A granary allocates the cost of unprocessed wheat to the production of feed, flour, and starch. For the current period, unproces
1 answer:
You might be interested in
Answer:
1. Book value at end of year 2 = $13,130
2. Depreciation from year 3 for last 3 years = $3,710 each year, that is $11,130 for three years.
Explanation:
As for the provided details, we have:
Cost of machinery = $23,860
Expected life = 4 years
Salvage value = $2,400
Straight line depreciation =
Under straight line method depreciation remains constant for life of asset.
Book value at end of year 2 = $23,860 - ($5,365 2) = $13,130
Thereafter in the beginning of year 3 the estimate is made to realize that the total remaining life expected is 3 years, with salvage value $2,000
Thus, depreciation from year 3 =
Therefore, depreciation from year 3 to year 5 = $3,710 each year.
Total depreciation of last 3 years = $3,710 3 = $11,130
Answer:
Ans.
a) BEP (units) =727; BEP($)= $36,350
b) BEP (units) =690; BEP($)=$34,500
Explanation:
Hi, in order to find the break even point in units, we have to use the following equation in both cases.
Since the sales mix is different in both scenarios, let´s find the average variable cost for a) (notice that there is no need to find the average price because both, the stool and the chair have the same price)
Now, the fraction aside each of the price is 1/2 in both cases, because the sale mix 1:1 means that the company makes 1 stool for every chair it makes, in fraction that is, for every 2 items that the company makes, 1 is a stool (1/2) and 1 is a chair (1/2).
So, our BEP in units is:
That means that the company has to make 727 units, which 363 are chairs and 364 are stools (you could say 364 chairs and 363 stools too, because we are heavily rouding numbers). This is represented in $36,350 in sales.
Now, for b), our average cost is:
As you can see, the fraction changed, that is because of the new sales mix of 1:4, that is: the company makes 4 stool for every chair it makes, in fraction that is, for every 5 items that the company makes, 4 are a stools (4/5) and 1 is a chair (1/5).
Now, let´s find our new BEP in units and dollars.
That means that the company has to make 690 products, which 138 are chairs and 552 are stools. This is represented in $34,500 in sales.
Best of luck.