Answer:
Given this change in the cost, the adequacy and quality of the estimated cost drivers and costs used by the system will determine the costing results for SR6 under the new system.
Explanation:
A cost driver can be described as the unit of an activity or any factor that makes the cost of an activity to fluctuate. An estimated cost driver is adequate and of the expected quality when quality or quantity is satisfactory or acceptable.
Therefore, given this change in the cost, the adequacy and quality of the estimated cost drivers and costs used by the system will determine the costing results for SR6 under the new system.
Answer:
The overhead applied to each unit of W2 under Activity-Based Costing is closest to $518.81
Explanation:
Find detailed computation in the attached.
Answer:
arithmetic average growth rate = (10% + 3.03% + 4.62% + 3.21%) / 4 = 5.22%
we need to find the required rate or return (RRR) in the following formula:
stock price = expected dividend / (RRR - growth rate)
- expected dividend = $2.57 x 1.0522 = $2.7042
- stock price = $60
- growth rate = 0.0522
605 = 2.7042 / (RRR - 0.0522)
RRR - 0.0522 = 2.7042 / 60 = 0.045
RRR = 0.045 + 0.0522 = 0.0973 = 9.73%
geometric average growth rate = [(1.10 x 1.0303 x 1.0462 x 1.0321)¹/⁴] - 1 = 0.05178 = 5.18%
again we need to find the required rate or return (RRR) in the following formula:
stock price = expected dividend / (RRR - growth rate)
- expected dividend = $2.57 x 1.0518 = $2.703126
- stock price = $60
- growth rate = 0.0518
60 = 2.703126 / (RRR - 0.0518)
RRR - 0.0518 = 2.703126 / 60 = 0.0450521
RRR = 0.0968521 = 9.69%
Answer:
11.58%
Explanation:
The computation of the cost of preferred stock is shown below:
Cost of preferred stock = (Annual dividend) ÷ {Price of preferred stock per share × (1 - flotation cost)}
= ($11) ÷ {($100 × (1 - 0.05)}
= $11 ÷ $95
= 11.58%
Simply we divide the annual dividend by the price of preferred stock per share after considering the flotation cost so that the correct cost of preferred stock can be computed