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MrRa [10]
3 years ago
6

Swan, Inc. uses the high-low method to analyze cost behavior. The company observed that at 20,000 machine hours of activity, tot

al maintenance costs averaged $37.30 per hour. When activity jumped to 25,000 machine hours, which was still within the relevant range, the average total cost per machine hour was $31.30.
Business
1 answer:
Reptile [31]3 years ago
5 0

Answer:

7.3

Explanation:

37.30 × 20,000 = $746,000

31.30× 25000 =$782,500

$746,000-$782,500 = $36,500

36,500/ 5,000 = 7.3

Note:

25,000-20 000= 5,000

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The Most recent financial statements for Moose Tours, Inc., appear below. Sales for 2016 are projected to grow by 20 percent. In
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Answer:

$5,006.07

Explanation:

The external financing needed = Projected Increase in Assets - Increase in Liabilities - Increase in Retained Earnings

Projected Increase in Asset = Assets Value*Sales Growth Rate

Projected Increase in Assets = $364,720 * 20%

Projected Increase in Assets = $72,944

Increase in Liabilities = Liabilities * Sales Growth Rate

Increase in Liabilities = $69,600 * 20%

Increase in Liabilities = $13,920

<em>To calculate the Increase in Retained Earning, the below calculations are needed:</em>

a. Profit Margin Rate = Net Income / Sales * 100

Profit Margin Rate = 75,000 / 751,000 * 100

Profit Margin Rate = 9.99%

b. Dividend Payout Ratio = Dividend / Net Income * 100

Dividend Payout Ratio = 30,000 / 75,000 * 100

Dividend Payout Ratio = 0.4

Dividend Payout Ratio = 40%

Retention Rate = 1 - Dividend Payout Ratio

Retention Rate = 1 - 0.40

Retention Rate = 0.60

Retention Rate = 60%

c. Expected Sales = $751,000 * 1.20 = $901,200

So, the Increase in Retained Earning = Expected Sales * Profit Margin * Retention Rate = $901,200 *9.99% * 60% = $54,017.93

Therefore, External Fund Needed = $72,944 - $13,920 - $54,017.93 = $5,006.07

3 0
2 years ago
Grape Corporation purchased a machine in December of the current year. This was the only asset purchased during the current year
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Answer:

d. In the following year using a half-year convention

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Since the mechine will only be in service in January of the following year, The corporation cost recovery should begin in the following year using a half year convention.

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