Answer:
a. $21
b. $1,890,000
Explanation:
a. The computation of the predetermined overhead rate is shown below:
Predetermined overhead rate = (Total estimated manufacturing overhead) ÷ (estimated computer hours)
= $2,100,000 ÷ 100,000 hours
= $21
b. Now the applied overhead which equals to
= Actual computer hours × predetermined overhead rate
= 90,000 hours × $21
= $1,890,000
Answer:
The stock price would be higher by $7.37
Explanation:
Free cash flow to equity = 195 million with a growth rate of 2% in perpetuity
Value of equity = Free cash flow to equity ÷ (Ce -g) = 195 million ÷ (13% - 2%)
= 190 ÷ 0.11 = $1,772,727,272.73 = $1,773 million
If growth rate is 3%, value of equity = 195 ÷ (13%-3%) = 195 ÷ 0.1 = $1,950 million
a. Value of stock = (1,773 + 15) million ÷ 22 = $81.27
b. Value of stock with 3% = 1,950 ÷ 22 = $88.64
Thus stock price would be higher by = b-a = $7.37
The break even point in composite units is 5000 units.
Break even point
The Break-even point is calculated by dividing the fixed cost by the contribution margin per unit.
For this sales mix, the contribution margin per unit is the aggregate of each contribution margin. Contribution margin is calculated by subtracting variable cost from the selling price
Contribution margin for A is $20- $12 = $8 x 3 units
Contribution margin for B is $ 30 - $18 = $12 x 2 units
Contribution margin for C is $40 -$24= $16 x 1 unit
Total contribution margin per unit will be
(8 x 3) x (12 x 2 ) x( $16 x 1)= $64
Break-even point = $320,000 /64
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Answer:
There are three stages of assignment of costs to each product and these are as under:
- Allocation
- Apportionment
- Absorption / Activity Based costing
So this question relates to stage one. Suppose the following situation:
There are 2 departments and they have following expenses
Department A has a supervisor whose annual salary is $30000
Department B has a worker whose annual salary is $22000
Department A & B have shared a rented property for there operations.
Department A and B also shares electricity bills and annual electricity charges stand almost $80,000
Now the directly attributable / traceable cost to Department A are those that are hundred percent related to Department A. In this example, we saw that supervisor salary is the only cost that is hundred percent related to Department A. Likewise Worker's salary is also relateable to Department B. Whereas the rental cost and electricity bills are not directly attributable to these departments. So this means the manufacturing costs that are directly traceable are those that hundred percent relates to the manufacturing departments.