Answer:
c.$37,737
Explanation:
Present value of Cost of Buying = The Cost of Press + [(Post Tax annual maintenance expenses - Annual Depreciation Tax shield)*PVIFA (6%,10)] - [Post tax Salvage Value*PVIF (12%,10)]
PV of Cost of Buying = 360000 + (3000*(1-40%)-360000/10*40%)*7.360 - 25000*(1-40%) * 0.322
PV of Cost of Buying = $262,434
Present value of Cost of Leasing = Post tax Lease Payment at the Beginning *(1+PVIFA(6%,9))
PV of Cost of Leasing = $48000*(1-40%)*(1+6.802)
PV of Cost of Leasing = $224,697
Net advantage to leasing = PV of Cost of Buying - PV of Cost of Leasing
Net advantage to leasing = $262,434 - $224,697
Net advantage to leasing = $37,737
Answer: 73days
Explanation:
$1,307 interest on $45,000 at 4.0%
Time used in paying back the loan is calculated thus:
Principal is $45,000
Interest is 4.0%
Tenor is x
Using the Simple Interest formula
I= P x T x R/100
1,307 = 45,000 x T x 0.04/100
1,307= 1,800T/100
1,800T = 1,307 x 100
1,800T = 130,700
T = 130,700/1,800
= 72.6
= 73days
Answer:
Item 1
Property taxes on the factory building = Manufacturing Overhead
Item 2
Production superintendents’ salaries = Manufacturing Overhead
Item 3
Memory boards and chips used in assembling computers = Direct Materials
Item 4
Depreciation on the factory equipment = Manufacturing Overhead
Item 5
Salaries for assembly-line quality control inspectors = Manufacturing Overhead
Item 6
Sales commissions paid to sell laptop computers = Period Costs
Item 7
Electrical components used in assembling computers = Direct Materials
Item 8
Wages of workers assembling laptop computers = Direct Labor
Item 9
Soldering materials used on factory assembly lines = Manufacturing Overhead
Item 10
Salaries for the night security guards for the factory building = Manufacturing Overhead
Explanation:
Direct Materials and Direct Labor are direct Product Costs. They can be easily traced on to the Product being manufactured - laptop computers. These include Memory boards and chips and Wages of workers assembling laptop computers.
Manufacturing Overhead can not be easily traced to the Product being manufactured. They do need to be allocated to the Products being manufactured through cost drivers. These include Soldering materials used on factory assembly lines and Production superintendents’ salaries.
Period Costs are Non - Manufacturing Costs. They are Expensed in the Income Statement in the period in which they are incurred and are not included in Product Cost. These include Sales commissions paid to sell laptop computers.
Answer:
7,000 units
Explanation:
The units which were transferred to the Finished goods inventory during the month of February is computed as:
Units transferred to Finished goods inventory = Started units during February + Started the month with units in process - Ended the month with units in process
where
Started units during February is 6,700
Started the month with units in process is 890
Ended the month with units in process is 590
Putting the values above:
Units transferred to Finished goods inventory = 6,700 + 890 - 590
Units transferred to Finished goods inventory = 7,590 - 590
Units transferred to Finished goods inventory = 7,000
The preparation of the income statement is as follows:
<u>Income statement</u>
Service revenue $9,300
Less:
Salaries expense $2,200
Utilities expense $1,200
Total expenses -$3,400
Net income $5,900
Therefore we can conclude that the net income is $5,900.
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