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Citrus2011 [14]
2 years ago
6

Stanton Inc. is considering the purchase of a new machine that will reduce manufacturing costs by $5,000 annually and increase e

arnings before depreciation and taxes by $6,000 annually. Stanton will use the Modified Accelerated Cost Recovery System (MACRS) method to depreciate the machine, and it has estimated the depreciation expense for the first year as $8,000. What is the supplemental operating cash flow for the first year?
Business
1 answer:
iris [78.8K]2 years ago
6 0

Answer:

$9,800

Explanation:

The computation of the supplemental operating cash flow for the first year is shown below:-

For computing the supplemental operating cash flow for the first year first we need to follow some steps to reach the answer which is here below:-

Total Inflows = Annual savings in cost + Increase in earning

= $5,000 + $6,000

= $11,000

Earnings before tax = Total Inflows - Depreciation

= $11,000 - $8,000

= $3,000

Tax = Earnings before tax × 40%

= $3,000 × 40%

= $1,200

Earning after tax = Earnings before tax - Tax

= $3,000 - $1,200

= $1,800

Cash flow in year 1 = Earning after tax + Depreciation

= $1,800 + $8,000

= $9,800

So, for computing the cash flow in year 1 we simply added earning after tax with depreciation.

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Manufacturing overhead was estimated to be $562,800 for the year along with 20,100 direct labor hours. Actual manufacturing over
Lemur [1.5K]

Answer:

$604,800

Explanation:

Applied manufacturing overhead is the manufacturing overhead that has been applied to production in a period.

it is calculated with the formula "budgeted overhead rate * actual labor hr"

Budgeted manufacturing overhead = $562,800

Budgeted Direct labor hours = 20,100

Budgeted Overhead rate = 562800/20100 =$28/hr

Actual manufacturing overhead = $543,705

Actual direct labor hours = 21600

Amount of manufacturing overhead applied = predetermined overhead rate * actual hr =28*21600

=$604,800

7 0
3 years ago
Imagine you are the owner of a natural gas company. You can either extract as much of the resource as fast as possible or delay
Arte-miy333 [17]

Answer:

A

Explanation:

7 0
3 years ago
Kyoko's Performance Pizza is a small restaurant in Detroit that sells gluten-free pizzas. Kyoko's very tiny kitchen has barely e
Dvinal [7]

Answer: variable; fixed

Explanation: In the short run, Kyoko's workers are variable inputs. This is because, the number of workers needed can be varied based on production needs, even in the short run. Examples are energy, labor etc.

Kyoko's ovens are fixed inputs. Fixed inputs are those inputs whose quantities cannot be changed in the short run by a firm as it seeks to change the quantity of output produced. Examples are equipment, land and building.

6 0
3 years ago
Aztec Company sells its product for $160 per unit. Its actual and budgeted sales follow.
nadezda [96]

Answer:

a. We have:

June's total cash collections = $605,760

July's total cash collections = $715,580

b. We have:

June's Loan Balance End of Month = $1,324,163

July's Loan Balance End of Month = $2,226,541

Explanation:

a. Prepare a schedule that shows the computation of cash collections of its credit sales (accounts receivable) in each of the months of June and July.

Note: See part a of the attached excel file for the schedule that shows the computation of cash collections for June and July.

In the part a of the attached excel file, we have:

June's total cash collections = $605,760

July's total cash collections = $715,580

b. Prepare a cash budget for June and July, including any loan activity and interest expense. Compute the loan balance at the end of each month.

Note: See part b of the attached excel file for cash budget for June and July.

In the cash budget in the attached excel file, the following calculations is made:

June additional loan = Minimum required cash balance - June Preliminary cash balance = $110,000 - (-$1,169,663) = $110,000 + $1,169,663 = $1,279,663

July additional loan = Minimum required cash balance - July Preliminary cash balance = $110,000 - (-$792,378) = $110,000 + $792,378 = $902,378

From the cash budget, we have:

June's Loan Balance End of Month = $1,324,163

July's Loan Balance End of Month = $2,226,541

Download xlsx
7 0
2 years ago
Most media companies have avoided monopoly charges by
Setler [38]
Purchasing diverse types of mass media
4 0
3 years ago
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