The following information was available at the beginning of 2019.Each bus will travel 90 000 kilometres (km) during the year.Road fund licences and insurances for the year will be $4 650 per bus.●CServicing and repairs per bus will be $1 250 every 30 000 km.Each bus costs $320 000 and is expected to have a useful life of six years afterwhich it will have a scrap value of $50 000...All tyres are replaced every 45 000 km at a cost of $600 per tyre. Each bus haseight tyres.●A total of 850 bus trips had been contracted for 2019.(a) Calculate the following overhead absorption rates for the year 2019.(i) Operational overheads per km(ii) Administrative overheads per bus trip(b) Explain one reason why the company uses predetermined overhead absorption●ACCBuntancy and Finance Institute) Ph-09 43013764/89977893rates.(c) Explain one reason why:(i) operational overheads are being absorbed on the basis of km travelled(ii) administrative overheads are being absorbed on the basis of bus tripsOn the six months January to June 2019, Umbriel Ltd had completed 465 bus tripsinvolving a distance of 178 400 km.The administrative overheads incurred were $81 760(d) Calculate the amount of over or under-absorption for each of operationaloverheads and administrative overheads for the six months January(i) Operational overheads(ii) Administrative overheads(e) Evaluate Umbriel Ltd's recovery of overheads for the six months January to June2019.

Some expenses are not directly associated with product, such as rent and electricity, such cost are…

The following information was available at the beginning C Each bus will travel 90 000 kilometres (km) during th Road fund licences and insurances for the year will E ● ● • • Servicing and repairs per bus will be $1 250 every 30 Each bus costs $320 000 and is expected to have a u which it will have a scrap value of $50 000.. ● • All tyres are replaced every 45 000 km at a cost of $ eight tyres. A total of 850 bus trips had been contracted for 201 (a) Calculate the following overhead absorption rates f (i) Operational overheads per km (ii) Administrative overheads per bus trip (b) Explain one reason why the company uses predete rates. (c) Explain one reason why: (i) operational overheads are being absorbed on (ii) administrative overheads are being absorbed On the six months January to June 2019, Umbriel Ltd H involving a distance of 178 400 km. The administrative overheads incurred were $81 760 (d) Calculate the amount of over or under-absorption overheads and administrative overheads for the s (i) Operational overheads (ii) Administrative overheads e) Evaluate Umbriel Ltd's recovery of overheads for 2019.

The following information was available at the beginning C Each bus will travel 90 000 kilometres (km) during th Road fund licences and insurances for the year will E ● ● • • Servicing and repairs per bus will be $1 250 every 30 Each bus costs $320 000 and is expected to have a u which it will have a scrap value of $50 000.. ● • All tyres are replaced every 45 000 km at a cost of $ eight tyres. A total of 850 bus trips had been contracted for 201 (a) Calculate the following overhead absorption rates f (i) Operational overheads per km (ii) Administrative overheads per bus trip (b) Explain one reason why the company uses predete rates. (c) Explain one reason why: (i) operational overheads are being absorbed on (ii) administrative overheads are being absorbed On the six months January to June 2019, Umbriel Ltd H involving a distance of 178 400 km. The administrative overheads incurred were $81 760 (d) Calculate the amount of over or under-absorption overheads and administrative overheads for the s (i) Operational overheads (ii) Administrative overheads e) Evaluate Umbriel Ltd's recovery of overheads for 2019.

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

Cost Reimbursement (break-even) 13. It costs $3400 for a first-class roundtrip from Boston to London (6560 miles) and there are 3 trips per week. Assuming an MARR of 15% and the following data, how many passengers must fly per trip on average? Item Cost $12,000K 15 years $2000K $225K $0.67 Initial Cost Service Life Salvage Value Annual Crew (labor) Fuel cost per mile Catering per person Fee per landing Maintenance per yr Insurance per yr $75 $250 $237K $166K
An asphalt road requires no repairs until the end of 2 years. At the end of 3rdyear, P90, 000 will be needed for repairs for the next 5 years, then P120, 000 at the end of each year for the next 5 years. If money is worth 14% compounded annually, what is the present value of the repair cost and its equivalent uniform annual cost for the 12-year period? Show complete solution and formula used. Calculate it manually. Please don't type it. Write it in a paper. Provide cash flow diagram. Thank you! ANS. P = 402,386.46, A = 71,089.35
An elevator system for a 15-yr old high-rise office building cost P 18M when first installed. The system was designed to last 30 years, with salvage value 10% of the initial cost. Using double declining balance method, what will be the book value at the end of 20 years? a) P 11.61 M b) P 6.39 M c) P 13.47 M d) P 4.53 M
1. Maintenance costs for a small bridge with an expected 50-yr life are estimated to be P 2,000.00 each year for the first 5 years, followed by a P10.000 expenditure in the 15th year and a P 20,000 expenditure in the 25th year. IfI 12% per year, what is the equivalent uniform annual maintenance costs over the entire 50-yr period? a. P 1,230 b. P 852 C. P 936 d. P 1,159
The department of transport will collect 5$ toll from each vehicle to recover the cost of a newly- built highway. In the first year (end of year 1), 10,000 cars are expected to use the highway followed by 4% annual increase in traffic due to the expansion of the city. Determine the equivalent present worth of this project over 20 years' time and at an interest rate of 8%?
Resurfacing a particular section of highway would result in cost of maintenance savings of $500 per year for the first five years and $1,000 per year for the next five years. If maintenance costs are the only consideration, the maximum amount to spend now on the project at 5% interest is __________. A. $5,556 B. $4,349 C. $3,392 D. $2,165
A company plans to purchase a new machine due to the expected demand for anew product. The machine costs Ghc185,000 and it is expected that the machineshall be used for five (5) years with a scrap value of Ghc15,000. The companyexpects the demand for the product to be as follows: Year 1 2 3 4 5 Demand (Units) 25,000 30,000 35,000 40,000 20,000 Increase Selling Price 2% per year Variable Cost of production Fixed production expenses 3% per year5% per year The company’s cost of capital is 10% and pays corporate tax at a rate of 25% inthe related year. Calculate the Net Present Value (NPV) of purchasing the newmachine advice whether it makes economic sense to buy the new machine.
K A highway bridge is being considered for replacement. The new bridge would cost $X and would last for 24 years. Annual maintenance costs for the new bridge are estimated to be $27,000. People will be charged a toll of $0.22 per car to use the new bridge. Annual car traffic is estimated at 360,000 cars. The cost of collecting the toll consists of annual salaries for six collectors at $9,000 per collector. The existing bridge can be refurbished for $1,400,000 and would need to be replaced in 24 years. There would be additional refurbishing costs of $80,000 every five years and regular annual maintenance costs of $17,000 for the existing bridge. There would be no toll to use the refurbished bridge. If MARR is 10% per year, what is the maximum acceptable cost (X) of the new bridge? Click the icon to view the interest and annuity table for discrete compounding when the MARR is 10per year. Choose the correct answer below. .... A. The maximum acceptable cost of the new bridge is $1,668,576.…
It is known that a project for the construction of public facilities with estimated costs and benefits of the project is as follows: • 6 year project life. • The applicable discount rate is 10% in the first year and the discount for the first year the second is an increase of 5%. • Expenses incurred only in year 1 and 2, with each Rp. 515,000,000 and Rp. 415 000 000. • Benefits received from year 3 to year 6 respectively Rp. 205,000,000, Rp. 305 000 000, Rp. 405 000 000 and IDR 505,000,000 Please count and explain the Project investment criteria a. Payback Period of Investment criteria b. NPV (net present value) criteria c. IRR (Internal Rate of Return) criteria
Entity A has the following loan finance in place during the year: $2,560,000 of 7.50% loan finance $3,550,000 of 9.50% loan finance Entity A constructed a new factory which cost $5,655,000 and this was funded out of the existing loan finance. The factory took 9 months to complete within the same reporting year. REQUIRED: Measure the borrowing costs should be capitalised. The borrowing costs should be capitalised is _________?
Find the selling price of an item which has a cost price of $15.61 and is sold at a loss of 371/2 % Ans $9.76 The government borrowed a certain amount of money to build a new bridge. It pays interest at a rate of 12%. If the yearly repayments are $320,000, calculate the amount borrowed. A potter finds he takes 5 hours to produce 8 vases. If he continues to work at the same rate , find: How long it will take him to make 20 vases How complete vases can be made in 24 hours Two brothers aged 15 and 10 years are given $3000 to be divided between them in the ratio of their ages. How much does each receive? If the cost of an article is $104 and its selling price is $120. Find the percentage profit.