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Fixed and Variable Cost Behavior
Harpers Inc. has a manufacturing depot where keeping a clean working environment is important. Cleaning the depot is the responsibility of the maintenance department. Two of the resources needed to clean the depot are labor and cleaning supplies. The cost driver for both resources is square feet cleaned. Depot cleaning laborers are paid the same wages regardless of the number of times the depot is cleaned. Cleaning supplies is a variable cost. The 40,000 square foot plant is thoroughly cleaned from four to eight times a month depending on the level and stage of manufacturing. For the most recent month, June, the depot was cleaned four times. The June cost of labor was $28,000 and cleaning supplies used cost $7,500. The manufacturing schedule for the next quarter (July through September) indicates that the depot will need to be cleaned five, six, and eight times respectively In Excel 1. Prepare a table that shows how labor cost, cleaning supplies cost, total cost, and total cost per square feet cleaned changes in response to the square feet cleaned. What is the predicted total cost of depot cleaning for the next quarter? 2. Suppose Harpers can hire an outside cleaning company to clean the depot as needed. The charge rate for cleaning is $6,100 per depot cleaning. If the outside cleaning company is hired, Harpers can lay off the workers who are now cleaning the depot and will spend nothing for cleaning supplies. Will Harpers save money with the outside cleaning company over the next quarter? Prepare a schedule that supports your answer. 3. Create a line chart that reflects the Total Cleaning Costs and Square Feet (Times Cleaned) for the two options (Harpers vs Outside Company). Must be properly labeled and on one chart. 4. At what level of activity (SqFt Cleaned) will the two options be equal?
The enacted tax rate is 29% for 2011 and 39% after. What amount should the firm report as the current portion of income tax expense for 2011.
Calculate the intrinsic value of the firm and stock price using the FCF valuation model. If the SEC filing provides the Weighted Average Cost of Capital (WACC).
Critique the usefulness of publicly available financial information contained in the annual report of a company from the perspective of a potential investor.
Your company is developing a new product for the computer printer industry. You have talked to several material vendor about being able to supply quality components for the new products. Numerous potential customers also have been surveyed, and most ..
Eighty percent of the premium applies to manufacturing operations and 20% applies to selling and administrative activities. Illustrate what amounts should be considered product and period costs respectively for the first year of coverage?
Preferred stock is nonparticipating and cumulative and Preferred stock participates up to 12 percent of its par value and is cumulative
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Suppose you borrow $50000 when financing a coffee shop which is valued at $75000. You expect to generate a cash flow of $84000 if demand is as expected. The cost of debt rate is 4%. What should the value of the equity be?
The predetermined overhead rate is $6 per direct labor hour. In addition, the flexible manufacturing overhead budget shows that budgeted costs are $4 variable per direct labor hour and $50,000 fixed. Calculate the overhead controllable variance.
In this coursework you need In Excel produce firstly a zero based budget (ZBB) and then produce a costing for the business game product using absorption costing.
The first step in the process for revenue recognition is to
(Learning Objective 1: Measure and record the cost of individual assets in a lump-sum purchase of assets) Advanced Automotive pays $210,000 for a group purchase of land, building, and equipment. At the time of acquisition, the land has a current mark..
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