Answer: $80 million per year for 25 years
Explanation:
The option you should choose is one that will guarantee you the highest present value.
This means that you need to discount the annual payment of $80 million per year for 25 years to find the present value. As you did not include a rate, we shall assume a rate of 8% for reference purposes.
The annual payment is an annuity so the present value can be calculated by:
Present value of annuity = Annuity payment * Present value interest factor, rate, no. of years
= 80,000,000 * Present value interest factor, 8%, 25 years
= 80,000,000 * 10.6748
= $853,984,000
<em>The present value of the annual payment is more than the present value of the $850 million received today so the Annual payment should be taken. </em>
Answer:
1. $6.50 per machine hour
2. $920
3. $ 17.69
4. $21.23
5. <u>Pricing methodology - Cost plus Mark -up</u>
- This ensures that the price charged covers all costs related to the product, which is good for maintaining profits.
- However the price does not consider the market demand and competition which might affect sales volumes
Explanation:
<u>Predetermined overhead rate</u>
Predetermined overhead rate = Budgeted Overheads / Budgeted Activity
= $650,000 / 100,000
= $6.50 per machine hour
<u>Total manufacturing cost assigned to Job 400</u>
Direct material $450
Direct labor cost $210
Overheads Applied ($6.50 × 40) $260
Total manufacturing cost $920
<u>Unit product cost for Job 400</u>
Unit product cost = Total Cost / Number of units completed
= $920 / 52 units
= $ 17.6923
= $ 17.69
<u>Selling price if Moody uses a markup percentage of 120%</u>
Selling price = Unit product cost × 120 %
= $ 17.69 × 120%
= $21.23
Answer:
Product 1 - $36
Product 2 - $ 96
Product 3 - $66
Explanation:
The accounting standard for Inventory under IFRS IAS 2 requires that inventory be recognized at cost which includes all the cost incurred to bring the item of inventory to a state or place where the item of inventory becomes available for sale.
These costs includes cost of purchase, freight, Insurance cost during transit etc.
Subsequently, inventory is to be carried at the lower of cost or net realizable value.
The NRV is the Selling price less the cost to sell.
Given
Product 1 Product 2 Product 3
Cost $36 $ 106 $ 66
Selling price $ 88 $ 168 $ 118
Costs to sell $ 9 $ 72 $ 26
NRV $ 79 $ 96 $ 92
Answer:
Explanation:
Debit cards typically pull funds from a checking account, while credit cards charge purchases using a line of credit. With a debit card, you're spending money from your own funds. Use a credit card and you're borrowing the money and eventually will have to pay it back to the card issuer, perhaps including interest.