A proposed cost-saving device has an installed cost of $720,000. It is in Class 8 (CCA rate = 20%) for CCA purposes. It will actually function for five years, at which time it will have no value. There are no working capital consequences from the investment, and the tax rate is 35%.

a. What must the pre-tax cost savings be for us to favour the investment? We require an 12% return. (Hint: This one is a variation on the problem of setting a bid price.) (Do not round your intermediate calculations. Round the final answer to 2 decimal places. Omit $ sign in your response.)

Cost savings           $

b. Suppose the device will be worth $100,000 in salvage (before taxes). How does this change your answer? (Do not round your intermediate calculations. Round the final answer to 2 decimal places. Omit $ sign in your response.)

Cost savings           $

Statement of Cost of Goods Manufactured for a Manufacturing Company

Cost data for Disksan Manufacturing Company for the month ended January 31 are as follows:

a. Prepare a cost of goods manufactured statement for January.

Feedback

a. Add the beginning materials and purchases and subtract the ending materials. Add direct labor and factory overhead. This will give total manufacturing costs. Then, add the total manufacturing costs to the beginning work in process and subtract the ending work in process.

b. Determine the cost of goods sold for January.
$

Cost of Capital: Cost of New Common Stock

If a firm plans to issue new stock, flotation costs (investment bankers' fees) should not be ignored. There are two approaches to use to account for flotation costs. The first approach is to add the sum of flotation costs for the debt, preferred, and common stock and add them to the initial investment cost. Because the investment cost is increased, the project's expected return is reduced so it may not meet the firm's hurdle rate for acceptance of the project. The second approach involves adjusting the cost of common equity as follows:

_L

The difference between the flotation-adjusted cost of equity and the cost of equity calculated without the flotation adjustment represents the flotation cost adjustment.

Quantitative Problem: Barton Industries expects next year's annual dividend, D₁, to be $1.96 and it expects dividends to grow at a constant rate g_L = 4.9%. The firm's current common stock price, P₀, is $24.50. If it needs to issue new common stock, the firm will encounter a 4.2% flotation cost, F. Assume that the cost of equity calculated without the flotation adjustment is 12.9% and the cost of old common equity is 12.6%. What is the flotation cost adjustment that must be added to its cost of retained earnings? Do not round intermediate calculations. Round your answer to two decimal places.

  %

What is the cost of new common equity considering the estimate made from the three estimation methodologies? Do not round intermediate calculations. Round your answer to two decimal places.

  %

1. In your workplace, give a good example of a direct cost? An indirect cost? Please provide an explanation of why your example fits the definition.

2. Does your organization use responsibility centers? please explain .. I work for a hospital setting.

Statement of Cost of Goods Manufactured for a Manufacturing Company

Cost data for Johnstone Manufacturing Company for the month ended March 31 are as follows:

InventoriesMarch 1March 31

Materials$149,750 $130,280

Work in process103,330 89,890

Finished goods77,870 88,590

Direct labor$269,550

Materials purchased during March287,520

Factory overhead incurred during March:

Indirect labor28,750

Machinery depreciation17,370

Heat, light, and power5,990

Supplies4,790

Property taxes4,190

Miscellaneous costs7,790

a. Prepare a cost of goods manufactured statement for March.

Johnstone Manufacturing Company

Statement of Cost of Goods Manufactured

For the Month Ended March 31

$

Direct materials:

$

$

$

Factory overhead:

$

Total factory overhead

Total manufacturing costs incurred during March

Total manufacturing costs$

Cost of goods manufactured$

b. Determine the cost of goods sold for March.
$

1. “Relevant Cost and Irrelevant Cost concepts are very significant for decision making in organizations.” Discuss the statement
2. What is Sunk Cost and is it necessary for decision making?
3. What is meant by “make or buy” decision? Use an example to explain how “make or buy” decisions are made?
4. Kindly type your response in order for me to copy and paste

Compute the cost of debt financing. Compute the cost of equity financing using the capital asset pricing model. Compute the weighted average cost of capital. The capital investment is to be depreciated as a 7 year asset using this table: Ownership year 1 (14.29%), year 2 (24.49%), year 3 (17.49%), year 4 (12.49%), year 5 (8.93%), year 6 (8.92%), year 7 (4.46%). Evaluate each independent project by computing net present value, internal rate of return, and payback. Then decide whether to accept or reject the project.

Debt 40%, interest rate 5%, tax rate 26%, equity 60%, risk free rate 6%, RM 13%, beta 1.10, working capital 10% next year's sales, no terminal cash flows

project 1 capital investment 1,000,000 year 1(revenue 780,000, expenses 585,000) year 2(revenue 799,500,expenses 599,625) year 3(revenue 819,488, expenses 614,616) year 4(revenue 839,975, expenses 629,981) year 5 (revenue 860,974, expenses 645,731) year 6 (revenue 882,498, expenses 661,874) year 7 (revenue 904,561, expenses 678,421) year 8 (revenue 927,175, expenses 695,381)

project 2 capital investment 750,000 year 1(revenue 800,000, expenses 600,000) year 2 (revenue 820,000, expenses 615,000) year 3 (revenue 840,500, expenses 630,375) year 4 (revenue 861,513, expenses 646,134) year 5 (revenue 883,050, expenses 662,288) year 6 (revenue 905,127, expenses 678,845) year 7 (revenue 927,755, expenses 695,816) year 8 (revenue 950,949, expenses 713,211)

project 3 capital investment 1,000,000 year 1 ( revenue 850,000, expenses 680,000) year 2 (revenue 871,250, expenses 697,000) year 3 (revenue 893,031, expenses 714,425) year 4 (revenue 915,357, expenses 732,286) year 5 ( revenue 938,241, expenses 750,593) year 6 (revenue 961,697, expenses 769,358) year 7 (revenue 985,739, expenses 788,592) year 8 (revenue 1,010,383, expenses 808,306)

Mallard Corporation uses the product cost concept of product pricing. Below is cost information for the production and sale of 45,000 units of its sole product. Mallard desires a profit equal to a 12% rate of return on invested assets of $800,000. Fixed factory overhead cost $82,000 Fixed selling and administrative costs 45,000 Variable direct materials cost per unit 5.50 Variable direct labor cost per unit 7.65 Variable factory overhead cost per unit 2.25 Variable selling and administrative cost per unit 0.90 The markup percentage on product cost for the company's product is....

The chief cost accountant for Kenner Beverage Co. estimated that total factory overhead cost for the Blending Department for the coming fiscal year beginning May 1 would be $210,000 and total direct labor costs would be $150,000. During May, the actual direct labor cost totaled $12,000 and factory overhead cost incurred totaled $17,100.

Required: