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2 years ago

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A company requisitioned $40,000 in direct materials and $30,000 in indirect materials from the storeroom to be used in productio

n. The journal entry to record this transaction debits ______.

1 answer:

UNO [17]2 years ago

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570,000. The firm will raise the $570,000 in capital by issuing $230,000 of debt at a before-tax cost of 11.1%, $20,000 of prefe

exis [7]

Answer:

WACC = 12.040%

Explanation:

WACC represents weighted average cost of all sources of financing. In the question there are three sources of finance 1) Equity 2) Preferred Stock 3) Debt.

1) Equity: The firm intends to raise $ 320,000 from equity out of total financing of $ 570,000 e.g. 56% of total financing comes from Equity. Thus multiplying the cost of equity 14.7% (given) with ratio of equity financing, we get to weighted average cost of equity of 8.253%.

2) Debt: The firm is raising $ 230,000 from debt e.g. 40% of total financing. The proportion of debt is multiplied by post tax cost of debt as the interest expense is deductible expense for tax purposes in most of the jurisdiction. Therefore we reduce the cost of debt with element of (1 - tax rate), thus we get to 8.325% = 11.1 (1 - 25%) as total cost of debt. In order to get weighted average cost of debt we multiply this post tax cost of debt with ratio of debt financing 40%, thus weighted average cost of debt is 8.325 * 40% = 3.359%

3) Preferred Stock: The firm is also raising finance from preferred stock having cost of 12.2%. Proportion of financing from preferred stock is 4% in total mix of financing, thus weighted average cost of preferred stock is 12.2% * 4% = 0.428%.

Now adding weighted average cost of all three sources of funding, we get WACC: 8.253% + 3.359% + 0.428% = 12.040%

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2 years ago

The costs and revenues associated with two alternatives are listed below:

Fudgin [204]

Answer:

The correct option is A,alternative 2 because it has a higher profit

Explanation:

The profit analysis of both alternatives is done below:

Alternative 1 Alternative 2

Projected revenue $100,000 $125,000

Costs:

unit level costs $20,000 $30,000

Batch-level costs $20,000 $25,000

Product-level costs $15,000 $15,000

facility-level costs $10,000 $10,000

total costs $65,000 $80,000

Profit(revenue-total costs) $35,000 $45,000

The correct answer is option A,as option 2 has a higher profit of $45,000 compared to alternative 1 of $35,000

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2 years ago

The rapid spread of brand communities has been one of the major impacts of social media. the harley davidson owners group is one

Bingel [31]

<span>These brand communities are effective because they provide a community for people belong to to feel part of things larger than themselves. They then help support the brand by sharing it with others who have similar interests and form an identity.</span>

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3 years ago

The consumer price index is the:

Dmitry [639]

Answer:

B. cost of a market basket of goods and services typically consumed in the current period.

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3 years ago

Read 2 more answers

Imprudential, Inc., has an unfunded pension liability of $750 million that must be paid in 17 years. To assess the value of the

Lana71 [14]

Answer:

$202,701,713.58

Explanation:

Present value of this liability = Value of liability / ((1+r)^t)

Present value of this liability = $750 million / ((1+0.08)^17)

Present value of this liability = $750 million / (1.08)^17

Present value of this liability = $750 million / 3.7000180548

Present value of this liability = $202,701,713.5840815

Present value of this liability = $202,701,713.58

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3 years ago