Bellfont Company produces door stoppers. August production costs are below (A+ Guaranteed)

Bellfont Company produces door stoppers. August production costs are below:

Door Stoppers produced                    75,000

Direct material (variable)                                            $20,000

Direct labor (variable)                                               40,000

Supplies (variable)                                                      20,000

Supervision (fixed)                                                      27,200

Depreciation (fixed)                                                    22,700

Other (fixed) 4,800

In September, Bellfont expects to produce 100,000 door stoppers. Assuming no structural changes, what is Bellfont’s production cost per door stopper for September?

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Assume that at the beginning of 2009, a company purchased a used jet (A+)

Assume that at the beginning of 2009, a company purchased a used jet at a cost of $44,400,000. The plane expects to remain useful for five years (6.5 million miles) and to have a residual value of $5,400,000. Fast Delivery expects to fly the plane 725,000 miles the first year, 1,225,000 miles each year during the second, third, and fourth years, and 2,100,000 miles the last year.

Compute

a. Straight-line

  • b. Units-of-production
  • c. Double-declining-balance

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At the beginning of 2014, Ovila Company estimated the following costs to produce (A+ Guaranteed)

At the beginning of 2014, Ovila Company estimated the following costs to produce one unit of product: 8 pounds of direct material costing $3 per pound; and, 2 hours of direct labor costing $12 per hour. Ovila also estimated annual factory overhead totaling $380,000, and 15,000 direct labor hours to be worked during the year.

Job 130, containing 400 identical units, was completed and sold during August of 2014. Job 130 required 2,500 pounds of direct material costing $4,500, and 680 hours of direct labor costing $8,700. At the end of 2014, Ovila determined that the total actual factory overhead was $480,000, and direct labor hours worked to have been 10,800.

(a) What was the estimated cost of Job 130?
(b) What is the “normal” cost of Job 130?
(c) What is the “prime” cost of Job 130?

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Cato is a CMA working in a new assignment as an assistant to Rose (A+ Guaranteed)

Cato is a CMA working in a new assignment as an assistant to Rose. Rose is the head manager of a production department. Cato notices the department has over-applied factory overhead in each of the last ten years. Cato asks Rose about the pattern and is reminded that bonuses depend on meeting budgets. Rose further tells Cato not question estimates.

Required:
(a) Why would the Rose do this?
(b) What is the harm to the company?
(c) What should Cato do, and why?
(d) What actions should Cato avoid, and why?

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FIN 350 WEEK 6 QUIZ 5 (A+ Guaranteed)

• Question 1
____ mortgages enabled more people with relatively lower income, or high existing debt, or a small down payment to purchase homes.

• Question 2
____ economic growth will probably ____ the risk premium on mortgages and ____ the price of

• Question 3
Rates for adjustable-rate mortgages are commonly tied to the

• Question 4
The interest rate on a second mortgage is ____ on a first mortgage created at the same time, because the second mortgage is ____ the existing first mortgage in priority claim against the property in the event of default.

• Question 5
Fannie Mae and Freddie Mac experienced financial problems during the credit crisis because they:

• Question 6
A financial institution has a higher degree of interest rate risk on a ____ than a ____.

• Question 7
Financial institutions that hold fixed-rate mortgages in their asset portfolios are exposed to ____ risk, because they commonly use funds obtained from short-term customer deposits to make long-term mortgage loans.

• Question 8
In a collateralized mortgage obligation (CMO), mortgages are segmented into ____ (or classes).
• Question 9
____ risk is the risk that a borrower may prepay the mortgage in response to a decline in interest rates.

• Question 10
For any given interest rate, the shorter the life of the mortgage, the ____ the monthly payment and the ____ the total payments over the life of the mortgage.

• Question 11
An institution that originates and holds a fixed-rate mortgage is adversely affected by ____ interest rates; the borrower who was provided the mortgage is adversely affected by ____ interest rates.

• Question 12
Which of the following is not true with respect to a growing-equity mortgage?

interest payments that result in full payment of the debt by maturity

• Question 13
From the perspective of the lending financial institution, interest rate risk is

Question 14
Collateralized mortgage obligations (CMOs) are generally perceived to have

• Question 15
Which of the following will typically require homeowners to ultimately request a new mortgage?

• Question 16
“Pink sheets” are traded on the

• Question 17
____ are portfolios of international stocks created and managed by various financial institutions.
• Question 18
The largest organized exchange, listing the largest firms, is the
• Question 19
A ____ requires that dividends cannot be paid on common stock until all current and previously omitted dividends are paid on preferred stock.

• Question 20
Shareholders can most easily measure a firm’s performance by monitoring changes in its ____ over time.
• Question 21
Managers of firms may consider a stock repurchase or even a leveraged buyout when they believe their stock is ____ by the market, or a secondary stock offering when they believe their stock is ____ by the market.

• Question 22
The prevailing price per share divided by the firm’s earnings per share is known as the

• Question 23
The transaction costs to the issuing firm in an IPO is usually ____ percent of the funds raised.
• Question 24
____ sell shares to investors and use the proceeds to invest in portfolios of international stocks created and managed by portfolio managers.

• Question 25
The ____ is a value-weighted index of stock prices of 500 large U.S. firms.

• Question 26
A new stock issuance by a specific firm that already has stock outstanding is referred to as a(n)

• Question 27
Which of the following is not a part of the over-the-counter market?

• Question 28
____ are acquisitions that require substantial amounts of borrowed funds.

• Question 29
Initial public offerings (IPOs) perform ____ on the day following the IPO and ____ for periods of a year or longer after the IPO.

• Question 30
When a firm buys some of its shares that it had previously issued, this is referred to as a:

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Babcock Company estimates the following cash flows and depreciation (A+ Guaranteed)

Babcock Company estimates the following cash flows and depreciation on a project that will cost $200,000 and will last 10 years with no salvage value:

Instructions

a) Calculate the expected annual rate of return on this project showing calculations to support your answer.

b) Calculate the cash payback on this project showing calculations to support your answer.

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Hnak Itzek manufactures and sells homemade wine, and he wants to develop (A+ Guaranteed)

Hnak Itzek manufactures and sells homemade wine, and he wants to develop a standard cost per gallon. The following are required for production of a 40-gallon batch.

2,700 ounces of grape concentrate at $0.08 per ounce
70 pounds of granulated sugar at $0.56 per pound
69 lemons at $0.86 each
120 yeast tablets at $0.21 each
120 nutrient tablets at $0.12 each
3,600 ounces of water at $0.009 per ounce

Hank estimates that 3% of the grape concentrate is wasted, 10% of the sugar is lost, and 28% of the lemons cannot be used.

Compute the standard cost of the ingredients for one gallon of wine.

Standard Cost Per Gallon$

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Keegan Company manufactures a single product and has a policy (A+ Guaranteed)

Keegan Company manufactures a single product and has a policy that ending inventory must equal 10% of the next month’s sales. It estimates that May’s ending inventory will consist of 28,800 units. June and July sales are estimated to be 288,000 and 298,000 units, respectively. Keegan assigns variable overhead at a rate of $2.60 per unit of production. Fixed overhead equals $408,000 per month.

Compute the number of units to be produced and use to compute the total budgeted overhead that would appear on the factory overhead budget for month ended June 30.

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Xcite Equipment Co. manufactures and markets a number of rope products (A+)

Xcite Equipment Co. manufactures and markets a number of rope products. Management is considering the future of Product XT, a special rope for hang gliding, that has not been as profitable as planned. Since Product XT is manufactured and marketed independently of the other products, its total costs can be precisely measured. Next year’s plans call for a $250 selling price per 100 yards of XT rope. Its fixed costs for the year are expected to be $500,000, up to a maximum capacity of 550,000 yards of rope. Forecasted variable costs are $150 per 100 yards of XT rope.

1. Estimate Product XT’s break-even point in terms of sales units. (1 unit = 100 yards.) (Do not round intermediate calculations.)

2. Using the problem data for Xcite Equipment Company, determine what net income will be if the sales volume exceeds breakeven by 100 units. Explain contribution margin and how it can be used in determining profit at varying levels of sales.

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Acct 504 Week 5 – E8-6, P8-1A, E9-3 and E9-13 (A+ Guaranteed)

Acct 504 Week 5

EXERCISE 8-6

PROBLEM 8-1A

EXERCISE 9-3

EXERCISE 9-13

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