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ICE Princess25 [194]
3 years ago
14

Exercise 04-4 Computing overhead rates under ABC LO P3 Xie Company identified the following activities, costs, and activity driv

ers for this year. The company manufactures two types of go-karts: Deluxe and Basic. Activity Expected Costs Expected Activity Handling materials $ 625,000 100,000 parts Inspecting product 900,000 1,500 batches Processing purchase orders 105,000 700 orders Paying suppliers 175,000 500 invoices Insuring the factory 300,000 40,000 square feet Designing packaging 75,000 2 models Required: Compute the activity rate for each activity, assuming the company uses activity-based costing. (Round activity rate answers to 2 decimal places.)
Business
1 answer:
IRISSAK [1]3 years ago
7 0

Answer and Explanation:

The computation of the activity rate for each activity is shown below:-

                      a                         b                             c   = a ÷ b

Particulars Expected Cost     Activity driver          Activity rate

Handling

material     $625,000              100,000                 $6.25 per part

Inspecting

product     $900,000                1,500                      $600 per batch

Processing

orders        $105,000                   700                        $150 per order

Paying

Supplies    $175,000                    500                       $350 per invoice

Insuring

factory       $300,000                   40,000                   $7.50 per sqft

Designing

packaging  $75,000                        2                         $37,500 per model

Total           $2,180,000

We simply divide the expected cost by the activity driver in order to find out the activity rate

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In order to encourage employee ownership of the company’s $1 par common shares, Washington Distribution permits any of its emplo
Shtirlitz [24]

Answer

The answer and procedures of the exercise are attached in the following archives.

Step-by-step explanation:

You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.  

6 0
4 years ago
Under a $150,000 insurance policy on her deceased father's life, May Green is to receive $12,000 per year for 15 years. Of the $
iVinArrow [24]

Answer:

$0

Explanation:

As we know that the life insurance proceeds would be recieved by the beneficary on the insured person death is tax free

Since the amount of $12,000 would be received by May Green on her insured father so this amount would be tax free

Therefore the amount that subjected to income tax is $0

3 0
3 years ago
Metropolitan Water Utility is planning to upgrade its SCADA system for controlling well pumps,booster pumps, and disinfection eq
Licemer1 [7]

Answer:

net wortht  -143,280.85

equivalent annual cost $ 24,932.98

Explanation:

We sovle for the present value of each annuity:

<em><u>The first three years:</u></em>

C \times \frac{1-(1+r)^{-time} }{rate} = PV\\

C 31,000.00

time 3

rate 0.08

31000 \times \frac{1-(1+0.08)^{-3} }{0.08} = PV\\

PV $79,890.0066

<em><u>Then the second phase annuity:</u></em>

C \times \frac{1-(1+r)^{-time} }{rate} = PV\\

C 20,000.00

time 5

rate 0.08

20000 \times \frac{1-(1+0.08)^{-5} }{0.08} = PV\\

PV $79,854.2007

NOw, we discount this as it is three years into the future

\frac{Maturity}{(1 + rate)^{time} } = PV  

Maturity  $79,854.2007

time  3.00

rate  0.08000

\frac{79854.2007415617}{(1 + 0.08)^{3} } = PV  

PV   63,390.8391

Total net worth:

79,890.0066    -   63,390.8391    =   -143,280.85

The EAC will be the annuity which makes the Present work

PV \div \frac{1-(1+r)^{-time} }{rate} = C\\

PV 143,280.85

rate 0.08

time 8

143280.85 \div \frac{1-(1+0.08)^{-8} }{0.08} = C\\

C  $ 24,932.983

7 0
3 years ago
Under what type of compensation plan is the agent responsible for the costs of advertising and promotion?
Oksana_A [137]

Answer:

100% plan

Explanation:

The 100% plan is when the agent doesn't have a base salary and the job pay depends completely on the comission for selling products. This compensation plan provides a big earning potential and the agent is an independent contractor and would have to cover costs of advertising and promotions. Because of that, the answer is that the type of compensation plan in which the agent is responsible for the costs of advertising and promotion is the 100% plan because the agent is not considered an employee and only receives the comission and has to cover the costs associated with advertising and promotion.

5 0
3 years ago
Your company currently has par, coupon bonds with 10 years to maturity and a price of . If you want to issue new 10-year coupon
vovangra [49]

Answer:

I looked for the missing numbers and found the following question:

Your company currently has $1,000 ​par, 6.5% coupon bonds with 10 years to maturity and a price of $1,078. If you want to issue new​ 10-year coupon bonds at​ par, what coupon rate do you need to​set? Assume that for both​ bonds, the next coupon payment is due in exactly six months.

We need to calculate the yield to maturity (YTM) of the current bonds. Since the bonds pay interests every 6 months, then the coupon = $32.50

YTM = {coupon + [(face value - market value)/n]}/[(face value + market value)/2]

YTM = {32.5 + [(1,000 - 1,078)/20]}/[(1,000 + 1,078)/2]

YTM = 28.6 / 1,039 = 0.275 x 2 = 5.5053% ≈ 5.51%

In order to sell the new bonds at par, the coupon rate must be 5.51%

3 0
3 years ago
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