A project has an initial cost of $18,400 and is expected to produce cash inflows of $7,200, $8,900, and $7,500 over the next thr
ee years, respectively. What is the discounted payback period if the required rate of return is 12 percent?
1 answer:
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Answer:
$409185
Explanation:
Given: Budgeted output units: 28,475 units
Budgeted machine-hours: 17,085 hours
Budgeted variable manufacturing overhead costs for 28,475 units: $358,785
Actual output units produced: 32,475 units
Actual machine-hours used: 15,000 hours
Actual variable manufacturing overhead costs: $384,060.
First, we will find Budgeted machine hour per unit produced.
Budgeted machine hour per unit produced=
⇒
∴Budgeted machine hour per unit produced= 0.6
Budgeted machine hours allowed for 32475 units=
Budgeted variable overhead rate per machine hour=
Budgeted variable overhead rate per machine hour=
Now, lets find out flexible budget amount.
Flexible budget amount=
Flexible budget amount=
∴Flexible budget amount for variable manufacturing overhead= $409185