Answer:D.None of the option is correct, the correct answer is Buy; savings=$203,000
Explanation:
The firm will Incurred the total fixed overhead it decides to make.
The total cost of making 6000 units is $163*6000=$978,000
The total cost of buying is $144*6000= $864,000 and when we deduct $89,000 to be saved from fixed overhead by buying we have a total cost of( $864,000-$89,00) =775,000.
This invariably means the company will save ($978,000-$775,000) which is equal to= $203,000 by buying.
Answer:
The answer is Balance sheet accounts are overstated and income statement accounts are understated.
Explanation:
Answer:
$20.38 buy
Explanation:
The computation of present value is shown below:-
Fair Value according to Gordon Model = Expected Div ÷ (Required Return - Growth rate)
= $1.63 ÷ (10.5% - 2.5%)
= $1.63 ÷ 8%
= $20.38
Fair Price = $ 20.38 and Actual Price = $18.00
As Fair Price is greater than the Actual Price so, the stock is under priced. Therefore advice to buy.
Answer:
PEZ Candy Inc.
1. PEZ Candy Inc. would be more likely to use process costing for the manufacture of its PEZ candies.
The reason is that the manufacturing of candies involves continuous processing of materials that results into candies. The processes are not customizable for separate orders.
2. PEZ Candy Inc. would incur these types of costs in the manufacture of its PEZ candies:
a. Direct material = sugar
b. Direct labor = wages of factory workers
c. Manufacturing overhead = utilities expenses
i. indirect materials = cleaning supplies
ii. indirect labor = factory supervisor's salary
iii. other manufacturing overhead = depreciation expense of factory equipment
3. PEZ Candy Inc. would be more likely to use job costing to calculate the cost of one particular birthday party hosted at the PEZ Visitor Center. The reason is that it is a specific event. It does not involve a continuous process.
Explanation:
a) Data and Calculations:
Materials for PEZ candy include:
Direct materials:
Sugar (95%)
Fruit flavoring
Coloring
Corn syrup
Product = PEZ candies
Services: customized birthday parties
