In: Finance
1. Calculate the lease payments in arrears if the equipment cost is $500,000 and the lessor’s rate is 10%. Assume a five equal annual repayments and a residual of 20% at the end of year five. The lessee’s debt rate is 6%.
2. Shine Ltd is considering purchasing or leasing new equipment. If it purchases the equipment it will cost $500,000 and if it leases the equipment it will be required to pay six rentals of $115,000 each. The equipment can be depreciated over three years on a straight-line basis for tax purposes. The residual value is expected to be zero and the tax rate is 30%. What is the incremental cash flow in Year 3 for leasing the equipment rather than buying it for Year 3? Assume that rental payments are paid at the beginning of each period.
3. Polycorp is about to lease mining equipment worth $1,500,000. The corporate tax rate is 20% and the equipment can be depreciated on a diminishing value basis of 30% over 4 years (salvage value is zero). Polycorp’s cost of debt is 8%. Calculate the present value of the tax savings from the depreciation foregone? Assume tax is paid in the year of income. Assume the remaining balance is added to the depreciation for year four.
In: Accounting
Since there are no standard ways of creating staffing process results and cost metrics, is there a need for some sort of oversight of how these data are calculated, reported, and used within the organization? Explain.
In: Operations Management
Cost of Units Completed and in Process
The charges to Work in Process—Assembly Department for a period, together with information concerning production, are as follows. All direct materials are placed in process at the beginning of production.
| Work in Process—Assembly Department | |||
|---|---|---|---|
| Bal., 6,000 units, 35% completed | 13,590 | To Finished Goods, 138,000 units | ? |
| Direct materials, 141,000 units @ $1.6 | 225,600 | ||
| Direct labor | 200,200 | ||
| Factory overhead | 77,900 | ||
| Bal. ? units, 35% completed | ? | ||
Cost per equivalent units of $1.60 for Direct Materials and $2.00 for Conversion Costs.
a. Based on the above data, determine the different costs listed below.
If required, round your interim calculations to two decimal places.
| 1. Cost of beginning work in process inventory completed this period. | $ |
| 2. Cost of units transferred to finished goods during the period. | $ |
| 3. Cost of ending work in process inventory. | $ |
| 4. Cost per unit of the completed beginning work in process inventory, rounded to the nearest cent. | $ |
b. Did the production costs change from the
preceding period?
c. Assuming that the direct materials cost per
unit did not change from the preceding period, did the conversion
costs per equivalent unit increase, decrease, or remain the same
for the current period?
In: Accounting
What cost might be included in the items in inventory and COGS for a manufactoring company versus what cost would be included in the items in inventory and COGS for a merchandising company?
In: Accounting
In form 4562, depreciation and amortization, how to apply and compute these information if cost of personal computer $7,000, cost of printer 2,000 furniture 3,000. Elected to expense the maximum portion of the cost of the computer, printer, and furniture allowed under the provisions of Section 179. These items were placed in service on January 15, 2016 amd used 100% in the business.
In: Accounting
Cost of Units Completed and in Process
The charges to Work in Process—Assembly Department for a period, together with information concerning production, are as follows. All direct materials are placed in process at the beginning of production.
| Work in Process—Assembly Department | |||
|---|---|---|---|
| Bal., 7,000 units, 65% completed | 24,150 | To Finished Goods, 161,000 units | ? |
| Direct materials, 165,000 units @ $1.5 | 247,500 | ||
| Direct labor | 380,700 | ||
| Factory overhead | 148,100 | ||
| Bal. ? units, 80% completed | ? | ||
Cost per equivalent units of $1.50 for Direct Materials and $3.20 for Conversion Costs.
a. Based on the above data, determine the different costs listed below.
If required, round your interim calculations to two decimal places.
| 1. Cost of beginning work in process inventory completed this period. | $ |
| 2. Cost of units transferred to finished goods during the period. | $ |
| 3. Cost of ending work in process inventory. | $ |
| 4. Cost per unit of the completed beginning work in process inventory, rounded to the nearest cent. | $ |
b. Did the production costs change from the
preceding period? yes or no
c. Assuming that the direct materials cost per
unit did not change from the preceding period, did the conversion
costs per equivalent unit increase, decrease, or remain the same
for the current period?
In: Accounting
The FIFO inventory method requires that a. the cost of the first items purchased be assigned to cost of goods sold. b. the cost of the last items purchased be assigned to cost of goods sold. c. the earliest goods purchased be allocated to ending inventory. d. the company uses a perpetual inventory system.
In: Accounting
You plan to buy a car in one year. It will cost $15,000 at that time. You now have $5,000 in a bank that pays 12% compounded monthly. You will save for the car by making monthly deposits in the bank for the next 12 months. How much will you have to deposit each month to have enough money in total to make the purchase?
Select one:
a. $738.50
b. $835.18
c. $769.43
d. $682.80
Karl has $100,000 in student loans at 6% compounded monthly. How much will Karl's monthly payment be in order to pay off the loan in 10 years?
Select one:
a. $610
b. $13,587
c. $9,777
d. $1,110
In: Finance
What is the difference between a product and a period cost and how is each type
of cost reported on the financial statements? What are some examples of a product and period cost?
In: Accounting