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nalin [4]
3 years ago
12

Direct Materials Purchases Budget Pasadena Candle Inc. budgeted production of 785,000 candles for January. Wax is required to pr

oduce a candle. Assume 10 ounces of wax is required for each candle. The estimated January 1 wax inventory is 16,000 pounds. The desired January 31 wax inventory is 12,500 pounds. If candle wax costs $1.24 per pound, determine the direct materials purchases budget for January. (One pound
Business
1 answer:
icang [17]3 years ago
8 0

Answer:

$604,035

Explanation:

The computation of the direct materials purchases budget is shown below:-

Total Wax Required                                490,625 Pounds

(785,000 × 10 ÷ 16)

Add: Ending Inventory                              125,00 Pounds

Total Units Available                              503125 Pounds

Less: Beginning Inventory                         16,000 Pounds

Total Pounds to be Purchased                 487,125 Pounds

Unit Price                                              $1.24 per Pounds

Total Direct Materials Purchased              $604,035

(487,125 × $1.24)

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<h2>Cost of goods sold of Baxter's Company = 3,06,000</h2>

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3 years ago
The real risk-free rate is 3.05%, inflation is expected to be 3.60% this year, and the maturity risk premium is zero. Ignoring a
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Answer:

Ans. The equilibrium rate of return on a 1-year Treasury bond is 6.65% (please check the explanation)

Explanation:

Hi, well, this type of bonds exist so people can avoid the time value of money risk, in other words, to keep money save from inflation and provide a risk free return at the same time. From a part of the text I can tell that the person who wrote it wanted to add up the risk free rate and the inflation rate, that is 3.05%+3.60% =6.65%.

This is why I wrote this answer, but the truth is that since they are both effective rates (risk free rate and inflation), they need to be add as effective rates, that is:

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Answer:

WACC = 0.18 or 18%

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