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3 years ago

Lawrence Company applies manufacturing overhead to jobs based on machine hours used.

Business

1 answer:

NikAS [45]3 years ago

3 0

Answer:

Under/over applied overhead= $10,000 underallocated

Explanation:

Giving the following information:

Overhead costs are estimated to be $300,000.

The estimated machine hours are 125,000 hours.

During the year, actual overhead costs totaled $322,0000 and it incurred 130,000 machine hours.

First, we need to calculate the estimated manufacturing overhead rate:

Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Estimated manufacturing overhead rate= 300,000/125,000= $2.4 per machine hour

Now, we can allocate overhead

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Allocated MOH= 2.4*130,000= $312,000

Finally, we determine the under/over allocation:

Under/over applied overhead= real overhead - allocated overhead

Under/over applied overhead= 322,000 - 312,000= $10,000 underallocated

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Answer:

c. 2.00.

Explanation:

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The cost of material H is

= 360 × $2.50

= $900

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Hence, the correct option is c.

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2 years ago

Orchard Farms has a pretax cost of debt of 7.29 percent and a cost of equity of 16.3 percent. The firm uses the subjective appro

svp [43]

Answer: Net present value = $446,556

Explanation:

First we'll compute the Weighted Average Cost of Capital :

Weighted Average Cost of Capital = $K_{e} \times W_{e} + K_{d} \times W_{d}$

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= 0.1255

where;

$K_{e}$ = Cost of equity

$W_{e}$ = Proportion of equity

$K_{d}$ = Cost of debt

$W_{d}$ = Proportion of debt

Now, we'll compute the cost of capital using the following formula:

Cost of capital = Weighted Average Cost of Capital + adjustment factor

= 0.1255 + 0.0125

= 0.138 or 13.8%

∴ Net present value = Cash outflows - Total PV of cash flows

= $3,900,000 - $1,260,000 (Annuity value of 13.8% for 5 years)

$= 3,900,000 - 1260000 \times \frac{[1-(1+13.8)^{-5}]}{13.8}$

= $3,900,000 - $3,453,444

= $446,556

Therefore, the correct answer is option(b).

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3 years ago

What is the purpose of reporting comprehensive income?A. To provide a consolidation of the income of the firm's segments.B. To r

jek_recluse [69]

Answer:

Option D

Explanation:

Comprehensive earnings reporting is intended to provide a summary of all adjustments in a corporation's equity arising from acknowledged exchanges as well as other time commercial activities other than dealings with holders in their capacities as shareholders.

If included with the fiscal reports with associated reports and other details, the details generated by disclosing detailed income will assist stakeholders, lenders as well as others in determining the operations of a business, and the duration and extent of potential cash streams of a business.

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3 years ago

Research suggests that wholly owned subsidiaries and expatriate staff are inappropriate for service industries because those ind

Furkat [3]

Answer:

The answer is True

Explanation:

Service industries would prefer not to hire an expatriate because they require close contact with customers, high levels of professional skills, specialized know-how, and customization.

They avoid expatriates because the new responsibilities, different culture and daily stress may lead to problems coping with their new position and location.

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3 years ago

Read 2 more answers

You rent a car for $29.95. The first 150 miles are free, but each mile thereafter costs 15 cents. You drive it 200 miles. What i

ohaa [14]

Answer:

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Explanation:

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200 miles you drove- 150 miles free= 50 miles you have to pay for

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1 year ago