2) TablMor Inc. Company manufactures furniture, including tables. Selected costs are given below:1. The salary of the CEO of the company is $250,000 per year.2. Instead of producing the tables, the company could rent its factory space for $85,000 per year.3. Salespeople are paid a commission of $23 for each table sold.4. The depreciation on the machines used to make the tables totals $38,000 per year. The machineshave no resale value and do not wear out through use.5. The tables are made of iron that costs $250 per table.6. The production line - on which workers are assembling the tables - is supervised by a production-manager who is paid $67,000 per year.7. Four machine-hours are required to produce a table. Utility costs are $8 per machine-hour.8. Wages are paid to workers that assemble tables. The cost of wages is $55 per table.9. The advertising expense of the year is $180,000 per year. It covers all the company's products.The company produced 100 tables and sold 80 during the month.What's the amount of Fixed Cost?O 431.840,0025.000,00108.200,00155.200,00O 22.000,00O 52.040,0038.000,00535.000,00O 85.000,003) TablMor Inc. Company manufartures furniture includinntabler

Answer- 535,000 Working Fixed cost are cost that are not dependent of the volume of units produced…

Answered: 2) TablMor Inc. Compar 1. The salary of…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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2. Brown Company bought a new machine 1 year ago for 12 million dollars. At that time the machine was estimated to have a life of 6 years and no salvage value. Annual operating costs are estimated at 20 million dollars. A new machine produced by another company does the same job but with an annual operating cost of only 17 million dollars. This new machine costs $21 million with a 5 year lifespan and no salvage value. The old machine can be sold for 10 million dollars. Straight-line depreciation is used and 40 percent corporate tax. If the cost of capital is 8 percent after taxes, calculate:a). Initial investment costsb). After-tax incremental cash flow.c). NPV of new investment.
Use the following to answer questions 76-79: (Ignore income taxes in this problem.) Perky Food Corporation produces and sells coffee jelly. Perky currently produces the jelly using a manual operation but is considering the purchase of machinery to automate its operations. Information related to the two operations is as follows: Cost of machinery. Useful life of machinery. Expected salvage value in 12 years. Expected annual revenue (50,000 jars).. Expected annual variable costs. Expected annual fixed costs. ***** B) 12.1% C) 14.5% D) 22.9% Manual Operation $210,000 $42,000 $72,000 Perky's discount rate is 12%. Perky uses the straight-line method of depreciation. 76. What is the net present value of automating operations using the incremental cost approach? Answer: A Level: Medium LO: 6 Automated Operation $420,000 $210,000 $135,000 $30,000 12 years $0 A) $11,940 B) $56,940 C) $(104,106) D) $112,684 Answer: C Level: Medium LO: 1 77. Within what range does the internal rate of return…
Wildhorse Inc. wants to purchase a new machine for $38,790, excluding $1,500 of installation costs. The old machine was purchased 5 years ago and had an expected economic life of 10 years with no salvage value. The old machine has a book value of $2,200, and Wildhorse Inc. expects to sell it for that amount. The new machine will decrease operating costs by $9,000 each year of its economic life. The straight-line depreciation method will be used for the new machine for a 6-year period with no salvage value. Click here to view PV table. (a) Determine the cash payback period. (Round cash payback period to 2 decimal places, e.g. 10.53.) Cash payback period (b) years Determine the approximate internal rate of return. (Round answer to O decimal places, e.g. 13%. For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Internal rate of return %
Granfield Company has a piece of manufacturing equipment with a book value of $41,500 and a remaining useful life of four years. At the end of the four years the equipment will have a zero salvage value. The market value of the equipment is currently $22,300. Granfield can purchase a new machine for $123,000 and receive $22,300 in return for trading in its old machine. The new machine will reduce variable manufacturing costs by $19,300 per year over the four-year life of the new machine. The total increase or decrease in net income by replacing the current machine with the new machine (ignoring the time value of money) is: Multiple Choice $77,200 decrease $23,500 increase $53,050 increase $23,500 decrease $19,200 decrease
[The following information applies to the questions displayed below.] Kate's Candy Corporation makes chewy chocolate candies at a plant in Winston-Salem, North Carolina. Steve Bishop, the production manager at this facility, Installed a packaging machine last year at a cost of $500,000. This machine is expected to last for 10 more years with no residual value. Operating costs for the projected levels of production, before depreciation, are $100,000 annually. 1. Steve has just learned of a new packaging machine that would work much more efficiently in the production line. This machine would cost $580,000 Installed, but the annual operating costs would be only $40,000 before depreciation. This machine would be depreciated over 10 years with no residual value. He could sell the current packaging machine this year for $250,000. equired: What is the estimated net present value of purchasing the new machine? (Do not round Intermediate calculation. Round your nswers to the nearest whole…
A $76,000 machine with a 10-year class life was purchased 3 years ago. The machine will now be sold for $31,000 and replaced with a new machine costing $51,000, with a 5-year class life. The new machine will not increase sales, but will decrease operating costs by $ 16,000 per year. Simplified straight line depreciation is employed for both machines, and the marginal corporate tax rate is 34 percent. What is the initial outlay for the project? ALTHOUGH THE INITIAL OUTLAY IS NEGATIVE, PLEASE ENTER YOUR ANSWER AS A POSITIVE SIGN. IN OTHER WORDS, IF YOUR ANSWER IS-10,000, ENTER IT AS 10,000. DO NOT ENTER THE DOLLAR SIGN
B2B Company is considering the purchase of equipment that would allow the company to add a new product to its line. The equipment costs $240,000 and has a 12-year life and no salvage value. The expected annual income for each year from this equipment follows. Sales of new product $ 150,000 Expenses Materials, labor, and overhead (except depreciation) 80,000 Depreciation—Equipment 20,000 Selling, general, and administrative expenses 15,000 Income $ 35,000 (a) Compute the annual net cash flow.(b) Compute the payback period.(c) Compute the accounting rate of return for this equipment.
[The following information applies to the questions displayed below.] Quick Copy purchased a new copy machine. The new machine cost $106,000 including installation. The company estimates the equipment will have a residual value of $26,500. Quick Copy also estimates it will use the machine for four years or about 8,000 total hours. Actual use per year was as follows: Year Hours Used 1 2,800 2 2,000 3 2,000 4 3,200 Problem 7-5B (Algo) Part 3 3. Prepare a depreciation schedule for four years using the activity-based method. (Round your "Depreciation Rate" to 3 decimal places and use this amount in all subsequent calculations. Round answers to the nearest whole dollar.) > Answer is complete but not entirely correct. QUICK COPY Depreciation Schedule-Activity-Based End of Year Amounts Depreciation Accumulated Year 1 Book Value Expense Depreciation $ 27,825 $ 27,825 $ 78,175 2 19,876 47,700 58,325 X 3 19,876 67,575 38,450 x 4 31,800 x 99,375 5,125 x Total $ 99,377
Stranger Things Corporation is planning to add a new product to its line. To package this product, the company needs to buy a new machine at a cost of $518,000 cost with an expected four-year life and $15,000 salvage value. Additional annual information for this new product line follows: Sales of new product Cost of Goods Sold (does not include depreciation) Selling, general, and administrative expenses (does not include depreciation) Required: (1) Determine income and net cash flow for each year of this machine's life. $ 1,750,000 1,248,000 (2) Compute this machine's payback period, assuming that cash flows occur evenly throughout each year. 315,000 (3) Compute net present value for this machine using a discount rate of 5%. Use the Present Value Tables below.
[The following information applies to the questions displayed below.] Astro Co. sold 19,200 units of its only product and incurred a $43,072 loss (ignoring taxes) for the current year, as shown here. During a planning session for year 2020's activities, the production manager notes that variable costs can be reduced 50% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $142,000. The maximum output capacity of the company is 40,000 units per year. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31, 2019 $704,640 563,712 Sales Variable costs Contribution margin Fixed costs 140,928 184,000 Net loss $(43,072) Compute the sales level required in both dollars and units to earn $120,000 of target pretax income in 2020 with the machine stalled and no change in unit sales price. (Do not round intermediate calculations. Round your answers to 2 decimal places. pund "Contribution margin…
B2B Company is considering the purchase of equipment that would allow the company to add a new product to its line. The equipment costs $144,000 and has a 12-year life and no salvage value. The expected annual income for each year from this equipment follows. Sales of new product $ 90,000 Expenses Materials, labor, and overhead (except depreciation) 48,000 Depreciation—Equipment 12,000 Selling, general, and administrative expenses 9,000 Income $ 21,000 (a) Compute the annual net cash flow.(b) Compute the payback period.(c) Compute the accounting rate of return for this equipment. I could not include an image for "C" please answer seperately
Santana Rey is considering the purchase of equipment for Business Solutions that would allow the company to add a new product to its computer furniture line. The equipment is expected to cost $280,000 and to have a five-year life and no salvage value. It will be depreciated on a straight-line basis. Business Solutions expects to sell 100 units of the equipment’s product each year. The expected annual income related to this equipment follows. Sales $ 385,000 Costs Materials, labor, and overhead (except depreciation) 193,000 Depreciation on new equipment 56,000 Selling and administrative expenses 32,000 Total costs and expenses 281,000 Pretax income 104,000 Income taxes (30%) 31,200 Net income $ 72,800 Required: (1) Compute the payback period. (2) Compute the accounting rate of return for this equipment.

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