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PilotLPTM [1.2K]
3 years ago
10

Cobe Company has already manufactured 28,000 units of Product A at a cost of $28 per unit. The 28,000 units can be sold at this

stage for $700,000. Alternatively, the units can be further processed at a $420,000 total additional cost and be converted into 5,600 units of Product B and 11,200 units of Product C per unit selling price for Product B is $105 and for Product C is $70.
Prepare an analysis that shows whether the 28,000 units of Product A should be processed further or not.

Sell as is Process Further
sales
Relevant Cost
Total relevant cost
Income (loss)
Incremental net income or loss
The company should
Business
1 answer:
Salsk061 [2.6K]3 years ago
7 0

Answer:

                       Cobe Company

                       Analysis statement

sell as pocess further

<u>Sales:</u>

      product B (5,600*$105)                          $588,000

      product C ( 11,200*$70)                        <u>    784,000</u>

                                                                        1,372,000

<u>Relevant Cost :</u>

manufacturing cost (28,000*28)  784,000

Additional cost                              <u>420,000     1,204,000</u>

Income                                                                 <u>168,000</u>

<em>The incremental net income is $168,000.</em>

<em>Therefore, the company should process further before selling the product</em>

Explanation:

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Answer:

Depreciation expense for 2018 is $6,300.

Depreciation expense for 2019 is $7,700.

Explanation:

The unit-of-production method also known as units-of-activity method is used when the asset value closely relates to the units of output it is able to produce. It is expressed with the formula below:

(Original Cost - Salvage value) / Estimated production capacity x Units/year

At Year 2018, depreciation expense (DE) is: ($45,000 - $10,000) / 100,000 miles x  18,000 miles = $6,300/year

At Year 2019, depreciation expense (DE) is: ($45,000 - $10,000) / 100,000 miles x  22,000 miles = $7,700/year

Accumulated depreciation for 2 years is $6,300 + $7,700 = $14,000.

Note that this depreciation method results in higher depreciation charge when the asset is heavily used, at this time, it was in Year 2019.

The NBV under this method is: $45,000 - $14,000 = $31,000.

7 0
3 years ago
On May 25, after the transactions had been posted, Adams discovered that the following entry contains an error. The cash receive
vampirchik [111]

Answer:

With the correcting entry method, the wrongly posted account will transfer the amount that was to be posted elsewhere to the place it was to be posted in. In this case the posting was to be to Accounts Receivable not Service fees so:

Date                   Account Title                                     Debit                  Credit

May 23              Service Fees                                   $1,270

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3 0
2 years ago
The Carlton Corporation has $5 million in earnings after taxes and 2 million shares outstanding. The stock trades at a P/E of 10
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Answer:

a. Compute the current price of the stock.

P/E ratio = 10

EPS = $5,000,000 / 2,000,000 stocks = $2.50 per stock

price = $2.50 x 10 = $25

b. If the $5 million is used to pay dividends, how much will dividends per share be?

$2.50, same as EPS

c. If the $5 million is used to repurchase shares in the market at a price of $30 per share, how many shares will be acquired?

$5,000,000 / $30 = 166,666.7 ≈ 166,667 stocks

d. What will the new earnings per share be?

outstanding stocks = 2,000,000 - 166,667 = 1,833,333

EPS = $5,000,000 / 1,833,333 = $2.73

e-1. If the P/E ratio remains constant, what will the price of the securities be?

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e-2. By how much, in terms of dollars, did the repurchase increase the stock price?

$27.30 - $25 = $2.30

f. Has the stockholders' total wealth changed as a result of the stock repurchase as opposed to receiving the cash dividend?

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4 0
3 years ago
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nata0808 [166]

Answer:

find all answers in the explanation below

Explanation:

Patent Registration: This can be defined as the registration of the protection an invention to ensure that no one can make a copy of the said invention elsewhere. A patent registration is usually done after obtaining a patent right. A patent is the protection of an invention or idea to ensure that it is not produced or sold, etc by another individual. Patents are usually issued by the Patent and Trademark Office

Design Registration: This is the registration of a design such that it cannot be used elsewhere by another person. The registration of a design helps to protect the external look of an invention or product to ensure it is unusable anywhere else.

Non disclosure agreement: This is a legal contract that exists between two parties in which confidential messages, information, etc exchanged between them cannot be revealed to a third party. A non disclosure agreement is also called a confidential agreement or secrecy agreement or confidential disclosure agreement, etc among other names.

Trademark Registration: This can be defined as the registration of the protection of a company's mode of identity with its customers. Trademarks range from signs to symbols, to words, etc.

Cheers.  

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3 years ago
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