Answer:
The company should use the weighted average method of process costing.
Explanation:
FIFO and Weighted average cost method are the two methods of Process costing. The company is already using the FIFO method for accounting of inventory under which cost are misappropriated into closing WIP.
To solve such issue, the company can use the weighted average method under which cost is calculated by weighted average and then evenly distributed to the unit transferred to other department and the ending work in process.
Example: Suppose company purchased goods lying stock 20000 units at $5 each. Weighted average cost calculated per unit is $3 per unit. Calculate Closing work in process
==> FIFO = 20000*5 = $100,000
==> Weighted average cost = 20000 * 3 = $60,000
Answer:
$24 million
Explanation:
Initial investment outlay includes the cost of the new manufacturing equipment and the net operating working capital.
Initial investment outlay = cost of the new manufacturing equipment + net operating working capital.
$19 million + $5 million = $24 million
Answer:
the annual depreciation rate is 25%
Explanation:
The computation of the depreciation rate is shown below:
= Yearly depreciation ÷ (Purchased cost - salvage value)
= ($3,000 × 12 months) ÷ ($180,000 - $36,000)
= $36,000 ÷ $144,000
= 25%
Hence, the annual depreciation rate is 25%
we simply applied the above formula
Answer:
Pretty sure its a I am not sure however
Explanation:
Answer:
The investors should be willing to pay $49.50 for this stock
Explanation:
Hi, first, we need to find out what the cost of equity is in order to find the price of the stock. that is:
Where:
rf= Risk free rate
rm=return on the market
r(e)=cost of equity
After finding r(e), we would need to find the price using the following equation.
Where:
Do= last dividend
g= growth rate
r(e)= cost of equity.
ok, so, let´s find out what the cost of equity is.
So, the r(e)=15%, now let´s find the price of this stock
Therefore, the price of this stock is $49.50
Best of luck.
