In the month of September, a department had 500 units in the beginning work in processinventory that were 60% complete. These units had $30,000 of materials costs and$22,500 of conversion costs. Materials are added at the beginning of the process andconversion costs are added uniformly throughout the process. During September, 10,000units were completed and transferred to the finished goods inventory and there were2,000 units that were 25% complete in the ending work in process inventory onSeptember 30. During September, manufacturing costs charged to the department were:Materials $690,000; Conversion costs $765,000.The cost assigned to the units transferred to finished goods during September was

Question: What percentage of the variation in overhead costs is explained by the independent variable

Answer: 82.8%

Explanation:

= 0.848 (84.8%), the explanation of variation in Y from the X regress

Question: What is the total overhead cost for an estimated activity level of 60,000 direct labor-hours

Answer: $410,000

Explanation:

The equation resulting from this regression analysis is:

Total overhead = Estimated fixed cost + Estimated variable cost per labor hour x Labor hours

= Intercept estimate + Coefficient estimate on independent variable x 60,000 DLH

= 110000 + 5 x 60000 DLH

= 110000 + 300000

= 410000

Here is the full question with the appropriate tables.

Cortez Company is planning to introduce a new product that will sell for $108 a unit. The following manufacturing cost estimates have been made on 20,000 units to be produced the first year;

Direct Materials                     $700,000                                                              

Direct Labor                           $720,000    (= $18 per hour × 40,000 hours)    

Manufacturing overhead costs have not yet been estimated for the new product, but monthly date on total production and overhead costs for the post 24 months have been analyzed using simple linear regression. The following results were derive from the simple regression and provide the basis for overhead cost estimates for the new product.

                     Simple Regression Analysis  Results.                                          

Dependent  variable-Factory overhead cost-Independent Variable-Direct labor hours Computed values                                                                          

Intercept                                                                             $ 120,0000              

Coefficient on independent variable                               $ 5.00                        

Coefficient of correlation                                                   .920                          

R²                                                                                         .828                          

What percentage of the variation in overhead costs is explained by the independent variable? 82.8% 91.1% 99.4% 74.5% None of the above.

What is the total overhead cost for an estimated activity level of 60,000 direct labor-hours?

$410,000.

$420,000.

$400,000.

$430,000.

Answer:

R² = 82.8%

$420,000

Explanation:

Given that:

R² = .828

The percentage of the variation in overhead costs explained by the independent variable in Y from the X regressor = %

= 82.8%

Given that:

direct labor-hours = 60,000

To calculate the Total overhead cost; we have:

(Total overhead) to be = Estimated fixed cost + estimated variable cost per  

                                        labor hour × labor-hours

                                      = Intercept estimate + Coefficient estimate on

                                       independent  variable × 60,000 direct labor-hours

                                      = $120,000 + ($5 × 60,000) direct labor-hours

                                      = $120,000 + $300,000

                                      = $420,000

∴  the total overhead cost for an estimated activity level of 60,000 direct labor-hours = $420,000.

Answer: a. in the short run but not in the long run

Explanation:

The Short Run is usually considered in Economics/ Business as a point in time where at least ONE factor of production is FIXED. This factor is usually the Factory because it is hard to change the capacity of a Factory in the Short run. For instance a wing might need to be constructed. Labour on the other hand is considered variable in the Short run though because more people can be hired and the people already hired can put in more overtime.

The Long Run is classified as a point where EVERY factor of production is Variable. There is enough time to even change the capacity of a Factory. So here even Factory is Variable.

Answer:

A. Noncash financing and Investing activity

Explanation:

The Cash Flow Statement records all Cash related transactions and used to determine the movement in the Balance of Cash and Cash Equivalent. When mortgage note is issued in exchange of a building, this is simply an Exchange of Assets without the movement of cash. Non - Cash activities are not shown in the Cash Flow Statement.

Answer:

a) & b) are true. c) & d) are false.

Explanation:

WTO is an international (intergovernmental) organisation, supervising international trade between countries.

a) is true. It seeks to establish impartial procedures for resolving trade disputes among its members.

It seeks to reduce remaining trade barriers through multilateral negotiations, b) is true

c) is false. It is headquartered in Geneva, Switzerland (not Belgium)

d) is false. Existence of the WTO has allowed most member countries to replace their local currencies with a universal currency beginning in 2002. It is an international trade organisation, not monetary policy organisation.

Answer:

a. Expected rate of return = 10%

b. Expected rate of return = 12%

Explanation:

Using dividend growth model we have,

where P = Current market price

D = Dividend at the year end

K = Expected return

g = growth rate

Putting values in the above we have,

a. $64 =

=

K = 0.07 + 0.03 = 0.1 = 10%

b. $64 =

=

K = 0.07 + 0.05 = 0.12 = 12%

Final Answer

a. Expected rate of return = 10%

b. Expected rate of return = 12%

Final answer:

The expected rate of return on the stock with a dividend growth rate of 3% is 7.03%, and with a dividend growth rate of 5% it is 9.03%.

Explanation:

The expected rate of return of an investment in a stock can be reduced to a calculation involving the cost of the stock, the dividends expected to be paid, and the rate of growth of those dividends. The formula for the expected rate of return is:

Rate of Return = (Dividends one year from now / Current Stock Price) + Dividend Growth Rate

In the case of the stock you are analyzing:

1. for a dividend growth rate of 3%, the formula becomes:
2. Expected Rate of Return = ($4.50 / $64) + 0.03 = 7.03%
3. for a dividend growth rate of 5%, the formula becomes:
4. Expected Rate of Return = ($4.50 / $64) + 0.05 = 9.03%

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