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In: Accounting
| East West Company produced | 204,000 | watches | last year and sold all of them during the last year. | ||||||
| The average selling price per watch was | $20.00 | ||||||||
| The average fixed manufacturing cost was | $7.00 | per unit | |||||||
| The company reported a gross margin of | $1,428,000 | in last year's income statement. | |||||||
| Company had no beginning or ending inventory for the last year. | |||||||||
| Assume that company incurred no other costs. | |||||||||
| Required: | |||||||||
| (A) Unit variable manufacturing cost during the last year | |||||||||
| (B) Total variable manufacturing cost incurred during last year | |||||||||
| (C) Total contribution margin generated during last year. | |||||||||
| Round all your final answers to two digits. | |||||||||
| Type only the number and no dollar sign or any other text in the answer box. | |||||||||
| Unit Variable manufacturing cost | $ | ||||||||
| Total Variable manufacturing cost incurred | $ | ||||||||
| Total contribution generated during last year | $ | ||||||||
In: Accounting
Marginal Incorporated (MI) has determined that the before cost of debt is 6% for the first $100 million in bonds it issues, and 8% for any bonds issued above $100 million. Its cost of preferred stock is 9%. The cost of internal equity is 12% and its cost of external equity is 14%. Currently, the firm’s capital structure has $600 million of debt, $100 million of preferred stock, and $300 million of common equity. The firm’s marginal tax rate is 30%. The firm is currently making projections for next period. Its managers have determined that the firm should have $75 million available from retained earnings for investment purposes next period.
What is the firm’s marginal cost of capital at each of the following total investment levels?
III. Total investment level of $77 million?
In: Finance
Week 2 Brisbane Indoor Sports, a sporting complex, has opening hours that fluctuate from month to month. The electricity costs and hours of operation for past six months is listed below: Month Total hours of operation Total electricity cost January 650 $ 4,240 February 700 $ 4,400 March 800 $ 4,800 April 600 $ 4,200 May 550 $ 3,700 June 500 $ 3,600 Required: a) Use the high-low method to estimate the cost behaviour for the complex’s electricity costs, assuming that the variable costs vary in proportion to the hours of operation. Express the total cost behaviour in formula form (Y = a + bx). What is the variable electricity cost per hour of operation? b) During July, the complex will open for 570 hours. Predict the complex’s total electricity costs for July using the cost estimation method employed in above requirement a). (3marks) c) What is the main drawba
In: Accounting
On June 15, 2018, Chang purchases $2,537,000 of equipment (7-year property) for use in her business. It is her only purchase of business property in 2018. Chang has taxable income from her business of $2,500,000 before any cost recovery.
Click here to access depreciation Table 8-2.
a. Assuming Chang does not elect
Section 179 and elects out of bonus depreciation, what is her total
2018 cost recovery?
$
b. Assuming Chang elects the maximum
Section 179 deduction allowable and elects out of bonus
depreciation, what is her total 2018 cost recovery?
$
c. Assuming Chang elects the maximum
Section 179 deduction allowable and does not elect out of bonus
depreciation, what is her total cost recovery?
$
d. Assuming Chang does not elect
Section 179 deduction allowable and does not elect out of bonus
depreciation, what is her total cost recovery?
$
In: Accounting
Marginal Incorporated (MI) has determined that the before cost of debt is 6% for the first $100 million in bonds it issues, and 8% for any bonds issued above $100 million. Its cost of preferred stock is 9%. The cost of internal equity is 12% and its cost of external equity is 14%. Currently, the firm’s capital structure has $600 million of debt, $100 million of preferred stock, and $300 million of common equity. The firm’s marginal tax rate is 30%. The firm is currently making projections for next period. Its managers have determined that the firm should have $75 million available from retained earnings for investment purposes next period.
What is the firm’s marginal cost of capital at each of the following total investment levels?
III. Total investment level of $77 million?
In: Finance
Hermosa, Inc., produces one model of mountain bike. Partial
information for the company follows:
| Number of bikes produced and sold | 490 | 830 | 980 | |||
| Total costs | ||||||
| Variable costs | $ | 119,560 | $ | ? | $ | ? |
| Fixed costs per year | ? | ? | ? | |||
| Total costs | ? | ? | ? | |||
| Cost per unit | ||||||
| Variable cost per unit | ? | ? | ? | |||
| Fixed cost per unit | ? | ? | ? | |||
| Total cost per unit | ? | $ | 518.75 | ? | ||
Required:
1. Complete the table. (Round
your "Cost per Unit" answers to 2 decimal
places.)
2. Calculate Hermosa’s contribution margin ratio
and its total contribution margin at each sales level indicated in
the table assuming the company sells each bike for $660.
(Round your percentage answers to 2 decimal places. (i.e.
.1234 should be entered as 12.34%.))
4. Calculate Hermosa’s break-even point in units
and sales revenue. (Round your answers to the nearest whole
number.)
In: Accounting
Cornerstone Exercise 6.10 (Algorithmic)
Cost Information and the Weighted Average Method
Morrison Company had the equivalent units schedule and cost information for its Sewing Department for the month of December, as shown below.
| Direct Materials | Conversion Costs | ||||||
| Units completed | 43,000 | 43,000 | |||||
| Add: Units in ending work in process × | |||||||
| Percentage complete: | |||||||
| 15,000 × 100% direct materials | 15,000 | — | |||||
| 15,000 × 45% conversion materials | — | 6,750 | |||||
| Eqivalent units of output | 58,000 | 49,750 | |||||
| Costs: | |||||||
| Work in process, December 1: | |||||||
| Direct materials | $65,000 | ||||||
| Conversion costs | 12,000 | ||||||
| Total work in process | $77,000 | ||||||
| Current costs: | |||||||
| Direct materials | $580,000 | ||||||
| Conversion costs | 182,000 | ||||||
| Total current costs | $762,000 | ||||||
Required:
1. Calculate the unit cost for December, using
the weighted average method. Do NOT round interim calculations and,
if required, round your answer to the nearest cent.
$ per equivalent unit
2. Calculate the cost of goods transferred out, calculate the cost of EWIP, and reconcile the costs assigned with the costs to account for.
Cost of goods transferred out:
| Units completed | $ |
| Cost of EWIP | |
| Total costs assigned (accounted for) | $ |
Reconciliation
Cost to account for:
| BWIP | $ |
| Current (December) | |
| Total | $ |
3. What if you were
asked to show that the weighted average unit cost for materials is
the blend of the November unit materials cost and the December unit
materials cost? The November unit materials cost is $4.33
($65,000/15,000), and the December unit materials cost is $13.49
($580,000/43,000). The equivalent units in BWIP are 15,000, and the
FIFO equivalent units are 43,000. Calculate the weighted average
unit materials cost using weights defined as the proportion of
total units completed from each source (BWIP output and current
output). Do NOT round interim calculations and, if required, round
your answer to the nearest cent.
$ per unit
In: Accounting
Cost Information and the Weighted Average Method
Morrison Company had the equivalent units schedule and cost information for its Sewing Department for the month of December, as shown below.
| Direct Materials | Conversion Costs | ||||||
| Units completed | 44,000 | 44,000 | |||||
| Add: Units in ending work in process × | |||||||
| Percentage complete: | |||||||
| 19,000 × 100% direct materials | 19,000 | — | |||||
| 19,000 × 45% conversion materials | — | 8,550 | |||||
| Eqivalent units of output | 63,000 | 52,550 | |||||
| Costs: | |||||||
| Work in process, December 1: | |||||||
| Direct materials | $66,000 | ||||||
| Conversion costs | 15,000 | ||||||
| Total work in process | $81,000 | ||||||
| Current costs: | |||||||
| Direct materials | $570,000 | ||||||
| Conversion costs | 185,000 | ||||||
| Total current costs | $755,000 | ||||||
Required:
1. Calculate the unit cost for December, using
the weighted average method. Do NOT round interim calculations and,
if required, round your answer to the nearest cent.
$ per equivalent unit
2. Calculate the cost of goods transferred out, calculate the cost of EWIP, and reconcile the costs assigned with the costs to account for.
Cost of goods transferred out:
| Units completed | $ |
| Cost of EWIP | |
| Total costs assigned (accounted for) | $ |
Reconciliation
Cost to account for:
| BWIP | $ |
| Current (December) | |
| Total | $ |
3. What if you were
asked to show that the weighted average unit cost for materials is
the blend of the November unit materials cost and the December unit
materials cost? The November unit materials cost is $3.47
($66,000/19,000), and the December unit materials cost is $12.95
($570,000/44,000). The equivalent units in BWIP are 19,000, and the
FIFO equivalent units are 44,000. Calculate the weighted average
unit materials cost using weights defined as the proportion of
total units completed from each source (BWIP output and current
output). Do NOT round interim calculations and, if required, round
your answer to the nearest cent.
$ per unit
In: Accounting
Cornerstone Exercise 6.10 (Algorithmic) Cost Information and the Weighted Average Method Morrison Company had the equivalent units schedule and cost information for its Sewing Department for the month of December, as shown below. Direct Materials Conversion Costs Units completed 41,000 41,000 Add: Units in ending work in process × Percentage complete: 14,000 × 100% direct materials 14,000 — 14,000 × 45% conversion materials — 6,300 Eqivalent units of output 55,000 47,300 Costs: Work in process, December 1: Direct materials $68,000 Conversion costs 14,000 Total work in process $82,000 Current costs: Direct materials $550,000 Conversion costs 180,000 Total current costs $730,000 Required: 1. Calculate the unit cost for December, using the weighted average method. Do NOT round interim calculations and, if required, round your answer to the nearest cent. $ per equivalent unit 2. Calculate the cost of goods transferred out, calculate the cost of EWIP, and reconcile the costs assigned with the costs to account for. Cost of goods transferred out: Units completed $ Cost of EWIP Total costs assigned (accounted for) $ Reconciliation Cost to account for: BWIP $ Current (December) Total $ 3. What if you were asked to show that the weighted average unit cost for materials is the blend of the November unit materials cost and the December unit materials cost? The November unit materials cost is $4.86 ($68,000/14,000), and the December unit materials cost is $13.41 ($550,000/41,000). The equivalent units in BWIP are 14,000, and the FIFO equivalent units are 41,000. Calculate the weighted average unit materials cost using weights defined as the proportion of total units completed from each source (BWIP output and current output). Do NOT round interim calculations and, if required, round your answer to the nearest cent. $ per unit
In: Accounting