CONNECT ONLINE ACCESS CODE MGRL ACCTG 21
17th Edition
ISBN: 9781265958374
Author: Garrison
Publisher: INTER MCG
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Textbook Question
Chapter 1, Problem 6Q
Define the following terms: (a) cost behavior and (b) relevant range.
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KIARA LIMITED
STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER:
ASSETS
Property, plant and equipment (cost)
Accumulated depreciation
Long-term investments
Inventory
Accounts receivable
Company tax paid in advance
Bank
EQUITY AND LIABILITIES
2024
2023
R
R
2 490 000
1 620 000
(630 000)
660 000
1 050 000
1 230 000
30 000
(480 000)
450 000
1 290 000
900 000
0
750 000
660 000
5 580 000
4 440 000
Ordinary share capital
2 700 000
2 000 000
Retained income
1 500 000
1 158 000
Long-term loan from Kip Bank (15%)
900 000
1 000 000
Accounts payable
480 000
228 000
Company tax payable
0
54 000
5 580 000
4 440 000
ADDITIONAL INFORMATION
All purchases and sales are on credit.
Interim dividends paid during the year amounted to R150 750.
Credit terms of 3/10 net 60 days are granted by creditors.
Accounting Question
REQUIRED
Study the information given below and answer the following questions. Where discount factors are required
use only the four decimals present value tables that appear after the formula sheet or in the module guide.
Ignore taxes.
5.1 Calculate the Accounting Rate of Return on average investment of the second alternative
(expressed to two decimal places).
5.2 Determine which of the two investment opportunities the company should choose by
calculating the Net Present Value of each alternative. Your answer must include the
calculation of the present values and NPV.
5.3 Calculate the Internal Rate of Return of the first alterative (expressed to two decimal
places). Your answer must include two net present value calculations (using consecutive
rates/percentages) and interpolation.
INFORMATION
The management of Bentall Incorporated is considering two investment opportunities:
(5 marks)
(9 marks)
(6 marks)
The first alternative involves the purchase of a new machine for R900 000 which…
Chapter 1 Solutions
CONNECT ONLINE ACCESS CODE MGRL ACCTG 21
Ch. 1 - Prob. 1QCh. 1 - Define the following: (a) direct materials, (b)...Ch. 1 - Explain the difference between a product cost and...Ch. 1 - Distinguish between (a) a variable cost, (b) a...Ch. 1 - Prob. 5QCh. 1 - Define the following terms: (a) cost behavior and...Ch. 1 - What is meant by an activity base when dealing...Ch. 1 - Prob. 8QCh. 1 - Distinguish between discretionary fixed costs and...Ch. 1 - Does the concept of the relevant range apply to...
Ch. 1 - What is the difference between a traditional...Ch. 1 - Prob. 12QCh. 1 - Prob. 13QCh. 1 - Prob. 14QCh. 1 - Prob. 1AECh. 1 - Prob. 2AECh. 1 - L01-2, L01-3, L01-4, L01-5, L01-6 Martinez...Ch. 1 - L012, L013, L014, L015, L016 Martinez Company’s...Ch. 1 - L01–1, L01–2, L01–3, L01–4, L01–5, L01–6
Martinez...Ch. 1 - L01–1, L01–2, L01–3, L01–4, L01–5, L01–6
Martinez...Ch. 1 - L01-1, L01-2, L01-3, L01-4, L01-5, L01-6
Martinez...Ch. 1 - L01-1, L01-2, L01-3, L01-4, L01-5, L01-6
Martinez...Ch. 1 - L01-1, L01-2, L01-3, L01-4, L01-5, L01-6
Martinez...Ch. 1 - L01-2, L01-3, L01-4, L01-5, L01-6 Martinez...Ch. 1 - L01-1, L01-2, L01-3, L01-4, L01-5, L01-6
Martinez...Ch. 1 - L01-1, L01-2, L01-3, L01-4, L01-5, L01-6
Martinez...Ch. 1 - L01-1, L01-2, L01-3, L01-4, L01-5, L01-6
Martinez...Ch. 1 - L01-1, L01-2, L01-3, L01-4, L01-5, L01-6
Martinez...Ch. 1 - L01-1, L01-2, L01-3, L01-4, L01-5, L01-6
Martinez...Ch. 1 - L01-1, L01-2, L01-3, L01-4, L01-5, L01-6
Martinez...Ch. 1 - L01-2, L01-3, L01-4, L01-5, L01-6 Martinez...Ch. 1 - EXERCISE 1—1 Identifying Direct and Indirect Costs...Ch. 1 - EXERCISE 1-2 Classifying Manufacturing Costs LO1-2...Ch. 1 - EXERCISE 1-3 Classifying Costs as Product or...Ch. 1 - EXERCISE 14 Fixed and Variable Cost Behavior LO14...Ch. 1 - Prob. 5ECh. 1 - EXERCISE 1—6 Traditional and Contribution Format...Ch. 1 - Prob. 7ECh. 1 - EXERCISE 18 Product Costs and Period Costs;...Ch. 1 - Prob. 9ECh. 1 - Prob. 10ECh. 1 - EXERCISE 1—11 Cost Behavior; Contribution Format...Ch. 1 - EXERCISE 1-12 Product and Period Cost Flows LO1–3...Ch. 1 - Prob. 13ECh. 1 - EXERCISE 1-14 Cost Classification 1O1–2, LO1–3,...Ch. 1 - Prob. 15ECh. 1 - EXERCISE 1–16 Cost Classifications for Decision...Ch. 1 - EXERCISE 1-17 Classifying Variable and Fixed Costs...Ch. 1 - PROBLEM 1-18 Direct and Indirect Costs; variable...Ch. 1 - PROBLEM 1-19 Traditional and Contribution Format...Ch. 1 - PROBLEM 120 Variable and Fixed Costs; Subtleties...Ch. 1 - Prob. 21PCh. 1 - Prob. 22PCh. 1 - PROBLEM 123 Cost Classification LO11, LO13, LO14...Ch. 1 - PROBLEM 1-24 Different Cost Classifications for...Ch. 1 - Prob. 25PCh. 1 - CASE 1-26 Cost Classification and Cost Behavior...Ch. 1 - Prob. 27C
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