Oscar's fixed costs of production is $3,000
Answer:
Calendar belongs to B category
Explanation:
The computation of ABC class that Calendars belong is shown below:-
Items Annual demand Unit cost Total cost Category
Watches 1,020 $65 $66,300 A
Caps 700 $8.5 $5,950 A
Calendars 650 $9 $5,850 B
Scented
candles 700 $5 $3,500 B
Key chain 967 $2.5 $2,417.5 C
Greeting
cards 1,000 $1.5 $1,500 C
Here, for computing the total we simply multiply the annual demand with unit cost of each items. Also we have categorized the A, B and C into values which means A has highest value, B is lower than A and C has the lowest value in compare of A and B.
Therefore, as per the requirement the Calendar belongs to B category.
Answer:
Present value = $62311.05
Explanation:
to calculate the Pv using a financial calculator
pmt = $5000, interest 5%, n= 20, FV=0
PV= $62311.05
OR USING FORMULA
PV = C *[1-1/(1+r)^t]/1
Answer: No
Explanation: Unless it is invested in short-term securities, there will be no interest income for cash in any financial statement.
Answer:
The answer is B
Explanation:
In Miller's decision-making process, he needs to recognize the costs and benefits that he will get from replacing the existing the current machinery with the new one and ignore all the cost that had happened (sunk cost) because has already incurred even if Miller chooses to replace or not to replace the current machine. In this case, it is the cost incurred to upgrade the current machine.
For option A, salvage value of the new machinery should be considered as it helps Miller estimates how much money he is going to recover after the machinery's useful life.
For C, salvage value of the current machinery should be considered as it helps Miller estimates how much he will get from selling this current machine as he disposes them to replace with the new one.
For D, Miller will need to know those the replacement result in any cost saving or cost increasing in the future which is part of the benefit or the cost of replacement.