Nature of the cost

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Answer 1

Question

Chapter 14, Problem 2PSB

1.

To determine

To identify: Nature of the cost

2.

To determine

Nature of overhead.

3.

To determine

Nature of expense.

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Andretti Company has a single product called a Dak. The company normally produces and sells 60,000 Daks each year at a selling price of $32 per unit. The company’s unit costs at this level of activity are given below: Direct materials $ 10.00 Direct labor 4.50 Variable manufacturing overhead 2.30 Fixed manufacturing overhead 5.00 ($300,000 total)Variable selling expenses 1.20 Fixed selling expenses 3.50 ($210,000 total)Total cost per unit $ 26.50 The company has 1,000 Daks on hand with some irregularities that make it impossible to sell them at the normal price through regular distribution channels. What unit cost figure is relevant for setting a minimum selling price to liquidate these units?

The financial manager at Rico Ltd had to choose between these two projects, alpha and beta, which have the following net cash inflows: Year Alpha Beta 1 5,000 36,000 2 18,500 36,500 3 36,200 37,000 4 123,000 175,000 Each project requires an initial investment of 118,000. No scrap values are forecast. Required:1. Calculate the payback period for each project. Answers must be expressed in years and months. Which project should be chosen and why? 2. Calculate the Net Present Value (NPV) for each project, using a discount rate of 12%. Which project would you choose and why? 3. Calculate the internal Rate of Return for each project. Which project should be chosen and Why?

Critically evaluate the strengths and limitations of the Capital Asset Pricing Model.

Answer 2

Question

Chapter 14, Problem 2PSB

1.

To determine

To identify: Nature of the cost

2.

To determine

Nature of overhead.

3.

To determine

Nature of expense.

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Answer 3

Question

Chapter 14, Problem 2PSB

1.

To determine

To identify: Nature of the cost

2.

To determine

Nature of overhead.

3.

To determine

Nature of expense.

Expert Solution & Answer

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Check out a sample textbook solution

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Answer 4

Question

Chapter 14, Problem 2PSB

1.

To determine

To identify: Nature of the cost

2.

To determine

Nature of overhead.

3.

To determine

Nature of expense.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 5

Chapter 14, Problem 2PSB

1.

To determine

To identify: Nature of the cost

2.

To determine

Nature of overhead.

3.

To determine

Nature of expense.

Answer 6

Chapter 14, Problem 2PSB

1.

To determine

To identify: Nature of the cost

Answer 7

Chapter 14, Problem 2PSB

1.

To determine

To identify: Nature of the cost

Answer 8

2.

To determine

Nature of overhead.

Answer 9

2.

To determine

Nature of overhead.

Answer 10

3.

To determine

Nature of expense.

Answer 11

3.

To determine

Nature of expense.

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 14 - Prob. 1MCQ Ch. 14 - What is Ella Company’s current ratio? a.0.69...Ch. 14 - What is Ella Company’s acid-test ratio? a.2.39...Ch. 14 - What is Ella Company’s debt ratio? a. 25.78% b....Ch. 14 - What is Ella Company’s equity ratio? a.25.78%...Ch. 14 - Describe the managerial accountant’s role in...Ch. 14 - Distinguish between managerial and financial...Ch. 14 - Prob. 3DQ Ch. 14 - Prob. 4DQ Ch. 14 - Distinguish between (a) factory overhead and (b)...

Nature of the cost

To identify: Nature of the cost

Nature of overhead.

Nature of expense.

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Chapter 14 Solutions