<span>The traditional view is that the optimum level of inspection is where the sum of inspection costs and the costs of passing defects is equal.
The optimum level of inspection is a company catching defects and making sure they are not letting a lot of defects slip by. The goal is to keep them under the average for the industry and as close to allowing no defects to slip through to consumers as possible.
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Answer:
Spending variance = $8260 unfavorable
Explanation:
<em>The fixed overhead spending variance is the difference between budgeted overhead and actual overhead incurred. It shows he amount by the budgeted and actual overhead differ.</em>
Budgeted overhead $131,250
Actual overhead <u>$139,510 </u>
Variance <u> 8260 unfavorable</u>
Answer:
The inspection point is the stage of the production cycle where products are checked to determine whether they are acceptable or unacceptable units
Explanation:
Answer:
The coupon rate will be 6.6415%.
Explanation:
By using the financial calculator, the I/Y will be computed:
Where
PMT = 7/2 % × 1,000
= $35
PV = -$1,035
FV = 1,000
N = 16 × 2
= 32
It is semiannually, so the number of years got doubled.
Then press CPT and I/Y
I/Y = 3.3207
In order to compute the coupon rate, again financial calculator will be used:
PV = -$1,000
FV = $1,000
N = 32
I/Y = 3.3207
Then Press CPT and PMT
PMT = 33.2075
Coupon rate = PMT/ FV × 100
= 33.2705/ 1,000 × 100
= 3.32075%
The coupon rate will also be double:
= 3.32075% × 2
= 6.6415%
This is the annual rate.
Answer:
The portfolio return is 13.432%
<u>Explanation:</u>
<u>The required return using CAPM</u>
First we will calculate the required rate of return for both the stocks using the CAPM equation.
Let rA be the required rate of return for Autodesk stock and rB be the required rate of return for Costco stock.
For Autodesk, rA = 0.04 + 2.16 * (0.10 - 0.04) = 0.1696 or 16.96%
For Costco, rB = 0.04 + 0.69 * (0.10 - 0.04) = 0.0814 or 8.14%
The portfolio return is the weighted average return of stocks in the portfolio.
rP or return of portfolio = 0.6 * 0.1696 + 0.4 * 0.0814 = 0.13432 or 13.432%