Answer:
$587,760
Explanation:
Budgeted factory overhead for the year at $645,792 budgeted direct labor hours for the year are 260,400.
If actual direct labor hours for the month of May are 237,000 and the labour hour is used as the measure for determining the overhead cost to be allocated, then
Overhead allocated for May = (237,000/260,400) × $645,792
= $587,760
Answer:
PAYBACK PERIOD
Year Cashflow Cummulative cashflow
$ $
0 (16,000) (16,000)
1 8,000 (8,000)
2 6,000 (2,000)
3 5,000 3000
4 6,000
5 5,000
Payback period
= 2 years + 2,000/5,000
= 2.4 years
Explanation:
In this case, we need to deduct the initial outlay from the cashflows for each year until the initial outlay is fully recovered.
Answer:
The town should provide the additional mosquito control only if the marginal benefit generated for the residents of Falls Valley is equal to or greater than $100,000.
Explanation:
The town must use the same logic as any business, they only increase their activities when MR ≥ MC, in this case the marginal revenue equals the benefits generated by the mosquito treatment.
