Because it helps the buyer or seller know how much they have
Answer:
a) $12,500 unfavorable
b) 0
Explanation:
variable factory overhead controllable variance = actual variable overhead expense - (standard variable overhead per unit x standard number of units)
actual variable overhead expense = $725,000
standard variable overhead per unit = $712,500 / 60,000 = $11.875
standard number of units = 60,000
variable factory overhead controllable variance = $725,000 - $712,500 = $12,500 unfavorable
Controllable factory overhead is not related to any changes in the actual volume or quantity produced.
Fixed factory overhead volume variance = actual fixed overhead - standard fixed overhead = $262,500 - $262,500 = 0
Fixed overhead was exactly the same as the standard or budgeted overhead.
Answer:
We will plant 165 of Crop A
Explanation:
We will compare the marginal contribution for each crop: A B
Profit: 170.00 210
cost of cultivating: 40.00 60
CM per constrain 4.25 3.50
Crop A is better regarding cultivating cost.
Now we analize the labor hours:
Profit: 170 210
Labor hours per crop 20 25
CM per constrain 8.50 8.40
Because Crop A is better at both constrain resource It will be better to plant only Crop A if possible. As assigning to Crop B will diminish the return on the scarce resourse.
We will see how much can we plant of Crop A
7400 / 40 = 185
3300 / 20 = 165
We will plant 165 of Crop A
which is the maximun we can plant at the given labor hours.
Answer:
c. 11.05%
Explanation:
The computation of firm's required return is shown below:-
First we need to find out the Market Risk Premium for computing the firm's required return.
Using CAPM, we calculate Market Risk Premium
Expected Future Market Rate of Return = Risk Free Rate on T-Bond + Beta of the Market × Market Risk Premium
10% = 6.5% + 1 × Market Risk Premium
Market Risk Premium = (10% - 6.5%) ÷ 1
= 3.5%
Required Rate of Return = Risk Free Rate + Beta of the Stock × Market Risk Premium
= 6.5% + (1 + 3.00%) × 3.5%
= 6.5% + 1.30 × 3.5%
= 11.05%
