Answer:
PV of Perpetuity = $5000
Explanation:
A perpetuity is a series of cash flows that are constant, occur after equal intervals of time and are for infinite period of time or are perpetual. Thus, it is like and annuity but with an infinite time period. The formula for the present value of of perpetuity is,
PV of Perpetuity = Cash Flow / r
Where,
- r is the required rate of return
PV of Perpetuity = 250 / 0.05
PV of Perpetuity = $5000
Answer:
A. the iso-quant line is tangent to the iso-cost line.
Explanation:
Cost minimization refers to the decrease in level of cost of production for certain specified level of production.
Iso quant line represents the labor and capital combinations keeping the total cost same. The least combination represents the tangent to isoquant, basically representing the idle choice of labor and capital.
In this manner the company chooses the idle way of cost minimization.
Answer:
The weighted average equivalent units of production for materials for the month would be 62,400 units
Explanation:
Consider the following formula:
Equivalent units of production for materials = Units completed and transferred out + Units in ending WIP * % of completion
= 60000 + (6000*40%)
= 62,400 units
Answer:
B) $ 4.25
Explanation:
From the data provided in the question, we need to classify the items into manufacturing costs.
Salary of production supervisor $ 40,000
Indirect materials $ 8,000
Rent on factory equipment <u>$ 20,000</u>
Total manufacturing costs <u>$ 68,000</u>
Estimated Machine Hours 16,000
Manufacturing Overhead - $ 68,000/ 16,000 hours $ 4.25 per machine hours
The other items provided in the question, sales commission and advertising expenses are selling expenses and are not manufacturing costs.
Answer:
$1,800
Explanation:
Here Decrease or increase can be calculated as under:
Increase in Revenue $15,000
Increase in Variable Cost (72k / 100k * $15,000) ($10,800)
Increase in Promotional Cost <u> ($6,000) </u>
Net Operating Income Decrease ($1,800)
Hence the decrease in Net Operating Income would be by $1,800.
Note: As the complete question is not provided and is not found online, almost similar question was picked from the internet. So make sure you account for of the differences.
The Numerical section of the question is given as under:
