None Schemm Inc. regularly uses material F04E and currently has in stock455 liters of the material, for which it paid $2,617 several weeks ago.If this were to be sold as is on the open market as surplus material, itwould fetch $5.19 per liter. New stocks of the material can bepurchased on the open market for $5.79 per liter, but it must bepurchased in lots of 1,000 liters. Determine the relevant cost of 800liters of the material to be used in a job for a customer.a. $4,152b. $5,790c. $4,632d. $4,361

Step 1: Calculate the opportunity cost as follows:Opportunity cost = Stock available * open market…

Answered: Schemm Inc. regularly uses material…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Park corporation is preparing a bid for a special order that would require 760 liters of materials SUN100. The company already has 580 liters of this raw material in stock that originally cost $6.70 per liter. Material SUN100 is used in the company's main product and is replenished on a periodic basis. The resale value of the existing stock of the material is $6.00 per liter. New stocks of the material can be readily purchased for $7.05 per liter. What is the relevant cost of the 760 liters of the raw material when deciding how much to bid on the special order? (CIMA adapted) $5,155 $5,358 $4,966 $4,560
Klingon Widgets, lnc., purchased new cloaking machinery four years ago for $12 million. The machinery can be sold to the Romulans today for $10.8 million. KlingonOs current balance sheet shows net fixed assets of $10 million, current liabilities of $ 850, 000, and net working capital of $249, 000. If all the current assets were liquidated today, the company would receive $1.16 million cash. What is the book value of Klingons total assets today? What is the market value?
Terrific Corporation, an equipment distributor, sells a piece of machinery with a list price of P800,000 to Archer Company. Per agreement, Archer will pay P850,000 in one year evidenced by a note. Terrific normally sells at cash price equivalent to 90% of list price. The note has a market rate of 12%. How much should be recorded as Sales? (The PV of 1 at 12% for 1 year is 0.89) P756,500 P850,000 P720,000 P800,000
Çorner Company puchased a van with a list price of P3,000,000. The dealer granted a 15% reduction in list price and an additional 10% cash discount on the net price if payment is made in 30 days. Irrecoverable taxes amounted to P40,000 and the entity paid an extra P30,000 to have a spęcial horn installed. What amount should be recorded as initial cost of the van? а. 2,550,000 b. 2,335,500, C., 2,365,000 d. 2,325,000 CS Scanned with CamScanner
Maymay & James purchased an item valued at $147,000. They paid $22,050 down and financed the rest at 2.72% compounded monthly. To reduce the amount owing to $36,940 at the end of 6 years, what size of equal payments must Maymay & James make at the end of each year? Enter the present value as a positive value in the PV box below. Enter PMT and FV as positive or negative values based on PV being positive. Report PMT accurate to the nearest cent. P/Y = 1 C/Y = 12 N = 6 1/Y= 2.72 PVS 124950 PMT= $
The D.J. Masson Corporation needs to raise $500,000 for 1 year to supplyworking capital to a new store. Masson buys from its suppliers on termsof 3/10, net 90, and it currently pays on the 10th day and takes discounts.However, it could forgo the discounts, pay on the 90th day, and therebyobtain the needed $500,000 in the form of costly trade credit. What is theeffective annual interest rate of this trade credit?
Commercial paper is usually sold at a discount. Tan Corporation has just sold an issue of 90-day commercial paper with a face value of $1 million. The firm has received initial proceeds of $978,000. (Note: Assume a 365-day year.) 1.If a brokerage fee of $9,612 was paid from the initial proceeds to an investment banker for selling the issue, what effective annual rate will the firm pay, assuming that the paper is rolled over every 90 days throughout the year? Format: 11.11%
The Tolar Corporation has 500 obsolete desk calculators that are carried in inventory at a total cost of $720.000. If these calculators are upgraded at a total cost of $110.000, they can be sold for a total of $170,000 As an alternative, the calculators can be sold in their present condition for $50,000 Assume that Tolar decides to upgrade the calculators. At what selling price per unit would the company be as well off as if it just sold the calculators in their present condition? Multiple Choce $770 per calculator Sho per calculat $230 per calculator
Manning Imports is contemplating an agreement to lease equipment to a customer for four years. Manning normally sells the asset for a cash price of $230,000. .Assume that 8% is a reasonable rate of interest. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) What must be the amount of quarterly lease payments (beginning at the commencement of the lease) in order for Manning to recover its normal selling price as well as be compensated for financing the asset over the lease term? (Round your answers to nearest whole number and round percentage answer to 1 decimal place.)
FITCO is considering the purchase of new equipment. The equipment costs $337000, and an additional $114000 is needed to install it. The equipment will be depreciated straight-line to zero over a 5-year life. The equipment will generate additional annual revenues of $260000, and it will have annual cash operating expenses of $85000. The equipment will be sold for $85000 after 5 years. An inventory investment of $71000 is required during the life of the investment. FITCO is in the 40 percent tax bracket, and its cost of capital is 10 percent. What is the project NPV? $55788. $71818. $88557. $40428.
Watson Co. sold some machinery to the Finney Co. on January 2, 2009. The cash selling price would have been P473,850. Finney entered into an installment sales contract which required annual payments of P125,000, including interest at 10% over five years. The first payment was due on December 31, 2009. What amount of interest income should be included in Watson’s 2010 income statement (the second year of the contract)? A 25,845 B 12,524 C 34,885 D 39,624
Q3.Aconstruction company has bought a hoist for $ 70,000 and has a useful life of 4 years. The scrap value of this device is estimated at $ 30,000 after 4 years. The device is depreciated as a sum of years. Assuming the device has an annual revenue of $ 18,000, an inflation rate of 12 percent, a profit tax rate of 35 percent, and a minimum attractive company return rate of 18 percent considering inflation, is it justified to buy this device? Isit acceptable?

SEE MORE QUESTIONS

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…

Accounting

ISBN:

9780134475585

Author:

Srikant M. Datar, Madhav V. Rajan

Publisher:

PEARSON

Intermediate Accounting

Accounting

ISBN:

9781259722660

Author:

J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:

McGraw-Hill Education

Financial and Managerial Accounting

Accounting

ISBN:

9781259726705

Author:

John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS