Managerial Accounting
17th Edition
ISBN: 9781260709568
Author: Garrison, Ray
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Question
Chapter 16, Problem 13F15
To determine
Concept Introduction:
Times Interest Earned Ratio
Times interest earned ratio is a measure of the number of times the Earnings are in relation to the interest expenses of the company. The ratio helps in understanding the Company’s ability to repay its interest commitments. Interest expenses are the cost of Debt of the Company.
To Compute:
Times Interest Earned Ratio
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Jones Manufacturing Co. Ltd. makes a product by way of three consecutive processes.
Inspection takes place during the processing operation, at which point bad units are separated
from good units and sold as scrap at $20 each. Normal losses are estimated to be 5% of input
during the period. The following data relates to process 2 for the month of October. During
October, 20,000 units valued at $400,000 were transferred from process 1 to process 2. Other
costs incurred during the month were:
Direct material added
Direct labour
Production overheads
$272,000
$254,000
$ 120,400
At inspection, 3000 units were rejected as scrap. These units had reached the following degree
of completion:
Transfer from process 1
Direct material added
Conversion costs
100%
80%
50%
Work-in-progress at the end of October was 4,000 units and had reached the following degree
of completion:
Transfer from process 1
Direct material added
100%
60%
40%
Conversion costs
There were no unfinished goods in process 2 at the…
Chapter 16 Solutions
Managerial Accounting
Ch. 16 - Prob. 1QCh. 16 - What is the basic purpose for examining trends in...Ch. 16 - Prob. 3QCh. 16 - Prob. 4QCh. 16 - Prob. 5QCh. 16 - Prob. 6QCh. 16 - Prob. 7QCh. 16 - Prob. 8QCh. 16 - A company seeking a line of credit at a bank was...Ch. 16 - Prob. 1F15
Ch. 16 - Prob. 2F15Ch. 16 - Prob. 3F15Ch. 16 - Prob. 4F15Ch. 16 - Prob. 5F15Ch. 16 - Prob. 6F15Ch. 16 - Prob. 7F15Ch. 16 - Prob. 8F15Ch. 16 - Prob. 9F15Ch. 16 - Prob. 10F15Ch. 16 - Prob. 11F15Ch. 16 - Prob. 12F15Ch. 16 - Prob. 13F15Ch. 16 - Prob. 14F15Ch. 16 - Prob. 15F15Ch. 16 - Prob. 1ECh. 16 - Prob. 2ECh. 16 - Prob. 3ECh. 16 - Prob. 4ECh. 16 - Prob. 5ECh. 16 - Prob. 6ECh. 16 - Prob. 7ECh. 16 - Prob. 8ECh. 16 - Prob. 9ECh. 16 - Prob. 10ECh. 16 - Prob. 11ECh. 16 - Prob. 12ECh. 16 - Prob. 13PCh. 16 - Prob. 14PCh. 16 -
PROBLEM 15-15 Comprehensive Ratio Analysis...Ch. 16 - Prob. 16PCh. 16 - Prob. 17PCh. 16 - Prob. 18PCh. 16 - Prob. 19PCh. 16 - Prob. 20PCh. 16 - Prob. 21P
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