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ANEK [815]
3 years ago
11

Sloan Corporation is considering new equipment. The equipment can be purchased from an overseas supplier for $3,040. The freight

and installation costs for the equipment are $610. If purchased, annual repairs and maintenance are estimated to be $420 per year over the four-year useful life of the equipment. Alternatively, Sloan can lease the equipment from a domestic supplier for $1,460 per year for four years, with no additional costs. Prepare a differential analysis dated December 3, to determine whether Sloan should lease (Alternative 1) or purchase (Alternative 2) the machine. (Hint: This is a "lease or buy" decision, which must be analyzed from the perspective of the machine user, as opposed to the machine owner.) If an amount is zero, enter "0". Use a minus sign to indicate a loss.
Business
1 answer:
Viktor [21]3 years ago
5 0

Answer:

Sloan Corporation

Differential Analysis:

Cost of Alternative 1 (Lease) - $1,460.00

Cost of Alternative 2 (Buy) = $1,332.50

Choose Alternative 2, purchase the equipment, and there will be a cost saving of $127.50 per year.

Explanation:

Buy Decision:

Cost of purchase = $3,040

Freight-in                      610

Total cost               $3,650

Annual equipment cost =     $912.50

Annual Repair cost =              420.00

Total annual cost to buy = $1,332.50

Cost of Lease per year = $1,460

Sloan Corporation's differential analysis of the lease or buy decision shows that it would be more profitable to purchase the equipment than to lease.  With a purchase decision, the cost savings will be $127.50 per year.  By undertaking this differential analysis, Sloan Corporation is able to determine the alternative that will serve its best interest, especially in terms of cost.

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Nielson Corp. sells its product for $6,600 per unit. Variable costs per unit are: manufacturing, $3,600, and selling and adminis
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Answer:

B) $8,400

Explanation:

Absorption costing consider all the cost incurred in production either variable or fixed as production cost.

As we know variable cost vary with the change in the sale but the fixed costs remains constant whatever the level of sale is.

As per given data

Selling price = $6,600

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Manufacturing Fixed Cost = $18,000

Total cost per unit = $3,600 + $18,000/20 = $4,500

Sales = Selling price x Numbers of units sold = $6,600 x 16 = $105,600

Cost of goods sold = Units sold x Cost per unit = 16 units x $4,500 = $72,000

Gross income = Sales - Cost of Goods sold = $105,600 - $72,000 = $33,600

Selling and Admin Cost = Variable cost + Fixed = (16 x $75) + $24,000 = $25,200

Net Income = Gross Income - Selling and Admin cost = $33,600 - $25,200 = $8,400

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3 years ago
If the ending inventory in the previous period was understated $17,000 and the ending inventory in the current period was overst
kotegsom [21]

Answer:

In the current period,

b. Cost of goods sold

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With the current period's beginning inventory (or previous period's ending inventory) understated by $17,000 and the overstatement of the current period's ending inventory by $27,000, it implies that the Cost of goods sold is understated by $10,000.  Once this cost is understated, the net income will be overstated, as well as the owner's equity (via the retained earnings).

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Porter Company uses standard costs for its manufacturing division. Standards specify 0.1 direct labor hours per unit of product.
kkurt [141]

Answer:

1,370.85 Unfavorable

Explanation:

Standard rate :

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= Budgeted direct labor hours  ÷ Production volume

= 640 ÷ 6,400

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= ( SH − AH ) × SR

where,

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SR is the standard variable overhead rate

(SH − AH ) × SR

= [(4,200 × 0.10) - 485] × $21.09

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What determines the amount of tax revenue generated from oil and natural gas produced in Texas?
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