CONNECT ONLINE ACCESS F/MANAGERIAL ACC.
6th Edition
ISBN: 9781264445356
Author: Noreen
Publisher: MCG
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Chapter 2A, Problem 2A.10P
1.
To determine
Introduction: Absorption costing is a technique for calculating cost of product by taking indirect expense and direct cost into consideration.
To calculate: Net operating income using absorption costing.
2.
To determine
Introduction: The variability between present value of all
To calculate:Income statement using absorption costing, after improving quality of raw material.
3.
To determine
Introduction: The variability between present value of all cash outflow and present value of all cash inflow is known as net present value (NPV). The discount rate at which the net present value is equal to zero is knows as Internal
To calculate:Income statement using absorption costing, after increasing selling price.
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The production department is proposing the purchase of an automatic insertion machine. It has identified three machines and has asked the accountant to analyze them to determine
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Machine A
$43,529.50 $80,697.00
Machine B Machine C
$64,675.95
310,925.00 268,990.00 431,173.00
Estimated average income
Average investment
Oa. Machine B
Ob. Machine A
Oc. Machine C
Od. Machines B and C have the same preferred average rate of return.
The production department is proposing the purchase of an automatic insertion machine. It has identified three machines and has asked the accountant to analyze them
to determine which one has the best average rate of return.
Machine A
Machine B
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$60,103.80
326,647.00 200,346.00
Ca, Machines B and C have the same preferred average rate of return
b. Machine C
C. Machine 11
d. Machine A
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497,597.00
14
Howard Cooper, the president of Finch Computer Services, needs your help. He wonders about the potential effects on
the firm's net income if he changes the service rate that the firm charges its customers. The following basic data pertain
to fiscal Year 3.
Standard rate and variable
costs
Service rate per hour
Labor cost
Overhead cost
Selling, general, and
administrative cost
Expected fixed costs
Facility maintenance
Selling, general, and
administrative
Required:
a. Prepare the pro forma income statement that would appear in the master budget if the firm expects to provide
36,000 hours of services in Year 3.
Required Required Required
A
B
с
$
b. A marketing consultant suggests to Mr. Cooper that the service rate may affect the number of service hours that the
firm can achieve. According to the consultant's analysis, if Finch charges customers $80 per hour, the firm can
achieve 45,000 hours of services. Prepare a flexible budget using the consultant's assumption.
c. The same…
Chapter 2A Solutions
CONNECT ONLINE ACCESS F/MANAGERIAL ACC.
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