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3 years ago

Nelter Corporation, which has only one product, has provided the following data conceming its most recent month of operations:

Business

1 answer:

mixer [17]3 years ago

8 0

Answer:

Part a

Nelter Corporation

Contribution format income statement for the month using variable costing

Sales ($108 x 3,000) $324,000

Less Cost of Sales ($138,000)

Contribution $186,000

Less Expenses

Fixed manufacturing overhead $64,530

Fixed selling and administrative $9,000

Variable selling and administrative (14 x 3,000) $42,000 ($115,530)

Net Income (loss) $70,470

Part b

Nelter Corporation

Income statement for the month using absorption costing

Sales ($108 x 3,000) $324,000

Less Cost of Sales ($219,000)

Gross Profit $105,000

Less Expenses

Fixed selling and administrative $9,000

Variable selling and administrative (14 x 3,000) $42,000 ($51,000)

Net Income (loss) $54,000

Explanation:

Calculation of Ending Units

Beginning Inventory 955

Add Production 2,390

Total Available for Sale 3,345

Less Sales (3000)

Ending Inventory 345

Variable Costs Calculations

Product Cost = Variable Manufacturing costs

= $25 + $20 + $1

= $46

Cost of Sales = units sold x product cost

= 3,000 x $46

= $138,000

Absorption Cost Calculation

Product Cost = Variable Manufacturing costs

= $25 + $20 + $1 + ($64,530 / 2,390)

= $25 + 20 + $ 1 + $27

= $73

Cost of Sales = units sold x product cost

= 3,000 x $73

= $219,000

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The Reuschel Company began 2018 with inventory of 21,000 units at a cost of $8 per unit. During 2018, 61,000 units were purchase

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Answer:

1. The Cost of Goods Sold for the period ended 2018 is 682,950.

2. If FIFO method has been used, the Cost of Goods Sold would have been 660,525. Hence, LIFO method has reduced Gross Profit by 22,425 (682,950 - 660,525).

Explanation:

LIFO is one of the methods to calculate cost of goods sold. It assumes that the recently purchased stock is sold first. When a company uses LIFO method, it gets a higher cost of goods sold figure because of Inflation factor.

In the example shared, the company has opening stock of 21,000 units which were purchased at a unit price of $8. During the Year, further units were purchased but this time at a unit cost of $9.95. It is given that the Sales were of 70,500 units. Since the company uses LIFO method, it must remove the recently purchased stock from its books first. So,

61,000 * 9.95 = $606,950.

But the company sold 70,500 units. It means that 61,000 of recently purchased goods were sold and the remaining (70,500 - 61,000) from opening stock.

9,500 * 8 = $76,000. This gives us total CGS of $682,950 (606,950 + 76,000).

If you have any further queries, feel free to ask me. Thanks!

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3 years ago

A stock has an average expected return of 10.8 percent for the next year. The beta of the stock is 1.22. The T-Bill rate is 5% a

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Answer: 4.7%

Explanation:

Expected return is calculated as:

= Risk free return + Beta ( Market risk premium)

10.8% = 5% + (1.22 × Market risk premium)

10.8% - 5% = 1.22market risk premium

5.8%/1.22 = market risk premium

Market risk premium = 0.058/1.22

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No the electronic devices where made to text and easier to text

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