Acton Corporation, which applies manufacturing overhead on the basis of machine-hours, has provided the following data for its m
1 answer:
Answer:
option (b) $69,768
Explanation:
Data provided in question:
Estimated manufacturing overhead = $73,440
Estimated machine-hours = 1,800
Actual manufacturing overhead = $68,700
Actual machine-hours = 1,710
now,
The predetermined overhead rate =
or
The predetermined overhead rate =
or
The predetermined overhead rate = $40.8 per hour
Therefore,
The applied manufacturing overhead for the year
= Actual machine-hours × predetermined overhead rate
= 1,710 × $40.8
= $69,768
Hence,
the correct answer is option (b) $69,768
You might be interested in
Answer:
NPV of Plan A: $15,669,953.
NPV of Plan B: $18.260,647.
For the Plan A, the IRR is r=0.15.
For the Plan B, the IRR is r=0.32.
Explanation:
We have two expansion plans:
Plan A:
- Expenditure: -$56 million
- Cash flow: $9 million/year
- Duration: 20 years
Plan B:
- Expenditure: -$12 million
- Cash flow: $3.8 million/year
- Duration: 20 years
The NPV of plan A can be expressed as:
NPV of Plan A: $15,669,953.
The NPV of plan B can be expressed as:
NPV of Plan B: $18.260,647.
To calculate the IRR, we have to clear the discount rate for NPV=0. We can not solve this analitically, but we can do it by iteration (guessing) or by graphing different NPV, with the discount rate as the independent variable.
For the Plan A, the IRR is r=0.15.
For the Plan B, the IRR is r=0.32.
