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
The likelihood that a decision maker will ever receive a payoff precisely equal to the EMV when making any one decision is: a. Low (near 0%) b. High (near 100%) c. Dependent on the number of alternatives d. Dependent upon the number of states of nature 3 points
Answer: low (near 0%)
Explanation:
The expected monetary value(EMV) simply refers to the amount of money that an economic agent can expect to make based on a particular decision that's made.
It should be noted that the likelihood that a decision maker will be able to receive a payoff that is exactly as thesame as the EMV when a decision is being made will be near to zero as it's very low that it'll happen.
Boenisch Corporation produces and sells a single product with the following characteristics: The company is currently selling 8,000 units per month. Fixed expenses are $406,000 per month. Management is considering using a new component that would increase the unit variable cost by $3. Since the new component would increase the features of the company's product, the marketing manager predicts that monthly sales would increase by 400 units. What should be the overall effect on the company's monthly net operating income of this change
Answer: Increase by $2,000
Explanation:
Current net operating income is:
= Contribution margin - Fixed costs
= (68 * 8,000) - 406,000
= $138,000
If component is added, Variable cost increases by $3 to $105. New contribution margin is:
= 170 - 105
= $65
Units sold increases by 400 to 8,400.
Net operating income becomes:
= (65 * 8,400) - 406,000
= $140,000
Net operating income increased by:
= 140,000 - 138,000
= $2,000
Item X is a standard item stocked in a company's inventory of component parts. Each year the firm, on a random basis, uses about 1,700 of item X, which costs $25 each. Storage costs, which include insurance and cost of capital, amount to $8 per unit of average inventory. Every time an order is placed for more of item X, it costs $26. a. Whenever item X is ordered, what should the order size be
Answer:
EOQ = 105.11898 rounded off to 105 units per order
Explanation:
To calculate the optimum order size when each order is placed, we need to find the EOQ or Economic order quantity. It is the quantity that should be ordered each time to minimize the inventory related costs. The formula to calculate EOQ is attached. The EOQ is calculated as follows.
EOQ = √[(2 * 1700 * 26) / 8]
EOQ = 105.11898 rounded off to 105 units
Yahir wants to become an Actor. What are the most helpful examples of milestones for this goal? Check all that apply.
taking an acting class
running a race
taking a science class
learning how to cook
participating in a school play
auditioning for a part in a television show
The helpful examples of milestones for becoming an actor includes:
taking an acting classparticipating in a school play auditioning for a part in a television showWho is an actor?An actor means someone who profession is based on acting on the stage, films, television etc.
The helpful examples of milestones for becoming an actor includes taking an acting class, participating in a school play and auditioning for a part in a television show.
Therefore, the Option A, E and F is correct.
Read more about Actor skills
brainly.com/question/1543496
Fleming Company provided the following information on selected transactions during 2021: Dividends paid to preferred stockholders $ 500,000 Loans made to affiliated corporations 1,400,000 Proceeds from issuing bonds 1,600,000 Proceeds from issuing preferred stock 2,100,000 Proceeds from sale of equipment 800,000 Purchases of inventories 2,400,000 Purchase of land by issuing bonds 600,000 Purchases of treasury stock 1,200,000 The net cash provided (used) by financing activities during 2021 is
Answer:
$2,000,000
Explanation:
Calculation to determine what The net cash provided (used) by financing activities during 2021 is
Using this formula
Net cash provided (used) by financing activities=(Dividends paid to preferred stockholders)+Proceeds from issuing bonds+Proceeds from issuing preferred stock+(Purchases of treasury stock )
Let plug in the formula
Net cash provided (used) by financing activities=($ 500,000) +$1,600,000 + $2,100,000 + ($1,200,000)
Net cash provided (used) by financing activities=$2,000,000
Therefore The net cash provided (used) by financing activities during 2021 is $2,000,000
last year, cayman corporation had sales of $26 million, total variable costs of $15 million, and total fixed costs of $5,000,000. in addition, they paid $4 million in interest to bondholders. cayman has a marginal tax rate of 21 percent. if cayman's sales increase by 15%, what should be the increase in operating income
Answer:
Cayman Corporation
The increase in operating income is 27.5% (or $1.65 million).
Explanation:
a) Data and Calculations:
Sales last year = $26 million
Total variable costs 15 million
Contribution margin $11 million
Fixed costs 5 million
Operating income $6 million
Bondholders' interest 4 million
Income before tax $2 million
Income taxes (21%) 0.42 million
Net income $1.58 million
Last Year Increase by 15%
Sales revenue = $26 million $29.9 million
Total variable costs 15 million 17.25 million
Contribution margin $11 million $12.65 million
Fixed costs 5 million 5.0 million
Operating income $6 million $7.65 million $1.65 m or 0.275
Bondholders' interest 4 million 4.0 million
Income before tax $2 million 3.65 million
Income taxes (21%) 0.42 million 0.7665 million
Net income $1.58 million 2.8835 million = 82.5%
what is cover letter is?
Answer:
A cover is a job application or document in this case that is submitted with The client's/Your credentials and why your interested in the job opening.
Nordstrom, Inc. operates department stores in numerous states. Suppose selected financial statement data (in millions) for 2020 are presented below. End of Year Beginning of Year Cash and cash equivalents $ 1,285 $ 122 Accounts receivable (net) 3,500 3,300 Inventory 1,500 1,500 Other current assets 555 515 Total current assets $6,840 $5,437 Total current liabilities $3,420 $2,722 For the year, net credit sales were $13,940 million, cost of goods sold was $9,000 million, and net cash provided by operating activities was $1,254 million. Compute the current ratio, accounts receivable turnover, average collection period, inventory turnover, and days in inventory at the end of the current year. (Round answers to 1 decimal place, e.g. 1.6.)
Answer:
a. Current ratio = Total current assets/Total current liabilities
Current ratio = $6,840/$3,420
Current ratio = 2 : 1
b. Accounts receivable turnover = Net credit sales / [Net beginning accounts receivables + Net ending accounts receivables / 2]
Accounts receivable turnover = $13,940 / [$3,300+$3,500/2]
Accounts receivable turnover = $13,940 / $3,400
Accounts receivable turnover = 4.1 times
c. Average collection period = 365 / Accounts receivables turnover
Average collection period = 365 / 4.1
Average collection period = 89.0244
Average collection period = 89 days
d. Inventory turnover = Cost of goods sold / [Beginning inventory+Ending inventory/2]
Inventory turnover = $9,000 / [$1,500+$1,500/2]
Inventory turnover = $9,000 / $1,500
Inventory turnover = 6 times
e. Days in inventory at the end of the current year = 365 / Inventory turnover
Days in inventory at the end of the current year = 365 / 6
Days in inventory at the end of the current year = 60.8333
Days in inventory at the end of the current year = 61 days
Fabrick Company's quality cost report is to be based on the following data: Lost sales due to poor quality $ 78,000 Quality data gathering, analysis, and reporting $ 23,000 Net cost of spoilage $ 88,000 Re-entering data because of keying errors $ 98,000 Test and inspection of in-process goods $ 24,000 Final product testing and inspection $ 78,000 Statistical process control activities $ 49,000 Returns arising from quality problems $ 16,000 Downtime caused by quality problems $ 26,000 What would be the total appraisal cost appearing on the quality cost report
Answer:
$102,000
Explanation:
Calculation to determine What would be the total appraisal cost appearing on the quality cost report
Using this formula
Total appraisal cost=Test and inspection of in-process goods + Final product testing and inspection
Let plug in the formula
Total appraisal cost=$ 24,000+$78,000
Total appraisal cost=$102,000
Therefore What would be the total appraisal cost appearing on the quality cost report is $102,000
g The liquidity trap refers to the situation where Multiple Choice the Fed adds excess reserves to the banking system, but it has minimal positive effect on lending, investment, or aggregate demand. excessive consumer debt limits the growth in consumer spending necessary to bring the economy out of recession. the public debt is so large that federal borrowing drives up interest rates and discourages private sector spending. a financial crisis causes a run on banks and the elimination of billions in excess reserves.
Answer:
The Fed adds excess reserves to the banking system, but it has minimal positive effect on lending, investment, or aggregate demand
Explanation:
liquidity trap can be regarded as a case whereby monetary policy becomes ineffective as a result of very low interest rates, and activities of
consumers, whereby consumer will prefer saving their money instead of
investing it in some investment as well as higher-yielding bonds. It should be noted that the The liquidity trap refers to the situation where The Fed adds excess reserves to the banking system, but it has minimal positive effect on lending, investment, or aggregate demand
Help
Sove & Exit
Submit
For the current fiscal year, Purchases were $350,000, Purchases Returns and Allowances were $5,000 and Freight In was $29,000. If the
beginning merchandise inventory was $210,000 and the ending merchandise inventory was 595,000, the Cost of Goods Sold is:
Answer:
212,000
Explanation:
Services are __________ products. By contrast, goods are __________ products.
a. rare; common
b. intangible; tangible
c. expensive; inexpensive
d. only business; only consumer
Answer:
B
Explanation:
Service is an action being done which is why it's not tangible while goods are the produced items which are tangible
The demand for a resource rises as Question 16 options: its productivity rises and the relative prices of substitutable resources rise. its productivity rises and prices of substitutable resources fall. its productivity falls and the relative prices of substitutable resources fall. its productivity falls and prices of substitutable resources fall.
Answer:
its productivity rises and the relative prices of substitutable resources rise.
Explanation:
In Economics, there are primarily two (2) factors which affect the availability and the price at which goods and services are sold or provided, these are demand and supply.
The law of demand states that, the higher the demand for goods and services, the higher the price it would be sold all things being equal. Thus, there exist a negative relationship between the quantity of goods demanded and the price of a good i.e when the prices of goods and services in the market increases or rises: there would be a significant decline or fall in the demand for this goods and services.
This ultimately implies that, an increase in the price level of a product usually results in a decrease in the quality of real output demanded along the aggregate demand curve.
A substitute product can be defined as a product that a consumer sees as an alternative to another product and as such would offer similar benefits or satisfaction to the consumer.
For substitute products (resources), the cross-price elasticity of demand is always positive because the demand of a product increases when the price of its close substitute (alternative) increases.
Hence, the demand for a resource rises as its productivity rises and the relative prices of substitutable resources rise.
Using the liquidity-preference model, when the Federal Reserve decreases the money supply, a. the equilibrium interest rate increases. b. the aggregate-demand curve shifts to the right. c. the quantity of goods and services demanded is unchanged for a given price level. d. the short-run aggregate-supply curve shifts to the left.
Answer:
A
Explanation:
When the fed increases money supply it is known as expansionary monetary policy. the excess of supply over demand leads to a fall interest rate
Pizza ltd. leased equipment from Tasty Company under a four-year lease requiring equal annual payments of sh.86, 038, with the first payment due at lease inception. The lease does not transfer ownership, nor is there a bargain purchase option. The equipment has a 4-year useful life and no residual value. If Pizza ltd.’s incremental borrowing rate is 10% and the rate implicit in the lease (which is known by Pizza ltd.) is 8%, what is the amount recorded for the leased asset at the lease inception?
Answer:
Sh. 300,001.60
Explanation:
Note: Missing word has been attached
Particulars Amount
Annual payments 86,038
x PV Annuity due 8%, 10 periods 3.48685
Amount recorded for the leased asset 300,001.60
Suppose the following transactions occur during 2018. 1. Waddah, a liquor store owner in the United States, buys 80 bottles of wine from a French vineyard at a price of $30 per bottle. 2. Autozone, a U.S. company, sells 200 spark plugs to a South Korean car company at $3.50 per spark plug. 3. Taylor, a U.S. citizen, pays $350 for a snowboard he orders from Arrieta White Mountain Supplies (a U.S. company). Based on these transactions, U.S. net exports (NX) in 2018 is $ ____ . [Note: If your answer is negative don't forget to enter a minus sign]
Answer: -$1,700
Explanation:
The Net exports are to be calculated by deducting imports into the U.S. from Exports to other countries from the U.S.
Exports:
2. Autozone, a U.S. company, sells 200 spark plugs to a South Korean car company at $3.50 per spark plug.
Imports
1. Waddah, a liquor store owner in the United States, buys 80 bottles of wine from a French vineyard at a price of $30 per bottle.
= Exports - Imports
= (200 * 3.50) - [80 * 30]
= -$1,700
The third transaction is neither an import nor an export as it was conducted entirely in the U.S.
Splish Company purchased a computer for $9,920 on January 1, 2019. Straight-line depreciation is used, based on a 5-year life and a $1,240 salvage value. On January 1, 2021, the estimates are revised. Splish now feels the computer will be used until December 31, 2022, when it can be sold for $620. Compute the 2021 depreciation. (Round answer to 0 decimal places, e.g. 45,892.) Depreciation expense, 2021 g
Answer:
$2914
Explanation:
The following steps would be taken to determine the answer
1. Calculate depreciation expense given the initial information
2. calculate the accumulated depreciation by the second year. Accumulated depreciation is sum of depreciation expense
3. subtract the accumulated depreciation from the cost price of the asset. This would give the book value
4. calculate the depreciation expense using the new information and the book value
Straight line depreciation expense = (Cost of asset - Salvage value) / useful life
($9,920 - $1240) / 5 = $1736
Accumulated depreciation = 1736 x 2 = $3472
Book value at the beginning of 2021 = 9920 - 3472 = $6448
Depreciation expense in 2021 = (6448 - 620) / 2 = $2914
Imagine that you are holding 5,300 shares of stock, currently selling at $40 per share. You are ready to sell the shares but would prefer to put off the sale until next year due to tax reasons. If you continue to hold the shares until January, however, you face the risk that the stock will drop in value before year-end. You decide to use a collar to limit downside risk without laying out a good deal of additional funds. January call options with a strike price of $45 are selling at $3, and January puts with a strike price of $35 are selling at $4. What will be the value of your portfolio in January (net of the proceeds from the options) if the stock price ends up at $28, $40, $48
Answer:
A. $180,200
$148,400
B.$206,700
$212,000
C. $233,200
$254,400
Explanation:
A. Calculation to determine the value of your portfolio in January and the value of your portfolio if you simply continued to hold the shares
STOCK PRICE $28
First step is to calculate the Value at expiration Using this formula
Value at expiration = Value of call + Value of put + Value of stock
Let plug in the formula
Value at expiration= $0 + ($35 - $28) + $28
Value at expiration= $35
Now let calculate the total net proceeds
Using this formula
Total net proceeds=(Final value - Original investment) × numbers of shares
Total net proceeds= ($35 - $1) × 5,300
Total net proceeds= $180,200
Calculation to determine the Net proceeds without using collar
Using this formula
Net proceeds without using collar = Stock price × Number of shares
Let plug in the formula
Net proceeds without using collar= $28 × 5,300 Net proceeds without using collar= $148,400
Therefore the value of your portfolio in January is $180,200 and the value of your portfolio if you simply continued to hold the shares is $148,400
B. STOCK PRICE= $40
First step is to calculate the Value at expiration using this formula
Value at expiration = Value of call + Value of put + Value of stock
Let plug in the formula
Value at expiration= 0 + 0 + $40
Value at expiration= $40
Now let calculate the total net proceeds
Using this formula
Total net proceeds=(Final value - Original investment) × numbers of shares
Total net proceeds= ($40 - $1) × 5,300
Total net proceeds= $206,700
Calculation to determine the Net proceeds without using collar
Using this formula
Net proceeds without using collar = Stock price × number of shares
Let plug in the formula
Net proceeds without = $40 × 5,300
Net proceeds without= $212,000
Therefore the value of your portfolio in January is $206,700 and the value of your portfolio if you simply continued to hold the shares is $212,000
C. STOCK PRICE $48:
First step is to calculate the Value at expiration using this formula
Value at expiration = Value of call + Value of put + Value of stock
Let plug in the formula
Value at expiration= ($45 - $48) + 0 + $48
Value at expiration = $45
Now let calculate the total net proceeds
Using this formula
Total net proceeds=(Final value - Original investment) × Numbers of shares
Total net proceeds= ($45 - $1) × 5,300
Total net proceeds= $233,200
Calculation to determine the Net proceeds without using collar
Using this formula
Net proceeds without using collar= Stock price × Number of shares
Let plug in the formula
Net proceeds without using collar= $48 × 5,300
Net proceeds without using collar= $254,400
Therefore the value of your portfolio in January is $233,200 and the value of your portfolio if you simply continued to hold the shares is $254,400
Piedmont Company segments its business into two regions—North and South. The company prepared the contribution format segmented income statement as shown: Total Company North South Sales $ 825,000 $ 550,000 $ 275,000 Variable expenses 495,000 385,000 110,000 Contribution margin 330,000 165,000 165,000 Traceable fixed expenses 156,000 78,000 78,000 Segment margin 174,000 $ 87,000 $ 87,000 Common fixed expenses 69,000 Net operating income $ 105,000 Required: 1. Compute the companywide break-even point in dollar sales. 2. Compute the break-even point in dollar sales for the North region. 3. Compute the break-even point in dollar sales for the South region. (For all requirements, round your intermediate calculations to 2 decimal places. Round your final answers to the nearest dollar.)
Answer:
Piedmont Company
1. Companywide break-even point in dollar sales
= $562,500
2. Break-even point in dollar sales for the North region
= $260,000
3. Break-even point in dollar sales for the South region
= $130,000
Explanation:
a) Data and Calculations:
Contribution format segmented income statement:
Total Company North South
Sales $ 825,000 $ 550,000 $ 275,000
Variable expenses 495,000 385,000 110,000
Contribution margin 330,000 165,000 165,000
Traceable fixed expenses 156,000 78,000 78,000
Segment margin 174,000 $ 87,000 $ 87,000
Common fixed expenses 69,000
Net operating income $ 105,000
Contribution margin ratio = Contribution margin/Sales
= $330,000/$825,00 = 0.40
For the north = $165,000/$550,000 = 0.30
For the south = $165,000/$275,000 = 0.60
Break-even point in dollar sales = Fixed cost/Contribution margin ratio
Companywide break-even point in dollar sales = $225,000/0.40
= $562,500
Break-even point in dollar sales for the North region = $78,000/0.30
= $260,000
Break-even point in dollar sales for the South region = $78,000/0.60
= $130,000
When production is greater than sales ______ affected. Multiple choice question. only the fixed production cost variance is only the variable production cost variance is both the fixed production cost and variable production cost variances are neither the fixed production cost or variable production cost variances are
variable costing will show higher net income than the absorption costing
1. During a recession, what specific actions in fiscal policy will the government do to help the economy? What specific actions in monetary policy will the Fed do to help the economy?
2. During an inflationary period and heated economy, what specific actions in fiscal policy and monetary policy will be expected?
Answer:
1.
Specific fiscal policies
increase government spending
reduce taxes
Specific monetary policies
open market purchase
lower interest rate
2.
Specific fiscal policies
reduce government spending
increase taxes
Specific monetary policies
open market sale
increase interest rate
Explanation:
Recession is when the GDP of two consecutive quarters is negative. the goal of policies at this time would be to increase spending
Inflation is a persistent rise in the general price levels. The goal of policies would be to reduce money supply
Discretionary fiscal policies are deliberate steps taken by the government to stimulate the economy in order to cause the economy to move to full employment and price stability more quickly than it might otherwise.
Discretionary fiscal policies can either be expansionary or contractionary
Expansionary fiscal policy is when the government increases the money supply in the economy either by increasing spending or cutting taxes. Expansionary fiscal policy should be carried out in a recession. Cutting taxes increases disposable income and spending
Contractionary fiscal policies is when the government reduces the money supply in the economy either by reducing spending or increasing taxes. This should be carried out in an inflationary period
Monetary policy are policies taken by the central bank of a country to shift aggregate demand.
There are two types of monetary policy :
Expansionary monetary policy : these are polices taken in order to increase money supply. When money supply increases, aggregate demand increases. reducing interest rate and open market purchase are ways of carrying out expansionary monetary policy
Contractionary monetary policy : these are policies taken to reduce money supply. When money supply decreases, aggregate demand falls. Increasing interest rate and open market sales are ways of carrying out contractionary monetary policy
Which facilities or amenities are most commonly available on a cruise chip?
Answer:
Generally, all cruise ship amenities have dining, entertainment, shopping or sporting facilities. There are bars and lounges as well, with some ships providing casinos and other adult-themed entertainment facilities.
Explanation:
Coronado Industries is constructing a building. Construction began on January 1 and was completed on December 31. Expenditures were $6370000 on March 1, $5280000 on June 1, and $8650000 on December 31. Coronado Industries borrowed $3170000 on January 1 on a 5-year, 13% note to help finance construction of the building. In addition, the company had outstanding all year a 11%, 3-year, $6350000 note payable and an 12%, 4-year, $12350000 note payable. What are the weighted-average accumulated expenditures
Answer:
Coronado Industries
The weighted-average accumulated expenditures are:
= $8,388,333.
Explanation:
a) Data and Calculations:
Amount borrowed on June 1 = $3,170,000
Interest rate = 13%
Outstanding 11% 3-year note payable = $6,350,000
Outstanding 12% 4-year note payable = $12,350,000
Date Expenditure Weight Weighted-Average
Expenditure
March 1 $6,370,000 10/12 $5,308,333
June 1 $5,280,000 7/12 3,080,000
December 31 $8,650,000 0/12 0
Weighted-average accumulated expenditure $8,388,333
The management of Penfold Corporation is considering the purchase of a machine that would cost $270,000, would last for 5 years, and would have no salvage value. The machine would reduce labor and other costs by $60,000 per year. The company requires a minimum pretax return of 12% on all investment projects. The net present value of the proposed project is closest to:______.
a. $(11,700).
b. $(53,700).
c. $(269,997).
d. $(113,700).
Answer:
The correct answer is B.
Explanation:
Giving the following information:
Initial investment= $270,000
Cash flow= $60,000
Number of years= 5
Discount rate= 12%
To calculate the net present value (NPV), we need to use the following formula:
NPV= -Io + ∑[Cf/(1+i)^n]
∑[Cf/(1+i)^n]:
Cf1= 60,000/1.12= 53,571.43
Cf2= 60,000/1.12^2= 47,831.63
.....
Cf5= 60,000/1.12^5= 34,045.61
∑[Cf/(1+i)^n]= 216,286.57
Now, the NPV:
NPV= -270,000 + 216,286.57
NPV= -53,713.43
Suppose you would like to make a global change to the font type and font color for all slides with the comparison layout. Which of the following would be the most efficient way to make this change?
Use Format Painter.
Use Animation Painter.
Use font commands on the Home tab.
Use slide master.
Answer:
D. Use slide master.
Explanation:
Edge
Kennedy Inc. has the following data for its operation in August: Increase in direct materials inventory 100 Sets Direct materials purchased (AQ) 1,600 Sets Finished goods manufactured 700 units Direct materials purchase-price variance $ 400 Favorable Budgeted Finished goods to manufacture 800 Units Direct materials purchases 2,000 Sets Direct materials per unit of finished goods 2 Sets Direct materials price per set (SP) $ 3.60 What was the actual purchase price (AP) per set of direct materials purchased (to two decimal places)
Answer:
Actual price= $1.6 per unit
Actual price= $3.2 per set
Explanation:
To calculate the actual price, we need to use the following formula:
Direct material price variance= (standard price - actual price)*actual quantity
400= (1.8 - actual price)*2,000
400= 3,600 - 2,000actual price
2,000actual price = 3,200
actual price= $1.6 per unit
Dockwiller Inc. manufactures industrial components. One of its products, which is used in the construction of industrial air conditioners, is known as D53. Data concerning this product are given below: The above per unit data are based on annual production of 8,000 units of the component. Direct labor is a variable cost. The company has received a special, one-time-only order for 500 units of component D53. There would be no variable selling expense on this special order and the total fixed manufacturing overhead and fixed selling and administrative expenses of the company would not be affected by the order. Assuming that Dockwiller has excess capacity and can fill the order without cutting back on the production of any product, what is the minimum price per unit below which the company should not accept the special order
Answer: $30
Explanation:
The company has excess capacity which means that we do not have to worry about opportunity costs.
We also do no have to worry about fixed costs and selling expenses.
The only relevant cost is therefore the variable costs:
= Direct labor + Direct material + Variable manufacturing overhead
= 26 + 3 + 1
= $30
Below $30 would mean incurring a loss.
During 2019, Coronado Industries expected Job No. 26 to cost $300000 of overhead, $500000 of materials, and $200000 in labor. Coronado applied overhead based on direct labor cost. Actual production required an overhead cost of $370000, $610000 in materials used, and $260000 in labor. All of the goods were completed. What amount was transferred to Finished Goods?
Answer:
See below
Explanation:
Given the above information, first we will compute the predetermined overhead rate
Predetermined overhead rate
= Estimated manufacturing overhead / Estimated labor
= $300,000/$200,000
= 1.5
The next step is to apply the
= [(1.5 × $260,000) + $260,000 + $610,000]
= $390,000 + $260,000 + $610,000
= $1,260,000
Absorption and Variable Costing Comparisons: Production Equals Sales Assume that Smuckers manufactures and sells 30,000 cases of peanut butter each quarter.
The following data are available for the third quarter of 2017.
Total fixed manufacturing overhead.......................................................90,000
Fixed selling and administrative expenses........... .. . .. . .. . . . . .. . . . . . 20,000
Sale price per case..................................................................................32
Direct materials per case .......................................................................15
Direct labor per case ........................................................................6
Variable manufacturing overhead per case ..........................................3
a. Compute the cost per case under both absorption costing and variable costing.
b. Reconcile any differences in income. Explain.
c. Compute te net income under both absorption costing and variable costing.
Answer:
a. Cost per case under Absorption costing:
= Direct materials per case + Direct labor per case + Variable manufacturing overhead per case + Fixed manufacturing overhead per case
= 15 + 6 + 3 + 90,000/ 30,000 cases
= $27
Cost per case under Variable costing:
= Direct materials per case + Direct labor per case + Variable manufacturing overhead per case
= 15 + 6 + 3
= $24
b. First we need to calculate income under both methods:
Under Absorption costing:
= Sales - Cost of goods sold - Selling and Admin expenses
= (30,000 cases * 32) - (30,000 * 27) - 20,000
= $130,000
Under Variable Costing:
= Sales - Cost of Goods sold - Fixed manufacturing overhead - Selling and Admin expenses
= (30,000 * 32) - (30,000 * 24) - 90,000 - 20,000
= $130,000
There is no difference in income because the cases manufactured equals the cases sold.
Irene has made Sara an offer on the purchase of a capital asset. Irene will pay (1) $200,000 cash or (2) $50,000 cash and a 6% installment note for $150,000 guaranteed by City Bank of New York. If Sara sells for $200,000 cash, she will invest the after-tax proceeds in certificates of deposit yielding 6% interest. Sara’s cost of the asset is $25,000. Why would Sara prefer the installment sale?
Answer:
Irene would prefer the instalment sale because she can defer the payment of tax until a future date. On the other hand, if she accept the cash sale, she would have to pay the tax immediately. The amount invested in certificate of deposit would be after tax.
Thus the value of an instalment payment would be greater than the value of a cash payment
Explanation: