €1.00 i€ 3.10% APR 3% APR If you borrowed $1,000,000 for one year, how much money would you owe at maturity? A. $1,450,352 B. $1,042,500 C. € 1,024,500 D. $1,525,400
Answer:
$1,042,500.
Explanation:
From the question above, we are given the following parameters; under the bid, we have $1.42 = €1.00 and $1.48 = €1.00; the borrowing and lending are $ 4.25% and 4% APR respectively for S0($/€).
Also, for F360($/€), the bid and ask values are: $1.48 = €1.00 and $1.50 = €1.00 respectively; the borrowing and lending values are 3.10% APR and 3% APR.
Therefore, the Borrowing rate is ($) 4.25% in $ . Thus, $1,000,000 for one year, one we owe
$1,000,000 × (1 + 0.0425) = $1,042,500 at maturity.
