Answer:
Predetermined manufacturing overhead rate= $391.78 per direct labor hour
Explanation:
Giving the following information:
Budgeted factory overhead= $2,948,125.
Direct labor hours:
Flutes= 2,000*2= 4,000
Clarinets= 1,500*3= 4,500
Oboes= 1,750*1.5= 2,625
Total direct labor hours= 7,525
To calculate the predetermined manufacturing overhead rate we need to use the following formula:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= 2,948,125/7,525
Predetermined manufacturing overhead rate= $391.78 per direct labor hour
<span>A product used in this way is known as a Benchmark Item.
Benchmark item refers to the type of product that is used as a standard when we want to compare it another similar product.
By seeing the price of Burger in this particular situation, Jason could predict the price of other product that being sold in that place.</span>
Answer:
The incorrect statement regarding relevant costs and revenues:
To be relevant, a cost or revenue must not be future-oriented and must differ between the alternatives.
Explanation:
For a cost or revenue to be considered as relevant, it must be incurred or earned at a future time. It must also differ between the options available for decision making. A cost or revenue cash flow is relevant if it arises from a management decision and can be avoided. This simply means that if the cost or revenue is not affected by management decision or does not make any difference in decisions, it is not relevant.
Answer:
The offer price will be $55.51
Explanation:
The constant cash flow over a indefinite period of time is the perpetuity. The dividend payment on the preferred is also considered as perpetuity because it pays the constant amount of dividend and there is no time limit for the payment.
Value of the preferred share can be determine by following formula
Value of Perpetuity / Cash flow / required rate of return
Price of share = Dividend Payment / Rate of return
Price of share = $6.8 / 12.25% = $55.51
