Answer:
a. Total revenue from the 3 products:
= $75,000 + $80,000 + $30,000
= $185,000
Total costs at the split-off point:
= $45,000 + $55,000 + $60,000
= $160,000
Gross profit currently being earned
= Total revenue - Total costs
= $185,000 - $160,000
= $25,000
b. Incremental revenue from product A:
= $116,000 - $75,000
= $41,000
Incremental costs = Rent for special equipment + Materials and labor cost
= $17,500 + $12,650
= $30,150
Incremental gross margin = Incremental revenue - Incremental costs
= $41,000 - $30,150
= $10,850
So, if product A is further processed, quarterly profits will increase by $10,850.
Answer:
$134,300
Explanation:
The computation of total manufacturing overhead is shown below:-
Variable manufacturing overhead = Variable manufacturing overhead cost per unit × Units produced
= $1.60 × 8,000
= $12,800
Total Manufacturing overhead = Variable manufacturing overhead + Fixed manufacturing overhead
= $12,800 + $121,500
= $134,300
So, for computing the total manufacturing overhead we simply applied the above formula.
Answer:
$7,000 gift will be worth $19,922 after 17 years ( or 68 quarters) given the discount rate is 6.2% compounded quarterly.
Explanation:
The worth of $7,000 nowadays after 17 years is equal to its future value compounded for the time of 17 years or 68 quarters.
As the discounted rate is 6.2% compounded quarterly, we have:
Compounding period = 17 x 4 = 68; Interest rate = 6.2%/4 = 1.55%.
Apply the formula for future value to determine the value of $7,000 in 17 years as: 7,000 x (1+1.55%) ^68 = $19,922.
Thus, the answer is $19,922.
It makes production more efficient
Answer:
D) budgets are a total amount and standards are a unit amount.
Explanation:
For each given choice in the question explanation is provided below as to why its or its not the correct answer.
A) only budgets contribute to management planning and control.
Both budgets and standards contribute in the planning and control are of the company. Therefore, this option is incorrect.
B) budgets but not standards may be used in valuing inventories.
Once gain both are used for valuing inventory, this is due to the fact that budget contains details gathered in standard costing. Therefore, this option is incorrect.
C) budgets but not standards may be journalized and posted.
Both the budget and standard are journalized and posted in the accounting system. Therefore, this option is incorrect.
D) budgets are a total amount and standards are a unit amount.
As standards are unit amounts which contributes in preparing the budget which are total amounts.
Hence, option D is correct.
