A system of maintaining standards in manufactured products by testing a sample of the output against the specification.
Answer:
C) Net present value and internal rate of return
Explanation:
Of the methods discussed, cash payback and average rate pf return does not take into account the time value of money. Cash payback and ARR basically only use the cash flows and profits in relevance to the investment.
Net present value as the name suggests, discounts these cash flows and then subtracts the initial outlay costs and Internal rate of return also discounts the project cash flows so that they equal zero. Thus these two are the options that take into account the time value. IRR often is calculated by discounting cash flows at different rates until the NPV = 0.
Hope that helps.
Answer:
Option B The company made large investments in fixed assets.
Explanation:
The reason is that the reaminder of the options talk about the increase of the cash not a decrease in cash amount. If the company cuts dividend then it is retaining cash, if the company is raising finance then it is increasing cash or if the company is selling its division or assets then it is raising cash.
These things constitutes to increase in cash flow.
The decrease is cash occurs when the company invests (cash outflow). So the company is making cash outflows which means cash level will decrease.
Answer:
The annual financial disadvantage is $62,560
Explanation:
<u>Analysis of the Costs of Producing Internally and Buying from External Supplier.</u>
Producing Internally External Supplier
Direct materials $3.50 $0
Direct labor $8.10 $0
Variable manufacturing overhead $8.60 $0
Supervisor's salary $4.00 $0
Depreciation of special equipment $2.40 $0
Allocated general overhead $7.60 $7.60
Extra contribution $0 ($2.19)
Purchases Cost $0 $32.70
Product Cost $34.20 $38.11
<u>Conclusion :</u>
We can see that the Product Cost to produce the part internally costs $3.91 less than the cost to purchase from external supplier. Therefore Sewtfi861 Corp has a disadvantage.
Annual disadvantage = 16,000 units × $3.91
= $62,560
