Brief Exercise 5-58 Sales Discounts (Appendix 5A) Harry Gardner provides tax services for small businesses. This year's tax seas
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Answer: Josh's bonus is $35,289.53.
In the question above, we need to look at the net savings that will occur from selling drinks instead of giving them as complimentary drinks. So we have,
Net Savings per year = $11.04 million
The company's MARR = 15%
Josh's bonus is 0.14% of the present value of three years' net savings.
Since the quantum of savings is constant each year, we can calculate the present value of these savings by using the Present Value of annuity formula.
PVA = Present value of three years' net savings = 25.20680529 million
Josh's bonus : 0.14% of present value of three years' net savings.
Josh's Bonus = $0.035289527 million or $35,289.53.
Answer:
- The predetermined overhead rate is calculated by dividing total estimated overhead costs by total estimated direct labor hours = $61,500 / 4,100 labor hours = $15 per direct labor hours
- total overhead rate for job 102 = 72 direct labor hours x $15 per direct labor hours = $1,080
- total overhead rate for job 101 = 155 direct labor hours x $15 per direct labor hours = $2,325.
