Answer:
$211,689. 53
Explanation:
Calculation to determine the remaining balance (or value) of the mortgage after the payment of the fifth annual installment
Step 1 is to compute PMT using Financial calculator
I = 6%
N = 20
PV = 250,000
FV = 0
PMT=?
Hence,
PMT = 21,796.14.
Now let determine the PV using Financial calculator
I = 6%
N = 15
PMT = 21,796.14
PV=?
Hence,
PV = $211,689. 53
Therefore the remaining balance (or value) of the mortgage after the payment of the fifth annual installment is $211,689. 53
Ruston Company Income Statement January 1 to December 31, 2017 (amounts in thousands) 7,800 1,560 6,240 780 700 500 4,260 70 4,190 1,676 2,514 Revenue Cost of Goods Sold (COGS) nl Gross Income Sales, General, & Administrative Expenses (SG&A) Depreciation Expense Other Expenses Earnings Before Interest & Taxes (EBIT) Interest Pre-Tax Income Income Taxes Net Income Between January 1 and December 31, 2017:
1. Accounts Receivable increase by $600,000
2. Accounts Payable increase by $300,000
3. Gross Property, Plant, & Equipment increase by $8,300,000
4. Long Term Debt increases by $700,000 Assume no other changes What is the Net Cash Flow?
Answer:
The Net Cash Flow is -$4,686,000.
Explanation:
Note: The data in this question are merged. The complete question with the sorted data are therefore provided before answering the question. See the attached pdf file for the complete question with the sorted data.
The explanation of the answers is now provided as follows:
Net Cash Flow can be determined by preparing the cash flow statement as follows:
Ruston company
Cash Flow Statement
For the Year Ended December 31, 2017
Details $’000 $’000
Cash Flows from Operating Activity
Net Income 2,514
Adjustment to net income
Depreciation expense 700
Increase in accounts receivable (600)
Increase in accounts payable 300
Net Cash Flows from Operating Activity 2,914
Cash Flows from Investing Activity
Increase in Gross Property, Plant, & Eq. (8,300)
Net Cash Flows from Investing Activity (8,300)
Cash Flows from Financing Activity
Increase in Long Term Debt 700
Net Cash Flows from Financing Activity 700
Net Cash Flow (4,686)
Therefore, the Net Cash Flow is -$4,686,000.
A department adds raw materials to a process at the beginning of the process and incurs conversion costs uniformly throughout the process. For the month of March, there were 5,000 units in the beginning work in process inventory; 70,000 units were started into production in March; and there were 25,000 units that were 60% complete in the ending work in process inventory at the end of March. What were the equivalent units of production for conversion costs for the month of March
Answer:
75,000 equivalent units
Explanation:
Calculation to determine What were the equivalent units of production for conversion costs for the month of March
First step is to calculate completed and transferred units
Completed and transferred units =5,000 + 70,000 − 25,000
Completed and transferred units = 50,000
Now let determine the equivalent units for direct materials cost
Using this formula
Equivalent units for direct materials cost =100% of the completed units + 100% of the ending inventory
Let plug in the formula
Equivalent units for direct materials cost= (50,000 × 100%) + (25,000 × 100%)
Equivalent units for direct materials cost=50,000+25,000
Equivalent units for direct materials cost=75,000
Therefore the equivalent units of production for conversion costs for the month of March is 75,000
Management of Carla Vista Home Furnishings is considering acquiring a new machine that can create customized window treatments. The equipment will cost $199,550 and will generate cash flows of $104,750 over each of the next six years. If the cost of capital is 13 percent, what is the MIRR on this project
Answer:
MIRR = 27.85%
Explanation:
Below is the calculations:
The cost of equipment, Present value = $199550
Generate cash flow each year = $104750
Time = 6 years
Now find the future value of annual cash flow = 104750 (F/A , 13%, 6)
The future value of annual cash flow =104750 x 8.3227
The future value of annual cash flow = $871802.825
Now find the MIRR = (871802.825 / 199550)^(1/6)-1
MIRR = (4.3688)^(1/6)-1
MIRR = 27.85%
For the month of September, Florida, Inc., incurs a direct materials cost of $12,000 for 7,500 gallons of strawberry lemonade produced in its Mixing Department. It also incurs conversion costs of $6,000 with 80% completed. If the conversion cost per equivalent unit was $1.15 per gallon in August, what is the difference in the conversion cost per equivalent unit between the two months
Answer:
Florida, Inc.
The difference in the conversion cost per equivalent unit between the two months is:
= $0.15.
Explanation:
a) Data and Calculations:
Direct materials cost = $12,000
Production units (gallons of strawberry lemonade) = 7,500
Conversion costs = $6,000
Degree of completion of conversion = 80%
Equivalent units of conversion = 6,000 (7,500 * 80%)
Therefore, the conversion cost per equivalent unit = $1.00 ($6,000/6,000)
The difference in the conversion cost per equivalent unit between the two months is $0.15 ($1.15 - $1.00)
IBM signs an agreement to lend one of its customers $200,000 to be repaid in one year at 5% interest. IBM would record this loan as: A. Notes Payable. B. Notes Receivable. C. Accounts Receivable. D. Unearned Revenue.
Answer:
B. Notes Receivable.
Explanation:
Since the company is signed an agreement for lending out of its customers for $200,000 that could be repaid in one year at 5% interest so it is not revenue not note payable and also not account receivable
Therefore it is a note receivable
Hence, the option b is correct
and, the same is to be considered and relevant
The following is TRUE about Inventory: A. Firms increase inventory because there is an opportunity cost to holding inventory B. Firms increase inventory because more inventory sitting for longer periods of time present more opportunities for damage, errors, rework, theft, and obsolescence C. Firms increase inventory because more inventory means more movement of materials D. Firms increase inventory because there is a risk of significant and unpredictable fluctuations in downstream demand E. Firms increase inventory because the more we spend on inventory, the more we need to spend on other inventory-related expenditures
Answer:
I don't know how it is possible
The Law Firm prepays for advertising in the local newspaper. On January 1, the law firm paid for months of advertising. How much advertising expense should Law Firm record for the two months ending February 28 under the
a. cash basis
b. accrual basis?
Answer and Explanation:
The computation of the advertising expense that should be record for the two month under following basis is
a. For cash basis
It should be recorded at $2,000
b. For accrual basis
= $2,000 ×2 ÷5
= $800
In this way, it should be determined
And, the same should be relevant
What can organizations do to keep rewards individualized enough to meet various employee needs (needs theory) while trying to ensure that everyone feels that all the different rewards are fair (equity theory)
Answer:
The best way to go about this is to design and operate and rewards system that recognizes individual needs as summarized and proposed by David McClelland.
The theory of equity on the other hand speaks to the perception of how input is compensated for in relation to those of others. Human beings (workers) will come with varying degrees of skills and input.
So to customize rewards in such a way that it recognizes unique contributions in an equitable way, one must first decide what key skills will be required for each job and which jobs are required to achieve organizational goals and objectives.
Explanation:
The Needs Theory by David Mclelland summarizes individual needs into three. They are:
Achievement AffiliationPowerA balanced reward system will have financial and non-financial benefits. some of the non-financial benefits will be tailored to have the above components.
- Achievement: An example of this is - Opportunity for higher assignments
- Affiliation: The need to belong to a strong Employer brand
- Power: This answers the question about whether or not one will become more influential as they progress with the company
The equity theory will guide the business owner in ensuring that all selected metrics of input are classed and priced accordingly.
The usual form of input include but are not limited to:
Ability Adaptability Commitment Determination Education Effort Enthusiasm Experience Flexibility Hard Work Loyalty Personal sacrifice Skill Support from co-workers and colleagues Time Tolerance Trust in supervisorsEquity sometimes is difficult to achieve due to issues with capacity on the part of the company. Best practice, however, is to recognize equity first from the perspective of standard industry practice, then match or exceed such offering by a combination of Financial and Non-Financial rewards that are based on the strength of the organization.
Another strategy is for organizations to adapt it's reward systems to Achievement Based Compensation. This type of compensation instead of focusing on the inputs listed above focuses on results.
In this case, expected results and capacity to deliver and subsequent rewards on same are discussed and agreed upon.
Minimum requirements are also defined ahead of time. Under this kind of structure, equity is achieved, and individual needs are recognized.
Cheers
It is essential that organizations meet the needs of employees on an individual basis and ensure that everyone feels that the different rewards are fair. This can be achieved by implementing a culture focused on integration, collaboration and open and clear communication.
What is Equity theory?It is a theory that explains how motivation in the workplace is related to the perception of employees through their sense of justice, that is, employees compare their work inputs and outputs in relation to others.
Therefore, by creating open communication and an effective reward system, employees can have their needs met and create a strong sense of appreciation for their work.
Find out more about Equity theory here:
https://brainly.com/question/26507171
Dockwiller Inc. manufactures industrial components. One of its products, which is used in the construction of industrial air conditioners, is known as D53. Data concerning this product are given below:
Per Unit
Selling price $1.50
Direct materials $26
Direct labor $3
Variable manufacturing overhead $1
Fixed manufacturing overhead $17
Variable selling expense $2
Fixed selling and administrative expense $18
The above per unit data are based on annual production of 3,000 units of the component. Assume that direct labor is a variable cost. The company has received a special, one-time-only order for 200 units of component S06. There would be no variable selling expense on this special order and the total fixed manufacturing overhead and fixed selling and administrative expenses of the company would not be affected by the order. If XYZ has excess capacity and can fill the order without cutting back on the production of any product, what is the minimum price per unit below which the company should not accept the special order?
a. $67 per unit
b. $150 per unit
c. $30 per unit
d. $47 per unit
Answer:
c. $30 per unit
Explanation:
The computation of the minimum price per unit below which the company should not accept the special order is given below:
Direct materials $26
Direct labor $3
Variable manufacturing overhead $1
minimum price per unit $30
Therefore the option c is correct
Consider the following information about production in quarter 1 of 2019. Firm T produces 600 tires at a cost of $28 each, and sells 580 tires to Firm B at a cost of $39 each.Firm B produces 290 bicycles at a total cost of $330 each, and sells 280 bicycles to consumers for $400 each. In this simple economy, what is the value of inventory investment
Answer:
$3,860
Explanation:
Value of stock at the end of Firm T:
Firm T has stock of 20 tires at the end of the year
The cost price is $28 per tire
Value = Closing stock * Cost price of each tIres
Value = 20 * $28
Value = $560
Value of stock at the end of Firm B:
Firm B has stock of 10 bicycles at the end of the year
The cost price is $330 each
Value = Closing stock * Cost price of each bicycle
Value = 10 * $330
Value = $3,300
Value of the inventory investment = Value of stock at the end of Firm T + Value of stock at the end of Firm B
Value of the inventory investment = $560 + $3,300
Value of the inventory investment = $3,860
Other things the same , as the price level rises, the real value of money a. falls and the exchange rate rises. b. and the exchange rate fall. c. rises and the exchange rate falls. d. and the exchange rate rise.
Answer:
falls and the exchange rate fall.
Explanation:
Increase in general price level is referred to an inflation.
Inflation is a persistent rise in the general price levels
Types of inflation
1. demand pull inflation – this occurs when demand exceeds supply. When demand exceeds supply, prices rise
2. cost push inflation – this occurs when the cost of production increases. This leads to a reduction in supply. Higher prices are the resultant effect
When price level rises, the real value of money decreases
For example, imagine that price of an apple is $5. If you have $100, you can by 20 apples. If price level increases by 100%, $100 would only buy 10 apples. thus, the real value of money decreases
Also exchange rate falls. exchange rate is the rate at which one currency is exchanged for another currency
If price level increases, domestic currency would become cheaper. As a result, exchange rate falls
A customer sells short 1,000 shares of DT at $60 a share on Monday, October 14 and deposits the Regulation T margin requirement. If on October 23 the stock is trading at $75 a share. What would be TRUE about the customer selling?
Solution :
Adjusted Oct 23rd
Maintenance call will be issued, i.e. ,
$ 75k x 0.3 = 22.5 k
Equity only = 15k
Therefore, the account will be adjusted on October 23rd and the margin maintenance call will be issued.
A 13-year, 6 percent coupon bond pays interest semiannually. The bond has a face value of $1,000. What is the percentage change in the price of this bond if the market yield to maturity rises to 6.7 percent from the current rate of 5.5 percent
Answer: -10.14%
Explanation:
Original Price of bond:
Interest is paid semiannually so some variables need to be adjusted:
Period = 13 * 2= 26 semi annual periods
Coupon = 6% * 1,000 * 0.5 = $30 per period
Yield = 5.5% / 2 = 2.75%
Price = $1,046
Price after yield increases to 6.7%
Period = 13 * 2= 26 semi annual periods
Coupon = 6% * 1,000 * 0.5 = $30 per period
Yield = 6.7% / 2 = 3.35%
Price = $939.88
Percentage change = (939.88 - 1,046) / 1,046
= -10.14%
Which of the following is an essential element of a valid real estate contract?
Duress
Legal purpose
Misrepresentation
Mutual mistake
Answer:
Legal purpose
Explanation:
The contract is approved when there is an agreement and agreement should be enforced i.e.
Agreement + enforceability = contract
Now the element of the contract that become the contract to be valid is the legal purpose that means the contract that should be made should be legal in the court point of view i.e. feasible
Therefore the second option is correct
Bear Claw Industries uses a job-order costing system. The Molding Department applies overhead based on machine hours, while the Assembly Department applies overhead based on direct labor hours. The company made the following estimates at the beginning of the current year:
Molding Assembly
Manufacturing overhead cost $700,000 $400,000
Machine hours 10,000 4,000
Direct labor hours 12,000 16,000
The following information was available for Job No. 7-29, which was started and completed during August:______.
Job No. 7-29
Molding Assembly
Direct materials $3,500 $ 7,500
Direct labor $9,000 $12,500
Direct labor hours 900 1,250
Machine hours 500 400
The predetermined overhead rate for the molding department is:_____.
a. $50.
b. $70.
c. $100.
d. $83.
Answer:
Molding= $70 per machine hour
Explanation:
Giving the following information:
Molding
Manufacturing overhead cost $700,000
Machine hours 10,000
To calculate the predetermined manufacturing overhead rate we need to use the following formula:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Molding= 700,000 / 10,000
Molding= $70 per machine hour
In year T, a US citizen buys 100 shares of Sonic on the Tokyo stock exchange at 700 yens each. Suppose the exchange rate then is $0.01 per yen. Suppose the price of the stocks falls to 600 yens each at time T +1. Nothing else changes. Compute the change in US external wealth between periods T and T +1 in dollars.
Answer:
Change in US external wealth between periods T and T +1 in dollars = -$100
Explanation:
Since nothing else changes, this implies that the exchange rate per yen is $0.01 in periods T and T +1. Therefore, we have:
Value shares of Sonic in period T in dollar = Number of shares of Sonic bought in period T * Price per share of Sonic in Yen in period T * Exchange rate per yen in periods T = 100 * 700 * $0.01 = $700
Value shares of Sonic in period T+1 in dollar = Number of shares of Sonic in period T+1 * Price per share of Sonic in Yen in period T+1 * Exchange rate per yen in period T+1 = 100 * 600 * $0.01 = $600
Change in US external wealth between periods T and T +1 in dollars = Value shares of Sonic in period T+1 in dollar - Value shares of Sonic in period T in dollar = $600 - $700 = -$100
The real interest rate is 3 percent, the inflation rate is 2 percent, and the tax rate on nominal interest is 25 percent. What is the true income tax rate on interest income? Why does inflation increase the true tax rate on interest income?
Answer:
True income tax on interest income:
= Tax on interest income / Real interest rate
Tax on interest income = Tax rate * Nominal interest
= 25% * (3% real rate + 2% inflation)
= 25% * 5%
= 1.25%
True income tax:
= 1.25% / 3%
= 41.67%
Why does inflation increase the true tax rate on interest income?
It is because tax is computed on the nominal interest rate as shown above. Nominal rates are affected by inflation such that when inflation rises, nominal rates rise as well which would lead to taxes being higher because they are now based on a higher figure.
Date of NoteFace AmountInterest RateTerm of Notea.January 5 *$90,000 60 days b.February 15 *21,000 4 30 days c.May 1968,000
Answer and Explanation:
The computation is shown below:
Note Due date Interest Explanation
a) May-04 $ 1,800 ($ 90,000 × 6% × 120 ÷ 360)
b) Mar-16 $70 ($21,000 × 4% × 30 ÷ 360)
c) Jul-03 $680 ($68,000 × 8% × 45 ÷ 360)
In this way the interest expense should be calculated
The same should be relevant and considered too
How has persuasion changed in the digital age?
a. Persuasion is simple and more personal
b. Persuasive techniques are bold and blunt
c. Persuasive messages spread at warp speed
d. All businesses are in the persuasion business
e. The volume and reach of persuasive messages have exploded
Answer:
Explanation:
Persuasion has changed a lot in the digital age, based on the options listed, the ones that are true would be ...
c. Persuasive messages spread at warp speed
d. All businesses are in the persuasion business
e. The volume and reach of persuasive messages have exploded
The internet and social media have allowed businesses to quickly and easily target millions of individuals around the world. So it is no wonder that all businesses are in the persuasion business. Persuasive techniques are able to spread incredibly fast from person to person, as well as word of mouth if enough individuals begin to like your product/service. The internet and social media even allow businesses to target specific categories on populations.
A 4-year project has an annual operating cash flow of $42,000. At the beginning of the project, $6,000 in net working capital was required, which will be recovered at the end of the project. The firm also spent $21,900 on equipment to start the project. This equipment will have a book value of $5,460 at the end of the project, but can be sold for $6,920. The tax rate is 21 percent. What is the Year 4 cash flow?
Answer:
Total cash flow $54,613
Explanation:
The computation of the year 4 cash flow is given below:
Selling price of equipment $6,920
Book value at year 4 end $5,460
Capital gain $1,460
Tax on capital gain at 21% $306.6
So, net cash flow from the sale of equipment
= $6,920 - $307
= $6,613
Now year 4 cash flow is
Annual operating cash flow $42,000
Release of working capital $6,000
Net cash flow form sale of equipment $6,613
Total cash flow $54,613
Coomb's Fashions forecasts sales of $125,000 for the quarter ended December 31. Its gross profit rate is 20% of sales, and its September 30 inventory is $32,500. If the December 31 inventory is targeted at $41,500, budgeted purchases for this quarter should be:
Answer:
Total purchase= $109,000
Explanation:
To calculate the budgeted purchases, we need to use the following formula:
Purchases= production + desired ending inventory - beginning inventory
Budgeted purchase:
Production= 125,000*0.8= 100,000
Desired ending inventory= 41,500
Beginning inventory= (32,500)
Total purchase= $109,000
xyz's corporation has an investment in 20,000 shares of wallace company common stock with a cost of $872,000. these shares are used in a property dividend to stockholders of xyz's. the property dividend is declared on may 25 and scheduled to be distributed on july 31 to stockholders of record on june 15. the fair value per share of wallace stock is $63 on may 25, $66 on june 15, and $68 on july 31. the net effect of this property dividend on retained earnings is a reduction of
Answer:
XYZ's Corporation
The net effect of this property dividend on retained earnings is a reduction of:
= $388,000.
Explanation:
a) Data and Calculations:
Cost of investment in Wallace Company = $872,000
Property dividend declaration date = May 25
Property dividend distribution date = July 31
Property dividend date of record = June 15
Fair value per share of Wallace shares:
May 25 = $63
June 15 = $66
July 31 = $68
Amount of property dividend declared = $1,260,000 ($63 * 20,000)
Analysis of entries:
May 25:
Property dividend $872,000 Loss on Distribution $388,000 Property Dividend Payable $1,260,000
July 31:
Property Dividend Payable $1,260,000 Cash $1,260,000
If aggregate expenditures increase by $14 billion and equilibrium GDP consequently increases by $70 billion, then the marginal propensity to consume in the economy must be
Answer:
0.2
Explanation:
Gross domestic product is the total sum of final goods and services produced in an economy within a given period which is usually a year
Marginal propensity to consume is the proportion of disposable income that is spent on consumption
Marginal propensity to consume = amount consumed / disposable income
Marginal propensity to save is the proportion of disposable income that is saved
Marginal propensity to save = amount saved / disposable income
MPC + MPS = 1
MPC = $14 billion / $70 billion = 0.2
Mr. and Mrs. Underhill operate a hardware store in a jurisdiction that levies both a sales tax on retail sales of tangible personalty and an annual personal property tax on business tangibles. The personal property tax is based on book value as of December 31. This year, Mr. and Mrs. Underhill purchased $840,000 of inventory for their store.a. Are Mr. and Mrs. CS required to pay sales tax on the purchase of the inventory?b. How can Mr. and Mrs. CS minimize their personal property tax by controlling the timing of their inventory purchases?A. Minimize inventory on hand as of December 31.
B. Minimize inventory on hand as of March 31.
C. Minimize inventory on hand as of December 1.
D. Minimize inventory on hand as of April 30.
Answer:
a). No.
b). Minimize inventory on hand as of December 31.
Explanation:
As per the details provided, the Underhill couple is not eligible to pay any kind of sales tax while purchasing the inventories for their business. This is because the inventories are not purchased for resale. The sales tax that is levied on the final good(sold to the consumer) includes the tax on inventories indirectly as well. Therefore, charging sales tax on inventories when bought would lead to double tax on a single good. Thus, the answer would be 'No' i.e. option a.
As per the second question, in order to minimize the property taxes the couple requires to 'decrease their purchases associated with inventory on approaching December 31st.' This is due to the rule of 'First In and First Out.' If the inventories on 31st December is restricted, the taxes would be applied on property accordingly but if there's a huge stock, the higher amount of taxes would be levied depending on the property that is being used for the business. Thus, option b is the correct answer.
Al owned a family high-deductible health policy as part of his MSA for the entire year. What is his maximum permitted contribution to the MSA in 2020 if his deductible is $5,000?
Job order versus Process Costing Which of the following industries would typically use job order costing, and which would typically use process costing? Steel manufacturing Business consulting Web designer Computer chip manufacturing Candy making Designer clothes manufacturing
Answer:
Job order versus Process Costing
Industries using job order costing:
Business consulting
Web designer
Designer clothes manufacturing
Industries using process costing:
Steel manufacturing
Computer chip manufacturing
Candy making
Explanation:
In job order costing, the manufacturer tracks its prime costs to individual products or jobs. This means that the costs of each job can be computed separately because costs are traced to each job. Under process costing, the prime costs are tracked to the department or process or batch, and not to individual products or jobs.
Financial information is presented below: Operating Expenses $ 89300 Sales Returns and Allowances 17000 Sales Discounts 11700 Sales Revenue 320900 Cost of Goods Sold 173900 The amount of net sales on the income statement would be
Answer:
Net sales = 292200
Explanation:
Below is the given values:
Operating expenses = $89300
Sales return = 17000
Sales discounts = 11700
Sales revenue = 320900
Cost of goods sold = 173900
Net sales = Sales revenue - Sales discount - Sales return
Net sales = 320900 - 11700 - 17000
Net sales = 292200
. A Real estate broker has a fiduciary responsibility to her client and her responsibilities include financial references, orders and examine reports, and must follow ADA title lll. This broker is most likely working for the client as:
A) An affiliate
B) An escrow officer
C) A property manager
D) A designated broker
Answer:
D) A designated broker
Explanation:
In the case when the responsibilities involved the financial references, orders and viewing the reports also at the same time we need to follow ADA title III so this means that the broker should be working for the client as the designated broker
So according to the given scenario, the option d is right
And, the same is to be considered
MotorCity, Inc. purchased 52,000 shares of Shaw common stock for $256,000. This represents 40% of the outstanding stock. The entry to record the transaction includes a:
Answer:
Debit to Long-Term Investments for $256,000
Explanation:
In the case when the shares are purchased they are considered for an investment that could generate the profit in near future. So here the long term assets is to be classified as the asset and the same is to be debited
Therefore it should be debited to the long term investment for $256,000
The same is relevant
The following partially completed T-accounts summarize transactions for Faaberg Corporation during the year: Raw Materials Work in Process Credit Credit Debit Beginning Balance Debit Beginning Balance 9,000 22,200 5,000 5,200 4,100 6,200 8,500 8,300 Finished Goods Manufacturing Overhead Credit Debit Credit Debit Beginning Balance 20,400 8,300 2,200 22,200 2,800 3,500 3,200 Cost of Goods Sold Debit Wages & Salaries Payable Credit 20,400 Beginning Balance Debit Credit 20,400 2,500 12,000
The direct labor cost was:
a. $20,400
b. $13.100
Answer:
$8,500
Explanation:
The computation of the direct labor cost is given below
The raw material issued should be
= 6,200 + 2,800
= 9,000
The manufacturing overhead applied is 8,300
So, here the amount should be from both work in process and manufacturing overhead
Therefore the remaining amount i.e. $8,500 should be the direct labor cost
