Answer:
10.0 years
Explanation:
The computation of the payback period is shown below
We know that
Payback period = initial cost ÷ increase in net income
= $30,000 ÷ $3,000
= 10 years
As the depreciation expense is a non-cash expense so we dont considered it
Therefore the first option is correct
Answer:
$270,000
Explanation:
Calculation for the amount of Machining cost assigned to Product A
Using this formula
Machine cost=Machine hours*Activity rate
Let plug in the formula
Machine cost=1,800*$150
Machine cost =$270,000
Therefore the amount of Machining cost assigned to Product A will be $270,000
Answer:
Explanation:
When the Peso depreciates by 30%, the firm can save money on the costs of production as the inputs would be less costly but the market for the firm in Mexico would be affected negatively as the depreciation of the peso would mean that now, the consumer can buy more goods with the same amount of money which will increase the demand. The loans that the subsidiary has taken would also be affected as it has to pay more for the collateral.
If the company reduces the inventory and stock the foreign receivables before the depreciation occurs to minimize the loss. Before the depreciation happens, the firm can convert the pesos denomination to the dollar so that its value doesn't fall.
Answer:
D. $96,000
Explanation:
We will allocate the cost on maintenance by first stablishing a rate per maintenence hour:
As this is direct method we aren''t doing an allocation to other service department we directly allocate against production department A and B
total hours: 480 + 320 = 800
160,000 total cost /800 hours = 200 per hour
Department B hours: 480
allocate to department B: 480 x 200 = 96,000
