The accountant for TI Company is preparing the company's statement of cash flows for the fiscal year just ended. The following i
1 answer:
You might be interested in
Answer:
Answer for the question;
Units of production data for the two departments of PacificCable and Wire Company for November of the current fiscal year areas follows:
Drawing Department Winding Department
Work in process, November 1 7,400 units, 45% completed 3,700 units, 65% completed
Completed and transferred to next
processing department during November 101,400 units 100,100 units
Work in process, November 30 5,600 units, 75% completed 5,000 units, 30% completed
a. If all direct materials are placed inprocess at the beginning of production, determine the directmaterials and conversion equivalent units of production forNovember for the Drawing Department. If an amount is zero, enter in"0".
Drawing Department
Direct Materials and Conversion Equivalent Units ofProduction
ForNovember
Whole Units Direct Materials
Equivalent Units Conversion
Equivalent Units
Inventory in process, November 1
Started and completed in November
Transferred to Winding Department inNovember
Inventory in process, November 30
Total
b. If all direct materials are placed inprocess at the beginning of production, determine the directmaterials and conversion equivalent units of production forNovember for the Winding Department. If an amount is zero, enter in"0".
Winding Department
Direct Materials and Conversion Equivalent Units ofProduction
ForNovember
Whole Units Direct Materials
Equivalent Units Conversion
Equivalent Units
Inventory in process, November 1
Started and completed in November
Transferred to finished goods inNovember
Inventory in process, November 30
Total
is given in the attachment.
Explanation:
Answer: Surething Inc, needs to issue bonds with 11% interest rate in order to make Hugh indifferent between investing in two bonds.
We arrive at the answer in the following manner:
The City of Helfin bonds are municipal bonds and hence they are tax free. This means that Hugh will get an after - tax return of 6.6%.
The bonds of Surething Inc offering a 10% interest, however are taxed at 40%. So, the current after-tax returns of the bond is:
Current after tax return = 0.06 or 6%
However Hugh will be indifferent to investing in these two bonds only if they offer the same after-tax return of 6.6%.
Given this, we can calculate the indifference rate as follows:
Pre-tax return = 0.11 or 11%.