Answer:
Instructions are listed below.
Explanation:
Giving the following information:
The Machining Department’s predetermined overhead rate is based on machine-hours and the Customizing Department’s predetermined overhead rate is based on direct labor-hours.
Machine-hours:
Machining= 13,000
Customizing= 29,000
Direct labor-hours:
Machining= 19,000
Customizing= 5,000
Total fixed manufacturing overhead cost
Machining = $68,900
Customizing= $20,500
Variable manufacturing overhead per machine-hour $ 1.00
Variable manufacturing overhead per direct labor-hour $ 4.20
Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Machining:
Estimated manufacturing overhead rate= (68,900/13,000) + 1= $6.3 per machine hour
Customizing:
Estimated manufacturing overhead rate= (20,500/5,000) + 4.2= $8.3 per direct labor hour
I believe its B) the fourth and fifth
Answer:
a. Expected Return = 16.20 %
Standard Deviation = 35.70%
b. Stock A = 22.10%
Stock B = 29.75%
Stock C = 33.15%
T-bills = 15%
Explanation:
a. To calculate the expected return of the portfolio, we simply multiply the Expected return of the stock with the weight of the stock in the portfolio.
Thus, the expected return of the client's portfolio is,
- w1 * r1 + w2 * r2
- 85% * 18% + 15% * 6% = 16.20%
The standard deviation of a portfolio with a risky and risk free asset is equal to the standard deviation of the risky asset multiply by its weightage in the portfolio as the risk free asset like T-bill has zero standard deviation.
b. The investment proportions of the client is equal to his investment in T-bills and risky portfolio. If the risky portfolio investment is considered of the set proportion investment in Stock A, B & C then the 85% investment of the client will be divided in the following proportions,
- Stock A = 85% * 26% = 22.10%
- Stock B = 85% * 35% = 29.75%
- Stock C = 85% * 39% = 33.15%
- T-bills = 15%
- These all add up to make 100%
