A company acquired an office building on three acres of land for a lump-sum price of $2,450,000. The building was completely equ
1 answer:
You might be interested in
Answer: D. 2.2%
Explanation: Equity Dividend Rate is calculated by dividing the Before Tax Cash Flow by the Acquisition price. If you need the answer in percentage form, you then multiply by 100.
Here, before-tax cash flow = $11,440
Acquisition price = $520,000
So Equity Dividend Rate = X 100
Equity Dividend Rate = 2.2%
In this question, you do not need the Net Operating Income (NOI). You only need the NOI if the Before Tax Cash Flow is not given and the debt service payment is. If this is the case, you subtract the debt service payment from the NOI to get the Before Tax Cash Flow.
Under- or Over-Applied Manufacturing Overhead:
Under- or Over-Applied Manufacturing Overhead refers to the balance in the manufacturing overhead control account after the actual overhead costs that were incurred and the applied overhead for the period has been recorded
1 .The appleid overhead is the predetermined rate of $2.40 per machine hour multiplied by the actual number of machine hours (75,000), so it is $180,000.
The applied overhead is debited to work-in-process inventory and credited to the manufacturing overhead account.
2. The underapplied or overapplied overhead for the year is the difference between the actual and applied overhead. We can show it in the T-account like this:
3. The company estimated its total overhead cost to be $192,000 and its total machine hours to be 80,000. The actual overhead cost was $184,000 and the actual machine hours were 75,000. We can see that the main reason why the manufacturing overhead was underapplied was the fact that it worked fewer machine hours than anticipated with a proportional decrease in the manufacturing overhead costs incurred. This is normal because an element of manufacturing overhead is fixed.
To know more about overhead applied manufacturing overhead:
#SPJ4
