Johnson Enterprises uses a computer to handle its sales invoices. Lately, business has been so good that it takes an extra 3 hours per night, plus every third Saturday, to keep up with the volume of sales invoices. Management is considering updating its computer with a faster model that would eliminate all of the overtime processing.Current Machine New Machine
Original purchase cost $15,230 $25,080
Accumulated depreciation $ 6,800 _
Estimated annual operating costs $24,950 $19,560
Useful life 5 years 5 years
If sold now, the current machine would have a salvage value of $8,490. If operated for the remainder of its useful life, the current machine would have zero salvage value. The new machine is expected to have zero salvage value after 5 years.
Prepare an incremental analysis. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
Answers
Answer:
The incremental cost is ($10,360)
Explanation:
Analysis of total cost over the 5 year period
Retain Old Machine Buy New Machine
Variable / Incremental Operating
Costs
Old Machine 124,750
New Machine 97,800
Old Machine Book Value
Retain: Annual depreciation 8,430
Buy : Lump sum written off 8,430
Old Machine Disposal (8,490)
Purchase Cost of New Machine 25,080
Total Cost 133,180 122,820
The use of new machine will result in lower cost for the next 5 years.The incremental cost is ($10,360)
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2. Alternative explanations of wage disparities Suppose that a labor economist claims that recipients of economics Ph.D.s gain little in terms of acquired productive skills from their graduate studies but that, instead, the degree simply reflects a high level of inherent mathematical ability. Which one of the following characterizes the labor economist's perspective on the link between education and wages?A. Compensating differentialsB. Human capitalC. SignalingD. The superstar phenomenonA famous rapper has earned enormous sums of money by supplying creative music to millions of fans. Which of the following statements characterize this market in which some earn astronomical incomes while others (who may have similar talent) earn very little? Check all that apply.A. Because of technology, his music is essentially a public goodB. The best recording artists have high levels of human capitalC. The best recording artists earn dramatically more than good or mediocre artistsD. Customers in this type of market prefer having twice as much of a good from a recording artist half as talented as the superstarE. Nearly all customers in the market desire the good supplied by the superstar.
What is reported on the statement of cash flows prepared with the indirect method for the year ended December 31, 2020? Assume there were no retirements of common stock or additional purchases of Treasury Stock during 2020. No dividends were declared in 2020. (A) Financing Activity of $144,000(B) Operating Activity $16,000 (C) Financing Activity of $161,000(D) B and C
_______ is the phenomenon of the shifting of individual management styles to become more similar to one another.
Answers
Answer:
A
Explanation:
the sales price increase and because the variable cost are the same the contribution margin will increase, which lead to think the BEP is lower.
But, because the fixed cost also increase we cannot determinate where the new BEP Will be higher or lower. The fixed cost could increase so much that nulifies the increase in the contribution margin or even be higher enought that the BEP goes higher.
So Option A is the only true statment.
Answers
Answer:
Present value of payments to the bank=938.51
Explanation:
The present value of the payment to the bank are an ordinary annuity i.e equal payments made at the end of each year for 16 years.
The Present value of an ordinary annuity is calculated as follows:
where PMT is the annual payment made at the end of each year=$100;
i is the interest rate or discount rate = 4%,
n=the number of years the periodic payment of 100 is to be made=12
Present value of payments to the bank = = 938.51
Answers
Answer:
The total annual cost for Alpha Ave. at 20 persons is $9000.
Explanation:
The total cost is made up of both the fixed and the variable costs.
The total cost equation for Alpha Ave can be written as,
Total Annual cost = 5000 + 200x
Where x is the number of persons living in the Alpha Ave.
Thus, at 20 persons living in the Alpha Ave, the ytotal annual cost will be,
Total Annual Cost-Alpha Ave. = 5000 + 200 * (20) = $9000
Answers
Answer:
$0 (at least under current laws)
Explanation:
Child support payments are not tax deductible. Even alimony payments made to former spouses are not tax deductible anymore.
Any property settlements resulting from a divorce are not tax deductible either nor are they considered taxable income for the receiving party.
So in this case, until the current law changes, Carter cannot deduct any amount from his tax return.
Answers
Answer:
Store A = 3.4521
Store B = 2.9589
Store C = 4.4384
Explanation:
Store A charges ADB method
purchase made on 5th first payment on 15th of 100
so from 5th to 15th Average daily balance =300 for 10 days
then from 15th to 4th for remaining 20 days average daily balance = 200
Average Daily Balance = (300*10+200*20)/30
Total finance charge = ADB*(APR*(Days/365))
=300*((0.18)*(10/365))+200*((0.18)*(20/365))
= 1.4795+1.9726=3.4521
Store B
Adjusted Balance Method uses adjusted balance to calculate the charges
Adjusted balance=Starting balance adjusted for credit and debit
Adjusted balance =300-100=200
Financial Charges = 200*(.18*(30/365))=2.9589
Store C
Previous Balance Method the interest is calculated on amount of balance carried from previous billing cycle
Balance Carried = 300
Charges =300*(.18*(30/365))= 4.4384
Answer:
Store A finance charge = $140.625
Store B finance charge = $90
Store C finance charge = $202.5
Explanation:
Store A
Average daily balance Finance Charge
(300*200)/2 = $250 3.75(250*0.15) = $140.625
Store B
Adjusted balance method
(300-100) = $200 3.00*(200*0.15) = $90
Store C
Previous balance method
300 - 0 = $300 4.50(300*0.15) = $202.5
Answers
Answer:
Predetermined manufacturing overhead rate= $2 per direct labor dollar
Explanation:
Giving the following information:
Estimated overhead cost= $1,200,000
Estimated direct labor cost= $600,000.
To calculate the predetermined overhead rate, we need to use the following formula:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= 1,200,000 / 600,000
Predetermined manufacturing overhead rate= $2 per direct labor dollar
Final answer:
The predetermined overhead rate of Bridge Building Company is 2, which is calculated by dividing the overhead costs by the direct labor costs. This signifies that for every dollar of direct labor cost, the company allocates two dollars to overhead costs.
Explanation:
The predetermined overhead rate of the Bridge Building Company can be calculated by dividing the total estimated overhead costs by the total estimated direct labor costs as follows:
- Overhead costs = $1,200,000
- Direct labor costs = $600,000
- Predetermined overhead rate = Overhead costs / Direct labor costs
- Therefore, the predetermined overhead rate = $1,200,000 / $600,000 = 2
This means that for every dollar of direct labor cost, the Bridge Building Company allocates two dollars to overhead costs. This rate is used as the allocation base for their overhead.
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