<u>Solution and Explanation:</u>
The data of SAG of special order is given below:
Cost per unit = $3.50
, Allocated fix cost = $1.50
, Number of units in order = 15000
<u>Calculated the total cost of the special order as follows:
</u>
Incremental cost per unit = Cost per unit-Allocated fix cost =$(3.50 minus 1.50) =$2
Incremental cost per unit=cost per unit-allocated fix cost =$(3.50 minus1.50) =$2
Total incremental cost 15000 unit = number of units in order x Incremental cost per unit =15000 multiply $2 =$30000
Therefore, total cost of the special order is $30000
b) Offering price by ETU = $35000. Hence, the offer made by ETU would affect the short term of the special order.
Contribution cost = $(35000 minus 30000) =$5000
Answer:
The alternative that should be chosen assuming identical replacement is:
Alternative B.
Explanation:
a) Data and Calculations:
Alternatives:
A B
First Cost $5,000 $9,200
Uniform Annual Benefit $1,750 $1,850
Useful life, in years 4 8
Rate of return 7% 7%
Annuity factor 3.387 5.971
Present value of annuity $5,927.25 $11,046.35
Net cash flow $927.25 $1,846.35
b) Alternative B yields a higher return than Alternative A. Since the two alternatives are based on the same rate of return, Alternative B will bring in a higher annual benefit, even when discounted to the present value.
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Must have drove 50 hours on a learners permits, 10 of which are at night.
Answer:
$27000
Explanation:
In order to make flexible budget for 60000 units we need differentiate between fixed and variable cost.
The Variable cost consist of:
Indirect Labor = $98000
Indirect materials = $105000
utilities = $14000
The Fixed cost consist of :
Depreciation Expense = $22000
Supervision = $5000
Hence, Adding Depreciation expense + Supervision (22000+5000) gives the total value of $27000 for fixed cost.
