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Arisa [49]
3 years ago
9

Magic Company adds materials at the beginning of the process in Department A. The following information on physical units for De

partment A for the month of August is available. Work in process, August 1 (60% complete with respect to conversion)72,000 Started in August480,000 Completed480,000 Work in process, August 31 (30% complete with respect to conversion)72,000 Required: a. Compute the equivalent units for materials costs and for conversion costs using the weighted-average method. b. Compute the equivalent units for materials costs and for conversion costs using the FIFO method.
Business
1 answer:
Dvinal [7]3 years ago
8 0

Answer:

Equivalent units

a) Weighted average =  523,200 units

b)  FIFO =  480,000 units

Explanation:

<em>FIFO Method.</em>

<em>Fully worked units</em><em>: These represent units of inventory that were started in a current period and completed that same period. The fully worked units are calculated in order to separate the opening inventory from  the the newly introduced when accounting for completed units under the FIFO.</em>

For magic company , fully worked units is

= 480,000 - 72,000 = 408,000 units

Equivalent units using Weighted Average

<em>Here, there are no distinction between opening inventory and the newly introduced</em>.

                                                            <em>            Equivalent Units</em>

Completed unit                    (100%× 480,000) = 480,000

Closing inventory                (60% × 72,000) = <u>     43,200</u>

Total equivalent units                                       <u>523,200</u>

Equivalent Units using FIFO

Item                                                               <em>Equivalent Units</em>

Opening inventory              (40% × 72,000) =  28,800

Fully worked                        (100%× 408,00) = 408,000

Closing inventory                (60% × 72,000) = <u> 43,200</u>

Total equivalent units                                     <u>480,000 </u>

<u />

Equivalent units

a) Weighted average =  523,200 units

b)  FIFO =  480,000 units

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Answer:

The correct answer is letter "D": the beginning balance of owner's equity.

Explanation:

The statement of owner's equity reports the changes in a company's capital balance during a certain period. Thus, the transactions that increased or decreased stakeholder's equity is portrayed in this section. In the statement of owner's equity, the income earned during the current period is added to the beginning capital balance and the owner's equity withdrawals are deducted.

<em>The statement of owner's equity shows at its head the Beginning equity balance -initial money invested in the company over a period.</em>

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Answer:

rE = 0.1486 or 14.86%

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what is the present value of a deferred perpetuity that pays $141 annually with the first payment occurring at year 5? assume th
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The present value of a deferred perpetuity is $1,938.89.

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The present value of a prospective sum of money or cash flow stream given a specified return rate is known as its present value (PV). The present value of future cash flows is reduced by the discount rate, and the higher coupon rate, the lower the present value of future cash flows. The key to correctly valuing future cash flows, whether they are earnings or debt obligations, is determining the appropriate discount rate. The concept of present value states that a quantity of funds today is worth greater than the same amount in the long term. In other words, money gained in the long term is not as valuable as money received today.

The present value of a deferred perpetuity that pays $141 annually with the first payment occurring at year 5 is $1,938.89. This can be calculated by taking the present value of an ordinary annuity formula, which is PV = A / (1 + r)^n, and adding 5 to n. This gives the equation PV = A / (1 + r)^(n + 5), which can be simplified to PV = A / (1 + r)^n * (1 + r)^5. Thus, the present value is $141 / (1 + 0.06)^10 * (1 + 0.06)^5, which equals $1,938.89.

To learn more about present value
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Answer:

Please see attachment

Explanation:

Please see attachment

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