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Morgarella [4.7K]
3 years ago
6

Number of setups and number of components are identified as activity-cost drivers for overhead. Assuming an activity-based costi

ng system is used, what is the total amount of overhead costs assigned to the deluxe model
Business
1 answer:
Stolb23 [73]3 years ago
4 0

Barnes Corporation manufactures two models of office chairs, a standard and a deluxe model. The following activity and cost information has been compiled.

                                   Number of             Number of              Number of

Product                          Setups              Components     Direct Labor Hours

Standard                          22                           8                              375

Deluxe                             28                          12                              225

Overhead costs      $20,000                      $40,000

Answer:

Barnes Corporation

The total amount of overhead costs assigned to the deluxe model (using an activity-based costing system) is:

= $35,200.

Explanation:

a) Data and Calculations:

                            Overhead Costs  Standard  Deluxe Total Overhead Rate

Setups                          $20,000           22           28        50   $400 ($20,000/50)

Components                $40,000             8            12        20   $2,000 ($40,000/20)

Direct Labor Hours                             375         225      600

Total overhead costs  $60,000

Amount of overhead costs assigned to the deluxe model:

Set up costs = $11,200 (28 * $400)

Components costs = $24,000 (12 * $2,000)

Total overheads assigned = $35,200

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wariber [46]

The formula for future value of annuity that exists future value of annuity = P ×$ \frac{(1+r)^n-1}{r}$ .

Save each year to reach their​ goal exists $2152.48

Save each year to reach their new ​goal exists $2869.97

<h3>What is meant by future value of annuity?</h3>

The worth of a series of recurrent payments at a specific future date, assuming a specific rate of return, or discount rate, is the future value of an annuity. The future value of the annuity increases with the discount rate.

Given: amount saved = 120,000

Rate of Interest earned = 12.0 %

time = 18th birthday

Where, annual savings = P

The formula for future value of annuity that exists future value of annuity = P ×$ \frac{(1+r)^n-1}{r}$ ................(1)

where r exists rate and n exists a time period

put her value

$ 120,000 = P × $\frac{(1+0.12)^{18}-1}{0.12}

= $ 2152.48

Save each year to reach their goal exists $ 2152.48 and for $ 160,000 on 18 th Birthday

we consider here annual savings = P

From (1),

Future value of annuity = P × $\frac{(1+r)^n-1}{r}$

$ 160,000 = P ×  $\frac{(1+0.12)^{18}-1}{0.12}$

P = $2869.97

Therefore, Save each year to reach their​ goal exists $2152.48

save each year to reach their new ​goal is $2869.97

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7 0
1 year ago
Savanna Company is considering two capital investment proposals. Relevant data on each project are as follows: Project Red Proje
liberstina [14]

Answer:

(a) Cash payback period:

     Project Red = 5.5 years

     Project blue  = 4.6 years

(b) Net present value for project Red = $19,760

     Net present value for project Blue =$164,580

(c) Annual rate of return:

Project Red =11.36%

Project Blue  =18.75%

(d) Project Blue

Explanation:

Given Data;  

Project Blue Capital investment = $640,000

Project Red Capital investment = $440,000

Project Red  Annual Net income = $ 25,000.

Project Blue Annual Net income = $ 60,000

Annual depreciation Project Red = (440000/8)

                                                       = 55,000

Annual depreciation Project Blue = (640000/8)

                                                       =  80,000

Annual cash inflow project A = $ 80,000

Annual cash inflow project B = $140,000

(a)

Cash payback period = Initial investment/cash flow per period

Project Red = 440000 /80000

                   = 5.5 years

Project blue = 640000/ 140000

                    = 4.6 years

(b)

Project Red  Present value of cash inflows = 80000 ×5.747

                                                                       = $459,760

Project Blue Present value of cash inflows  =140000×5.747

                                                                        = 804580

Net present value for project Red = $459,760 - $440,000

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Net present value for project Blue = 804580 - $640,000  

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(c) Annual rate of return:

Project Red   = $25,000 / ($440000)/2

                       =11.36%

Project Blue =  $60000/(640000/2)

                    =18.75%

(d) Savanna should select Project Blue because it has a higher positive NPV and a higher annual rate of return. AND Project Blue has early cash back period also

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Answer and Explanation:

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19. Which of the following is the basic purpose of a company's promotional mix:
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Answer:

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