You have been asked to decide about oneof two mutually exclusive alternatives (A &B). The following table gives the initial costs,annual savings in labor costs, and theexpected life of two pieces of equipment.Plot PW vs. i for each equipment on thesame graph and identify the AAIRR fromthe graph (i for the intersection). Then,highlight the corresponding value of i inyellow in your spreadsheet.High-cost Equipment (A)Low-cost Equipment (B)Initial Cost$137,910$100,000Savings in Labor Costs$42,000 / year$32,000 / yearLife5 years5 years

Internal rate of return:The Internal Rate of Return (IRR) is a critical metric used in finance and…

Answered: Initial Cost Savings in Labor Costs…

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter4: Accounting For Factory Overhead

Section: Chapter Questions

Problem 4E: Using the data in E4-2 and spreadsheet software, determine: The variable cost per unit, the total...

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Choose the correct letter of answer On a scattergrap, the diagonal line cuts across two sets of observations, namely: 600:200, and 900:500 which refer to costs and units, respectively. The fixed costs is plotted in the graph at P400. In this case, the variable cost per unit is equal to: a. P1.00b. P1.25c. P1.50d. P1.12
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Using the data in E4-2 and spreadsheet software, determine: The variable cost per unit, the total fixed cost, and R2. The plotted data points using the graphing function. Compare the results to your solutions in E4-2 and E4-3 and explain the reasons for the results.
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a) Determine the variable cost per unit and the fixed cost using the high-low method.b) What is the equation of the total mixed cost function?c) Prepare the scatter diagram and insert the trendline or line of best-fit. Use a scaleof 2 cm to represent 1,000 units on the x-axis & 2 cm to represent $50,000 on the yaxis.
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Initial Cost Savings in Labor Costs Life High-cost Equipment (A) $137,910 $42,000/year 5 years Low-cost Equipment (B) $100,000 $32,000/year 5 years