Answer:
c. $3,379
Explanation:
<em>Calculate the Product Costs first as follows:</em>
Direct Materials :
Milling $ 450
Customizing $ 190
Direct Labor :
Milling $ 580
Customizing $ 570
Variable Overheads :
Variable manufacturing overhead : Milling ($ 1.30
×70) $ 91
Variable manufacturing overhead : Customizing ($ 5.00×60) $300
Fixed Overheads :
Milling ( $ 153,400/ 26,000 × 70) $413
Customizing ( $ 18,500/5,000 × 60) $222
Total Cost $2,816
<em>To find Selling Price add a 20% Mark -up on Cost</em>
Total Cost $2,816.00
Add Mark-up 20% $563.20
Selling Price $3,379.20
Answer:
credit to Work in Process of $59,000.
Explanation:
Based on the information given the appropriate l journal entries to record these transactions would include a: CREDIT TO WORK IN PROCESS OF $59,000
Dr Finished goods $59,000
Cr Work in process $59,000
Dr Cost of goods sold $65,000
Cr Finished goods $65,000
Answer:
The price of the stock today is $96.06
Explanation:
The price of a stock whose earnings are expected to grow at a constant rate forever can be calculated using the dividend discount model which bases the price of a stock on the present value of the expected future dividends from the stock.
As the required rate of return is changing, we will calculate the price in three stages.
The formula for price today under this model is in the given situation is,
P0 = D1 / (1+r1) + D2 / (1+r1)^2 + D3 / (1+r1)^3 + D4 / (1+r2)^4 + D5 / (1+r2)^5 +
D6 / (1+r2)^6 + [ D7 / (r3 - g) ] / (1+r2)^6
Where,
- D1, D2, ... D7 represents the dividend in year 1,2, ... 7 (till Year 7)
- r represents the required rate of return
- r1 is 12%
- r2 is 10%
- r3 is 8%
So, price of the stock today is,
P0 = 3.05 * (1+0.05) / (1+0.12) + 3.05 * (1+0.05)^2 / (1+0.12)^2 +
3.05 * (1+0.05)^3 / (1+0.12)^3 + 3.05 * (1+0.05)^4 / (1+0.10)^4 +
3.05 * (1+0.05)^5 / (1+0.10)^5 + 3.05 * (1+0.05)^6 / (1+0.10)^6 +
[3.05 * (1+0.05)^7 / (0.08 - 0.05)] / (1+0.10)^6
P0 = $96.06
