In: Accounting
A new American graduate is contemplating buying a Japanese, German, or an American car. No matter the type of car, he plans to buy a new one at the end of 8 years. Japanese car will cost $30,000 and have a fuel usage of 23 Miles Per gallon (mpg) for the first 2 years, and will decrease by 3% per year thereafter. Repair cost will start at $700 per year, and increase by 3% per year. At the end of year 8, the car can be sold for $5000. Insurance cost will be $700 for the first year, increasing by 2% per year thereafter.
A German car will cost $45,000 and have fuel usage of 21mpg for
the first 5 years, and decrease by 1% thereafter to year 8. Repair
cost will start at $1000 in year 1 and increase by 4% per year. It
will have a salvage value of $7000 at the end of year 8. Insurance
cost will be $850 the first year, increasing by 2% per year
thereafter.
The American car will cost $35,000 and have fuel usage of 20mpg for
the first 3 years, and will decrease by 3% per year thereafter.
Repair cost will be $800 in year 1, increasing by 4% per year
thereafter. Being an American, the graduate will price the pride of
owning an American car at $0.4 for every 20 miles driven,
increasing by 2% per year. Insurance cost will be $800 per year
increasing by 2.2% per year. The car can be sold for $5500 at the
end of year 8.
If the graduate anticipates driving 150000 miles by the end of year
8 and the average interest rate is expected to remain at 5% per
year, which car is economically affordable based on present worth
analysis? Assume fuel cost will be $3 per gallon in year 1 and
increase by an average of 2% per year. Show all your workings.
In: Accounting
In: Accounting
In: Accounting
Walsh Company manufactures and sells one product. The following information pertains to each of the company’s first two years of operations:
| Variable costs per unit: | ||
| Manufacturing: | ||
| Direct materials | $ | 27 |
| Direct labor | $ | 13 |
| Variable manufacturing overhead | $ | 5 |
| Variable selling and administrative | $ | 4 |
| Fixed costs per year: | ||
| Fixed manufacturing overhead | $ | 400,000 |
| Fixed selling and administrative expenses | $ | 90,000 |
During its first year of operations, Walsh produced 50,000 units and sold 40,000 units. During its second year of operations, it produced 40,000 units and sold 50,000 units. The selling price of the company’s product is $54 per unit.
Required:
1. Assume the company uses variable costing:
a. Compute the unit product cost for year 1 and year 2.
Year 1 __________
Year 2 __________
| b. Prepare an income statement for year 1 and year 2. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
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2. Assume the company uses absorption costing:
a. Compute the unit product cost for year 1 and year 2.
(Round your answers to 2 decimal places.)
Year 1_____________
Year 2 _____________
b. Prepare an income statement for year 1 and year 2. (Round your intermediate calculations to 2 decimal places)
|
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3. Reconcile the difference between variable costing and absorption costing net operating income in year 1 and year 2.
| Year 1 | Year 2 | |
| Variable Costing Net Operating income (loss) | ||
| Manufacturing Overhead Cost (Released OR deffered) | ||
| Manufacturing Overhead Cost (Released or Deffered) | ||
| Absorption Costing Net operating income (loss) |
In: Accounting
Walsh Company manufactures and sells one product. The following information pertains to each of the company’s first two years of operations:
| Variable costs per unit: | ||
| Manufacturing: | ||
| Direct materials | $ | 27 |
| Direct labor | $ | 13 |
| Variable manufacturing overhead | $ | 5 |
| Variable selling and administrative | $ | 4 |
| Fixed costs per year: | ||
| Fixed manufacturing overhead | $ | 400,000 |
| Fixed selling and administrative expenses | $ | 90,000 |
During its first year of operations, Walsh produced 50,000 units and sold 40,000 units. During its second year of operations, it produced 40,000 units and sold 50,000 units. The selling price of the company’s product is $54 per unit.
Required:
1. Assume the company uses variable costing:
a. Compute the unit product cost for year 1 and year 2.
Year 1 __________
Year 2 __________
| b. Prepare an income statement for year 1 and year 2. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
2. Assume the company uses absorption costing:
a. Compute the unit product cost for year 1 and year 2.
(Round your answers to 2 decimal places.)
Year 1_____________
Year 2 _____________
b. Prepare an income statement for year 1 and year 2. (Round your intermediate calculations to 2 decimal places)
|
|||||||||||||||||||||||||
3. Reconcile the difference between variable costing and
absorption costing net operating income in year 1 and year
2.
| Year 1 | Year 2 | |
| Variable Costing Net Operating income (loss) | ||
| Absorption Costing Net operating income (loss) |
In: Accounting
Two-week-old Tabitha has infant respiratory distress syndrome. Eighty-year-old Anthony has emphysema, and 50-year-old Jenny has pulmonary fibrosis.
In your initial post, explain why the mechanics of breathing are greatly compromised in each case.
In: Nursing
You want to buy a new sports car 3 years from now, and you plan to save $6,200 per year, beginning one year from today. You will deposit your savings in an account that pays 5.2% interest. How much will you have just after you make the 3rd deposit, 3 years from now? (Hint: Ordinary Annuity)
In: Finance
1) Currency appreciation: Consider price of beer. Let's pretend that last year a bottle of beer used to cost one dollar, but this year it costs two dollars per bottle.
a) This means beer costs twice as much as last year; or beer price has gone up by ___________%
b) One dollar buys half as much beer as last year; or dollar has fallen in value by ___________%
Note: The same idea works for relative values of currencies, i.e. appreciation of Yen against the dollar or depreciation of dollar against the Yen.
2) Do problem 1 using different data. Last year a bottle of beer used to cost $ 0.50, but this year it costs $ 0.60.
a) Beer price has gone up by _________%
b) Dollar has fallen in value by _________%
3) Find PVfor following cash flows using a discount rate of 10% per period, all periods are of the same (but unspecified) duration.
0_____1_____2_____3_____4
$10 $10 $10 $110
a) use calculator, make sure that you know the procedure.
N=____, PMT=_____, i=____, FV=_____,
PV=_____
b) use spreadsheet, make sure that you know the procedure
PV=________
c) use intuition: PV=_____because ____________________
Hint: Compare coupon rate and discount rate.
d) if we use a higher discount rate the PV will be higher/lower
In: Finance
You are thinking of purchasing a house. The house costs $250,000. You have $36,000 in cash that you can use as a down payment on the house, but you need to borrow the rest of the purchase price.
The bank is offering a 30-year mortgage that requires annual payments and has an interest rate of 6% per year. What will be your annual payment if you sign this mortgage?
In: Finance