Answer:
$4.00
Explanation:
the required rate of return=dividend yield(2/3)+growth rate(1/3)
The dividend yield of the stock is defined as the expected dividend divided by the current share price
dividend yield=expected dividend(in 1 year)/share price
dividend yield=2/3*15%=10%
expected dividend=unknown
share price=$42
10%=expected dividend/$42
expected dividend=10%*$42=$4.20
expected dividend=D0*(1+g)
g=growth rate=1/3*15%=5%
$4.20=D0*(1+5%)
$4.20=D0*1.05
D0=$4.20/1.05
D0=$4.00
A company has fixed costs of $94,050. Its contribution margin ratio is 33% and the product sells for $69 per unit. What is the company's break-even point in dollar sales
,Answer: $285,000
Explanation:
The Contribution margin of a product refers to its selling price less that of the variable costs incurred to make and sell the good.
It can be used to calculate the breakeven point in sales along with the fixed costs.
To calculate a company's break-even point in dollar sales, the formula is:
= Fixed costs / Contribution margin ratio
= 94,050 / 33%
= $285,000
Job applicants generally face two kinds of interviews: screening interviews and hiring interviews.
a. True
b. False
Answer:
A) true
Explanation:
screening interview can be regarded as event that is been carried out during hiring process, which gives the recruiter opportunity to gauges the suitability of a job applicant as regards the occupation , these will allow the
recruiter to decided if the applicant name will be short listed, and it's regarded as the first interview for a candidate applying for a job.
Hiring interviews can be regarded efficient as well as effective hiring process which involves step-by-step process that will be followed in hiring a new employee, here whereby an organization will identifies its talent needs, then carry out recruitment as regards its talent pool and at the end most qualified candidates is been hired, their are different hiring processes for different company.
It should be noted that the Job applicants generally face two kinds of interviews: screening interviews and hiring interviews.
Klingon Widgets, Inc., purchased new cloaking machinery four years ago for $8 million. The machinery can be sold to the Romulans today for $7.3 million. Klingonâs current balance sheet shows net fixed assets of $6 million, current liabilities of $760,000, and net working capital of $219,000. If all the current assets were liquidated today, the company would receive $1.01 million cash.
1. What is the book value of Klingonâs total assets today? (Enter your answer in dollars, not millions of dollars, e.g., 1,234,567.)
2. What is the sum of net working capital and the market value of fixed assets? (Enter your answer in dollars, not millions of dollars, e.g., 1,234,567.)
Answer:
Net working capital = Current assets - Current liabilities
$219,000 = Current assets - $760,000
Current assets = $219,000 + $760,000
Current assets = $979,000
1. Total assets = Current assets + Net fixed assets
Total assets = $979,000 + $6,000,000
Total assets = $6,979,000
So, the book value of Klingonâs total assets today is $6,979,000.
2. Sum of net working capital and the market value of fixed assets:
= Market value of current assets + Market value of fixed assets
= $1,010,000 + $7,300,000
= $8,310,000
In what type of market transaction does the issuing corporation receive cash proceeds?
Answer:
In the primary market, companies issue new shares to investors in exchange for cash. The proceeds from such an offering are used to fund the business, make acquisitions.
Explanation:
A borrower obtains an ARM with a start rate of 2%. The ARM has an initial cap of 1%, a periodic cap of 2%, and a lifetime cap of 4%. Assume that the ARM will adjust three times, and that at each adjustment, the rate will increase by the maximum amount possible. What is the maximum amount that the interest rate can reach
Answer:
6%
Explanation:
The computation of the maximum amount that the interest rate can reach is shown below:
Since the arm rate is increased from 2% to 3% at the first adjustment
Now at the second adjustment, it increased from 3% to 5%
At the third adjustment, it increased from 5% to 7%
So here the interest rate should be
= 2% + 4%
= 6%
Also it can never be more than 6%
Harrelson Company manufactures pizza sauce through two production departments: Cooking and Canning. In each process, materials and conversion costs are incurred evenly throughout the process. For the month of April, the work in process accounts show the following debits. Cooking Canning Beginning work in process $0 $4,640 Materials 22,900 10,400 Labor 8,750 7,240 Overhead 32,000 27,300 Costs transferred in 55,000Journalize the April transactions.
Answer:
4/30
Dr Work in Process—Cooking $22,900
Dr Work in Process—Canning $10,400
Cr Raw Materials Inventory $33,300
4/30
Dr Work in Process—Cooking $8,750
Dr Work in Process—Canning $7,240
Factory Labor $15,990
4/30
Dr Work in Process—Cooking $32,000
Dr Work in Process—Canning $27,300
Cr Manufacturing Overhead $59,300
4/30
Dr Work in Process—Canning $55,000
Work in Process—Cooking $55,000
Explanation:
Preparation of the journal entries
4/30
Dr Work in Process—Cooking $22,900
Dr Work in Process—Canning $10,400
Cr Raw Materials Inventory $33,300
($22,900+$10,400)
4/30
Dr Work in Process—Cooking $8,750
Dr Work in Process—Canning $7,240
Factory Labor $15,990
($8750+$7,240)
4/30
Dr Work in Process—Cooking $32,000
Dr Work in Process—Canning $27,300
Cr Manufacturing Overhead $59,300
($32,000 +$27,300)
4/30
Dr Work in Process—Canning $55,000
Work in Process—Cooking $55,000
Your income is $10,000 over the cutoff for the next lowest tax bracket. Your average tax rate is 10%. Your marginal tax rate is 25%. You contribute $3,000 to a traditional IRA and your contribution is fully deductible, should you decide to go that way. You decide, in fact, to make this a traditional IRA. How much did your contribution actually cost you, in after-tax dollars
Answer:
"$2,250" is the appropriate answer.
Explanation:
Given values are:
Before tax cost,
= $3000
Marginal tax rate,
= 25%
or,
= 0.25
The after tax cost of contribution will be:
= [tex]Before \ tax \ cost\times (1-Marginal \ tax \ rate)[/tex]
By putting the values, we get
= [tex]3000(1-25 \ percent)[/tex]
= [tex]3000(1-0.25)[/tex]
= [tex]3000\times 0.75[/tex]
= [tex]2250[/tex] ($)
The ABC Corporation makes collections on sales according to the following schedule: 45% in month of sale 50% in month following sale 5% in second month following sale The following sales have been budgeted: Sales April $ 160,000 May $ 180,000 June $ 170,000 Budgeted cash collections in June would be:
Answer: $170500
Explanation:
Based on the information given in the question, the budgeted cash collections in June would be calculated thus:
= (45% × $160000) + (50% × $180000) + (5% × $170000)
= $72000 + $90000 + $8500
= $170500
Therefore, the budgeted cash collections in June would be $170500
Your grandparents would like to establish a trust fund that will pay you and your heirs $200,000 per year forever with the first payment one year from today. If the trust fund earns an annual return of 3.9 percent, how much must your grandparents deposit today
Answer:
PV= $5,128,205.13
Explanation:
Giving the following information:
Annual cash flow= $200,000
Annual rate of return= 3.9% = 0.039
We need to calculate the present value to be invested to obtain a perpetual annuity of $200,000. To determine the initial investment, we need to use the following formula:
PV= Cf / i
PV= 200,000 / 0.039
PV= $5,128,205.13
Tuscany Company estimated the following costs at the beginning of a particular year: Overhead $5,340,000 Direct labor cost $890,000 Tuscany uses normal costing and applies overhead on the basis of direct labor cost. (Direct labor cost equals total direct labor hours worked multiplied by the wage rate.) The direct labor cost was $50,000 for the month of January. Determine the overhead applied for the month of January.
Answer: $300,000
Explanation:
As overhead is applied on the basis of direct labor cost, the overhead rate for the period is:
= Overhead / Direct labor cost * 100%
= 5,340,000 / 890,000 * 100%
= 600%
If direct labor cost is $50,000 then overhead applied will be:
= Direct labor cost * Overhead rate
= 50,000 * 600%
= $300,000
Company X has a P/E ratio of 10 and a stock price of $50 per share. Calculate earnings per share of the company.A) $5 per share.B) $ per share.C) $0. per share.D) $6 per share.
Answer:
A) $5 per share
Explanation:
Calculation to determine the earnings per share of the company.
Using this formula
EPS=Stock price/P/E ratio
Let plug in the formula
EPS = 50/10
EPS= $5 per share
Therefore the earnings per share of the company will be $5 per share
In the world oil market, oil is supplied up to the point where: Select one: A. the marginal cost of the last barrel is at a maximum B. the marginal cost of the last barrel is the greatest distance from the price buyers are willing to pay for that last barrel C. the marginal cost of the last barrel is zero D. the marginal cost of the last barrel is just equal to the price buyers are willing to pay for that last barrel.
Answer:
D. the marginal cost of the last barrel is just equal to the price buyers are willing to pay for that last barrel.
Explanation:
In the case of the oil market that oil is to be supplied to the point where the marginal cost of the previous barrel should be equivalent to the price where the pruchaser want to pay for that previous barrel
So as per the given situation, the option d is correct
ANd, the rest of the options seems incorrect
People often become entrepreneurs because they want to be their own boss and be in control of most or all of the major decisions related to their business. How might this relate to potential financial success
Answer:
The proper explanation about the possible potential success depending on the state of mind of every entrepreneur is below.
Explanation:
First of all, most of the entrepreneurs tend to have the attitude of wanting to reach their goals no matter what, they are of strong emotional intelligence due to the fact that decide to be brave enough to follow their dreams and have the courage of risking their savings in order to gain success so therefore that they try to control everything in the meaning of expenses as well as try to learn what they need with the purpose of obtaning more benefits and loses in their work and business. So that is why that with their state of mind their might reach better results financially because their are all the time looking for constant improvement.
The short-run effects of an increase in the saving rate include a higher level of productivity.
a. True
b. False
False
The short-run effects of an increase in the saving rate include a higher level of productivity, a higher growth rate of productivity, and a higher growth rate of income.
Find the lump sum deposited today that will yield the same total amount as this yearly payment (made at the end of each year for 20 years at the given interest rate, compounded annually).
Answer:
$129,108.10
Explanation:
Missing word "$9500 at 4%"
Present Value of the amount to be deposited P = ?
Annual Year end payment A = $9,500
Rate of interest r = 4% compounded annually
Period of payment n = 20 years
P = A * [1- (1/(1+r)^n)] / r
P = $9500 * [1 - (1/(1+0.04)^20)] / 0.04
P = $9500 * [1-(1/(1.04)^20)] / 0.04
P = $9500 * [1 - (1/2.191123143)] / 0.04
P = $9500 [1 - 0.45638695] / 0.04
P = $9500 * 0.5436131 / 0.04
P = $9500 * 13.590326
P = $129,108.1003
P = $129,108.10
So, the lump sum deposited today is $129,108.10.
Cumberland Co. sells $1,114 of merchandise to Hancock Co. for cash. Cumberland paid $779 for the merchandise. Under a perpetual inventory system, which of the following is the correct journal entry(is)?
a. debit Cash, $1.084 credit Merchandise Inventory: $722
b. debit Cash. $1,084. credit Sales. $1.084 and debit Cost of Merchandise Sold. 722credit Merchandise Inventory: 5722
c. debit Accounts Receivable. $1,084, credit Sales. $1,084, and debit Cost of Merchandise Sold, 5722 credit Merchandise Inventory, 5722
d. debit Cash 5722: credit Sales. $722
Answer:
Debit Cash $1,114
Credit Sales $1,114
Debit Cost of merchandise sold $779
Credit Merchandise inventory $779
Explanation:
Based on the information given the correct journal entry(is):
Debit Cash $1,114
Credit Sales $1,114
Debit Cost of merchandise sold $779
Credit Merchandise inventory $779
Phillips Corporation's fiscal year ends on November 30. The following accounts are found in its job order cost accounting system for the first month of the new fiscal year.
Other data:
1. On December 1, two jobs were in process: Job No. 154 and Job No. 155. These jobs had combined direct materials costs of $9,950 and direct labor costs of $15,200. Overhead was applied at a rate that was 75% of direct labor cost.
2. During December, Job Nos. 156, 157, and 158 were started. On December 31, Job No. 158 was unfinished. This job had charges for direct materials $4,400 and direct labor $5,200, plus manufacturing overhead. All jobs, except for Job No. 158, were completed in December.
3. On December 1, Job No. 153 was in the finished goods warehouse. It had a total cost of $5,500. On December 31, Job No. 157 was the only job finished that was not sold. It had a cost of $4,300.
4. Manufacturing overhead was $1,145 underapplied in December.
List the letters (a) through (m) and indicate the amount pertaining to each letter. Raw Materials Inventory Dec. 1 Beginning balance
a. Dec. 31 Requisitions 18,950 31 Purchases 18,025 Dec. 31 Ending balance 8,125 Work in Process Inventory Dec. 1 Beginning balance (Entry field with correct answer)
b. Dec. 31 Jobs completed (Entry field with incorrect answer) (f) 31 Direct materials (Entry field with correct answer)
c. 31 Direct labor 9,100 31 Overhead (Entry field with correct answer)
d. Dec. 31 Ending balance (Entry field with correct answer)
e. Finished Goods Inventory Dec. 1 Beginning balance (Entry field with correct answer)
f. Dec. 31 Cost of goods sold (Entry field with incorrect answer) (i) 31 Completed jobs (Entry field with incorrect answer)
g. Dec. 31 Ending balance (Entry field with correct answer)
h. Factory Labor Dec. 31 Factory wages 12,225 Dec. 31 Wages assigned (Entry field with correct answer)
i. Manufacturing Overhead Dec. 31 Indirect materials 3,300 Dec. 31 Overhead applied (Entry field with correct answer)
j. 31 Indirect labor (Entry field with correct answer)
k. 31 Other overhead 1,545
Answer:
Phillips Corporation
a = 9,050 beginning balance Raw Materials
b = 36,660 beginning balance WIP
c = 15,650 direct materials
d = 6,825 Overhead applied
e = 13,500 Ending balance WIP
f = 5,500 beginning balance Finished Goods
g = 54,625 Completed jobs
h = 4,300 ending balance Finished Goods
i = 9,100 wages assigned
j = d
k = 3,125 indirect labor
l = 1,145 Underapplied overhead
m = 55,825 cost of goods sold
Explanation:
a) Data and Analysis:
1. Jobs in process:
Job No. 154 and Job No. 155
Combined direct materials costs $9,950
Combined direct labor costs 15,200
Overhead applied (75%) 11,400
Total work in process, beginning $36,550
2. Jobs started in December:
Job Nos. 156, 157, and 158
Direct materials $4,400
Direct labor 5,200
Overhead applied (75%) 3,900
Total work in process $13,500
Beginning work in process = $36,550
Ending work in process = $13,500
Beginning Finished Goods Inventory: Job 153 $5,500
Ending Finished Goods Inventory: Job 157 $4,300
Raw Materials Inventory
Dec. 1 Beginning balance 9,050 (a)
Dec. 31 Requisitions 18,950
Dec. 31 Purchases 18,025
Dec. 31 Ending balance 8,125
Total 27,075 27,075
a = $9,050 (27,075 - $18,025)
Work in Process Inventory
Dec. 1 Beginning balance $36,550 b.
Dec. 31 Jobs completed 54,625 (g)
Dec. 31 Direct materials 15,650 c.
Dec. 31 Direct labor 9,100
Dec. 31 Overhead 6,825 d.
Dec. 31 Ending balance 13,500 e.
Finished Goods Inventory
Dec. 1 Beginning balance 5,500 f
Dec. 31 Cost of goods sold 55,825 (m)
Dec. 31 Completed jobs 54,625 g.
g. Dec. 31 Ending balance 4,300 h
Factory Labor
Dec. 31 Factory wages 12,225
Dec. 31 Wages assigned 9,100
Dec. 31 Overhead 3,125
Manufacturing Overhead
Dec. 31 Indirect materials 3,300
Dec. 31 Overhead applied 6,825 d.
Dec. 31 Indirect labor 3,125 k.
Dec. 31 Other overhead 1,545
Dec. 31 Underapplied overhead 1,145
Two towns, each with three members, are deciding whether to put on a fireworks display to celebrate the New Year. Fireworks cost $360. In each town, some people enjoy fireworks more than others. In the town of Bayport, each of the residents values the public good as follows:
Resident Value (Dollars)
Musashi 50
Rina 100
Sean 300
he total benefit of the fireworks display to the town of Bayport is $: ___________
Answer:
$450
Explanation:
The benefit an individual derives from an activity can be described as the total satisfaction or utility that individual derives from carrying out a particular activity. It is the value an individual derives from a particular activity
Benefit can be measured in dollars or in utils
the higher the value of the dollar or util, the higher the benefit the consumer derives from an activity
A rational person would weigh the cost of an activity to the benefit that would be derived from the activity. The individual would carry out the activity only if benefit outweigh the cost.
For example, in this question, the total benefit of fireworks display is 450. this is greater than the cost. So, the town would carry out the firework display
Total benefit is the sum of individual value individuals would derive from an activity.
total benefit = $50 + $100 + $300 = $450
Check all answers that apply. Based on the model output, we can say that both the size of the move (CuFt) and number of large furniture moved are important considerations when estimating the total number of labor hours required. We can make this claim because __________.'
Answer:
P-value for slope coefficient of the size of the mode CuFt is0.00
Explanation:
The slope coefficient is change in probability when all other independent variables are held constant. The output is 93.3 which is due to the variation in labor hours. These variations are due to large number of furniture moved in cubic feet.
Which of the following is a consumer right for the consumer bill of rights?
1. Right to know
2. Right to return
3. It’s a profit
4. Right to sanity
Answer:
both numbers one and two
Which of the following is a consumer right per the consumer bill of rights?
1. Right to know
2. Right to return
3. Right to profit
4. Right to sanity
Answer:
1. Right to know.
Explanation:
The Consumer Bill of Rights refers to certain rights that are given to customers in a business transaction. These set of rights are given to customers or consumers and are made so that consumers will have equal rights to be protected against any unfair or false claims.
Among the given set of rights, the right to know is a consumer right according to the bill of rights. This right is one of the four sets of original rights as set in the consumer bill of rights. The other three are the right to safety, to be heard, and to choose.
Thus, the correct answer is option 1.
MC Qu. 111 Brush Industries reports the following... Brush Industries reports the following information for May: Sales$955,000 Fixed cost of goods sold 111,000 Variable cost of goods sold 261,000 Fixed selling and administrative costs 111,000 Variable selling and administrative costs 136,000 Calculate the operating income for May under absorption costing.
Answer:
Particulars Amount
Sales $955,000
Less: Fixed cost of goods sold $111,000
Less: Variable cost of goods sold $261,000
Gross Profit $583,000
Less: Fixed selling & admin. costs $111,000
Less: Var. selling & admin. costs $136,000
Operating Income $336,000
A government is torn between selling annual pollution allowances and setting an annual pollution tax. Unlike in the messy real world, this government is quite certain that it can achieve the same price and quantity either way. It wants to choose the method that will pull in more government tax revenue. Is selling allowances better for revenues or is setting a pollution tax better, or will both raise exactly the same amount of revenue
Answer: Both will raise the same amount
Explanation:
The government here is certain that it can achieve the same quantity and price regardless of if it uses a pollution tax or pollution allowance. This means that it would be charging the companies the same regardless of the method used.
Both methods would therefore yield the same amount if the government uses either of them.
Since the Troy Division also sustained an operating loss in the prior year, Rice's president is considering the elimination of this division. Troy Division's traceable fixed costs could be avoided if the division were eliminated. The total common corporate costs would be unaffected by the decision. If the Troy Division had been eliminated at the beginning of last year, Rice Corporation's operating income for last year would have been:
Answer:
c. $30,000 lower
Explanation:
Missing word "Rice Corporation currently operates two divisions which had operating results last year as follows:
West Division Troy Division
Sales $600,000 $300,000
Variable costs 310,000 200,000
Contribution margin 290,000 100,000
Traceable fixed costs 110,000 70,000
Allocated common corporate costs 90,000 45,000
Net operating income (loss) $ 90,000 ($15,000)
Options are: a. $15,000 higher, b. $45,000 lower, c. $30,000 lower, d. $60,000 higher"
Particulars Amount
Contribution margin $100,000
Less: Traceable fixed costs $70,000
Segment margin of Troy Division $30,000
The operating income would been $30,000 less without the segment margin contributed by the Troy Division. Hence, If the Troy Division had been eliminated at the beginning of last year, Rice Corporation's operating income for last year would have been $30,000 lower.
The Ace Battery Company has forecast its sales in units as follows: January February March April 1,200 May 1,050 June 1,000 July 1,500 1,750 1,900 1,600 Ace always keeps an ending inventory equal to 140 percent of the next month's expected sales. The ending inventory for December (January's beginning inventory) is 1,680 units, which is consistent with this policy. Materials cost $13 per unit and are paid for in the month after production. Labour cost is $6 per unit and is paid in the month the cost is incurred. Overhead costs are $8,000 per month. Interest of $8,400 is scheduled to be paid in March, and employee bonuses of $13,600 will be paid in June. a. Prepare a monthly production schedule for January through June (Enter all values as positive value.) Saved ework Help Save & Exit Submit Check my work January 1200 February 1050 March 1000 April 1500 May 1750 June 1900 July 1600 Forecasted unit sales Desired ending inventory Beginning inventory Units to be produced b. Prepare a monthly summary of cash payments for January through June. Ace produced 1.000 units in December Ace Battery Company Summary of Cash payments February March December January April May June Units produced Material cost Labour cost Overhead cost Interest Employee bonuses Total cash payments
Answer:
The Ace Battery Company
a) Monthly Production Schedule
January February March April May June
Sales Forecast: 1,200 1,050 1,000 1,500 1,750 1,900
Ending inventory 1,470 1,400 2,100 2,450 2,660 2,240
Sales units available 2,670 2,450 3,100 3,950 4,410 4,140
Beginning inventory 1,680 1,470 1,400 2,100 2,450 2,660
Units for production 990 980 1,700 1,850 1,950 1,480
b) Monthly Cash Payments:
January February March April May June
Payments:
Production materials 0 $12,870 $12,740 $22,100 $24,050 $25,350
Labor costs $5,940 5,880 10,200 11,100 11,700 8,880
Overhead costs 8,000 8,000 8,000 8,000 8,000 8,000
Interest expense 8,400
Employee bonuses 13,600
Total payments $13,940 $26,750 $39,340 $41,200 $43,750 $55,830
Explanation:
a) Data and Calculations:
January February March April May June July
Sales Forecast: 1,200 1,050 1,000 1,500 1,750 1,900 1,600
Ending inventory 1,470 1,400 2,100 2,450 2,660 2,240
Sales units available 2,670 2,450 3,100 3,950 4,410 4,140
Beginning inventory 1,680 1,470 1,400 2,100 2,450 2,660 2,240
Units for production 990 980 1,700 1,850 1,950 1,480
Costs of materials $12,870 $12,740 $22,100 $24,050 $25,350 $19,240
Payments:
Production materials 0 $12,870 $12,740 $22,100 $24,050 $25,350
Labor costs $5,940 5,880 10,200 11,100 11,700 8,880
Overhead costs 8,000 8,000 8,000 8,000 8,000 8,000
Interest expense 8,400
Employee bonuses 13,600
Cash payments $13,940 $26,750 $39,340 $41,200 $43,750 $55,830
At what point does this NDA hinder an employee from getting a new job or using their skill and knowledge on their new job?
Answer:
The point of NDA is way bigger so that may help u on the answer
Explanation:
Frank decides that a social media campaign is the best way for him to attract new business to Slice of Life Pizza. After Frank identifies his strategies and goals, the next step in the campaign is
Answer: identify your target audience
Explanation:
Since Frank has identified his strategies and goals, then the next step in the campaign will be to identify the target audience.
The target audience refers to the consumers that are likely to attract new business to Slice of Life Pizza. This is vital for Frank to be able to reach out to more customers and make profit.
Alexis Co. reported the following information for May: Part A Units sold 6,800 units Selling price per unit $ 980 Variable manufacturing cost per unit 610 Sales commission per unit - Part A 98 What is the manufacturing margin for Part A
Answer:
$2,516,000
Explanation:
Calculation to determine the manufacturing margin for Part A
Sales $6,664,000
($980*6800)
Less: Cost of goods sold ($4,148,000)
($610*6800)
Manufacturing margin for product A $2,516,000
Therefore the manufacturing margin for Part A is $2,516,000
What is the purpose of analyzing market activities and creating an income funnel?
Answer: To determine if a marketing plan is effective
Explanation:
Analysis of the market is necessary in understanding the market, competitors and the consumers better.
Creating a market analysis helps the manufacturer understand the target audience and market conditions which are vital in the creation of a successful good or service. It also helps in determining if there's effectiveness regarding the marketing plan used.
Analyzing market activities and creating an income funnel also helps to distinguish a company from other competitors and therefore makes one stand out when compared to others.
Predetermined Factory Overhead Rate Exotic Engine Shop uses a job order cost system to determine the cost of performing engine repair work. Estimated costs and expenses for the coming period are as follows: Engine parts $556,200 Shop direct labor 406,000 Shop and repair equipment depreciation 37,900 Shop supervisor salaries 105,300 Shop property taxes 19,100 Shop supplies 14,600 Advertising expense 11,100 Administrative office salaries 47,800 Administrative office depreciation expense 6,100 Total costs and expenses $1,204,100 The average shop direct labor rate is $14.00 per hour. Determine the predetermined shop overhead rate per direct labor hour. Round the answer to nearest whole cent. $fill in the blank 1 per direct labor hour
Answer: $6.10 per direct labor hour
Explanation:
Predetermined shop overhead rate = Estimated Overhead costs / Estimated Direct labor hours
Estimated overhead costs:
= Shop and repair equipment depreciation + Shop supervisor salaries + Shop property taxes + Shop supplies
= 37,900 + 105,300 + 19,100 + 14,600
= $176,900
Estimated direct labor hours
= Shop direct labor / Average Direct labor rate
= 406,000 / 14
= 29,000 hours
Predetermined shop overhead rate = 176,900 / 29,000
= $6.10 per direct labor hour
