Answer:
The Annual Operating Cash Flow is $1,029,811.43
Explanation:
Initial Investment = Cost of Machine + Modification Cost
Initial Investment = $2,575,000 + $375,000
Initial Investment = $2,950,000
Salvage Value = $0
Useful Life = 7 years
Depreciation per year = (Initial Investment - Salvage Value) / Useful Life
Depreciation per year = ($2,950,000 - $0) / 7
Depreciation per year = $421,428.57
Annual Operating Cash Flow = (Sales – Operating Costs) * (1 – Tax Rate) + Tax Rate * Depreciation
Annual Operating Cash Flow = ($1,890,000 - $454,600) * (1 - 0.40) + 0.40 * $421,428.571
Annual Operating Cash Flow = $1,435,400 * 0.60 + 0.40 * $421,428.571
Annual Operating Cash Flow = $1,029,811.4284
Annual Operating Cash Flow = $1,029,811.43
The annual operating cash flow for ABC after considering costs related to the machine investment, increased sales, and taxes, is $1,034,097.
To compute the annual operating cash flow, we first add up the total cost of the machine. This includes the purchase price of the machine which is $2,575,000, the cost of modifications which is $375,000, and the additional inventory investment of $75,000. This gives a total investment cost of $3,025,000. Given that this will be depreciated straight-line over 7 years with no salvage value, the annual depreciation expense will be $3,025,000 / 7 = $432,143.
The machine is expected to increase ABC's sales revenues by $1,890,000 per year, but will also increase operating costs excluding depreciation by $454,600. Therefore, the total annual income before tax would be the increased sales ($1,890,000) minus the increased costs ($454,600) and the depreciation ($432,143), which equals $1,003,257.
As ABC's tax rate is 40%, the annual tax payable will be: $1,003,257 * 0.4 = $401,303. The annual income after tax is then $1,003,257 - $401,303 = $601,954. Finally, we must remember to add back the depreciation (as it is a non-cash item) to get to EBIT. This gives us a final operating cash flow of $601,954 + $432,143 = $1,034,097.
#SPJ11
B. Short-run marginal cost increases as output increases
C. Long-Run marginal cost increases as output increases
D. Short-run average cost increases as output increases
E. As output doubles, long run total cost more than doubles
Answer:
B. Short-run marginal cost increases as output increases
Explanation:
diseconomies of scale are the cost disadvantages that economic actors accrue due to an increase in organizational size or on output, resulting in production of goods and services at increased per-unit costs.
Answer:
The correct answer is the option A: Chemical analysis.
Explanation:
To begin with, a chemical analysis consists in the study of chemical composition and structure of substances and it refers to the field of chemistryas its name indicates so therefore that it does not implicate the allocation of joint costs as all of the other methods. Moreover, this type of analysis is considered to be the principal basis technique by which every chemical information is obtanied and there are also two main brances in it, the qualitative and quantitative analysis.
Answer:
$35,200
Explanation:
Given that
Invested amount = $320,000
Rate of interest = 11%
So by considering the above information, the amount of annual scholarship that can be given from this investment is
= Invested amount × Rate of interest
= $110,000 × 11%
= $35,200
By multiplying the invested amount with the rate of interest we can find out the annual scholarship amount
What will be the selling price per unit if Garcia uses a markup of 15% of total cost?
Answer:
Selling price = $301.3
Explanation:
The selling price would be determined by adding the total unit cost to the mark- up.
Mark up is the proportion of cost that is to be earned as profit.
Selling price = Total unit cost + Profit
Profit = 25% × unit cost
Selling price = Unit cost + Mark-up
Selling price = Unit cost + (15%× unit cost)
Total unit cost =Variable cost + unit fixed cost
Total fixed cost = 645,000 + 111,000 = 756,000
Unit fixed cost = $756,000/10,500 =×72
Total unit cost = 105 + 35 + 50 + 72 = 262
Selling price = 262 + ( 15% + 262) = 301.3
Selling price = $301.3
Answer:
9,792.75 units
Explanation:
The formula to compute the break even point in units is shown below:
Break even point in units = Fixed cost ÷ Weightage average Contribution margin per unit
where,
Fixed cost is $378,000
And, the Weightage average Contribution margin per unit is
= (Total contribution margin) ÷ (Total sales units)
= (8,000 units ×$34 + $2,000 × $57) ÷ (8,000 units + 2,000 units)
= ($272,000 + $114,000) ÷ (10,000 units)
= ($386,000) ÷ (10,000 units)
= $38.6 per unit
Now the break even point in units is
= $378,000 ÷ 38.6 per unit
= 9,792.75 units
2. Issued $1,050 of supplies from the materials inventory.
3. Purchased $25,100 of materials on account.
4. Paid for the materials purchased in the transaction (1) using cash.
5. Issued $30,100 in direct materials to the production department.
6. Incurred direct labor costs of $25,500, which were credited to Wages Payable.
7. Paid $21,600 cash for utilities, power, equipment maintenance, and other miscellaneous items for the manufacturing shop.
8. Applied overhead on the basis of 110 percent of direct labor costs.
9. Recognized depreciation on manufacturing property, plant, and equipment of $5,100.
The following balances appeared in the accounts of Sunset
Products for March:
Beginning Ending
Materials Inventory $9,150 _____
Work-in-Process Inventory $16,600 _____
Finished Goods Inventory $65,100 $36,600
cost of goods sold $73,100
Prepare T-Accounts to show the flow of costs during the period from materials inventory through the cost of goods sold.
Sunset products
Journal entry
1. Dr Material 20500
Cr Account payable 20500
(Material purchased on account)
2. Dr work in process 1050
Cr Material 1050
(material issued)
3. Dr Material 25100
Cr Accounts payable 25100
( Material purchased on account )
4. Dr Accounts payable 20500
Cr Cash 20500
(Paid for material purchased on account)
5. Dr Work in process 30100
Cr Material 30100
( Direct material issued to production department)
6. Dr Work in process 25500
Cr Wages payable 25500
( Direct labor cost incurred)
7. Dr Factory overhead 21600
Cr Cash 21600
( Paid cash for utilities)
8. Dr Work in process (25500*110%) 28050
Cr Applied overhead 28050
(Applied overhead)
9. Dr Factory overhead 5100
Cr Accumulated depreciation 5100
(To record depreciation)
T-account
Work in process Material
Dr___________Cr____ DR ___________CR
16600------ 9150 -----
1050 ----- 20500 ---- 1050
30100 ----- 25100--- 30100
25500---
28050---
Accounts payable Cash
Dr____________Cr_ DR ___________Cr
--- 20500 ---- 20500
----- 25100 ----21600
20500-----
Factory overhead Wages payable
Dr ____________Cr Dr _____________Cr
21600---
-----25500
5100---
Applied factory overhead Accumulated depreciation
Dr_____________Cr Dr ___________Cr_
----28050 ---5100
Cost of goods sold Finished goods
Dr_____________Cr Dr ______________Cr
( open) 65100 ---
101300 --- 36600 (end)
Dr Finished goods 101300
Cr Work in process 101300
(move work in process to finished goods)
Dr Cost of goods sold 129800
Finishd goods 129800
(move finished goods to cost of goods sold)