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UkoKoshka [18]
2 years ago
8

Happinessistheroad Corp. has the following information available regarding its labor: Managers expected to pay $11 per direct la

bor hour. Each unit produced should take 1 direct labor hour; actual total usage was 990 direct labor hours. Finally, the company planned to produce 1,000 units, but only produced 950. The direct labor spending variance is $990 (unfavorable). How much did the company actually spend on direct labor per hour
Business
1 answer:
777dan777 [17]2 years ago
8 0

Answer:

The actual labor rate per hour is $12

Explanation:

First and foremost, we need to understand that a direct labor spending variance of $990(unfavorable) means that the firm spent an additional $990 compared to what was expected.

Also, the spending variance is computed as the actual labor rate minus the standard labor rate multiplied by the actual labor hours worked

spending variance=(actual labor rate-standard labor rate)*actual labor hours

spending variance=$990

actual labor rate=unknown=(assume it is X)

standard labor rate=$11

actual labor hours worked=990

$990=(X-$11)*990

$990/990=X-$11

$1=X-$11

X=$1+$11

X=actual labor rate=$12

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statuscvo [17]

Answer:

Current Share price= $114.21

Explanation:

The Dividend Valuation Model is a technique adopted to detremine the value of an asset. According to this model, the value of an asset is the sum of the present values of the future cash flows that would arise from the asset discounted at the required rate of return (discount rate)

The model is premised on the concept of the time value of money. The idea that $1 today is not the same as $1 tomorrow. The $1 of today is worth more than that of tomorrow; because of the opportunity to earn interest. So to determine the worth of a future cash flow, we compute its worth today- its present value.

The Present Value of a future cash flow is the amount that needs to be invested today at a particular rate of return to equal the same cash flow in the future. Present value means the value in year 0 or now

The process of calculating the present value of a future sum is called discounting. So to calculate the current stock price in this question, we shall discount the future dividends using the required rate of return and then add them together.

So if an asset (e.g a stock) promises some cash flows in the future, those cash flows need to be brought to their present values and then be added to arrive at the value of the asset

In this question, the cash flows are the dividends as given and the rate of return (discount rate) is 15%

So we apply this model as follows:

Step 1 : PV of div from year 1 to 10  =  15× ((1-1.15)^(-10))/0.15)  =  75.282

Step 2:PV (in year 10)of div from year 11 onward=(15×1.05)/(0.15-0.05)=  157.5

Step 3:PV(in year 0) of div from year 11 onward =  157.5 × (1.15)^ (-10) =  38.93

Current Share price= $75.282 + $38.93 = $114.21

<em>Note:</em><em> step 3 is important because the the cash flows from year 11 onward were discounted to arrive at their values in year 10. Since we are interested in the current price i.e year 0 value, it is important that we re-discount again to bring them to their PV in year 0.</em>

8 0
2 years ago
A truck acquired at a cost of $80,000 has an estimated residual value of $8,000, has an estimated useful life of 200,000 miles,
laila [671]

Answer:

a. The depreciable cost is $72000.

b. The depreciation rate is $0.36 per mile.

c. The depreciation expense for the year is $6480.

Explanation:

a.

The depreciable cost is the cost that is eligible for depreciation. It is calculated by deducting the residual value from the cost of the asset.

Depreciable cost = Cost - residual value

Depreciable cost = 80000 - 8000 = $72000

b.

The depreciation rate can be calculated by dividing the depreciable cost by the total estimated useful life of the asset.

The depreciable rate = 72000 / 200000 = $0.36 per mile driven

c.

The units of activity depreciation for the year is,

Depreciation expense = 0.36 * 18000 = $6480

6 0
2 years ago
Given the acquisition cost of product z is $30, the net realizable value for product z is $27, the normal profit for product z i
vitfil [10]
Lcm requires to value inventory at the lower of acquisition cost or net realizable value.

Net realizable value = $27 - $1 = $26
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Therefore, it would be valued at $26
5 0
2 years ago
On August 1, 2020, Ascent Corp. borrowed $80,000 cash on an 8-month note payable with a 7% annual rate that requires Ascent to p
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Answer and Explanation:

The computation is shown below:

Interest payable:

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= $80,000 × 7% × 5 ÷ 12

= $2,333.33

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Interest expense:

= Borrowed amount × rate of interest × given months ÷ total months

= $80,000 × 7% × 3 ÷ 12

= $1,400

So here for recording the payment of interest the interest payable is debited for $2,333.33

The same is to be considered

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2 years ago
Consumer​ surplus:
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Consumer surplus is the difference between the maximum amount the consumer is willing to pay for the price of the good and the price that was actually paid by the consumer or commonly known as the current market price. The price that the consumer is willing to pay is determined by the demand curve in the market.

8 0
3 years ago
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