In: Operations Management
Assume you are the general manager of a large hotel and have formulated a strategy of renting banquet facilities to organizations for big events. At a monthly management meeting, your sales manager informs the head of food operations that a big reception in one week will require converting a large hall from a meeting room to a banquet facility in 60 minutes...a difficult but an achievable operation that will require precise planning and extra help. The food operations manager is furious about not being informed earlier. What is wrong here? As the general manager what strategies will you put in place to resolve the issue?
In: Operations Management
Kubin Company’s relevant range of production is 25,000 to 33,500 units. When it produces and sells 29,250 units, its average costs per unit are as follows:
| Average Cost per Unit | ||
| Direct materials | $ | 8.50 |
| Direct labor | $ | 5.50 |
| Variable manufacturing overhead | $ | 3.00 |
| Fixed manufacturing overhead | $ | 6.50 |
| Fixed selling expense | $ | 5.00 |
| Fixed administrative expense | $ | 4.00 |
| Sales commissions | $ | 2.50 |
| Variable administrative expense | $ | 2.00 |
Required:
1. Assume the cost object is units of production:
a. What is the total direct manufacturing cost incurred to make 29,250 units?
b. What is the total indirect manufacturing cost incurred to make 29,250 units?
2. Assume the cost object is the Manufacturing Department and that its total output is 29,250 units.
a. How much total manufacturing cost is directly traceable to the Manufacturing Department?
b. How much total manufacturing cost is an indirect cost that cannot be easily traced to the Manufacturing Department?
3. Assume the cost object is the company’s various sales representatives. Furthermore, assume that the company spent $117,000 of its total fixed selling expense on advertising and the remainder of the total fixed selling expense comprised the fixed portion of the company's sales representatives’ compensation.
a. When the company sells 29,250 units, what is the total direct selling expense that can be readily traced to individual sales representatives?
b. When the company sells 29,250 units, what is the total indirect selling expense that cannot be readily traced to individual sales representatives?
Complete this question by entering your answers in the tabs below.
1. Assume the cost object is units of production:
a. What is the total direct manufacturing cost incurred to make 29,250 units? (Round per unit values to 2 decimal places.)
b. What is the total indirect manufacturing cost incurred to make 29,250 units? (Round per unit values to 2 decimal places.)
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|
|
In: Accounting
Lower-of-Cost-or-Market Inventory
On the basis of the following data:
| Product |
Inventory |
Cost per |
Market Value per Unit |
| Model A | 12 | $106 | $102 |
| Model B | 45 | 84 | 70 |
| Model C | 36 | 254 | 243 |
| Model D | 31 | 85 | 88 |
| Model E | 41 | 132 | 148 |
Determine the value of the inventory at the lower of cost or market. Assemble the data in the form illustrated in Exhibit 9.
| Inventory at the Lower of Cost or Market | |||
| Product | Total Cost | Total Market | Lower of Total Cost or Total Market |
| A | $ | $ | $ |
| B | |||
| C | |||
| D | |||
| E | |||
| Total | $ | $ | $ |
In: Accounting
In: Finance
As the financial manager of Wilmore Company Limited,
with a passion to boost employment creation through intraregional
tourism in Ghana, you have acquired a land at Ho to put up an
exquisite amusement park that features a number of attractions
including games, pools, gardens, rides etc. The project will cost a
total of GH₵100,000. The following cash flows are expected from the
project. The beta of the project is 1.5 and the market return is
15%. The risk-free rate of return is 8%.
Year
₵
0
(100,000)
1
20,000
2
25,000
3
32,000
4
35,000
Using the CAPM approach, what is the cost of equity on
this project?
[2 marks]
Wilmore Company Limited is a levered entity with percentage of debt
out of total capital being 40%. If the interest rate on a bank loan
is 10%, the tax rate is 20%, and the cost of equity is as computed
in (a), what will be the after tax cost of debt? [2 mark]
What will be the weighted average cost of capital (WACC)? [2
mark]
Using the WACC computed in (c), what will be the NPV of the
investment? ` [3 marks]
Compute the IRR for the project? [3 marks]
What will be your overall advice concerning viability of the
project?
[2 marks]
Mr. Norman and Mr. Foster are both investors looking
to buy financial assets. Mr. Norman prefers assets with the lowest
prices while Mr. Foster prefers assets on the financial market with
higher prices. Each of them currently has GHC 1,000 to invest and
needs your assistance to know which asset to buy to suit their
preference. The following information provides details of
investment options.
Asset A is a bond with a coupon rate of 10% and pays semi-annual
coupons. The par value is GHC 1,000, and the bond has 5 years to
maturity. The yield to maturity is 11%.
Asset B is a stock whose dividend is expected to increase by 20% in
one year and by 15% in two years. After that, dividends will
increase at a rate of 5% per year indefinitely. The last dividend
was GHC 100 and the required return is 20%.
Which asset will Mr. Norman and Mr. Foster invest in? [8
marks]
In the 2020 accounting year, investors made a number observations
in terms of certain decisions some corporations were taking:
(i) The board of directors of some manufacturing and services
companies decided to pay stock dividends instead of cash
dividends;
(ii) On the other hand, the board of directors of majority of
companies within the ICT industry decided to pay special cash
dividends;
(iii) It was also observed that some the management of some
companies had decided to repurchase shares while others were
engaging in stock splits.
What could be the reason for these three decisions and choice of dividend payments by the boards of these companies and what will be the effect of such decisions on the outstanding number of shares and the share prices of these companies? [8 marks]
In: Finance
As the financial manager of Wilmore Company Limited,
with a passion to boost employment creation through intraregional
tourism in Ghana, you have acquired a land at Ho to put up an
exquisite amusement park that features a number of attractions
including games, pools, gardens, rides etc. The project will cost a
total of GH₵100,000. The following cash flows are expected from the
project. The beta of the project is 1.5 and the market return is
15%. The risk-free rate of return is 8%.
Year
₵
0
(100,000)
1
20,000
2
25,000
3
32,000
4
35,000
Using the CAPM approach, what is the cost of equity on
this project?
[2 marks]
Wilmore Company Limited is a levered entity with
percentage of debt out of total capital being 40%. If the interest
rate on a bank loan is 10%, the tax rate is 20%, and the cost of
equity is as computed in (a), what will be the after tax cost of
debt?
[2
mark]
What will be the weighted average cost of capital
(WACC)? [2 mark]
Using the WACC computed in (c), what will be the NPV
of the investment? `
[3
marks]
Compute the IRR for the project?
[3 marks]
What will be your overall advice concerning viability
of the project?
[2 marks]
Mr. Norman and Mr. Foster are both investors looking
to buy financial assets. Mr. Norman prefers assets with the lowest
prices while Mr. Foster prefers assets on the financial market with
higher prices. Each of them currently has GHC 1,000 to invest and
needs your assistance to know which asset to buy to suit their
preference. The following information provides details of
investment options.
Asset A is a bond with a coupon rate of 10% and pays
semi-annual coupons. The par value is GHC 1,000, and the bond has 5
years to maturity. The yield to maturity is 11%.
Asset B is a stock whose dividend is expected to
increase by 20% in one year and by 15% in two years. After that,
dividends will increase at a rate of 5% per year indefinitely. The
last dividend was GHC 100 and the required return is
20%.
Which asset will Mr. Norman and Mr. Foster invest
in? [8 marks]
In the 2020 accounting year, investors made a number
observations in terms of certain decisions some corporations were
taking:
(i) The board of directors of some manufacturing and services
companies decided to pay stock dividends instead of cash
dividends;
(ii) On the other hand, the board of directors of majority of companies within the ICT industry decided to pay special cash dividends;
(iii) It was also observed that some the management of
some companies had decided to repurchase shares while others were
engaging in stock splits.
What could be the reason for these three decisions and choice of dividend payments by the boards of these companies and what will be the effect of such decisions on the outstanding number of shares and the share prices of these companies?
In: Finance
Ayayai Inc. is trying to determine whether to use the FIFO or average cost formula. The accounting records show the following selected inventory information:
|
Purchases |
Cost of Goods Sold |
Ending Inventory |
||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Date |
Units |
Cost |
Total |
Units |
Cost |
Total |
Units |
Cost |
Total |
|||||||||||
|
Oct. |
2 |
9,600 |
$13 |
$124,800 |
9,600 |
$13 |
$124,800 |
|||||||||||||
|
15 |
16,000 |
15 |
240,000 |
[1] |
[2] |
|||||||||||||||
|
[3] |
[4] |
[5] |
||||||||||||||||||
|
29 |
21,400 |
|||||||||||||||||||
|
[6] |
[7] |
|||||||||||||||||||
|
[8] |
[9] |
[10] |
[11] |
[12] |
[13] |
|||||||||||||||
The company accountant has prepared the following partial statement
of income to help management understand the financial statement
impact of each cost determination cost formula.
|
FIFO |
Average |
||||
|---|---|---|---|---|---|
|
Sales |
$523,000 | $523,000 | |||
|
Cost of goods sold |
|||||
|
Gross profit |
|||||
|
Operating expenses |
191,000 | 191,000 | |||
|
Income before income tax |
|||||
|
Income tax expense (30%) |
|||||
|
Net income |
Fill in the missing amounts in the perpetual inventory schedule, assuming the use of the FIFO cost formula.
|
Purchases |
Cost of Goods Sold |
Ending Inventory |
|||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Date |
Units |
Cost |
Total |
Units |
Cost |
Total |
Units |
Cost |
Total |
||||
|
Oct. 2 |
9,600 |
$13 |
$124,800 |
9,600 |
$13 |
$124,800 |
|||||||
|
15 |
16,000 |
15 |
240,000 |
enter a number of units |
enter a dollar amount |
||||||||
|
enter a number of units |
enter a dollar amount |
$enter a total amount |
|||||||||||
|
29 |
21,400 |
(total units sold) |
|||||||||||
|
enter a number of units |
$enter a dollar amount |
||||||||||||
|
enter a number of units |
enter a dollar amount |
$enter a total amount |
enter a number of units |
enter a dollar amount |
enter a total amount |
||||||||
i double checked and this is the complete question, is there anything specific needed?
In: Accounting
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
Complete the above schedule of the company’s total costs and costs per unit. (Round the per unit variable cost and fixed cost to 2 decimal places.)
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In: Accounting
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During April, the production department of a process
manufacturing system completed a number of units of a product and
transferred them to finished goods. Of these transferred units,
79,000 were in process in the production department at the
beginning of April and 316,000 were started and completed in April.
April's beginning inventory units were 80% complete with respect to
materials and 20% complete with respect to conversion. At the end
of April, 101,000 additional units were in process in the
production department and were 85% complete with respect to
materials and 35% complete with respect to conversion.The
production department had $1,336,480 of direct materials and
$970,047 of conversion costs charged to it during April. Also, its
beginning inventory of $270,083 consists of $250,325 of direct
materials cost and $19,758 of conversion costs.
Using the FIFO method, prepare the direct materials cost and the
conversion cost per equivalent unit and assign April's costs to the
department’s output. (Round "Cost per EUP" to 2 decimal
places.)
In: Accounting