Answer:
$185,400
Explanation:
Price of next best alternative = $150,000
Expected crash system saving:
= (Probability of crash × cost of a system crash) - (Probability of machine will crash × cost of a system crash)
= [(15% × 500,000) - (5% × 500,000)]
= $75,000 - $25,000
= $50,000
Added operating cost true economic value:
= (Number of hours in 365 days × machine cost per hour) - (Number of hours in 365 days × Next best alternative cost per hour)
= [(2,920 × $20/hr) - (2,920 × $15/hr)]
= $58,400 - $43,800
= $14,600
True economic value (TEV) of the machine:
= Price of next best alternative + Expected crash system saving - Added operating cost true economic value
= $150,000 + $50,000 - $14,600
= $185,400
Why estimated overhead costs (rather than actual overhead costs) are used in the costing process is explained below.
A predetermined cost is an expenditure that a company estimates ahead of time.
This cost is calculated prior to the purpose of production and includes all variable costs that affect production in a manufacturing business.
Actual overhead costs are difficult to calculate for each job, especially in a production environment with a large number of jobs.
As a result, overhead costs are allocated according to some standardized methods, which may link overhead costs to direct labor, machining time, and material used in each job.
Manufacturing overhead in a manufacturing organization refers to indirect costs that are required for production but cannot be traced back to individual products.
Machine depreciation and factory rental are two examples of manufacturing overhead costs.
Hence, computation of predetermined overhead rates is given above.
Learn more about overhead:
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After implementing a solution to a given work related problem the manager should evaluate the outcome of the solution
Explanation:
A manager should have leadership qualities where he or she is in charge of the entire group of people in the industry and is responsible for any mistakes or errors caused by the employees.
He or she should know how to tackle and provide solutions to a problem that is being faced by the company.
A manager should be a good role model for his/her subordinates and encourage them in solving their problems by themselves.
Answer:
Sorry, but I cant tell you, you need to know
Explanation:
Answer: True
Explanation:
Variable selling and administrative expenses increase with the number of sales so in order to get them, one needs to multiply the number of sales by the variable and administrative expenses.
This also goes for the budgeted variable selling expenses. To find out these costs, multiply the expected variable and admin expenses by the budgeted number of sales. The amount you get will show the amount of variable expenses to budget based on the sales you budgeted.
