B. What is the total cost at the break even point.
Answer:
$759,000
Explanation:
Preparation of a schedule showing the amount at which the ovens should be recorded in Great Harvest’s Equipment account.
Purchase price 690,000
Add Freight costs 30,000
Add Electrical connection 4,000
Add Labor costs 32,800
Add Bread dough used in testing the oven 800
Add Safety Guards 1,400
Total cost of equipment $759,000
Therefore the amount at which the ovens should be recorded in Great Harvest’s Equipment account will be $759,000
Answer:
The firm has a return on equity of D. 4 percent
Explanation:
Return on equity (ROE) helps an investor see how much after-tax profit a company gained for each dollar in equity, is calculated by formula:
Return on equity (ROE) = Net income/shareholder's equity
The firm has net profits after taxes of $30,000 and common stockholders' investment of $750,000 - shareholder's equity.
ROE = ($30,000/$750,000) x 100% = 4.00%
