Chapter 23, Problem 4DQ

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Apex Digital Innovations is planning a project that will increase sales by $350,000 and cash expenses by $95,000. The project will cost $720,000 and will be depreciated using the straight- line method to a zero book value over the 8-year life of the project. The company's marginal tax rate is 30%. What is the yearly value of the depreciation tax shield?

General accounting question

What is the budgeted cost of direct materials?

Wagner Manufacturing uses direct labor-hours to calculate its predetermined overhead rate. At the beginning of the year, the estimated manufacturing overhead was $420,000. At year-end, actual direct labor-hours were 30,000 hours, the actual manufacturing overhead was $410,000, and the company had overapplied overhead of $10,000. Calculate the predetermined overhead rate per direct labor-hour.

The following labor standards have been established for a particular product: • • Standard labor hours per unit = 2.0 hours Standard labor rate = $15.50 per hour The following data pertain to operations concerning the product for the last month: • Actual hours worked = 4,200 hours • Actual total labor cost = $63,000 • Actual output = 2,000 units Compute the labor rate variance for the month.

The CV Company has just purchased $75,000,000 of plant and equipment that has an estimated useful life of 20 years. The expected salvage value at the end of 20 years is $7,500,000. What will the book value of this purchase (excluding all other plant and equipment) be after its fifth year of use?

Maxwell Industries uses flexible budgets. At a normal capacity of 25,000 units, the budgeted manufacturing overhead is $75,000 variable and $300,000 fixed. If Maxwell Industries had actual overhead costs of $385,500 for 27,000 units produced, what is the difference between actual and budgeted costs?

What is the difference in net income between absorption abd variable costing for this financial accounting question?