The central pacific railroad filled much of its need for labor by hiring __

Exercise 2-10 Applying Overhead Cost to a Job [LO2-2] Sigma Corporation applies overhead cost to jobs on the basis of direct lab

OlgaM077 [116]

Answer:

See explanations below.

Explanation:

1. Yes. Overhead should be applied to job W at year-end. Overhead is applied to every jobs whether or not they are completed at year end.

b. To calculate the amount of overhead to be applied to job W, we need to calculate first the overhead application rate based on direct labor cost through job V.

Direct labor cost. $8,000

Overhead applied $6,000

Overhead rate = [ Overhead applied / Direct labor cost ] × 100

= [6,000/8,000] × 100

= 75%

Overhead to be applied to job W

Direct labor cost $4,000

Overhead rate 75%

Overhead to be applied = $3,000

It therefore means that $3,000 should be applied to job W.

2. Because job W was not completed at the year end, it would then be included in the work in process inventory in the financial statements of Sigma Corporation at year end.

6 0

3 years ago

Ware Co. produces and sells motorcycle parts. On the first day of its fiscal year, Ware issued $35,000,000 of five-year, 12% bon

nlexa [21]

Answer:

Cash proceeds is $37,702,607.23

First premium amortization $214,869.64

Second premium amortization is $225,613.12

First year interest expense is $ 3,759,517.24

Explanation:

The amount of cash proceeds from the bond issue is the pv of the bond using the pv formula,=-pv(rate,nper,pmt,fv)

rate is 10% yield to maturity divided 2 since interest is semi-annual i.e 5%

nper is 5 years multiplied by 2=10

pmt is the semi-annual interest payable by the bond i.e $35,000,000*12%*6/12=$2,100,000

fv is the face value of the bond at $35,000,000

=-pv(5%,10,2100000,35000000)

pv=$37,702,607.23

The amount of premium to be amortized in first semi-annual interest payment:

Interest expense=$$37,702,607.23*10%/2=$1,885,130.36

coupon interest=$35,000,000*12%/2=$2,100,000

Premium amortized=$2,100,000-$1,885,130.36

premium amortized=$214,869.64

The amount of premium to be amortized in second semi-annual interest payment:

interest expense=($37,702,607.23+$2,100,000-$1,885,130.36)*10%/2

=$1,874,386.88

Premium amortized=$2,100,000-$1,874,386.88

premium amortized=$225613.12

Bond expense for the first payment= 37,702,607.23*10%/2

=$1,885,130.362

Bond expense for the first payment= 37,487,737.59 *10%/2

=$ 1,874,386.88

First year bond interest expense= 1,874,386.88+1,885,130.362

=$ 3,759,517.24

Find attached schedule in addition

Download xlsx

4 0

3 years ago

A bond has a face value of $1,000, a coupon of 4% paid annually, a maturity of 30 years, and a yield to maturity of 7%. What rat

Lelechka [254]

Answer:

-11.8%

Explanation:

the key to answer this question is to remember that valuation of a bond depends basically of calculating the present value of a series of cash flows, so let´s think about a bond as if you were a lender so you will get interest by the money you lend (coupon) and at the end of n years you will get back the money you lend at the beginnin (principal), so applying math we have the bond value given by:

$price=\frac{principal*coupon}{(1+i)^{1} }+ \frac{principal*coupon}{(1+i)^{2} } \frac{principal*coupon}{(1+i)^{3} }+...+\frac{principal+principal*coupon}{(1+i)^{n} }$

so in this particular case that one year later there are 29 years to maturity so we have:

$price=\frac{1,000*0.04}{(1+0.08)^{1} }+ \frac{1,000*0.04}{(1+0.08)^{2} } \frac{1000*0.04}{(1+0.08)^{3} }+...+\frac{1,000+1,000*0.04}{(1+0.08)^{30} }$

$price=553.6638$

so as we have a higher rate the investment has the next return:

$return=\frac{553.66}{627.73} -1$

$return=-11.8\%$

4 0

3 years ago

Consider a service company that provides carpet cleaning and uses straight-line depreciation. Classify the cost of the depreciat

madreJ [45]

Answer: Fixed Indirect costs.

Explanation:

Depreciation cost is the amount of a fixed asset that has been charged to expense through a periodic depreciation charge. Depreciation can either be a direct cost which is one that varies in concert with changes in a related activity while

an indirect cost is one that is not directly associated with an activity.

The determination of depreciation as a direct or indirect cost depends upon what it is associated with. For example carpet cleaning is an Indirect costs because it's precise benefits to a specific project is difficult or impossible to trace Also,since depreciation is a fixed cost, because it recurs in the same amount per period throughout the useful life of an asset then cost of the depreciation on the carpet cleaning is a Fixed Indirect Cost.

8 0

3 years ago

A group that sponsors bike helmet poster contests for children to promote bicycle safety is providing which marketing offering

KengaRu [80]

Ideas is your answer

4 0

2 years ago

The central pacific railroad filled much of its need for labor by hiring ___ immigrants.