In: Accounting
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 |