Answer:
Option E (13) is the correct answer.
Explanation:
According to the question, the values are:
Daily demand,
d = 25
Safety stock,
S = 5
Lead time,
L = 5
Number of kanbans,
N = 10
Now,
The formula is:
⇒ [tex]N=\frac{dL+S}{C}[/tex]
By putting the values, we get
⇒ [tex]10=\frac{25\times 5+5}{C}[/tex]
⇒ [tex]10=\frac{130}{C}[/tex]
⇒ [tex]C=\frac{130}{10}[/tex]
⇒ [tex]=13[/tex]
Number of computer each one hold is 14 computers
Given that;Lead time = 5 days
Safety stock = 15 computers
Daily demand = 25 computers
Find:Number of computer each one hold
Computation:Total demand = 25 × 5 = 125
Total number of computers = 125 + 15
Total number of computers = 140 computers
Total number of kanbans = 10 kanbans
Number of computer each one hold = 140 / 10
Number of computer each one hold = 14 computers
Computation:https://brainly.com/question/20470140?referrer=searchResults
Brandon and Jane Forte file a joint tax return and decide to itemize their deductions. The Fortes' income for the year consists of $120,000 in salary, $1,000 interest income, $1,500 non qualifying dividends, and $1,100 long-term capital gains. The Fortes' expenses for the year consist of $3,000 in investment interest expense and $900 in tax preparation fees. Assuming that the Fortes' marginal tax rate is 32 percent and they make no special elections, what is the amount of investment interest expense deduction for the year
Answer: $2500
Explanation:
The amount of investment interest expense deduction for the year will be calculated thus:
The value of interest expense will be:
= Interest income + Non qualifying dividend
= $1000 + $1500
= $2500
It should be noted that the investment interest expenses will be $2500 due to the fact that thus is lesser than Fortes' expenses for the year which is $3,000 in investment interest expense.
Pecan acquires Southern in an acquisition reported as a merger. The acquisition results in $50 million in goodwill. The acquisition cost includes an earnings contingency, valued at $1 million at the date of acquisition. Within the measurement period, additional information on Southern's expected future performance at the date of acquisition reveals that the earnout actually had a fair value of $200,000 at the date of acquisition. The entry to record the new information includes a credit of $800,000 to:
Answer:
Dr Earnings contingency liability $800,000
Cr Goodwill $800,000
Explanation:
Based on the information given the appropiate journal entry to record the new information includes a credit of $800,000 to:Dr Earnings contingency liability $800,000 and Cr Goodwill $800,000 reason been that the acquisition cost is lesser.
Dr Earnings contingency liability $800,000
Cr Goodwill $800,000
Troy Engines, Ltd., manufactures a variety of parts for use in its product. The company has always produced all of the necessary parts for its product, including all of the electronic circuits. The company sells 22,000 units of its product per year. An outside supplier has offered to sell electronic circuits to the company for a cost of $35 per unit. To evaluate this offer, the company has gathered the following information relating to its own cost of producing the electronic circuits internally:
Per Unit 14,000 unit per per year
Direct materials $14 $196,000
Direct labor 10 140,000
Variable manufacturing overhead 4 56,000
Fixed manufacturing overhead, traceable 6 84,000
Fixed manufacturing overhead, allocated 9 126,000
Total cost $43 $602,000
Required:
a. Assuming the company has no alternative use for the facilities that are now being used to produce the carburetors, what would be the financial advantage (disadvantage) of buying 14,000 carburetors from the outside supplier?
b. Should the outside supplier's offer be accepted?
c. Suppose that if the carburetors were purchased, Troy Engines, Ltd., could use the freed capacity to launch a new product. The segment margin of the new product would be $140,000 per year. Given this new assumption, what would be financial advantage (disadvantage) of buying 14,000 carburetors from the outside supplier?
d. Given the new assumption in requirement 3, should the outside supplier's offer be accepted?
Answer and Explanation:
The computation is shown below:
a.
Differential analysis
Particulars Make Buy
Direct material 196000
Direct labour 140000
variable manufacturing
overhead 56000
Fixed manufacturing
overhead (84000 ÷ 3) 28000
Purchase cost (14000 × 35) 490000
Total relevant cost $420,000 $490,000
Financial (disadvantage) is -$70,000
b. No as there is a financial disadvantage
c.
Differential analysis
Particulars Make Buy
Direct material 196000
Direct labour 140000
variable manufacturing
overhead 56000
Fixed manufacturing
overhead (84000 ÷ 3) 28000
Opportunity cost $140,000
Purchase cost (14000 × 35) 490000
Total relevant cost $560,000 $490,000
Financial advantage is $70,000
d. Yes it should be accepted as it is a financial advantage
Wexpro, Inc., produces several products from processing 1 ton of clypton, a rare mineral. Material and processing costs total $62,000 per ton, one-fourth of which is allocated to product X15. Eight thousand three hundred units of product X15 are produced from each ton of clypton. The units can either be sold at the split-off point for $16 each, or processed further at a total cost of $9,800 and then sold for $19 each.
Required:
1. What is the financial advantage (disadvantage) of further processing product X15?
2. Should product X15 be processed further or sold at the split-off point?
Answer:
1) Financial advantage = $15,100
2) X15 should be processed further because it would generate 15,100
Explanation:
A company should process a product further if the additional revenue from the split-off point is greater than than the further processing cost.
Also note that all cost incurred up to the split-off point are irrelevant to the decision to process further .
$
Sales revenue after further processing
(19×8,300) 157,700
Sales revenue at the split-off point
(16×8,300) 132,800
Additional sales revenue from further processing 24,900
Less further processing cost (9,800)
Financial advantage 15,100
Financial advantage = $15,100
X15 should be processed further because it would generate 15,100
why might trade unions be against the privatisation of government industries
Answer:
GDTDE
Explanation:
EGREGRE
At the end of the quarter, a company made an adjusting entry to recognize $1000 of interest costs that have been incurred this quarter in constructing a new piece of production equipment. What is the correct journal entry?
A. Dr. interest expense 1000 or Cr. Interestrest Payable $1000.
B. Dr. Equipment $1000 Cr. Interest Payable $1000.
C. No entry is needed.
D. Dr. work in Process $1000 Cr. Interest Payable $1000.
E. Dr. Interest Expense $1000 Cr.Cash $1000.
Answer:
The correct journal entry is:
B. Dr. Equipment $1000 Cr. Interest Payable $1000.
Explanation:
The company will debit the interest cost to its Equipment under construction account with the sum of $1,000 while the Interest Payable is credited with the same amount. The adjustment of the interest cost helps the company to capitalize the $1,000 with a debit to its asset account and a credit to the liability account since the amount has not been paid out to the finance house affected. By capitalizing the interest cost, the asset's value is increased while the interest payable increases the current liability of the company as at the date of the adjustment.
Loren is in charge of implementing a wellness program for his organization. In formulating the plans for the wellness program, Loren visits and studies a number of other businesses that have successfully implemented such programs. When it is time to actually start the program in his organization, which of the following services or benefits is Loren LEAST likely to include?
a. Smoking cessation programs
b. Nutrition and weight-loss seminars
c. Cancer treatments including chemotherapy and radiation therapies
d. Stress management workshop sessions
Answer:
c. Cancer treatments including chemotherapy and radiation therapies
Explanation:
A wellness.program is defined as a set of activities.aomed at improving the quality of life of individuals through exercise, proper diet, and stress management.
The main idea behind a wellness program is prevention of illness with a healthy routine.
In the given scenario the other options are wellness initiatives except Cancer treatments including chemotherapy and radiation therapies.
This is excluded because it is study of a full blown illness and not preventive strategies to stay healthy.
a project partner suggests you make several time consuming edits to your project the day before the deadline, even though she's had the opportunity to review your work all along. would would you do? check all that apply. A review her suggestions and tell her you'll prioritize the most important ones. B suggest that she should have made her suggestions sooner. C message her to tell her you won't have time to address the edits. D thank her for her suggestions but keep the work as it is. E ask for her help addressing the edits
Answer:
A and E
Explanation:
Considering the scenario described in the question, the right action to take in this event are:
1. review her suggestions and tell her you'll prioritize the most important ones: due to deadline which is nearby, the best thing to do during review is to ensure the study is done to the essential part of the project
2. ask for her help addressing the edits: because she's had the opportunity to review the work all along. And she is the one that suggested time-consuming modifications; it is ideal to ask for her input or help make the necessary edits so it will be faster, as she may have seen the needed improvements.
Hence, the correct answer is options A and E.
You are offered the opportunity to put some money away for retirement. You will receive five annual payments of $25,000 each beginning in 40 years. How much would you be willing to invest today if you desire an interest rate of 12%?
Answer:
19k
Explanation:
You are given the following prices for a zero coupon bond that matures for 1 on the maturity date: Maturity DatePrice 1 year0.965 2 years0.920 3 years0.875 4 years0.825 5 years0.770 Josh and Phillip enter into a four year swap with a notional amount of 200,000. The swap has annual settlement periods. Under the swap, Josh will pay Phillip the fixed swap rate at the end of each year while Phillip will pay Josh the variable rate where the variable rate is the one year spot rate at the beginning of each year. Determine the net swap payment at the end of the first year.
Answer:
The net swap payment at the end of the first year is:
= $7,000.
Explanation:
a) Data and Calculations:
Zero coupon bond that matures for 1 on the maturity date
Maturity Date Price
1 year 0.965
2 years 0.920
3 years 0.875
4 years 0.825
5 years 0.770
Net swap payment at the end of the first year = fixed swap rate - variable swap rate * notional principal amount
= (1 - 0.965) * $200,000
= $7,000
b) Swaps are used by entities to hedge against their exposure to interest rate fluctuations. A swap reduces the uncertain future cash flows by allowing entities to take advantage of future market realities by revising their own debt obligations with a counterparty. In our example, Phillip agrees to pay Josh a variable swap rate while Josh pays Phillip a fixed swap rate. At the end of each period, the swap rates are netted off before applying the notional principal amount to arrive at the net swap payment.
Pacific Ink had beginning work-in-process inventory of $959,660 on October 1. Of this amount, $402,560 was the cost of direct materials and $557,100 was the cost of conversion. The 58,000 units in the beginning inventory were 30 percent complete with respect to both direct materials and conversion costs. During October, 122,000 units were transferred out and 40,000 remained in ending inventory. The units in ending inventory were 80 percent complete with respect to direct materials and 40 percent complete with respect to conversion costs. Costs incurred during the period amounted to $3,005,200 for direct materials and $3,786,840 for conversion.
Required:
Compute the costs of goods transferred out and the ending inventory using the weighted-average method.
Answer:
Pacific Ink
Cost of goods transferred out = $6,540,420
Ending inventory = $1,211,840
Explanation:
a) Data and Calculations:
Units Materials Conversion Total
Beginning WIP inventory $402,560 $557,100 $959,660
Costs incurred during the period $3,005,200 $3,786,840 $6,792,040
Total production costs $3,407,700 $4,343,940 $7,751,700
Units in WIP inventory 58,000 30% 30%
Units transferred out 122,000 100% 100%
Ending inventory 40,000 80% 40%
Units started 104,000 (122,000 + 40,000 - 58,000)
Equivalent unit of production Units Materials Conversion
Units transferred out 122,000 122,000 122,000
Ending inventory 40,000 32,000 16,000
Equivalent units 154,000 138,000
Cost per equivalent unit:
Total production costs $3,407,700 $4,343,940
Equivalent units 154,000 138,000
Cost per equivalent unit $22.13 $31.48
Costs assigned to:
Cost of goods transferred out $2,699,860 $3,840,560 $6,540,420
Ending inventory 708,160 503,680 1,211,840
Total costs assigned $3,408,020 $4,344,240 $7,752,260
g You bought a house with a 30-year mortgage with loan size $500,000 and interest rate 6%. Assuming the total transaction cost is $3,000 and your marginal income tax rate is 24%. What is your tax deduction for the first 2 months
Answer:
your tax deduction for the first 2 months is $1,199.40
Explanation:
given data
loan PV = $500,000
interest rate r = 6% = 6% / 12 = 0.5%
time period t = 30 year = 360 months
total transaction cost = $3,000
marginal income tax rate = 24%
to find out
What is your tax deduction for the first 2 months
solution
first we get here monthly payment that is
monthly payment = [tex]\frac{PV\times r}{1-(1+r)^{-t}}[/tex] ...............1
monthly payment = [tex]\frac{500000 \times 0.005}{1-(1+0.005)^{-360}}[/tex]
monthly payment = $2997.75
So
for 1st month interest is = $500000 × 0.005
1st month interest = $2500
and
for 2nd month interest
interest = [ $500000 - ( $2997.75 - $2500 ) ] × 0.005
2nd month interest interest = $2497.51
so
total interest paid in 2 month is = $2500 + $2497.51
total interest paid in 2 month = $4997.51
and
tax deduction is = $4997.51 × 0.24
tax deduction is = $1199.40
Shareholders, customers, suppliers, and employee groups are considered
A. indirect stakeholders
B. convertible stakeholders
C. direct stakeholders
D. formal stakeholders
Answer: its “direcr stakeholders”
Explanation: bcs it is
trade industry short note
Answer:
Trade is a basic economic concept involving the buying and selling of goods and services, with compensation paid by a buyer to a seller, or the exchange of goods or services between parties.
A central characteristic of management by objectives (MBO) is that: Group of answer choices employees are given complete freedom to set their own goals as long as they are consistent with guidelines approved by the CEO. it assumes that management must motivate employees, since employees are incapable of motivating themselves. goals are set by top management and followed without question by others within the organization. goals are set through a process involving members of the organization.
Answer:
goals are set through a process involving members of the organization.
Explanation:
Management by objectives (MBO) refers to the management where there is a strategic management model that focuse to improve the organization performance by defining the goals & objectives and the same would be by both management and employees.
so here according to the given options, the last option is correct as it represents the characteristic of the MBO
So the same would be selected
Brand [X] has tasked you with looking at various KPIs for their recent campaign. Below are the results for the campaign. Using the provided KPI calculations, your own research and intuition.
Amount spent (USD) CPM Impression Clicks Click- Through Rate
Campaign Total $2783 $1.55 1,801,348 26,048 1.45%
Required:
Do you believe this campaign performed well?
Answer:
Yes, the campaign performed well.
Explanation:
Recent campaign by Brand X has performed really well. The results obtained are analyzed against the Key Performance Indicators set by the company. The amount spent on the campaign is $2783 whereas the Clicks per minute is $1.55 which indicates that customers are impressed by the campaign and they are gaining attraction in the campaign details so the CPM impression is high.
they check the inventory in their Office Supply Closet once every 10 days, placing an order with their supplier depending on the inventory level in the closet. This week, the operator has counted 180 highlighters in the closet. They have already placed an order with a supplier for 500 highlighters that should arrive in 3 days. What is the Office Manager's Inventory Position?
Answer:
680 highlighters
Explanation:
Inventory level = 180 highlighters
On-order inventory = 500 highlighters
Inventory position = Inventory level + On-order inventory
Inventory position = 180 highlighters + 500 highlighters
Inventory position = 680 highlighters
So, the Office Manager's Inventory Position is 680 highlighters
Indicate how each of the following transactions affects U.S. exports, imports, and net exports.
a. A British scholar spends a year at Harvard University as a visiting scholar.
b. Your parents go on a trip to Japan in late March for the Cherry Blossom season.
c. A Canadian buys a new Ford. Your aunt buys a novel by a British author from a local bookstore.
d. A European family goes to Disney World in Florida for vacation.
Answer:
a. A British scholar spends a year at Harvard University as a visiting scholar.
Foreigners that only spend money in the US increase US exports, increasing net exports alsob. Your parents go on a trip to Japan in late March for the Cherry Blossom season.
Americans spending money on other countries increase US imports, decreasing net exports alsoc. A Canadian buys a new Ford. Your aunt buys a novel by a British author from a local bookstore.
Assuming that the Ford car was built in the US, exports will increase and so will net exports. Buying imported goods increase imports and decrease net exportsd. A European family goes to Disney World in Florida for vacation.
Foreigners that only spend money in the US increase US exports, increasing net exports alsoOn January 1, 2019, Sanders Corporation purchased equipment having a fair value of $68,301.30 by issuing a non-interest-bearing, $100,000, 4-year note due December 31, 2022. Required: Prepare the journal entries to record (1) the purchase of the equipment, (2) the annual interest charges over the life of the note, and (3) the repayment of the note.
Answer:
(1)
Jan 01, 2019
Dr. Equipment $68,301.30
Dr. Discount on note Payable $31,698.70
Cr. Note Payable $1,00,000
(2)
Dec 31, 2019
Dr. Interest Expenses $7,924.68
Cr. Discount on note Payable $7,924.68
Dec 31, 2020
Dr. Interest Expenses $7,924.68
Cr. Discount on note Payable $7,924.68
Dec 31, 2021
Dr. Interest Expenses $7,924.68
Cr. Discount on note Payable $7,924.68
Dec 31, 2022
Dr. Interest Expenses $7,924.68
Cr. Discount on note Payable $7,924.68
(3)
Dec 31, 2022
Dr. Note Payable $1,00,000
Cr. Cash $1,00,000
Explanation:
The asset is recorded at the discounted value of the note payable.
Discount on the bond = Face value of Loan note - Fair value of equipment = $100,000 - $68,301.30 = $31,698.70
Annual Interest expense = Total Discount on the bond / Numbers of years
Annual Interest expense = $31,698.70 / 4
Annual Interest expense = $7,924.68
The Note will be payable on December 31, 2022 by value of $100,000
If the monopolist can engage in perfect price discrimination, what is the marginal revenue from selling the 5th shirt
Answer:
Hello your question is incomplete, the missing part is attached below
answer : $120
Explanation:
In a perfect price discrimination situation the price( revenue ) attached to the quantity of goods is = the marginal revenue gotten
From the attached table
The price for the quantity demanded ( 5 ) = marginal revenue
i.e. Marginal revenue from selling the 5th shirt = $120
What kinds of barriers get in the way of "following your dreams"?
Answer: A. Individuals may not have the talents or resources to simply do whatever they dream of doing.
The kind of obstacles that prevent people from "following their ambitions" It's possible that some people lack the skills or resources necessary to pursue their dreams.
What kinds of skills are examples?making excellent choices despite having little knowledge. recognizing other people's viewpoints and interacting with various types of people successfully. Setting objectives, keeping track of progress, and making an effort to enhance your job. generating original answers and imaginative concepts to address issues.
What does human resources talent mean?Talent management, which includes a variety of HR procedures throughout the employee life cycle, is the attraction, selection, and retention of personnel. It includes hiring, onboarding, succession planning, learning and development, performance management, workforce planning, and employee engagement.
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Answer:
Individuals may not have the talents or resources to simply do whatever they dream of doing.
Explanation: Just took the test
A bank loans Kellie's Print Shop $350,000 to remodel a building near campus to use as a new store. On their respective balance sheets, this loan is
Answer: b. an asset for the bank and a liability for Kellie's Print Shop. The loan does not increase the money supply.
Explanation:
Banks make money by loaning out money to people and companies. This means that loans are an asset to banks because it enables them to generate cash.
Kellie's Print Shop will have to pay back to loan however which means that it is a liability to them because they owe the bank.
This loan will not increase the money supply because if not explicitly stated that it does, we assume that the loan was made from bank deposits by other bank customers which means that it is already part of the money supply.
Explain the concept of sustainable entrepreneurship and its dimensions.
Joseph and Mary, owners of Hotel Christmas have decided to sell their property. Hotel Christmas is a five-star full-service resort and has a trailing 12 months cash flow of $6,118,000. A neighboring limited-service property, The Motel, is valued at $16,000,000. The market cap rate for five-star, full-service properties in this area is 8.5%. Under standard market conditions, approximately how much would the sale price of the Christmas
Answer:
the amount that would be considered for the sale price of the Christmas is $71,976,470.59
Explanation:
The computation of the amount that would be considered for the sale price of the Christmas is given below;
We need to apply the following formula for the same
= Cash flow ÷ cap rate
= $6,118,000 ÷ 8.5%
= $71,976,470.59
By dividing the cash flow from the cap rate we simply determined the sale price
hence, the amount that would be considered for the sale price of the Christmas is $71,976,470.59
A marketing research agency conducted a study to determine the reasons for the decreased sales of a line of fishing equipment at Wishin' I Were Fishin' stores. Researchers spoke to customers at the outdoor sporting goods store as well as at competitors' stores. This information gathered by the researchers is an example of:_____.
Answer:
Primary data
Explanation:
Researchers obtain information about a particular subject in order to identify a certain pattern in the popular under study.
They obtain information in two forms: primary data and secondary data.
Primary data is obtained from the original source that is affected by an event. While secondary data is obtained from primary data that was initially collected.
In the give scenario to determine the reasons for the decreased sales of a line of fishing equipment at Wishin' I Were Fishin' stores. Researchers spoke to customers at the outdoor sporting goods store as well as at competitors' stores.
They went to the actual people that had an opinion on the subject matter, so the information is primary data
Hotaling Corporation is analyzing a capital expenditure that will involve a cash outlay of $146,040. Estimated cash flows are expected to be $30,000 annually for seven years. The present value factors for an annuity of $1 for 7 years at interest of 6%, 8%, 10%, and 12% are 5.582, 5.206, 4.868, and 4.564, respectively. The internal rate of return for this investment is:
Answer:
The solution shows that a rate of return of 10% which provides an annuity factor of 4.868 generates an NPV which is equal to zero. Thus, our IRR or internal rate of return is 10%.
Explanation:
The IRR or internal rate of return is the rate at which NPV or Net Present Value of the investment becomes zero. We are provided with the initial outlay for the project and the annual cash inflows along with time period. Using the annuity factors given below, we need to find out the factor which makes the NPV zero. The NPV is calculated as follows,
NPV = Present Value of Cash Inflows - Initial Outlay
We can try out each annuity factor and see what NPV is generates.
1. 6% rate (Annuity factor = 5.582)
NPV = (30000 * 5.582) - 146040
NPV = $21420
2. 8% rate (Annuity factor = 5.206)
NPV = (30000 * 5.206) - 146040
NPV = $10140
3. 10% rate (Annuity factor = 4.868)
NPV = (30000 * 4.868) - 146040
NPV = $0
So, from the above solution we can see that a rate of return of 10% which provides an annuity factor of 4.868 generates an NPV which is equal to zero. Thus, our IRR or internal rate of return is 10%
Marriage between individuals who have similar social characteristics
Homogamy is the marriage between individuals who have similar social characteristics.
What is homogamy?Homogamy is the practice that involves individuals marrying each other because they have similar characteristics. It involves marriage between individuals who are, in some culturally important way, similar to each other.
The similar characteristics in homogamy include:
Race/ethnicityReligious backgroundAgeEucation backgroundSocial backgroundTherefore, marriage between individuals who have similar social characteristics is know as homogamy.
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Irving Corporation makes a product with the following standards for direct labor and variable overhead: Standard Quantity or HoursStandard Price or RateStandard Cost Per Unit Direct labor 0.20hours$33.00per hour$6.60 Variable overhead 0.20hours$6.90per hour$1.38 In November the company's budgeted production was 7,200 units, but the actual production was 7,000 units. The company used 1,520 direct labor-hours to produce this output. The actual variable overhead cost was $9,880. The company applies variable overhead on the basis of direct labor-hours. The variable overhead rate variance for November is:
Answer:
Variable overheads rate variance = $608 favorable
Explanation:
The variable overhead rate variance is the difference between the standard cost of the actual labour hours and the actual variable overhead expenditure
$
1,520 hours should have cost (1,520× $6.90) 10,488
But did cost 9,880
Rate variance 608 Favorable
Variable overheads rate variance = $608 favorable
Capable Golf Cart, Inc. (CGC) manufactures two models of golf cart: LX and EX. The budget data for next month is available. LX EX Total Units produced 50 30 80 Direct labor hours 2,000 3,000 5,000 Machine hours 1,500 1,200 2,700 Direct materials $125,000 $90,000 $215,000 Direct labor 90,000 60,000 150,000 Manufacturing overhead 202,500 Total $567,500 Required: 1. Compute the reported unit cost for each product if direct labor hours are used as the allocation base. 2. Compute the reported unit cost for each product if direct labor costs are used as the allocation base. 3. Compute the reported unit cost for each product if machine hours are used as the allocation base.
Solution :
1. Allocation on the basis of [tex]$\text{Direct labor hours}$[/tex]
LX EX
Direct Material 125000 90000
Direct [tex]$\text{labor}$[/tex] cost 90000 60000
Manufacturing overhead [tex]$81000$[/tex] [tex]$121500$[/tex]
(202500/5000 x 2000) (202500/5000 x 3000)
Total cost 296000 271500
Units produced 50 30
Cost per unit 5920 9050
2. Allocation on the basis of [tex]$\text{Direct labor costs}$[/tex]:
LX EX
Direct Material 125000 90000
Direct labor cost 90000 60000
Manufacturing overhead 121500 81000
(202500/150000 x 90000) (202500/150000 x 60000)
Total cost 336500 231000
Units produced 50 30
Cost per unit 6730 7700
3. Allocation on the basis of [tex]$\text{machine hours}$[/tex]
LX EX
Direct Material 125000 90000
Direct labor cost 90000 60000
Manufacturing overhead 112500 90000
(202500/2700 x 1500) (202500/2700 x 1200)
Total cost 327500 240000
Units produced 50 30
Cost per unit 6550 8000
Zachary Airline Company is considering expanding its territory. The company has the opportunity to purchase one of two different used airplanes. The first airplane is expected to cost $23,680,000; it will enable the company to increase its annual cash inflow by $6,400,000 per year. The plane is expected to have a useful life of five years and no salvage value. The second plane costs $27,880,000; it will enable the company to increase annual cash flow by $8,200,000 per year. This plane has an eight-year useful life and a zero salvage value. Required Determine the payback period for each investment alternative and identify the alternative Zachary should accept if the decision is based on the payback approach. (Round your answers to 1 decimal place.)
Answer: See explanation
Explanation:
For the first airplane:
Payback period will be:
= Cost of first airplane ÷ Annual cash inflow
= 23,680,000 / 6,400,000
= 3.7 years
For the second airplane:
Payback period will be:
= Cost of first airplane ÷ Annual cash inflow
= 27,880,000 / 8,200,000
= 3.4 years
Since the decision is based on the payback approach, Zachary Airline should select the second option since it has a lesser payback period.