Answer:
$76.5 million
Explanation:
For computing the EBIT, first we have to do the following calculations
Free cash flow = Operating cash flow – Investment in operating capital
$39.1 million = Operating cash flow -$ 22.1million
So, operating cash flow is
= $39.1 million + $22.1 million
= $61.20 million
Now
Operating cash flow = EBIT – Taxes on EBIT + Depreciation expenses
$61.2 million = EBIT- $28.9 million + $13.6 million
So, the EBIT is
= $61.2 million + $28.9 million - $13.6 million
= $76.5 million
Answer:
The Net Operating income will be the same for both methods.
Explanation:
Net Operating income under absorption costing and variable costing methods usually differ because of existence of inventory.
Fixed overheads are deferred in Inventory when using absorption costing. Meaning that a higher income is obtained under absorption costing than variable costing when there is inventory and a lower income under absorption costing than variable costing.
When units produced are units sold, there is no inventory. Therefore, the Net Operating income will be the same for both methods.
Answer:
market trends change constantly, funding fall through, business partners flake, and ideas may go wrong
Answer:
Explanation:
a. The computation of the labor rate variance is shown below:
= Actual Hours × (Actual rate - standard rate)
= 5,050 × ($16.80 per hour - $16 per hour)
= 5,050 × $0.80 per hour
= $4,040 unfavorable
b. The computation of the labor time variance is shown below:
= Standard Rate × (Actual hours - Standard hours)
= $16 per hour × (5,050 hours - 1,000 × 5.4 hours)
= $16 per hour × -350 hours
= -$5,600 favorable
c. The computation of the total labor variance is shown below:
= (Actual hours × Actual rate) - (Standard hours × standard rate)
= (5,050 hours × $16.80 per hour) - (1,000 bicycles × 5.4 hours × $16 per hour)
= $84,840 - $86,400
= -$1,560 favorable
