Answer:
The cost of the work transferred-out during May is $18,630
Explanation:
For computing the cost of work transferred, first we have to compute the conversion cost per unit and material cost per unit
The conversion cost per uni = Conversion cost ÷ (transferred units + work in progress)
= $11,160 ÷ (2,700 + 300 × 30%)
= $11,160 ÷ (2,700 + 90)
= $11,160 ÷ 2,790
= $4 per unit
Now, material cost per unit = Material cost ÷ (transferred units + work in progress)
= $8,700 ÷ (2,700+300)
= $8700 ÷ 3,000
= $2.9 per unit
So, total cost of the work transferred is equals to
= Transferred units × conversion cost per unit + transferred units × material cost per unit
= 2,700 × $4 + 2,700 × $2.9
= $10,800 + $7,830
= $18,630
Hence, the cost of the work transferred-out during May is $18,630
Answer:
b) cash inflow in the final year of the project
Explanation:
Aftertax salvage value is the net proceeds from the sale or disposal of fixed assets like Plant and Equipment (PPE) at the end of the project. The amount of money received is an income and therefore, tax must be paid on it and the company keeps the rest.
The after tax salvage value of a fixed asset used in a project , is included in the NPV calculation . It is a terminal cashflow and is part of the project since the assets being sold are used in production of the items that Rossiter Restaurants sell. However, it is important to note that you will use the PV of the after tax salvage value with the PV of other cash inflows and initial investment amount to find the NPV of the project.
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Explanation:
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