The following is total monthly budgeted cost and activity
information for the four activity centers in the billing department
of Oregon Power Company:
| Activity Center |
Variable |
Fixed |
Cost Driver |
| Statement inquiry |
$73,888 |
$166,000 |
3,200 labor hours |
| Correspondence |
$9,604 |
$27,000 |
2,800 letters |
| Account billing |
$130,000 |
$70,000 |
2,600,000 lines |
| Payment verification |
$11,825 |
$77,000 |
21,500 accounts |
In September, actual total costs and activity were as follows:
| Activity Center |
Total Costs |
Driver Amount |
| Statement inquiry |
$241,803 |
3,240 labor hours |
| Correspondence |
$36,377 |
2,660 letters |
| Account billing |
$208,633 |
2,760,000 lines |
| Payment verification |
$89,764 |
21,400 accounts |
Required
Compute the flexible-budget variances for the following two
activity cost items (round all answers to the nearest dollar and
enter favorable variances as positive numbers and unfavorable
variances as negative numbers):
Account Billing is....?
In: Accounting
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In: Accounting
Green Co. constructed a machine at a total cost of $60.90
million. Construction was completed at the end of 2017 and the
machine was placed in service at the beginning of 2018. The machine
was being depreciated over a 10-year life using the
sum-of-the-years’-digits method. The residual value is expected to
be $3.30 million. At the beginning of 2021, Green decided to change
to the straight-line method.
Required:
1. Ignoring income taxes, what journal entry(s)
should Green record relating to the machine for 2021?
2. Suppose Green has been using the straight-line
method and switches to the sum-of-the-years’-digits method.
Ignoring income taxes, what journal entry(s) should Green record
relating to the machine for 2021?
In: Accounting
You buy a car, which cost $100.000. The purchase can be financed with a payment of 20% and the remaining 80% is covered by an 8-year annuity loan. The loan bears interest rate of 3% p.a., and it has monthly terms in the following you therefore also apply a discount rate of 3% p.a.
a) Determine the size of the payment, U, and the monthly payment, Y, belonging to the loan.
You consider if it is realistic to sell the car after 3 years.
b) Calculate the present value of the paying monthly benefit, Y, for 4 years from now. What is the value of this including the payout U?
You could even rent the car for 4 years which requires a one-time payment of $8000 today and after a monthly payment of $1000
c) What is the present value of the renting deal?
If you buy the car today, you expect to sell it for $70.000 after 3 years to pay back the annuity loan
d) How much do you have left after 3 years, when you payed back the loan? What is the present value of this? What will the present value today of buying the car under these conditions?
It turns out the leasing agreement includes a service agreement costs of $100 each month
e) What will the present value of today buying the car now that you include the cost of the service agreement?
Of course, it is highly uncertain what price you can sell the car for in three years
f) Set up an equation that shows what the car with a documented service agreement must be able to sell to after three years, so that the present value of resp. purchase and lease are the same. Determine (numerically) this selling price.
- Thank you so much in advance!
In: Finance
In: Accounting
The direct labor cost of making airplanes decreases with learning (learning curve). As a result, the cost of manufacturing a given airplane depends on the unit number (first, fifth, 10th, 50th, etc.). The following data shows the direct labor cost for selected production numbers. Airplane # (X) 1 4 12 32 64 130 200 300 500 Labor Time (Y) 7300 6500 5400 5000 4500 4200 4000 3700 3400 a- Using Excel graphs, find linear, power, exponential, and polynomial fits for this dataset. Make sure to include equations and R2 for each fit. Insert all graphs here and select the best model based on R2. NOTE: No logarithmic model required. b- If an airplane manufacturer charges $200 per hour for direct labor cost, use the best fitted model equation in part (a) and find the total labor cost if a small airliner orders 5 airplanes (#505 to 509).
Please explain/show, with formulas, in Excel.
In: Statistics and Probability
What are plant assets and how does a business measure the cost of a plant asset?
Discuss some of the individual costs that may be included in the overall cost of a plant asset.
In: Accounting
Duffer Resorts is redoing its golf course at a cost of $2,744,320. It expects to generate cash flows of $1,223,445, $2,007,812, and $3,147,890 over the next three years. If the appropriate discount rate for the firm is 13 percent, what is the NPV of this project? (Do not round intermediate computations. Round final answer to nearest dollar.)
PLEASE SHOW WORK!
In: Finance
Management is contemplating the purchase of a new oven which cost $25,000.00 with an estimated salvage value of zero. Expected before tax cash savings from the new oven are $4,000 a year over its full depreciable life. Depreciation is computed using straight line over a 5 year life, and the cost of capital is 10%. At the end of the oven's life, it can be sold for 2,000. Assume a 40% tax rate.
What is the net present value of the new oven? IRR?
In: Finance
In: Accounting