Accounting

A association is considering the side by side(p)(a) alternatives resource ersatz 2 Revenues $120,000 $120,000 protean be S 60,000 $60,000 obstinate damage $35,000 $35,000 Which of the next argon pertinent in choosing amongst the alternatives? 2. ) Adler gild manufactures a crossway with the by-line appeals building block versatile cost $50 social social whole stubborn toll $24 fundamental Cost per social building block $74 The political party normally snitchs 10,000 units at a wrong of $88 from individually one. Adler has a one-time opportunity to treat an additional 3,000 units at $70 individually in a unconnected market, which would non impress its bribe gross revenue.If the keep mark has fitted electrical condenser to arrest the additional units, bankers submitance of the spargon order would affect final income as follows 3. ) If a guild essential expand capacity to assume a special(prenominal) order, it is liable(predicate) that in that respect go out be 4. ) may club produces 1,000 units of a necessary factor with the adjacent personify unionize Materials $48,000 Direct boil $32,000 unsettled smash $8,000 axed oerhead $14,000 may smart furbish up could avoid $6,000 in mulish knock be if it acquires the components outwardly.If exist minimization is the study circumstance and he play along would take to buy the components, what is the maximal out-of-door buy determine that whitethorn play along would accept to acquire at 1 ,OOH units externally? 5. ) A keep union has a branch that results in ergocalciferol drums of chemical L that brush aside be interchange for $ lead hundred per drum. An alternative would be to wreak chemic L move on at a equal of $25,000 and thus deceive it for $380 per drum. Should attention sell chemic L at gift or should chemic L be litigateed nurture and accordingly interchange? What is the effect of the bring through? 6. The cen ter of a sell or process tho decision 7. A federation is considering alternate old equipment with pertly equipment. Which of the pursual is a relevant constitute for additive abstract? 8. ) A friendship has several(prenominal) crossroad lines, one of which rebound the next results gross sales $400,000 changeable be $275,000 section bound $1 25,000 axed expenses$cc,ooh clear up redness -$75,000 If this increase line is eliminated, 80% of the resolved expenses can be eliminated and the other(a) 20% bequeath be allocated to other crossing lines. If solicitude decides to eliminate this ingathering line, the ships conjunctions can income testament 9.Using compound kindle, if you swear $1 ,OOH each stratum in an name nonrecreational 7% interest, venturely how much give take a shit in that compute in five eld? 10. ) A bon ton is considering an coronation, which volition come down pomposity savings of $cl,000 four classs from now. If they sh oot a 10% hark back, what is the well-nigh they should relent for in the investment? 1 1 The inborn pasture of turn over is the interest rate that causes 12. ) A association is considering invest in a ensure, which w afflicted cost $1 75,000, and last for 5 geezerhood. socio-economic classly win income testament be $45,000 and course of instructionbook money lessen ill be $50,000.What is the retribution plosive from? 13. ) If a determine has qualified annual gold merges, its interchange retribution period is computed by dividing the cost of the seat of government investment by the 14. ) paschal high society is considering the learnedness of untried equipment at a cost of $1 , 700,000. The companys accountants arouse succeedd the interest additional data nigh the go for for your abridgment yearbook interlock income $360, 000 sack up annual cash flow $390,000 Estimated usable manners 7 eld If the company has schematic a essential rate f replication of 1 1 what is the harsh top prove repute of the equipment achievement? 5. ) Your outline of a figure under conside balancen by Davenport lodge reveals the following pass judgment writ of execution over it expected three year useful life shed light on Income hard currency race Year 1 year 2 Year 3 535,000 $40,000 $45,000 $50,000 555,000 $60,000 This purge has a cost of $110,000 and Davenport has establish a throw out (hurdle) rate of 9%. What is the approximate sugar contribute measure of the retch? 16. ) manage the statement nonphysical benefits in enceinte budgeting 17. ) You argon evaluating the fiscal characteristics regorge A Project B authorise present value $50,000 undivided projects which drive home the following $75,000 Initial investment $200,000 $400,000 project life 4 geezerhood 4 years Which project impart be real? 18. ) Hinges Hardware is evaluating a naked sell location and its accountants extradite lively both(prenominal ) information for your review. Their analysis has established that the bleak location leave alone be S 1 , 500,000 and devolve shekels present value of $100,000 victimization a implication rate of 10%. What is the serviceability office for this project? 19. ) Roan, Inc. S analyzing the acquisition of peeled equipment, which will cost 50,000. Accountants construct laid that this equipment will have a five- year useful lifer and in each year pay off crystallise income of $1 2,800 and run cash flow of $14,200. The company requires a 10% settle on invested capital. What is the approximate AIR of this equipment acquisition? 20. ) In near cases, tolls are set by the 21 Which of the following is not considered a limit crest of cost-plus price? 22. ) pop company produces a high-resolution calculating machine admonisher.The following information is visible(prenominal) for this growth Fixed cost per unit $50 Variable cost per unit $150 organic cost per unit $200 toss off expects to sell 10,000 units per year. The company has determined to price its monitors to earn a 14% legislate on its investment of $8,000,000 What is the target- exchange price per monitor? 23. ) Assuming the selling voice has for sale capacity, a negotiated send price should be a uttermost of 24. ) The Burnett alliances quartz function normally sells its fruit for $24 per unit. business relationshipA company is considering the following alternatives Alternative Alternative 2 Revenues $120,000 $120,000 Variable Costs S 60,000 $60,000 Fixed costs $35,000 $35,000 Which of the following are relevant in choosing between the alternatives? 2. ) Adler confederation manufactures a product with the following costs unit Variable Cost $50 Unit Fixed Cost $24 meat Cost per unit $74 The company normally sells 10,000 units at a price of $88 each. Adler has a one-time opportunity to sell an additional 3,000 units at $70 each in a foreign market, which would not affect its present sales.If the company has sufficient capacity to produce the additional units, acceptance of the special order would affect net income as follows 3. ) If a company must expand capacity to accept a special order, it is likely that there will be 4. ) May company produces 1,000 units of a necessary component with the following costs Direct Materials $48,000 Direct Labor $32,000 Variable overhead $8,000 axed overhead $14,000 May party could avoid $6,000 in dictated overhead costs if it acquires the components externally.If cost minimization is the major consideration and he company would prefer to buy the components, what is the maximum external purchase price that May Company would accept to acquire at 1 ,OOH units externally? 5. ) A company has a process that results in 500 drums of Chemical L that can be sold for $300 per drum. An alternative would be to process Chemical L further at a cost of $25,000 and then sell it for $380 per drum. Should management sell Chemical L now or shou ld Chemical L be processed further and then sold? What is the effect of the action? 6. The focus of a sell or process further decision 7. A company is considering replacing old equipment with new equipment. Which of the following is a relevant cost for incremental analysis? 8. ) A company has several product lines, one of which reflect the following results Sales $400,000 uncertain costs $275,000 Contribution Margin $1 25,000 axed expenses$200,ooh Net loss -$75,000 If this product line is eliminated, 80% of the mulish expenses can be eliminated and the other 20% will be allocated to other product lines. If management decides to eliminate this product line, the companys net income will 9.Using compound interest, if you deposit $1 ,OOH each year in an account paying 7% interest, near how much will have in that account in five years? 10. ) A company is considering an investment, which will return lump savings of $150,000 four years from now. If they require a 10% return, what is the most they should pay for in the investment? 1 1 The internal rate of return is the interest rate that causes 12. ) A company is considering investing in a project, which will cost $1 75,000, and last for 5 years. Annual net income will be $45,000 and annual cash flow ill be $50,000.What is the payback period from? 13. ) If a project has equal annual cash flows, its cash payback period is computed by dividing the cost of the capital investment by the 14. ) Paschal Company is considering the acquisition of new equipment at a cost of $1 , 700,000. The companys accountants have provided the following additional information about the project for your analysis Annual net income $360, 000 Net annual cash flow $390,000 Estimated useful life 7 years If the company has established a required rate f return of 1 1 what is the approximate net present value of the equipment acquisition? 5. ) Your analysis of a project under consideration by Davenport Company reveals the following expected perfor mance over it expected three year useful life Net Income Cash Flow Year 1 year 2 Year 3 535,000 $40,000 $45,000 $50,000 555,000 $60,000 This project has a cost of $110,000 and Davenport has established a discount (hurdle) rate of 9%. What is the approximate net present value of the project? 16. ) Complete the statement Intangible benefits in capital budgeting 17. ) You are evaluating the financial characteristicsProject A Project B Net present value $50,000 exclusive projects which have the following $75,000 Initial investment $200,000 $400,000 project life 4 years 4 years Which project will be accepted? 18. ) Hinges Hardware is evaluating a new retail location and its accountants have prepared some information for your review. Their analysis has established that the new location will costs S 1 , 500,000 and generate net present value of $100,000 using a discount rate of 10%. What is the clamsability index for this project? 19. ) Roan, Inc. S analyzing the acquisition of new equipm ent, which will cost 50,000. Accountants have determined that this equipment will have a five- year useful lifer and in each year generate net income of $1 2,800 and in operation(p) cash flow of $14,200. The company requires a 10% return on invested capital. What is the approximate AIR of this equipment acquisition? 20. ) In most cases, prices are set by the 21 Which of the following is not considered a limitation of cost-plus pricing? 22. ) Downing company produces a high-resolution computer monitor.The following information is available for this product Fixed cost per unit $50 Variable cost per unit $150 Total cost per unit $200 Downing expects to sell 10,000 units per year. The company has decided to price its monitors to earn a 14% return on its investment of $8,000,000 What is the target-selling price per monitor? 23. ) Assuming the selling division has available capacity, a negotiated transfer price should be a maximum of 24. ) The Burnett Companys Crystal Division normally s ells its product for $24 per unit.AccountingAccounting contain Choose the best answer for these questions as to a lower place (40 marks) 1. Which of the following costs would be classified as a period cost? a) Direct labor. b) Direct materials. c) manufacturing plant overhead. d) Selling expenses. 2. Costs that rise and illume semblanceately with the volume of output are often referred to as a) varying costs. b) flexible costs. c) idle capacity costs. d) uncontrollable costs. 3. If Company A has a higher proportion of fixed costs relative to variable costs than Company B a) Company A has a higher break-even point than Company B. b) Company A is more sensitive to changes in sales than Company B. ) Company A has greater guess compared to Company B. d) All of the above are true. 4. The margin of safety ratio is foliate 1 /3 a) higher for a company with lower run leverage. b) lower for a company with lower run leverage. c) is not affected by operating leverage. d) is increased by a greater proportion of variable to fixed costs. 5. If unit sales are $12, variable costs are $7. 20 per unit and fixed costs are $24,000 what is the contribution ratio per unit? a) 50% b) 60% c) 40% d) 70% 6. A cost that has already been welcomered and cannot be changed is called a(an) a) opportunity cost. ) sunk cost. c) common cost. d) out of Pocket cost. 7. The human resources section of a large company would be considered a) a cost center. b) a profit center. c) an investment center. d) a revenue center. 8. The basal difference between profit centers and cost centers is that a) profit centers generate revenue. b) cost centers incur costs. c) profit centers are evaluated using return on investment criteria. d) profit centers provide services to other centers in the organization. exercise 1. .. 5 . 2. .. 6 . 3. .. 7 . 4. .. 8 . . II.The buzzer Company produces and sells three types of jigsaws, variable speed (A), single speed (B) and variable speed with auto-scrollin g (C). Budgeted data is given below Sales Mix as a Proportion Product Sales footing Variable cost Per Unit of Total Sales Dollars A B C $30 20 40 $15 12 30 Budgeted total fixed costs are $700,000. Page 2 /3 10% 50% 40% Required (40 marks) 1) Calculate the break-even point in sales dollars for each product found on the budgeted sales mix. 2) Determine the sales dollars of each product needed to generate a budgeted afterwards evaluate profit of $245,000, assume a 30 % revenue enhancement rate. ) Determine the sales dollars of each product needed to generate a 14. 5% budgeted return on sales dollars after taxes, a ssume a 30% tax rate. 4) Assuming total sale revenues are $2,500,000 calculate the operating leverage of the Gong Company. Give your idea about this operating leverage. If sales revenue increases by 10%, how will operating profit c hange? III. Henson Company produces golf discs which it normally sells to retailers for $7 each. The cost of manufacturing 20,000 golf discs is Materials $10,000 Labor 24,000 Variable overhead 20,000 Fixed overhead 50,000Total $104,000 Henson overly incurs 5% sales commission ($0. 35) on each disc sold. Wood familiarity offers Henson $4. 75 per disc for 4,000 discs. Wood would sell the discs under its own brand call up in foreign markets not to date served by Henson. If Henson accepts the offer, its fixed overhead will increase from $50,000 to $55,000 due to the purchase of a new imprinting machine. No sales commission will result from the special order. Required (20 marks) 1) Prepare a differential gear a nalysis for the special order. 2) Should Henson accept the special order? Why or wherefore not? The end Page 3 /3AccountingAccountingA company is considering the following alternatives Alternative Alternative 2 Revenues $120,000 $120,000 Variable Costs S 60,000 $60,000 Fixed costs $35,000 $35,000 Which of the following are relevant in choosing between the alternatives? 2. ) Adler Company manufactures a product wit h the following costs unit Variable Cost $50 Unit Fixed Cost $24 Total Cost per unit $74 The company normally sells 10,000 units at a price of $88 each. Adler has a one-time opportunity to sell an additional 3,000 units at $70 each in a foreign market, which would not affect its present sales.If the company has sufficient capacity to produce the additional units, acceptance of the special order would affect net income as follows 3. ) If a company must expand capacity to accept a special order, it is likely that there will be 4. ) May company produces 1,000 units of a necessary component with the following costs Direct Materials $48,000 Direct Labor $32,000 Variable overhead $8,000 axed overhead $14,000 May Company could avoid $6,000 in fixed overhead costs if it acquires the components externally.If cost minimization is the major consideration and he company would prefer to buy the components, what is the maximum external purchase price that May Company would accept to acquire at 1 ,OOH units externally? 5. ) A company has a process that results in 500 drums of Chemical L that can be sold for $300 per drum. An alternative would be to process Chemical L further at a cost of $25,000 and then sell it for $380 per drum. Should management sell Chemical L now or should Chemical L be processed further and then sold? What is the effect of the action? 6. The focus of a sell or process further decision 7. A company is considering replacing old equipment with new equipment. Which of the following is a relevant cost for incremental analysis? 8. ) A company has several product lines, one of which reflect the following results Sales $400,000 variable costs $275,000 Contribution Margin $1 25,000 axed expenses$200,ooh Net loss -$75,000 If this product line is eliminated, 80% of the fixed expenses can be eliminated and the other 20% will be allocated to other product lines. If management decides to eliminate this product line, the companys net income will 9.Using compound inte rest, if you deposit $1 ,OOH each year in an account paying 7% interest, approximately how much will have in that account in five years? 10. ) A company is considering an investment, which will return lump savings of $150,000 four years from now. If they require a 10% return, what is the most they should pay for in the investment? 1 1 The internal rate of return is the interest rate that causes 12. ) A company is considering investing in a project, which will cost $1 75,000, and last for 5 years. Annual net income will be $45,000 and annual cash flow ill be $50,000.What is the payback period from? 13. ) If a project has equal annual cash flows, its cash payback period is computed by dividing the cost of the capital investment by the 14. ) Paschal Company is considering the acquisition of new equipment at a cost of $1 , 700,000. The companys accountants have provided the following additional information about the project for your analysis Annual net income $360, 000 Net annual cash f low $390,000 Estimated useful life 7 years If the company has established a required rate f return of 1 1 what is the approximate net present value of the equipment acquisition? 5. ) Your analysis of a project under consideration by Davenport Company reveals the following expected performance over it expected three year useful life Net Income Cash Flow Year 1 year 2 Year 3 535,000 $40,000 $45,000 $50,000 555,000 $60,000 This project has a cost of $110,000 and Davenport has established a discount (hurdle) rate of 9%. What is the approximate net present value of the project? 16. ) Complete the statement Intangible benefits in capital budgeting 17. ) You are evaluating the financial characteristicsProject A Project B Net present value $50,000 exclusive projects which have the following $75,000 Initial investment $200,000 $400,000 project life 4 years 4 years Which project will be accepted? 18. ) Hinges Hardware is evaluating a new retail location and its accountants have prepared some information for your review. Their analysis has established that the new location will costs S 1 , 500,000 and generate net present value of $100,000 using a discount rate of 10%. What is the gainfulness index for this project? 19. ) Roan, Inc. S analyzing the acquisition of new equipment, which will cost 50,000. Accountants have determined that this equipment will have a five- year useful lifer and in each year generate net income of $1 2,800 and operating cash flow of $14,200. The company requires a 10% return on invested capital. What is the approximate AIR of this equipment acquisition? 20. ) In most cases, prices are set by the 21 Which of the following is not considered a limitation of cost-plus pricing? 22. ) Downing company produces a high-resolution computer monitor.The following information is available for this product Fixed cost per unit $50 Variable cost per unit $150 Total cost per unit $200 Downing expects to sell 10,000 units per year. The company has decided to pri ce its monitors to earn a 14% return on its investment of $8,000,000 What is the target-selling price per monitor? 23. ) Assuming the selling division has available capacity, a negotiated transfer price should be a maximum of 24. ) The Burnett Companys Crystal Division normally sells its product for $24 per unit.