Why is physical location critical for a distribution business

Computing second-year depreciation and accumulated depreciationAt the beginning of 2016, Air Asia purchased a used airplane at a

Bezzdna [24]

Answer:

1. a.$4,375,000

b. $7,500,000

c. $9,800,000

2. $8,750,000

$18,200,000

$17,500,000

Explanation:

1. The computation of the depreciation expense for the second year is presented below:

a) Straight-line method:

= (Purchase value of airplane - residual value) ÷ (useful life)

= ($40,000,000 - $5,000,000) ÷ (8 years)

= ($35,000,000) ÷ (8 years)

= $4,375,000

In this method, the depreciation is same for all the remaining useful life

(b) Double-declining balance method:

First we have to find the depreciation rate which is shown below:

= One ÷ useful life

= 1 ÷ 8

= 12.5%

Now the rate is double So, 25%

In year 1, the original cost is $40,000,000 so the depreciation is $10,000,000 after applying the 25% depreciation rate

And, in year 2, the $30,000,000 × 25% = $7,500,000

(c) Units-of-production method:

= (Purchase value of airplane - residual value) ÷ (estimated miles)

= ($40,000,000 - $5,000,000) ÷ ($5,000,000 miles)

= ($35,000,000) ÷ ($5,000,000 miles)

= $7 per miles

In first year, it would be

= Miles in first year × depreciation per miles

= 1,200,000 miles × $7

= $8,400,000

Now for the second year, it would be

= Miles in second year × depreciation per miles

= 1,400,000 miles × $7

= $9,800,000

2. The calculation of the accumulated depreciation balance would be

Straight line method:

= $4,375,000 + $4,375,000

= $8,750,000

Double-declining balance method:

= $10,000,000 + $7,500,000

= $17,500,000

Units-of-production method:

= $8,400,000 + $9,800,000

= $18,200,000

4 0

3 years ago

What is the total manufacturing overhead assigned to the current order for Men's Razors if the firm uses a volume-based plant wi

Brut [27]

Answer:

$7,200

Explanation:

The computation of the total manufacturing overhead assigned is shown below:

= ($168,640 + $127,840 + $554,400 + $1,078,000) ÷ $514,368

= 375% per direct-labor dollar.

Now

= $514,368 ÷ 8,037

= $64 per DL hour.

And,

= $64 × 30 direct labor hours

= $1920.

So,

Manufacturing overhead is

= 1920 × 375%

= $7,200

8 0

3 years ago

LMN Insurance Company is concerned about its exposure to hurricane losses for property risks it insured on the Gulf Coast. LMN b

ELEN [110]

Answer:

c) Catastrophe Bonds

Explanation:

These type of bonds are also known as the CAT bonds, and they are issued at any catastrophic event which is foreseen in the future. Basically these are insured linked securities that are used in the process of managing risks that are associated with the catastrophic events such as mentioned in the question i.e hurricane.

Any investor before investing in these bonds should fully understand what type of bonds are these because they posses a greater risk of low return and are very different from conventional bonds.

Hope this helps.

Thanks buddy.

3 0

3 years ago

4. Which of the following is an example of ethical behavior by an inspector?

Viktor [21]

C refusing to share information

3 0

4 years ago

Rajesh Indian Market (RIM) is open 12 months out of the year. At RIM, the demand for rice is very consistent 200 pounds per mont

Paladinen [302]

Answer:

A. 566 pounds

Explanation:

Given: Demand for rice is very consistent= 200 pounds per month.

Cost of rice per order= $50 per order.

Rice cost= $5 per pound.

Carrying charge= 15%

EOQ: Economic order quantity (EOQ) is the number of units that company should include in their inventory with each order to reduce cost of inventory.

Now, calculating EOQ.

Formula; EOQ= $\sqrt{\frac{2DP}{C} }$