Answer:
Total production requirements for 3 months = 665720 units
Explanation:
The opening inventory in July should have been 200000 * 0.8 = 160000 units
However there is a shortage of 10000 units as opening inventory is 150000 units.
- July sales are expected to be 200000 units.
- August sales will be = 200000 * 105% = 210000 units
- September Sales will be = 210000 * 105% = 220500 units
- October Sales will be = 220500 * 105% = 231525 units
The production requirement is to produce enough to match this month's sale along with 80% of next months sale.
The production requirement for 3 months ending 30 september will be,
- July = (200000-150000) + 0.8 * 210000 = 218000 units
- August = 210000 * 0.2 + 220500 * 0.8 = 218400 units
- September = 220500 * 0.2 + 231525 * 0.8 = 229320 units
Total production requirements for 3 months = 218000 + 218400 + 229320 = 665720 units
Answer:
The WACC is 10.93%
Explanation:
The WACC or weighted average cost of capital is the cost to firm of its capital structure. The capital structure of the firm consists of debt, preferred stock and common stock. The WACC is calculated by taking the sum of the weighted average cost of each component of the capital structure.
WACC = wD * rD * (1-tax rate) + wP * rP + wE * rE
Where,
- w represents the weight of each component as a proportion of total assets
- r represents the cost of each component
- We take the after tax cost of debt. So, rD is multiplied by (1-tax rate)
WACC = 0.45 * 0.09 * (1-0.35) + 0.1 * 0.065 + 0.45 * 0.17
WACC = 0.109325 or 10.9325% rounded off to 10.93%
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Answer:
B. $600
Explanation:
The average cost method assigns a cost to inventory items based on the total cost of goods purchased (or produced) in a period divided by the total number of items purchased (or produced). Weighted Average Unit Cost is calculated by following formula:
Weighted Average Unit Cost = Total Cost of Inventory
/Total Units in Inventory
Total value purchased in July = $1,400+$220 = $1,620
Weighted Average Unit Cost = ($380+$1,620)/100 = $20
Ending inventory = 30 x $20 = $600
Noted: The company did not have date of selling merchandise. In the situation, assuming that the company uses periodic inventory system.