. Show how a firm can increase its cost of equity and cost of debt capital, yet still come out with an overall cost of capital that is unchang

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:

This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.

Open spreadsheet

1. Prepare a cost of goods manufactured statement for March. Round your answers to the nearest dollar.

   Johnstone Manufacturing Company
   Statement of Cost of Goods Manufactured
   For the Month Ended March 31
   Machinery depreciation					$
   Direct materials:
   	$
   	$
   			$
   Factory overhead:
   	$
   Total factory overhead
   Total manufacturing costs incurred during March
   Total manufacturing costs					$
   Cost of goods manufactured					$

2. Determine the cost of goods sold for March. Round your answer to the nearest dollar.

Explain the essential differences between full cost pricing and marginal cost pricing strategies.

A proposed arena investment project for KAC-Polo has an equipment cost of $1,100,000. The cost will be depreciated straight-line to a zero salvage value over its 20 year life. The firm will also use their existing, but currently unused, equipment for this project that has been fully depreciated but still has a market value of $437,000. Cash sales will be $1,923,490 per year and variable costs will run $270,469 per year. Fixed cost is $46,100 per year. The firm will also need to invest $260,831 in net working capital. Marketing research for this project was $70,500 last year and on-going marketing ads will cost $9,000 per year. The current capital structure is 40 percent common stock and sixty percent debt, however the capital structure next year will change to 60 percent common stock, 10 percent preferred stock, and 30 percent debt. Preferred stock will be issued at $42 a share with annual dividends of $5. Currently, the coupon rate on the bonds is 6% while the yield to maturity is 7%. The US T-bill rate is 2.7%, the beta for KAC-Polo is 1.7, and the current return to the S&P500 is 15%. The corporate marginal tax rate is 31% while the average tax rate is 26%.

What are the cash flows for the project?

What is the cost of capital for this project?

(C.) What is the NPV of this project?

(D.) What is the Payback Period?

(E.) What is the Profitability Index?

(F.) What is the IRR?

(G.) Should you accept or reject this project? Assume the payback cutoff is 4 years.

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:

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

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

What are the distinctions between the certified cost and pricing data and information other than cost or pricing data?

1. Why are different inventory cost methods used in regards to cost flow and goods flow?

1.

To adjust a company’s LIFO cost of goods sold to FIFO cost of goods sold

the ending LIFO reserve is added to LIFO cost of goods sold.

the ending LIFO reserve is subtracted from LIFO cost of goods sold.

an increase in the LIFO reserve is subtracted from LIFO cost of goods sold.

a decrease in the LIFO reserve is subtracted from LIFO cost of goods sold.

2.

All of the following statements are true regarding the LIFO reserve except:

Companies using LIFO are required to report the LIFO reserve.

The financial statement differences of using LIFO normally increase the longer a company uses LIFO.

Current ratios and the inventory turnover can be significantly affected if a company has material LIFO reserves.

The equation (LIFO inventory – LIFO reserve = FIFO inventory) adjusts the inventory balance from LIFO to FIFO.

3.

Use the following information for Tamarisk, Inc., Metlock, Inc., Grouper Industries, and Evans Services to answer the question “What is Grouper's LIFO reserve for 2021?”

$47

$530

$88

$36

4.

Use the following information for Pina Colada Corp., Sunland Company, Monty Industries, and Cynthia Services to answer the question “Using the LIFO reserve adjustment, which company would have the strongest liquidity position for 2022 as expressed by the current ratio?”

Sunland

Pina Colada

Monty

Cynthia

5.

Use the following information for Marigold Corp., Nash's Trading Post, LLC, Blue Spruce Industries, and Evans Services to answer the question “Using LIFO, what is Marigold's inventory turnover for 2022 (to the closest decimal place)?”

6.7 times

7.8 times

9.0 times

12.6 times

6.

Use the following information for Skysong, Inc., Kingbird, Inc., Bridgeport Industries, and Evans Services to answer the question “Using the LIFO adjustment, which company shows the greatest improvement in its current ratio from 2021 to 2022?”

Bridgeport

Evans

Skysong

Kingbird

7.

Manufactured inventory that has begun the production process but is not yet completed is

finished goods.

raw materials.

merchandise inventory.

work in process.

8.

Each of the following is a feature of internal control except

independent internal verifications.

limited access to assets.

generic design of documents.

authorization of transactions.

Fama’s Llamas has a weighted average cost of capital of 9.6 percent. The company’s cost of equity is 12 percent, and its pretax cost of debt is 7.6 percent. The tax rate is 35 percent. What is the company's debt–equity ratio? (Do not round intermediate calculations and round your answer to 4 decimal places, e.g., 32.1616.)

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:

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

b. Determine the cost of goods sold for January.