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Margarita [4]
3 years ago
13

The controller of Crane Industries has collected the following monthly expense data for use in analyzing the cost behavior of ma

intenance costs. Month Total Maintenance Costs Total Machine Hours January $2,590 330 February 2,890 380 March 3,490 530 April 4,390 660 May 3,090 530 June 4,790 730 Determine the variable cost components using the high-low method.
Business
1 answer:
Vesna [10]3 years ago
3 0

Answer:

Variable cost per unit= $5.5 per unit

Explanation:

Giving the following information:

Month Total Maintenance Costs Total Machine Hours

January $2,590 330

February 2,890 380

March 3,490 530

April 4,390 660

May 3,090 530

June 4,790 730

To calculate the variable cost using the high-low method, we need to use the following formula:

Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)

Variable cost per unit= (4,790 - 2,590) / (730 - 330)= 2200/400= $5.5 per unit

You might be interested in
Universal Travel Inc borrowed $500,000 on November 1, 2018 and signed a twelve month note bearing interest at 6% Principal and i
horrorfan [7]

Answer:

Interest will be $5000

So option (A) will be correct option

Explanation:

We have given principal amount P = $500000

Rate of interest = 6 %

Time is November 1 to December 31

So time = 2 months = 0.1666 year

Interest is given by

Interest =\frac{principal\ amount\times rate\times time}{100}=\frac{500000\times 6\times 0.1666}{100}=$5000

So option (a) will be correct option

4 0
3 years ago
Brandtly Industries invests a large sum of money in R&D; as a result, it retains and reinvests all of its earnings. In other
Rama09 [41]

Answer:

a. What is the present value of the free cash flows projected during the next 4 years?

the NPV of the firm's cash flows = $3/1.09 + $6/1.09² + $8/1.09³ + $16/1.09⁴ = $2,752,294 + $5,050,080 + $6,177,468 + $11,334,803 = $25,314,645

b. What is the firm’s horizon, or continuing, value?

to calculate terminal or horizon value at year 4, we must use the Gordon growth model formula:

terminal value = [$16,000,000 (1 + 3%)] / (9% - 3%) = $16,480,000 / 6% = $274,666,667

c. What is the firm’s total value today?

firm's total present value = $25,314,645 + ($274,666,667/1.09⁴) = $219,895,463

d. What is an estimate of Brandtly’s price per share?

Brandtly's share price = (firm's present value - total debt) / outstanding stocks = ($219,895,463 - $75,000,000) / 7,500,000 million stocks = $19.32 per stock

7 0
3 years ago
Beginning inventory $ 34,000 Inventory purchases (on account) 164,000 Freight charges on purchases (paid in cash) 19,000 Invento
sukhopar [10]

Answer:

<u>Journal entries - Perpetual inventory system</u>

<em>Inventory purchases (on account) 164,000</em>

Inventory $ 164000(debit)

Trade Payables $ 164000 (credit)

<em>Freight charges on purchases (paid in cash) 19,000</em>

Freight Charges $ 19000 (debit)

Bank $19000 (credit)

*****Freight Charges forms part of cost of Inventory (IAS 2) therefore write off freight cost to Inventory Account****

Inventory $19000 (debit)

Freight Charges $ 19000 (credit)

<em>Inventory returned to suppliers (for credit) 21,000</em>

Trade Payable $ 21000 (debit)

Inventory $21000(credit)

<em>Sales (on account) 259,000</em>,

Trade Receivables $ 259000 (debit)

Revenue $259000(credit)

<em>Cost of inventory sold 157,000</em>

Cost of Sales $157000 (debit)

Inventory $157000 (credit)

<u>Journal entries - Periodic inventory system</u>

<em>Inventory purchases (on account) 164,000</em>

Inventory $ 164000(debit)

Trade Payables $ 164000 (credit)

<em>Freight charges on purchases (paid in cash) 19,000</em>

Freight Charges $ 19000 (debit)

Bank $19000 (credit)

*****Freight Charges forms part of cost of Inventory (IAS 2) therefore write off freight cost to Inventory Account****

Inventory $19000 (debit)

Freight Charges $ 19000 (credit)

<em>Inventory returned to suppliers (for credit) 21,000</em>

Trade Payable $ 21000 (debit)

Inventory $21000(credit)

<em>Sales (on account) 259,000</em>,

Trade Receivables $ 259000 (debit)

Revenue $259000(credit)

<em>Cost of inventory sold 157,000</em>

Cost of Sales $157000 (debit)

Inventory $157000 (credit)

Explanation:

<em>Inventory purchases (on account) 164,000</em>

Recognise an Asset - Inventory and a liability - Account payable

<em>Freight charges on purchases (paid in cash) 19,000</em>

Recognise an expense - Freight Charges and de-recognise asset - Bank

*****Freight Charges forms part of cost of Inventory (IAS 2) therefore write off freight cost to Inventory Account****

Derecognise expense- Freight and recognise an asset - Inventory

<em>Inventory returned to suppliers (for credit) 21,000</em>

De-recognise Asset - Inventory and De-recognise Liability - Account Payable

<em>Sales (on account) 259,000</em>,

Recognise Asset - Trade Receivable and Recognise Revenue

<em>Cost of inventory sold 157,000</em>

Recognise expense - Cost of Sale in Profit and Loss and De-recognise Asset- Inventory

6 0
3 years ago
Gerald received a one-third capital and profit (loss) interest in XYZ Limited Partnership (LP). In exchange for this interest, G
olchik [2.2K]

Answer:

The appropriate answer is "$9,300".

Explanation:

The given values are:

FMV,

= $31,000

Adjusted basis,

= $15,500

Encumbered mortgage,

= $9,300

Now,

The Gerald's outside basis will be:

= Adjusted \ basis-Encumbered \ mortgage+Share \ of \ mortgage

On substituting the given values, we get

= 15,500 - 9,300+(\frac{9,300}{3})

= 15,500 - 9,300 + 3,100

= 18,600-9,300

= 9,300 ($)

7 0
3 years ago
Logan purchased a rental home and lot for $150,000. Her expenses totaled $5,000. Lots in the area sell for approximately $10,000
lana [24]

Answer:

The correct response is "145,000 ".

Explanation:

The given values are:

Purchased cost,

= $150,000

Expenses,

= $5,000

Selling cost,

= $10,000

Now,

Logan's basis for depreciation will be:

= Purchased \ cost+Expenses-Selling \ cost

On putting the values, we get

= 150000+5000-10000

= 155000-10000

= 145,000 ($)

3 0
2 years ago
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