Splenda specializes in making S'mores cakes. The cost of making the S' mores is as mentioned in the table. Recently Splenda has been facing a lot of problems with the oven as some of its chocolate chips are not sticking to the cracker and hence they have to scrap them. This accounts for 10% of the S'mores actually made. A vendor feels that the installation of a new oven which has just been introduced in the market is the solution to this problem. He says that the installation of this oven with temperature sensors that would have an onetime cost of $90,000 in year 0 will completely reduce the loss due to the defective items. Splenda operates 40 hours a week for 48 weeks a year. It can sell a box of S'mores for $15. Assuming Splenda can sell all the cakes it makes which option would you recommend for a 10-year life to Splenda if the cost of capital for Splenda is 6%.

Please only attempt if you are 100% sure about the answer. Show all step. Do not copy from chegg.

a. AEW of current?

b. AEW of New?

c. Which option to be selected?

An automated inspection system purchased at a cost of $600,000 by ABC Engineering was depreciated using the MACRS method. The system was sold after 5 years for $150,000. The automated inspection system is a 7-year property according to MACRS GDS Property Class. Determine the accumulated depreciation of year 1, 2, 3, 4 and 5.

The cost per equivalent units of direct materials and conversion in the Bottling Department of Beverages on Jolt Company is $0.50 and $0.10, respectively. The equivalent units to be assigned costs are as follows:

The beginning work in process inventory had a cost of $3,330. Determine the cost of completed and transferred out production, and the ending work in process inventory.

How would the assignment of property rights under zero transaction cost be a benchmark to the issue of a man hitting the back of a seat of the passenger in front of them on an airplane because they have their seat fully reclined?

Perez Company acquires an ore mine at a cost of $4,200,000. It incurs additional costs of $1,176,000 to access the mine, which is estimated to hold 3,000,000 tons of ore. 280,000 tons of ore are mined and sold the first year. The estimated value of the land after the ore is removed is $600,000. Calculate the depletion expense from the information given. 1. & 2. Prepare the entry to record the cost of the ore mine and year-end adjusting entry.

1. You are calculating the cost of capital for Drill Corp. The firm’s capital structure consisted of accounts payables, operating leases, two bonds, and equity. Accounts payables have a market value of $100 million, whereas operating lease has a debt value of $550 million. The first bond is a simple 30-year semiannual coupon paying bond with a book value of $180 million and market value of $130 million. The second is a zero-coupon bond with 10 years to maturity and $550 million face value. The firm’s equity has a book value of $600 million, but a market value of $1.3 billion.

The firm has a debt rating of BB, beta of 1.1, and tax rate of 35%. The expected return on the market portfolio is 12% and the risk-free rate is 5%. From professional journals, you also know yields associated with specific debt ratings, which are as the following

If the company assigns accounts payables a cost that is the same as the overall firm WACC, estimate the weighted average cost of capital for Drill Co.

The following is information related to X Company, a company that uses a standard cost system:

Standard cost card for 1 unit of Product A:

Direct materials – Raw Material A   (1 kilogram @ $ 20/kg.)           $ 20

Direct materials – Raw Material B   (1 kilogram @$ 10/kg.)         $ 10

Direct labour       (1 hour @ $15/hr.)                                 $ 15

Variable overhead       (1 hour @ $ 5/hr.)                                  $   5

Fixed overhead    (1 hour @ $ 10/hr.)                                       $ 10

Total budgeted fixed overhead:                                            $ 1,000

Budget total units of production:                                         100 units

Actual units produced                                                       88 units

Actual costs incurred:                                                    Total    

Direct materials – Raw Material A   (130 kilograms                             $ 2,860

Direct materials – Raw Material B   ( 60 kilograms)                 $    660

Direct labour       (100 hours)                                         $ 1,600

Variable overhead       (100 hours)                                                 $    480

Fixed overhead                                                                       $ 1,120

Required:

Calculate the direct labour variances.

Calculate the two variable overhead variances.

Calculate the direct material variances.

Pls write clearly

The Cost of Producing Wine at Only a Small Fraction of the Price

Most consumer goods are not sold by the manufacturer. Instead, they are produced by the manufacturer, who sells to a wholesaler, who in turn sells to a retailer, who sells to the public. Such is the case with most wine.

There has been an outcry in recent years over increases wine in prices. Although prices have risen sharply, the multilevel market structure and the markup that occurs at the wholesale and retail levels have a much larger role in the price increases than the production of the wine itself. Total production costs for a typical $24 bottle of wine are just $4.92, or about 20.4% of the final price, whereas wholesale and retail markups together make up 40% of the final price. Not surprisingly, raw materials (grapes) are the single biggest cost. The cost of the grapes may be as much as 60% of total production costs but varies greatly from lower-quality inexpensive wines to the highest quality wines. The second-highest cost for many vintners is the barrels used to ferment the wine. French oak barrels cost as much as $700 apiece and last only a few years. The other major production cost, other than the actual physical plant where the winemaking occurs, is time. Quality wines spend 2–2 ½ years aging in barrels and then an additional 8 months in bottles before being ready for sale.

1. How much substitutability do you suppose exists between inputs in winemaking? How might this factor affect efforts to cut costs?
2. If a firm were to find a new technology that cut the required aging time in half, how would it affect the demand for other inputs?

Do we have to ignore value of human life in benefit cost analysis?

Included in the inventory count were goods with a cost of $11,000, which were waiting to be picked-up by the freight company for delivery to a customer. The terms were 1/10 net 30, FOB shipping. The goods had been invoiced to the customer on December 31, 2018 at $14,000.What are the key financial reporting issues? Where possible. What is the potential impact of the issue on the balance sheet and income statement, and explain why an adjustment is required? If there are areas where judgment is involved, or the accounting treatment is not clear. What are the alternatives that are available and factors that need to be considered in choosing an alternative?