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3 years ago

Problem 24-6A Payback period, break-even time, and net present value LO P1, A1

Business

1 answer:

KengaRu [80]3 years ago

6 0

Answer:

1. Payback period = 2.8 years

2. Break-even time = 3.8 years

3. NPV = $12,577

Explanation:

NOTE: See the attached excel file for the calculation tables.

1. Determine the payback period for this investment.

Payback period = 2 years and [(49,600 / 70,800) * 12] months = 2 years and 8 months approximately = 2.8 years.

2. Determine the break-even time for this investment.

Break-even time = 3 years and [(23,622 / 36,199) * 12] months = 3 years and 8 months approximately = 3.8 years

3. Determine the net present value for this investment.

Net present value (NPV) of this investment is $12,577

Download xlsx

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Answer:

A journal entry was prepared to record the transactions of Marcelino Company during the month of April with the scheduled cost of goods.

Explanation:

Solution

The first step is to take is preparing a journal entries to record the transactions of Marcelino Company during the month of April.

(a) JOURNAL ENTRIES OF MARCELINO COMPANY

Job 306 Job 307 Job 308 April Total

Balances on 31st

March

Direct materials 29000 35000 64000

Direct labor 20000 18000 38000

Applied overhead 10000 9000

(b)

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Direct materials 135000 220000 100000 455000

Direct labor 85000 150000 105000 340000

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Overhead under applied 5000

We create another Journal for Marcelino Company

Journal Credit Debit

Material Control 500000

Account Payable 500000

Overhead control 175000

Overhead payable 175000

Wage Control 363000

Wage Payable 363000

Work in progress 455000

Material Control 455000

Work in progress 340000

Direct labor 38000

Work in progress 170000

Applied overhead 170000

Overhead under applied 5000

Cost of Goods sold 5000

Finished Goods 507000

Work in progress 507000

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Answer:

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Explanation:

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Brent's total taxable benefit = $1,950 + $347.50 = $2,297.50

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