Answer: The $4.05 market price
Explanation: Air-tite can buy or sell Hydrol at $4.05. If they decide to accept the order, there has to be a higher return on the use of Hydrol in the return than they would get from selling Hydrol as is.
There may also be an opportunity cost to using the product for this special order if there is an order that would yield higher returns for the use of Hydrol.
The quantity that would remain after making the special order does not have any impact on the decision making process, as they are considering just one order that requires Hydrol.
The purchase price is not relevant as they cannot purchase Hydrol at that price in the present. The total quantity is not relevant either as they have enough for the order.
Answer:
$3,176 , it's two months of interests $1,588 + $1,588
Explanation:
If the company paid each month 1/12 of capital plus interest it means that it's necessary to deduct the total amount of interests paid each month.
The company paid $25,588 and the monthly capital it's $24,000, therefore the company paid on interest an amount of $1,588 each month.
The issue of a one year installment note means that the company repay the principal to the lender in a series of periodic payments, in this case each month pay principal plus interests
In the income statement we have to applied the accrual criteria which means that the company only recognize the interest paid in the past months, November and December.
Answer:
Standard rate per direct labor hour is $27.1
Explanation:
Standard rate per direct labor hour includes the hourly pay rate, Payroll taxes and fringe benefits. For Theresa Corporation,
We have given that
Basic direct labor rate is $21.00 per hour
Payroll Taxes is 10% of basic direct labor rate i.e. 10% of $21.00 = $2.10 per hour
Fringe Benefits is $4.00 per hour.
So Standard rate per direct labor hour = $21.00 + $2.10 + $4.00 = $27.1
