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xz_007 [3.2K]
3 years ago
9

Bonita Industries began using dollar-value LIFO for costing its inventory two years ago. The ending inventory for the past two y

ears in end-of-year dollars was $286000 and $465000 and the year-end price indices were 1.0 and 1.2, respectively. Assuming the current inventory at end of year prices equals $650000 and the index for the current year is 1.25, what is the ending inventory using dollar-value LIFO
Business
1 answer:
Vitek1552 [10]3 years ago
3 0

Answer:

Bonita Industries

The ending inventory using the dollar-value LIFO is:

$520,000

Explanation:

a) Data and Calculations:

                                           Year 1          Year 2       Current Year

Ending inventory            $286,000    $465,000    $650,000

Year-end price indices        1.0               1.2               1.25

Ending inventory

using dollar-value LIFO $286,000   $387,500     $520,000

b) The ending inventory is usually indexed using the base year price index.  This gives an ending inventory value that is consistent with the base year.  For example, since the current year's inventory equals $650,000, with a current year index of 1.25, the ending inventory is evaluated based on year 1's price index of 1.0.  The computation divides the current inventory value by the current price index ($650,000/1.25), giving $520,000 as the current year's ending inventory value.

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Pineapple Motor Company manufactures two types of speciality electric motors, a commercial motor and a residential motor, throug
Usimov [2.4K]

Answer:

a. Single Plant wide  Factory Overhead  Rate = $ 140 per machine hour

Overhead Rate of  Assembly Department $ 120 per machine hour

Overhead Rate of  Testing Department=    $ 150 per unit per machine hour.

Total Overhead per Unit    Commercial  $ 588      Residential $  462      

Explanation:

Pineapple Motor Company

Assembly Department  Factory Overhead 360,000

Testing Department  Factory Overhead 900,000

Total  Factory Overhead 1,260,000

Direct machine hours were estimated as follows:

Assembly Department 3,000 hours

Testing Department 6,000

Total 9,000 hours

                                      Commercial              Residential

Assembly Department       1.4 dmh                    1.1 dmh

Testing Department             2.8                           2.2

Total machine hours per unit 4.2 dmh           3.3 dmh

Single Plant wide  Factory Overhead  Rate = Total  Factory Overhead 1,260,000/Total 9,000 hours

a. Single Plant wide  Factory Overhead  Rate = $ 140 per machine hour

Overhead Allocated to Assembly Department = No of Hours * Rate

                      = 3000  * $ 140 = $ 420,000

Overhead Allocated to Testing Department = No of Hours * Rate

                      = 6000  * $ 140 = $ 840,000

b. Overhead Rate of  Assembly Department = Factory Overhead / Machine Hours= 360,000/3,000 hours = $ 120 per machine hour

                     

Overhead Rate of  Testing Department=   Factory Overhead / Machine Hours=  900,000/ 6000 hours=  $ 150 per unit per machine hour.

Overhead Allocated

                                         Commercial              Residential

Assembly Department       1.4 *120                   1.1 dmh *120

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Testing Department             2.8*150                    2.2*150

<u>                                                420                             330                    </u>

<u>Total Overhead per Unit     $ 588                       $  462              </u>

c. ABC approach is better as it gives an estimate of the overhead per unit both for the Commercial and Residential department using the assembly and testing overheads rates separately. The single plant wide rate gives a mere estimate of the overall costs.

3 0
3 years ago
A portfolio manager is considering the purchase of a bond with a 5.5% coupon rate that pays interest annually and matures in thr
dmitriy555 [2]

Answer:

The price of the bond is closest  $101.36  

Explanation:

It is noteworthy that a rational investor pays for a bond today the cash flows derivable from the bonds in future discounted to today's terms.

The future cash flows comprise of the yearly coupon interest of $5.5(5.5% *$100) for 3 years as well as the repayment of the principal $100 at the end of year 3.

To bring the cash inflows today's term, we multiply them  them by the discounting factor 1/(1+r)^N , where is the yield to maturity of 5% and N is the relevant the cash flow is received.

The discounting is done in attached spreadsheet leading $ 101.36  present value today.

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7 0
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The following amounts were selected from the production report of Chandon Corporation: Actual units in production 42,000 Equival
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Answer:

Total cost is equal to $81300

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Equivalent cost of labor = =39000\times 0.9=35100$

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So total cost will be $81300

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Answer:

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So, the answer is: The stock price will be $25.72 in ten years from now.

8 0
3 years ago
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