Answer:
Income statement prepared under the absorption costing method
Sales 2,600,000
Less: Cost of Goods Sold
Beginning Inventory 0
Add: Cost of Goods Produced
Materials Used 1,218,000
Labor Costs 522,000
Variable Overhead 87,000
Fixed Overhead 130,500
Less: Ending Inventory (1,957,500/4,350)×350 (157,500) 1,800,000
Gross Profit 800,000
Less: Operating Costs:
Selling and Administrative Expenses:
Variable Sales/Administrative Costs (60,000)
Fixed Sales/Administrative Costs (25,000)
Net Profit 715,000
Explanation:
Product/Manufacturing Cost under Absorption Costing = Direct Materials + Direct Labor + Variable Overheads + Fixed Overheads
Period Cost under Absorption Costing = All Non-Manufacturing Expenses
Answer:
setup cost = $1.75
setup time = 2.625 min
Explanation:
given data
The firm operates for 250 days annually.
Annual demand is 22,000.
Daily demand is 88.
Daily production stands at 250.
Desired lot size is set at 63 (equivalent to 2 hours of output).
Holding costs are $40 per unit each year.
To determine
the setup cost and setup time
solution
The setup cost is calculated as
setup cost = 
......................1
Here, Q represents the desired lot size, H is the holding cost, d denotes daily demand, D is annual demand, and p is the daily output.
Plugging in the values,
setup cost = 
setup cost = 
setup cost = $1.75
Next,
the setup time is given by
setup time = 
....................2
setup time = 
setup time = 2.625 min
The raw materials price variance amounts to $14,016 favorable.
The calculation for this variance is done as follows:
= Actual Quantity × (Standard Price - Actual Price)
= 23,360 liters × ($5.40 - $4.80)
= 23,360 liters × $0.6
= $14,016 favorable
This is derived by taking the standard price, subtracting the actual price, and multiplying the difference by the actual quantity to arrive at the finalized value.
Result:
The amount he should pay equals = $270,000
Explanation:
The sum due for the investment represents the present value of net income, discounted at a 12% return rate.
The occupancy percentage = 100 - 5= 95%
The net income equals occupancy rate × total income - expenses
= 95%× 3,600× 12 - 8,640= 32400
<passuming this="" income="" continues="" indefinitely="" the="" present="" value="" of="" is="" calculated="" as="">
PV of net income = A/r
A = 32400, r = 12%
= 32400/0.12
=$270000
The amount he should pay equals = $270,000
</passuming>
Answer:
$9.71
Explanation:
The calculations for the share price are outlined below:-
Current EPS = Net Income ÷ Total Common Shares
= $9,250,000 ÷ 5,500,000
= $1.68
Current P/E ratio = Current stock price ÷ Current EPS
= $12 ÷ $1.68
= 7.14
Projected EPS for next year = $9,250,000 × 1.25 ÷ 8,500,000
= $1.36
Forecasted stock price for next year = $1.36 x 7.14
= $9.71
