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Ashley Limited‘s overhead costs of $700,000 consist of machining $400,000; inspecting $200,000; and packaging $100,000. Machining...

Ashley Limited‘s overhead costs of $700,000 consist of machining $400,000; inspecting $200,000; and packaging $100,000. Machining works 4,000 hours a year, 500 inspections occur each year, and 1,000 packing order occur each year. Information on the company’s two products are as follows:

                                                        Theta                Beta

Machining hours                      1,000                  3,000

Inspections                                    100                      400

Packing orders                             350                      650

Direct labor hours                    1,700                  1,800

How much overhead is allocated to Beta using a single overhead rate (based on direct labor hours) and using ABC, respectively?

a.

$340,000 and $360,000
b.

$340,000 and $175,000
c.

$360,000 and $175,000
d.

$360,000 and $525,000

As the CFO of an insurance company, you have just agreed to pay Rebecca Smith a sum assured. The sum assured provides for Rebecca to receive $5,000 per year at the end of the year for each of the next 5 years. Assuming a discount rate of 10%, what is the value of the sum assured to Rebecca today?

Type of Cash Flow

Periods

Interest Rate

      Factor

PV of $1

5

10%

0.6209

FV of $1

5

10%

1.6105

PV ordinary annuity

5

10%

3.7908

FV ordinary annuity

5

10%

6.1051

PV annuity due

5

10%

4.1699
a.

$18,954
b.

$15,523
c.

$20,849
d.

$30,526

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Expert Solution

ekkarill92 answered 1 year ago
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