CII, Inc., invests $630,000 in a project expected to earn a 12% annual rate of return. The earnings will be reinvested in the pr
1 answer:
Answer:
$1,956,684
Explanation:
As the project has a expected annual return, we have to calculate future value of this investment to find how much money Cll, Inc. will have after 10 years to reinvest.
We know,
FV = PV ×
Given,
Present Value, PV = $630,000
Annual rate of return, i = 12% = 0.12
Number of period, n = 10 years
Putting the value into the above formula, we can get,
FV = $630,000 ×
FV = $630,000 × 3.105848
FV = $1,956,684
$1,956,684 can be reinvested after the liquidation of 10 years.
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Answer:
b. $303,000
Explanation:
The activity rate
1. Machining =
= $ 20 per machine hour
2. Machine set up =
= $ 500 per set up
3. Product design =
= $ 22000 per product
4. Order size =
= $ 26 per direct labor hour
Now the ABC cost (Product T05P)
1. Machining =
= 4000 x 20
= $ 80,000
2. Machine set ups =
= 90 x 500
= $ 45,000
3. Product design =
= 1 x 22000
= $ 22,000
4. Order size =
= 6000 x 26
= $ 156,000
Therefore, the total manufacturing overhead cost assigned to product T05P = 80000 + 45000 + 22000 + 156000
= $ 303,000