Calculate the IRR for the following proposal:
| Machine cost | $4,500,000 |
| Set up cost | $30,000 |
| Training cost | $30,000 |
| Annual maintenance cost | $15,000 |
| Anticipated annual savings | $477,000 |
| Annual labor savings | $40,000 |
| Useful life in years | 8 |
| Overhaul cost in year 4 | $30,000 |
| Annual operating cost | $27,000 |
| Hurdle rate | 8% |
| Salvage value | $50,000 |
| Depreciation method | straight line |
In: Finance
The following table lists out the overhead cost:
|
Activity cost pool |
Overhead cost (£) |
Additional Notes |
|
Job-order set up |
25,000 |
|
|
Procurement and placement |
350,000 |
|
|
Installation of winding system |
170,000 |
An auto winding system is fitted with every watch |
|
Quality inspection (machine) |
70,000 |
|
|
Quality inspection (manual) |
24,000 |
|
|
Finishing |
160,000 |
Hand-made finishing |
|
Packaging and delivery |
44,250 |
The company packages and delivers watches in batches containing 10 watches per batch. On an average, the packaging and delivery cost is the same for all batches (10 watches= 1 batch) |
|
Factory cleaning services |
30,000 |
A cost that is not consumed by any of the products |
2. The company pays £8 per direct labour hour
3. The following table lists out some key figures for this firm:
|
Description |
Quantity |
|
Number of watches |
1,500 units |
|
Direct labour hours |
7,000 hours |
|
Machine hours |
14,000 hours |
|
Number of job orders |
110 |
|
Inspection hours using machine |
800 hours |
|
Number of cycles for procurement and placement |
2,400 times |
Required:
a) Calculate the manufacturing overhead absorption rate using the traditional absorption costing system
b) What would be the sales price of the following two products using the ABC system if the company adds 30% mark-up on total allocated costs?
|
Model |
Luxury |
Sports |
|
Category |
Female |
Male |
|
Job order number |
LF-340 & LF-341 |
SM-119 & SM-120 |
|
Number of units |
40 |
60 |
|
Direct materials (£ per unit) |
85 |
55 |
|
Direct labour hours |
200 |
250 |
|
Machine hours |
225 |
750 |
|
Inspection hours using machine |
12 |
40 |
|
Number of cycles for procurement and placement |
50 |
80 |
In: Accounting
Nipigon Manufacturing has a cost of debt of 7 %, a cost of equity of 12%, and a cost of preferred stock of 9%. Nipigon currently has 130,000 shares of common stock outstanding at a market price of $25 per share. There are 48,000 shares of preferred stock outstanding at a market price of $38 a share. The bond issue has a face value of $950,000 and a market quote of 104. The company’s tax rate is 35%.
Required:
Calculate the weighted average cost of capital for Nipigon. You must show and clearly label all calculations to receive full marks. You can either enter your calculations in the space provided
In: Finance
PROBLEM
I
INSTRUCTIONS
Classify each cost as either a product cost or period cost. Indicate whether each product cost is a direct material cost, a direct labor cost, or a factory overhead cost. Indicate whether each period cost is a selling expense or an administrative expense.
The following is a list of costs that we incurred in the production and sales of boats:
In: Accounting
21.How to calculate Break even: & definition of break even
22. Calculate marginal safety:
23. CVP income statement is & how to calculate it :
24. What a Master budget is:
Why we use budgets & why its useful
In: Accounting
Accounting 2: Cost Terms, Cost Behavior, Cost Systems.
Assignment: To interview a manufacturing company and get information on their comp.
What 8 in depth questions would you ask to get better understanding of them while focusing on the: pricing process
In: Accounting
Complete the following cost and revenue schedule.
|
Rate of Output |
Total Cost |
Marginal Cost |
Average Fixed Cost |
Average Variable Cost |
Average Total Cost |
Price |
Marginal Revenue |
|
0 |
200 |
121 |
|||||
|
1 |
225 |
121 |
|||||
|
2 |
260 |
121 |
|||||
|
3 |
381 |
121 |
|||||
|
4 |
580 |
121 |
|||||
|
5 |
800 |
121 |
Use the completed cost and revenue schedule to answer the following questions.
a. Use the optimization rule to maximize profit. What rate of output maximizes profit?
b. What is the actual amount of profit at the profit-maximizing level of output you found in (1a)?
In: Economics
In: Accounting
1. Define variable cost, fixed cost, and mixed cost.
2. Describe what happens to the net income of a company under each of the following assumptions: (a) Units sold are less than break-even units. (b) Units sold are greater than break-even units. (c) Units sold are equal to the break-even units
In: Accounting
In: Accounting