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3 years ago

Merone Company allocates materials handling cost to the company's two products using the below data:

Business

1 answer:

meriva3 years ago

8 0

Answer:

Material handling cost allocated to Prefab Barns= $99,750

Explanation:

Activity-based costing is a form of absorption costing where overheads are charged to product using cost drivers.

Under this method, overheads are first analyzed and categorized by the activities responsible for them and then charged to product based on the amount of benefits enjoyed using cost drivers.

Activity rate per driver is calculated as:

Activity overhead for the period / Total cost drivers for the period

Using direct labour hours, the material handling cost can allocated as follows:

Total direct labour hours

(850 ×6500) +(9500×350) =8850000

Material handing cost allocated to Prefab =

(9500×350)/8850000 × $265,500 =$99750

Material handling cost allocated to Prefab Barns= $99,750

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Drake Manufacturing makes a variety of products, including lawn mowers. 's Lawn Mower Division can use a component, K32, manu

andrew-mc [135]

Answer:

b. $11, the variable cost.
d. $25, the market price.

Explanation:

1. The Electrical Division has excess capacity so supplying the Lawn Mower Division can be done and they will still be able to sell to outside customers. They should therefore only charge the variable cost to make component K32 which is $11 as they are in the same company.

2. The highest acceptable transfer price that the Lawn Mower division would pay is the market price of $25. At a price higher than this, it would make no sense to source the component from the Electrical division because the Lawn Mower division could simply source it from the market and save on costs.

8 0

3 years ago

A small town has 1,000 people, 600 of whom are healthy and 400 of whom are sick. The annual expected medical claims of the healt

Snowcat [4.5K]

Answer:

a. 3,900

Explanation:

We find the probability of healthy persons & the weak out of the total population in the town.

Probability of healthy persons

P(h) = 600/1000

P(h) = 0.6

Probability of weak persons

P(w) = 400/1000

P(w) = 0.4

We find the pay off for both the healthy and the weak, then add up to get the expected value or the minimal annual premium

Expected Value = 0.6*$500 + 0.4*$9000

Expected Value = $300 + $9000

Expected Value = $3,900

So, the annual premium must be at least $3,900.

6 0

3 years ago

The principal represents an amount of money deposited in a savings account subject to compound interest at the given rate. Princ

kap26 [50]

Answer:

After 4 years the amount of money in the account will be $10,704.8

The interest earned is $1,204.8

Explanation:

To calculate future value on a certain amount (principal), with compound interest, the formula below is used:

FV = PV × $(1+\frac{r}{n}) ^{n*t}$

where:

FV = Future value

PV = present value = principal = $9,500

r = interest rate in decimal = 3% = 0.03

n = compounding period per year = quarterly = 3 times per year

t = time in years = 4 years

∴ FV = 9,500 × $(1+\frac{3}{0.03}) ^{3*4}$

FV = 9,500 × $1.001^{12}$

FV = $10,704.8 (to 1 decimal place)

interest earned = future value - Present value

= 10,704.8 - 9,500 = $1,204.8

4 0

3 years ago

The Crash Davis Driving School has an ROE of 13.3 percent and a payout ratio of 32 percent. What is its sustainable growth rate?

Nikolay [14]

Answer:

sustainable growth rate for Crash Davis Driving School: 9.044%

Explanation:

$growth = ROE \times (1 - $dividends payout ratio)$

0.133 x (1-0.32) = 0.09044

The firm will grow as the amount that isn't paid as dividends increase the equity through retained earnings. Because both, common sense the acounting equaition if the earnings are retained they will be investment and assets will increase:

Assuming the company thakes no debt for the period then:

Assets = liab + equity

Assets = 0 + increase in RE

Assets = + increase in RE

Thus, this is the rate at which assets grows without taking new debt

7 0

3 years ago

For a risk averse person, a. the pleasure of winning $1,000 on a bet exceeds the pain of losing $1,000 on a bet. b. the pain of

kompoz [17]

Answer:

B. the pain of losing $1,000 on a bet exceeds the pleasure of winning $1,000 on a bet.

Explanation:

A risk averse person is an individual or person rather who prefers lower returns with known risk than higher returns with unknown or higher risks. In this case, the individual prioritizes preservation of capital at hand over the potential of a more than average return. In this scenario, for a risk averse individual, the pain of losing $1,000 on a bet exceeds the pleasure of winning $1,000 on a bet based on the high uncertainty attached to winning the $1000 bet.

8 0

3 years ago