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Gekata [30.6K]
3 years ago
15

Our company makes sophisticated lenses for satellite cameras. We allocated our overhead (OH) costs using practical equipment mac

hine hours (MHs).
For 2019, we estimated:

the cost of excess capacity of $760,000;
practical MHs of 25,000;
and estimated MHs used of 20,000.

We are considering switching to using "textbook" absorption costing to allocate our OH costs using estimated MHs. If we made the switch, our OH rate would be closest to:
Business
1 answer:
ser-zykov [4K]3 years ago
5 0

Answer:

If we made the switch, our OH rate would be closest to: $30.40 per MH

Explanation:

Overhead Rate is used to allocate manufacturing overheads (indirect costs) to jobs and departments.

In our senario Overhead rate are used to allocate fixed manufacturing overheads to production of lenses for satellite cameras.

Overhead Rate = Budgeted Overheads / Budgeted Activity

                          = $760,000/ 25,000

                          = $30.40 per practical equipment machine hour

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Brut [27]

Answer:

b. the supply of ivory has fallen, leading to an increase in price and reward for poaching.

Explanation:

In Economics, there are primarily two (2) factors which affect the availability and the price at which goods and services are sold or provided, these are demand and supply.

The law of demand states that, the higher the demand for goods and services, the higher the price it would be sold all things being equal. On the other hand, law of supply states that the higher the price of goods and services, the lower the supply.

Poaching can be defined as an illegal or illegitimate procurement (purchase) of protected wildlife living organisms such as elephants, fish, trees, gaming, etc.

In an attempt to reduce poaching of elephant tusks for ivory, officials in Kenya burned illegally gathered ivory. Economists tend to point out that the supply of ivory has fallen, leading to an increase in price and reward for poaching in accordance with the law of supply.

This ultimately implies that, an increase in the price level of a product usually results in a decrease in the quality of real output demanded along the aggregate demand curve.

6 0
3 years ago
Fama’s Llamas has a WACC of 9.7 percent. The company’s cost of equity is 12 percent, and its pretax cost of debt is 7.5 percent.
Bezzdna [24]

Answer:

0.4766

Explanation:

Given:

WACC = 9.7%

Company’s cost of equity = 12%

Pretax cost of debt = 7.5%

Tax rate = 35%

Now,

WACC

=  Weight × Cost of equity + (1 - weight) × Pretax cost of debt × (1-tax rate)

or

0.097 = weight × 0.12 + ( 1 - weight ) × 0.075 × (1 - 0.35)

or

0.097 = 0.12 × weight + 0.04875 - 0.04875 × weight

or

0.04825 = 0.07125 × weight

or

weight = 0.6772

also,

weight = \frac{\textup{Equity}}{\textup{Debt + Equity}}

or

\frac{\textup{1}}{\textup{weight}}  = \frac{\textup{Debt+equity}}{\textup{Equity}}

or

\frac{1}{0.6772} = \frac{\textup{Debt}}{\textup{Equity}}  + 1

or

1.4766 = \frac{\textup{Debt}}{\textup{Equity}}  + 1

or

\frac{\textup{Debt}}{\textup{Equity}}  = 0.4766

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Answer:

1.

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lilavasa [31]

Answer:

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2 years ago
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