In: Accounting
A proposed cost saving investment has a five year life and an installed cost of $800,000. The depreciation schedule for the equipment is three year MACRS for which the annual factors are .333, .4445, .1481, .0741. The equipment has an estimated salvage value in year 5 of $65,000 before taxes. The company's required return on cost saving investments is 12% and its tax rate of 35%. The company expects to borrow the funds neccesary to make the investment and pay the interest at the rate of 7%. The loan will be interest only for five years with the repayment of principal at the end of the life of the project. A net working capital investment of $50,000 will be required immediatley and 50% of that will be recovered at the end of the third year of the project life. The balance of the NWC will be recovered at the end of year five. Management believes that the annual cost savings will be either $100,000 or $400,000 dpending on wether the economy is weak (40%) or stron (60%) for the next five years. An expected cost of the project is that the manager of the project will hire an assistant who will cost $45,000 per year before taxes for the first three years of the project. In the last two years of the project, the assistant will not be needed for the project and may be laid off or promoted to another project, depending on the need in the company for their skill set. Calculate the net present value of this project, then state wether the company should invest?
In: Finance
Statement of Cost of Goods Manufactured for a Manufacturing Company Cost data for Sandusky Manufacturing Company for the month ended January 31 are as follows:
Inventories January 1 January 31
Materials $159,750 $135,790
Work in process 105,440 89,620
Finished goods 83,070 90,980
Direct labor $287,550
Materials purchased during January 306,720
Factory overhead incurred during January:
Indirect labor 30,670
Machinery depreciation 18,530
Heat, light, and power 6,390
Supplies 5,110
Property taxes 4,470
Miscellaneous costs 8,310
In: Accounting
What is opportunity cost and how do opportunity costs figure into cost / benefit analysis?
In: Economics
Discuss how to perform cost control based on the processes involved in cost management.
In details and what is the best ways possible.
In: Accounting
Indicate the missing amount of different cost items, and prepare a condensed cost of goods manufactured schedule, an income statement, and a partial balance sheet. Incomplete manufacturing costs, expenses, and selling data for two different cases are as follows:
Case
1 2
Direct Materials Used $ 6,300 $ (g)
Direct Labour $3,000 $4,000
Manufacturing Overhead $6,000 $5,000
Total Manufacturing Costs (a) $ 16,000
Beginning Work in Process Inventory $1,000 (h)
Ending Work in Process Inventory (b) $ 2,000
Sales $22,500 (i)
Sales Discounts $1,500 $1,200
Cost of Goods Manufactured $15,800 $20,000
Beginning Finished Goods Inventory. (c) $5,000
Goods Available for Sale $18,300 (j)
Cost of Goods Sold (d) (k)
Ending Finished Goods Inventory $1,200 $2,500
Gross Profit (e) 6,000
Operating Expenses 2,700 (l)
Net Income (f) 2,200
Instructions
(a) Indicate the missing amount for each letter.
(b) Prepare a condensed cost of goods manufactured schedule for Case 1.
(c) Prepare an income statement and the current assets section of the balance sheet for Case 1.
Assume that in Case 1 the other items in the current assets section are as follows: cash $3,000, receivables (net) $10,000, raw materials $700, and prepaid expenses $200.
In: Accounting
Japanese companies are companies that apply Material Flow of Cost Accounting (MFCA) and this cost calculation method is then brought to Indonesia. Material Flow of Cost Accounting (MFCA) collaborates with ISO 14051. In connection with of MFCA to Indonesia, explain the MFCA starting from the historical process of MFCA, the definition of MFCA, the process of calculating MFCA, and the advantages if the companies using MFCA (using info graphic and explanation, you can also using example) (30 points).
In: Accounting
COST OF CAPITAL ASSIGNMENT
STEPHANIE’S CAJUN FOODS, INC NEEDS TO DETERMINE THEIR COST OF CAPITAL FOR CAPITAL BUDGETING PURPOSES. THEY HAVE ASSEMBLED THE FOLLOWING INFORMATION:
MARKET PRICE OF OUTSTANDING BONDS 95
COUPON RATE – SEMI-ANNUAL PAYMENTS 11.0%
MATURITY VALUE $ 1,000
YEARS TO MATURITY 25
FLOTATION COSTS 2%
CORPORATE TAX RATE 21%
MARKET PRICE OF OUTSTANDING PREFERRED $ 50
PAR VALUE $ 25
DIVIDEND (PERCENTAGE OF PAR) 10%
FLOTATION COSTS 1%
MARKET PRICE OF COMMON STOCK $ 60
CURRENT STOCK DIVIDEND $ 7.50
GROWTH RATE 4.0%
FLOTATION COSTS 5.0%
TARGET CAPITAL STRUCTURE
BONDS 10.00%
PREFERRED STOCK 20.00%
COMMON STOCK 30.00%
RETAINED EARNINGS 40.00%
THE CURRENT CAPITAL STRUCTURE, BASED ON BOOK VALUES, APPEARS AS FOLLOWS:
BONDS $ 20,000,000
PREFERRED STOCK 1,000,000
COMMON STOCK (PAR $10) 30,000,000
RETAINED EARNINGS 80,000,000
CALCULATE: A) THE COMPONENT COSTS OF CAPITAL
In: Accounting
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Fama's Llamas has a weighted average cost of capital of 11.5 percent. The company's cost of equity is 16 percent, and its pretax cost of debt is 7.5 percent. The tax rate is 34 percent. What is the company's target debt-equity ratio? (Do not round your intermediate calculations.) |
In: Finance
1.
v. What is the meaning of Material Control in Cost Accounting ?
vi. Explain Cost Unit with an Example ?
In: Accounting